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Annual Report of the CTFL SETA

This annual report highlights the achievements and projects of the CTFL SETA in developing skills in the clothing, textiles, footwear, and leather industries. It emphasizes the importance of creating a highly skilled workforce to contribute to workplace security, business viability, and employment growth in South Africa.

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Annual Report of the CTFL SETA

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  1. Annual Report of the CTFL SETA 2008/09

  2. CTFL SETA Vision • To become the leading sector in skills development in South Africa and thereby create a highly skilled workforce that will contribute to workplace security, increased business viability and employment growth in the country.

  3. CTFL Sector Profile • Clothing: Manufacturers of all types of apparel including outerwear, underwear, men’s, ladies’ and children’s clothing, protective gear and other accessories • Textiles: Manufacturers of all types of textiles made from natural or synthetic fibres for use in apparel, home textiles, upholstery and industrial applications. • Footwear & Leather: • Manufacturers of leather for use in the manufacture of footwear & apparel and general goods • Manufacturers of footwear from leather and/or textiles • Manufacturers of general goods such as handbags, luggage, car seats from leather and/or textiles

  4. CTFL Sector Profile • Number of levy paying firms in the sector: 1191 (based on firms eligible to pay skills development levies) • 199 large firms (+150 employees) = 17% • 237 medium firms (50 – 149 employees) = 20% • 755 small firms (49 or less employees) = 63% • Levy income per size category: • 62% of levy contributed by large firms • 18% of levy contributed by medium firms • 20% of levy contributed by small firms

  5. Report from the Chairperson – Mr F Barnard The Chairperson, Mr F Barnard, reported as follows: • New projects and programmes • Alignment of current CTFL qualifications with newQCTO requirements • New FET model for learnership provision • Scholarships for Textile Master Students at TUL in Czech Republic, co-funded by the Office of the Deputy President and JIPSA • Recognition of Best Practice in Skills Development • Women in Leadership Conference in three regions • Strategic discussions • Customised Sector Programme for clothing and textiles • SETA re-establishment and incorporation into W&R SETA

  6. Report from the CEO- Mr PK Naicker The CEO, Mr PK Naicker, reported as follows: • Massive demands for upskilling of workforce • Implementation of FET Amendment Act 2006 • Threatened learnership provisioning in the sector • New FET model for learnership delivery • 5 HTPIs (+50 sites) and 36 WTPIs (+22 sites) • 922 learnership grants @ R18 million not sufficient to meet demand • CTFL SETA ETQA re-accredited until September 2011 • National qualifications for Sewing Machine Mechanics at NQF 3 & 4

  7. Report from the CEO- Mr PK Naicker Highlights of the period under review: 3 CTFL firms recognised for Good Practices in Skills Development Joint project with Deputy President/JIPSA enabling 10 students to attend a two-year Master’s Scholarship Programme at TUL in Czech Republic Women in Leadership Conference showcasing achievements of women in the sector Project to develop sewing skills and construction techniques of disabled learners in sheltered employment Trade Union Projects: Cape Town Fashion Festival, HIV Aids Awareness project 3 Research studies: Skills Audit, Learnership & Technologists Tracer Study, BEE Study

  8. Report from the ETQA Manager- Mr L Paltu • The ETQA Manager, Mr L Paltu reported as follows: • To achieve the ETQA’s primary objective of ensuring quality education and training in the CTFL sector, the department focused on: • Accreditation and monitoring of training providers; • Registration of assessors and moderators; • Development and registration of qualifications, unit standards and learnerships; • Quality assuring provision and certification of all CTFL qualifications; and • Maintaining a national learner database as per SAQA and NLRD requirements

  9. Report from the ETQA Manager- Mr L Paltu New FET model for learnership implementation to ensure quality learnership delivery: CTFL SETA accredited 5 Host Training Provider and 36 Workplace Training Provider Institutions CTFL SETA registered 140 employed and 377 unemployed learners on learnerships 245 employed and 459 unemployed learners successfully completed learnerships and received certificates CTFL SETA registered 23 textile apprentices Committees ETQA and Apprenticeship Committees serve a s forum for industry consultation, collaboration and input.

  10. Report from the ETQA Manager- Mr L Paltu Other matters that were addressed included: Enhancement of the CTFL Management Information System Progress made towards registration of assessors and moderators ETQA workshops held during the period under review New qualifications registered with SAQA for Sewing Machine Mechanics at NQF Levels 3 & 4 New and revised learnerships (50) registered with the DoL against the NQF Level 2 National Certificate – CTFL Manufacturing Processes (58227) Results of ETQA audits conducted at all CTFL accredited training providers

  11. Report from the ETQA Manager- Mr L Paltu SAQA Audit – May 2008 CTFL ETQA passed with minor non-compliances Final score 1.9 out of 3 Placed in Top 5 of ETQAs audited by SAQA CTFL SETA ETQA re-accredited until 26 September 2011.

  12. NSDS II Targets vsPerformance • The CTFL SETA reported its achievements against the NSDS II targets set in the Service Level Agreement with the Department of Labour for the period April 2008-2009. A number of interventions have been undertaken during the year to address the targets and other sector skills priorities. • These interventions included: • Mandatory grants disbursed to firms that submitted Workplace Skills Plans and Annual Training Report

  13. NSDS II Targets vsPerformance • CTFL SETA bursary and grant schemes for employed learners including ABET, Management Development, Technologist Training, Learnerships and critical/scarce skills programmes • Grants for unemployed learners, technology students and students undergoing work experience • Sector projects implemented in partnership with other organisations such as new venture creation programmes, training of disabled learners in sheltered employment, HIV Aids awareness project, Cape Town Fashion Festival, Women in Leadership conference and research studies (skills audit and learnership tracer study). • The report included actual vs targets, budget vs actual expenditure and reasons for variances.

  14. Report from the CFO - Ms G Layzell The CFO, Ms Gina Layzell, reported as follows: • Income: • Skills development levy income increased by 3% from the previous year to R61.8 million. • Additional revenue included • Penalties and interest of R516 000 • Investment Income of R5.8 million • Other revenue (of R77 000 • Funding of R1.2 million from KZN DED for projects co-funded by the CTFL SETA and the KZN DED in collaboration with the TUL in the Czech Republic.

  15. Report from the CFO - Ms G Layzell • Expenditure: • Administration expenditure increased by 10% from the previous financial year but did not exceed 10% levy income received. • Mandatory grant payments amounted to 80% of total mandatory levy income • Discretionary grant expenses amounted to R21.5 million which included the R1.2 million received from KZN DED. Although this was 9% more than the previous year, it was still lower than anticipated mainly due to:

  16. Report from the CFO - Ms G Layzell • Expenditure (cont): • A delay in learnership payments to firms as a result of changes in the legislation, which required the SETA learnership training providers to be registered with Umalusi and the Department of Education. • Payment of grants toward learnerships, ABET and management programmes in tranches, which prolong the payment process but decrease risk to the CTFL SETA • The CTFL SETA has committed R36.6 million of discretionary reserves to approved projects & grants and R4.1 million has been ringfenced for future projects • Total funds of R40.7 million should be spent in the next financial year.

  17. Report from the Audit Committee – Mr D Naidoo The Chairperson of the Audit Committee, Mr D Naidoo, reported as follows: The Audit Committee met four times during the period under review and conducted its affairs in compliance with the Audit Committee charter. The Audit Committee deemed the internal controls applied by the CTFL SETA over financial and risk management effective, efficient and transparent. Regular Internal Audits were conducted and no matters were reported that indicated any material deficiencies in the system of internal control.

  18. Report from the Audit Committee – Mr D Naidoo • The Audit Committee reviewed the audited annual financial statements, the Auditor-General’s management report and the SETA’s compliance with legal and regulatory provisions and concurred with the Auditor-General’s report. • The Audit Committee was satisfied with the effectiveness of the Internal Audit Function and believe that it has addressed the risks pertinent to the CTFL SETA in its audits.

  19. Report from the Auditor-General • The Auditor-General submitted an unqualified audit opinion to Parliament on the Financial Statements and Performance Information of the CTFL SETA for the year ended 31 March 2009. • Without qualifying its opinion, the Auditor-General drew attention to the following matters: • Re-licensing: The CTFL SETA has applied for a renewal of its certificate of establishment which comes to an end on 31 March 2010. It is expected that the legislated renewal process will be concluded by 31 March 2010. • Non-compliance with applicable legislation: The CTFL SETA has not obtained approval from National Treasury before a new bank account was opened.

  20. Report from the Auditor-General The Auditor-General found the overall governance framework of the CTFL SETA to be adequate. The Auditor-General stated that the evidence obtained was sufficient and appropriate to report that no significant findings have been identified as a result of the review.

  21. Statement of Responsibility • The Annual Report included a Statement of Responsibility by the CTFL SETA Council with regards to its responsibilities relating to: • Overseeing the preparation of the annual financial statements; • Developing policies and procedures that determine operational parameters; • Continuous monitoring of SETA activities and financial transactions; and • Risk management. • The Council deemed the CTFL SETA a going concern in the following financial year and has applied for the renewal of its license at the end of March 2010. • The Council was not aware of any matters arising since the end of the financial year that would have a significant effect on the operations or financial position of the CTFL SETA.

  22. Report from the Accounting Authority of the CTFL SETA • The report of the Accounting Authority (Council) of the CTFL SETA detailed: • The legislative framework through which the CTFL SETA has been established and by which it is governed; • The general review of the state of financial affairs with specific reference to the nature of the SETA’s income, expenditure in terms of admin, mandatory and discretionary grants and the status of reserves available after year end; and • The services rendered by the CTFL SETA aligned with the objectives developed by stakeholders. • The report addressed capacity constraints experienced as a result of staff vacancies during 2008/09.

  23. Report from the Accounting Authority of the CTFL SETA • The CTFL SETA Council supports the principles of good corporate governance and the report details the role of the CTFL SETA Council in ensuring that SETA Staff, Council and Committee members operates within a clear policy framework and in line with its constitution and code of conduct. • Emphasis is placed compliance with relevant legislation, risk management, fraud prevention and internal audits. • The report described the composition and mandate of the CTFL Council and its committees. • The report noted that constituency representatives served on SETA governance structures without receiving remuneration.

  24. Report from the Accounting Authority of the CTFL SETA • Only the Chairperson of the Audit Committee and individual Audit Committee members who are retired and serving in their personal capacity and not as firm representatives, received remuneration. The amounts paid in this regard was detailed in a table. • It was further noted that Council/committee members were re-imbursed for instances where they made their own travel/accommodation arrangements to attend SETA meetings. • The remuneration of the two Senior Managers of the CTFL SETA (CEO & CFO) was detailed in a table. • Mention was also made of payments made to consultants for services such as payroll administration and audit consulting.

  25. Report from the Accounting Authority of the CTFL SETA • The Accounting Authority report further addressed issues such as • Safety, health and environmental management policies and procedures; • Social investment prioritisation and spending; and • Human capital development (employment equity and skills development). • The Authority report briefly reflected on discontinued activities, new/proposed activities and performance against NSDS targets and reiterated the application made for re-establishment of the CTFL SETA.

  26. Annual Financial Statements & Annexures The Annual Report included: • Detailed Annual Financial Statements: • Statement of financial performance • Statement of financial position • Statement of changes in net assets • Cash flow statement • Accounting policies to the Annual Financial Statements • Notes to the Annual Financial Statements • Annexures: • Governance Structures (Members and attendance at meetings) – Annexure 1 • Human Resources Report (including organisational structure) – Annexure 2 • Acronyms – Annexure 3.

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