2005 - 2006 - HWSETA 2006 ANNUAL

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					Contents
Vision/Mission                                               2
Key Objectives and Acknowledgements

Chairperson’s Report                                         3-5

Chief Executive Officer’s Report                             6-7

HWSETA Scorecard                                             8

Governance Structures                                        9 - 17

Divisional Reports:
     Finance                                                 18 - 19
     Skills Development Planning                             20 - 29
    Achievements Against Targets                             30 - 32
     Education and Training Quality Assurance                33 - 39
     Human Resources and Operations                          40 - 45

Audit Committee Report                                       46

Report of the Auditor General                                47 - 48

Annual Financial Statements                                  49
   Accounting Authority Report                               50 - 53
   Income Statement (Statement of Financial Performance)     54
   Balance Sheet (Statement of Financial Position)           55
   Statement of Changes in Net Assets                        56
   Cash Flow Statement                                       57
   Notes to the Annual Financial Statements                  58 - 85

Acronyms and Abbreviations                                   86

Contact information and Annual General Meeting information   87




                                                                       1
    HWSETA - ANNUAL REPORT 2005-2006




                 Vision
            HWSETA
                     The creation of a skilled workforce to meet the health and social development
                     needs of all people in South Africa.


                 Mission
                     The Health and Welfare Sector Education and Training Authority endeavors to
                     create and implement an integrated approach for the development and provision of
                     an appropriately skilled workforce that will be empowered to render quality health
                     and social development services that are comparable to world-class standards.

                 Philosophy
                     The HWSETA espouses the philosophy of a better life for all through people
                     development.


                 HWSETA’s key objectives
                       Develop and implement the Sector Skills Plan

                       Develop and administer learnerships

                       Support the implementation of the National Qualifications Framework (NQF)

                       Implement ETQA responsibilities as mandated by the South African Qualifications Authority

                       Disburse levies collected from employers in the health and social development sectors

                       Forge links with stakeholders and bodies in the health and social development sectors

                       Account for the effective and efficient use of public monies received from levies collected from
                       employers, in line with the provisions of the Public Finance Management Act

                       Report to the Minister of Labour through the Director-General of the Department of Labour on
                       matters related to the HWSETA



                     Acknowledgements:

                     The HWSETA Board thanks the following:

                     Stakeholders for their valued contributions and interest in the skills development programme as part of
                     the broader social transformation agenda for socio-economic upliftment for all in our sector and society.

                     Sectoral employers for their levy contributions and for their participation in the skills development
                     agenda within their respective organisations.

                     Department of Labour for its support.

                     Staff members and volunteers who participated in advancing the work of the HWSETA.




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                  Chairperson’s Report
Dr V. Van Wyk

The HWSETA was established under the auspices of the Skills Development Act (Act 1 of
1998) and is an independent public entity as described in Section 3(b) of the Public Finance
Management Act, Act 1 of 1999. The Board, as the Accounting Authority, is accountable
for ensuring sound governance. This report covers the first year of the second Board of the
Health and Welfare Sector Education and Training Authority, (HWSETA), who assumed their
roles in April 2005.

The new HWSETA Board is more representative than the former. We are proud to have an
active person with a disability from the National Council for Persons with Physical
Disabilities representing her sector. We also have broad representation from a variety of
employer stakeholders, namely from SA Medical Association (SAMA); SA Optometric
Association; Hospital Association of SA; The SA Dental Association (SADA) and National
Pathology Group (NPG). The levy exempt sector is represented by a person from the S. A.
Gerontological Association. All trade unions with membership in our sector have
representation, namely NEHAWU, PSA, HOSPERSA, NPSWU, NUPSAW and PAWUSA.
Government is represented by three members each from the Health and Social Development
Departments respectively. Gender and race is also evenly spread.

The Board's role is to provide leadership, direction, and stewardship of the organisation's
assets and interests in relation to the public funds it administers to promote public interest in
skills development within the Health and Social Development (welfare) sector. The Board
takes its fiduciary responsibilities very seriously. At all times it exercises oversight over the
HWSETA and ensures compliance with laws and regulations governing the HWSETA’s
activities. Against this backdrop a Special Task Team was also appointed to review certain
governance processes of the organisation and corrective steps are presently being
implemented.

The vision of the HWSETA is “The creation of a skilled workforce to meet the health and
social development needs of all people in South Africa”.

The principles of the National Skills Development Strategy clearly indicate what the
priorities of the HWSETA should be. Priorities which we in the Health and Social
Development sectors inter alia fully identify with and embrace are:

     !   Support economic growth for job creation and poverty eradication;
     !   Promote productive citizenship for all by aligning skills development and national
         strategies for growth and development;
     !   Accelerate Broad Based Black Economic Empowerment and Employment Equity.

The HWSETA continued to have a good mutual relationship with South African
Qualifications Authority (SAQA). Through the Joint Implementation Plan (JIP) funds were
channeled to SAQA to accelerate the generation of 15 new qualifications in our sector.
SAQA also granted extension of accreditation for the 8 qualification in our sector. The
HWSETA is also providing logistical support to SAQA in the scoping of a qualification(s) for
Traditional Health Practitioners in order to expand participation and access to skills
development by its diverse constituency. This relationship is highly valued.

The Expanded Public Works Programme (EPWP) is a priority programme for government.
The Social Sector response to this programme promotes skills development programmes for
Home/Community Based Care and Early Childhood Development. The HWSETA gave

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    HWSETA - ANNUAL REPORT 2005-2006




                  technical support to the development of the curriculum framework for the
                  Home/Community Based Care (NQF 3). Technical support was also provided for the
                  selection of lead service providers to facilitate the implementation of the HCBC skills
                  programme in Limpopo, Free State and the Western Cape. In order to increase the human
                  resource capacity of the ETQA division for this important programme, we are grateful to
                  report that, with the assistance of the National Department of Health, funding was sourced
                  from the European Union (EU) to appoint 6 staff members for two years. This cooperation is
                  assisting the HWSETA to comply with its mandate in this area.

                  For the HWSETA to achieve its skills development targets, accredited education and training
                  providers are needed. The HWSETA granted accreditation to 75 education and training
                  providers (33 were granted provisional accreditation whilst 42 received full accreditation).
                  Financial and technical support for the establishment of provider forums was provided in
                  KwaZulu Natal and the Western Cape to promote the development of quality practice in
                  communities. Training and registration of assessors and moderators being deemed
                  competent were accredited and a further 153 assessors and 58 moderators were registered
                  against our qualifications. In all 63 HWSETA constituents providers were audited with a
                  view to monitor their education and training activities. A total of 633 learners, providers,
                  assessors, moderators and verifiers who complied with the relevant requirements were
                  certificated. These civil society entrepreneurs are the backbone to this service and are
                  rendering invaluable services to our beneficiaries.

                  We are proud to announce that St Mary's Hospital in KwaZulu Natal was approved for
                  funding in order to attain the status of being a learning centre of excellence. This funding
                  was to be used by St Mary's to create a clinical laboratory that would enable learners from
                  disadvantaged communities to acquire a broad range of skills and expose them to cutting
                  edge medical technology.

                  The submission of Workplace Skills Plans (WSPs) has been transformed by the SDP
                  division. WSP applications are now mostly submitted electronically, providing efficient
                  online services to our stakeholders. Skills Development Facilitators (SDFs) were contracted
                  to assist SMMEs to complete the WSP online.

                  The HWSETA Board approved R1.004 million for a special project to promote the
                  participation of the levy exempt sector through funding of their training needs as identified
                  in their Workplace Skills Plan (WSP). In mitigation, it should be noted that these small
                  entities struggle to comply with the requirements for successful approval of the WSP and
                  submission of accurate reports on training implemented.

                  Adult Basic Education and Training (ABET) remains a priority programme. Due to interest
                  mainly by unemployed, the Department of Labour has consented to targeting workers as
                  well as unemployed across levels 1- 4 of ABET in each year of implementation. This is in
                  line with the priority to assist out-of-school young people to ascend the skills ladder.

                  The HWSETA Board approved R15 million but R10,25m was committed for the
                  implementation of bursaries in the public sector. The funds allocated to the Social
                  Development Sector were centralised under the co-ordination of the National Department
                  of Social Development and has culminated in scholarships being awarded to 190 students,
                  one being a deaf student. We trust that this programme will be extended beyond the public
                  service in future.

                  The National Skills Development Strategy for the period 1 April 2005 to 31 March 2010 is
                  going to place a heavy financial burden on all SETAs. To achieve the targets set, the
                  HWSETA will have to draw on all its resources and we will have to look both internally and
                  externally to secure financial resources. Of the 19 national and provincial Departments of

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Health and Social Development, 16 departments made financial contributions to the Health
and Welfare SETA. We are most grateful to these departments who contribute without any
legal prescription.

The Minister of Finance announced that employers who have an annual payroll of less than
R500 000 (increased from R250 000), no longer have to make skills development levy
contributions. However, these employers must still be encouraged to participate in skills
development and must be accommodated from a reduced financial base. This will reduce
the income of the HWSETA.

My appreciation and acknowledgements go to:

    !   A supportive and dedicated Board Administration team who facilitated the smooth
        functioning of the HWSETA Board,
    !   Enthusiastic and hard working Board members who have dedicated so much of their
        time to the HWSETA over and above their normal commitments,
    !   Our Audit Committee and Internal Auditors,
    !   Our stakeholders who participated in the HWSETA's processes during the reporting
        year,
    !   All levy contributors in the sector without whom the HWSETA would not be able to
        function,
    !   The staff of the HWSETA who often, under difficult circumstances, continued to
        render services to our beneficiaries,
    !   The Senior Management and Management of the HWSETA for their efforts during
        the year,
    !   The Departments of Labour, Health and Social Development for their support, and
    !   The Office of the Auditor-General for valuable guidance whenever it was requested.




_________________
Dr. V. van Wyk
Chairperson: HWSETA Board




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    HWSETA - ANNUAL REPORT 2005-2006




                                 Chief Executive Officer’s Report
                       .
                 Dr K.P Govender

                  The launch of the new National Skills Development Strategy 2005-2010 by the
                  Department of Labour marked the beginning of a new focus in skills development. A
                  product of extensive and sometimes exhaustive consultations with key stakeholders and role
                  players in the country, it marked a significant shift from the previous strategy to the extent
                  that it addresses skills development from a very broad perspective. While the broad
                  objectives are more or less the same as the previous strategy, NSDS II spells out in greater
                  detail the national priority areas which have to be addressed. This strategy links directly to
                  the broader goals of government, i.e. to halve unemployment and poverty and to reduce
                  inequality by 2014 and to ensure that skills development institutions use their resources to
                  advance our skills revolution. The identification of a number of success indicators for each
                  of the NSDS objectives compels SETAs to focus on delivery from the very outset. The
                  introduction by the Department of Labour of a system to validate progress reports provided
                  by SETAs implies that SETAs continuously review systems and procedures. This ensures
                  reporting is accurate, reliable and verifiable.

                  It is in this context that the HWSETA had to plan and operationalise its work in the year
                  under review. However, the fact that the Memorandum of Understanding (MoU) with the
                  Department of Labour was only finalised in the latter half of the second quarter implied that
                  implementation of the HWSETA business plan was somewhat delayed, resulting in limited
                  time for the achievement of targets. That notwithstanding, I am pleased to report that we
                  were able to achieve against our targets. I am pleased to report also that in some instances
                  we had exceeded our targets.

                  Implementation of NSDS 2005-2010 required additional resources both in terms of
                  personnel and skills needs. To this extent, a new organogram was developed and approved
                  by the Board. Of significant importance to the HWSETA, was the establishment of a new
                  division, namely, the Monitoring and Evaluation division. It was realised that while the
                  HWSETA did conduct monitoring and evaluation exercises, they were not conducted at the
                  desired level, resulting in non compliances by the employers and / or training providers not
                  being detected timeously. It is expected that compliance by stakeholders will improve once
                  this division is properly resourced and functioning effectively and efficiently.

                  One of the highlights of the year under review was the hosting of our first National
                  Conference in the Limpopo Province. The conference, which was very well attended,
                  served also as a barometer to assess our effectiveness and efficiency as a service delivery
                  agent. The conference evaluation report indicates that while there is still room for
                  improvement, overall our services are perceived positively and are being appreciated. A
                  customer satisfaction survey conducted by the HWSETA in the year under review serves to
                  substantiate this finding.

                  We held our 3rd AGM in New Brighton, Port Elizabeth. The HWSETA Board had taken a
                  conscious decision to bring the HWSETA AGM to the people at grassroots level. The AGM
                  was well received by those in attendance and the beautifully choreographed song and dance
                  rendered by youth with disabilities added colour to the occasion.

                  In looking at the year ahead, the challenges of increasing access to services to stakeholders
                  in the rural and semi rural areas remain. This challenge gains increased prominence in the
                  light of new initiatives that government is embarking upon. These initiatives are the
                  Accelerated and Shared Growth Initiative for South Africa (ASGISA) and the Joint Initiative
                  for Priority Skills Acquisition (JIPSA). ASGISA attempts to on the one hand, accelerate the

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annual growth of our economy to 6% by 2010, while on the other, it hopes to stimulate job
creation. However, the lack of appropriate skills is a challenge and is of concern, a view
echoed by our President in his State of the Nation Address 2006, wherein he stated that “we
have to pay particular attention to the issue of scarce skills”. The challenge for the HWSETA
is to support ASGISA in whatever way it can and thereby make ASGISA a reality.

Finally, I want to take this opportunity to thank the Board, Management, Staff and
Stakeholders for their cooperation and participation in the skills development process.
Special thanks also go out to the Department of Labour for its support and leadership.




___________________
Dr KP Govender
Chief Executive Officer




                                                                                                7
8
    HWSETA SCORECARD FOR THE PAST 5 YEARS (2000-2005)
                                                                                                                                                                             HWSETA - ANNUAL REPORT 2005-2006




    Performance Assessment Summary

                                                                  Score   Comment
    Assessment against NSDS Targets                               5       Execllent perfomance levels achieved by the HWSETA
    Assessment of Governance and Management                       5       Execllent perfomance levels achieved by the HWSETA
    Assessment of Financial Management                            2       Poor perfomance levels achieved by the HWSETA
    Assessment of Sector Representation and Stakeholder Support   N/A     Not scored but evaluated by DoL, NSA and NEDLAC and comments on possible improvements submitted.
    Overall Score for HWSETA                                      4
Governance Structures
The HWSETA Board is the Accounting Authority of HWSETA. The HWSETA was
established under the auspices of the Skills Development Act, 1998 (Act No. 97 of 1998)
as ammended and is an independent public entity as described in Section 3(b) of the Public
Finance Management Act,1999( Act No. 1 of 1999) as ammended. The Board, as the
Accounting Authority, is accountable for ensuring sound governance.

The Board's role is to provide leadership, direction, and stewardship of the organisation's
assets and interests in relation to the public funds it administers to promote public interests
in skills development within the Health and Social Development (welfare) sector.

Board members
The Board constitutes 24 Board members. The Board meets every two months, or as
required to enable it to assert its governance responsibility as the Accounting Authority, and
as the employer of all HWSETA staff.

The incoming Board members were nominated during 2005 by their respective
constituencies and appointed by the outgoing Board for a term of five years terminating in
March 2010.

The Chairperson and Vice-Chairperson of the Board were elected by the Board in 2005, and
were nominated as Board members from the employer and organised labour sectors,
respectively.

The Board constitutes of representatives from the Health and Social Development
constituencies as indicated in the HWSETA Constitution, Chapter 9(1):

     ! Twelve members representing organised labour within the scope of the Authority
     ! Twelve members representing organised employers within the scope of the Authority
         # Six members representing employer organisations in the private sector
         # Three members representing the Department of Health, as an employer in the
             public sector
          # Three members representing the Department of Social Development, as an
             employer in the public sector
     ! One member representing the Professional Councils, being all the councils in the
       sector that have been established by Acts of Parliament, if the Minister, having
       consulted the members of the Authority representing organised labour, organised
       employers and relevant government departments, considers it appropriate, and
     ! One member representing those employers who are exempt from paying levies in
       terms of section 4 of the Skills Development Levies Act, Act 9 of 1999, if the
       Minister, after having consulted the members of the Authority representing
       organised labour, organised employers and relevant government departments
       considers it appropriate.

Executive Committee of the Board
The Board is assisted by its Executive Committee (EXCO), which comprises of 10 members
from the Board. The members of the Executive Committee were nominated and appointed
by the Board in accordance with the HWSETA's Constitution. The Executive Committee
meets on a monthly basis to assert strategic oversight over the HWSETA's affairs. The term
of office for the Executive Committee is the same as for the Board.



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     HWSETA - ANNUAL REPORT 2005-2006




                   Standing Committees
                   Sub-committees referred to as Standing Committees, which provide technical guidance and
                   recommendations in key portfolio areas, assist the Executive Committee. The Audit
                   Committee is a Standing Committee with direct delegations from, and reporting to the
                   Board. It further assists the Authority in its compliance, oversight, and fiduciary
                   responsibilities within the prevailing legislative prescriptions.

                   Fiduciary responsibility of Board Members
                   All Board members are aware of their fiduciary responsibilities and the need for fair,
                   transparent and accountable decisions and actions. Board members are both individually
                   and collectively liable for all decisions and actions of omission and commission by the Board
                   during their term of office. The Board noted the concern as per the Auditor-General's
                   Emphasis Of Matter with respect to the draft annual Financial Statements submitted for
                   audit purposes on 31 May 2006, not being in compliance with GAAP and GRAP standards.
                   The Board contracted Deloitte's special audit services to address all matters raised by the
                   Auditor General's office, including GAAP and GRAP standards.

                   Statutory Meetings
                   Attendance of members at all statutory meetings is recorded in an attendance register,
                   which is audited annually by the Internal Auditors. All meetings are formally noted, with an
                   agenda and supporting meeting packs. Meeting protocol is formal, and all minutes and
                   documents are formally tabled, considered, addressed, filed and stored. The documents
                   are audited annually through an internal audit by the Internal Auditor.

                   Allowances for Board Members
                   Board members are not staff members of HWSETA, and they do not receive any salaries or
                   benefits. Board members are employers of the HWSETA staff, and as such serve the
                   HWSETA in their capacity as the Accounting Authority with executive oversight,
                   accountability and responsibility. An allowance is paid to Board members for their
                   attendance at and contributions to the statutory meetings. The allowance rates approved by
                   the Board are:

                   ! R1 000.00 for attendance at Board and Executive Committee meetings
                   ! R500.00 for attendance at Standing Committee meetings

                   The Board reviews the allowances annually, and at present the allowances are below the
                   stipulated minimum allowance tariffs as directed by National Treasury. A record is kept of all
                   allowances paid to members, and is also audited through internal audits conducted by the
                   Internal Auditor.

                   Review and Amendments to the HWSETA's Constitution
                   The Board undertook a process to review and revise the HWSETA Constitution. This process
                   has been completed and the revised Constitution was gazetted on 8 September 2005.
                   Consideration is currently being given to change the name of the Health and Welfare SETA to
                   Health and Social Development SETA.

                   Executive Management
                   The Chief Executive Officer (CEO) of HWSETA is Dr K P Govender, the Chief Financial Officer
                   (CFO) is Mr Keith Keys, and the other Executive Manager is Mr Bheki Zulu (Education
                   Training Quality Assurance). The position for the SDP Executive Manager is currently
                   vacant.

                   Staff of HWSETA
                   A total of 49 permanent staff and 6 contractors were on the HWSETA's establishment for the
                   reporting year.

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Governance Structures for the period 1 April 2005 to 31 March 2006

BOARD MEMBERS
No board member resigned during the reporting year.

Table 1: Board Members of HWSETA



                       Board Member      Membership role     Organisation



                      Dr Vernon van Wyk Chairperson         Department of
                                        of the Board        Social
                                        Chairperson of EXCO Development,
                                                            Gauteng

                                        Vice-Chairperson
                                        of the Board
                      Ms Nomsa Dhlamini Vice-Chairperson    NEHAWU
                                        of EXCO




                      Mr Ezra Mfingwana Member              NUPSAW
                                        of the Board
                                        and EXCO




                      Mr Andrew Crichton Member of the      Dept of Health
                                         Board and EXCO




                      Ms Yvonne Mbane    Member of the      Dept of Social
                                         Board and EXCO     Development,
                                                            National




                      Mr Yonke Mahlati   Member of the      NEHAWU
                                         Board




                                                                             11
     HWSETA - ANNUAL REPORT 2005-2006




                                         Board Member           Membership role     Organisation



                                        Mr.                      Member of the    Department of
                                        Mohale Matsuma           Board            Social Development




                                        Ms Shereen Samuel        Member of the    NEHAWU
                                                                 Board




                                        Prof. Marlene Viljoen    Member of the    Department of
                                                                 Board            Health, Free State




                                        Dr. Lulu.                Member of the    Department of
                                        Nkonzo-Mtembu            Board            Health,
                                                                                  KwaZulu Natal




                                        Ms Thembi Gumbi          Member of the    SA Medical
                                                                 Board            Association (SAMA)




                                        Mr. Dire Thomas          Member of the    SA Optometric
                                                                 Board and EXCO   Association




                                        Ms Sharon Slabbert       Member of the    Hospital
                                                                 Board            Association of SA
                                                                                  (HASA)




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Board Member         Membership role     Organisation



Ms Thea Cronje         Member of the    National
                       Board and EXCO   Pathology Group




Dr Lethoko Tsiu        Member of the    SA Dental
                       Board            Association
                                        (SADA)



Ms Dorothy-Anne        Member of the    National Council
Howitson               Board            for Persons with
                                        Physical
                                        Disabilities



Ms Volene Werely       Member of the    DENOSA
                       Board and EXCO




Ms Mary Moleko         Member of the    DENOSA
                       Board




Mr Gavin Moultrie      Member of the    HOSPERSA
                       Board and EXCO




Dr Sanjay Balkaran     Member of the    NPSWU
                       Board and EXCO




                                                           13
     HWSETA - ANNUAL REPORT 2005-2006




                                              Board Member           Membership role     Organisation



                                              Mr Phakamile             Member of the   PAWUSA
                                              Bangani                  Board




                                              Mr Lourens               Member of the   PSA
                                              van der Merwe            Board




                                              Ms Santie Pruis          Member of the   SA Council for
                                                                       Board           Social Services
                                                                                       Professions


                                                                                       SA Gerontological
                                                                                       Association
                                              Mr Trevor Joseph         Member of the   (Payments for
                                                                       Board           attendance are for
                                                                                       the Methodist
                                                                                       Homes for the Aged)




                    Table 2: Equity status/profile of HWSETA Board

                       White      African      Indian                       Coloured        Disabled
                    Male Female Male Female Male Female                    Male Female    Male Female
                     5       5   6        5  1        0                     0      2       -       1




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Table 3: Attendance of Board and Executive Committee meetings by HWSETA Board and Executive Members
                                                Attendance by (24) Board Members   Attendance by (10) EXCO
  Board Members                                            to meetings              Members to meetings
                                               Board (5) Special Board Meetings           EXCO (7)
 Dr Vernon van Wyk Chairperson                    4                 3                        7
 Ms Nomsa Dhlamini Vice-Chairperson               5                 3                        7
 Ms Yvonne Mbane                                  3                 2                        6
 Mr Mohale Matsuma                                4                 2
 Mr Andrew Crichton                               4                 2                         5
 Dr Lulu Nkonzo-Mtembu                            3                 2
 Prof Marlene Viljoen                             2                 2
 Ms Thembi Gumbi                                  3                 2
 Mr Dire Thomas                                   5                 3                         7
 Ms Sharon Slabbert                               5                 3
 Dr Lethoko Tsiu                                  3                 2
 Ms Thea Cronje                                   3                 1                         5
 Miss Dorothy-Ann Howitson                        5                 3
 Ms Volene Werely                                 4                 2                         6
 Ms Mary Moleko                                   5                 3
 Mr Gavin Moultrie                                3                 1                         4
 Mr Yonke Mahlati                                 5                 2
 Ms Shereen Samuel                                3                 2
 Dr Sanjay Balkaran                               5                 3                         5
 Mr Ezra Mfingwana                                3                 0                         5
 Mr Phakamile Bangani                             5                 3
 Mr Lourens van der Merwe                         3                 3
 Ms Santie Pruis                                  3                 3
 Mr Trevor Joseph                                 4                 1




Table 4: Calendar Schedule of HWSETA Board meetings convened
                 Board Meetings                          Special Board Meetings/workshops/AGM
                22 April 2005                                  26 May 2005 (Board Induction)
                27 May 2005                                    11 August 2005 (Board Induction)
                12 August 2005                                 24 November 2005 (AGM)
                23 September 2005
                23 November 2005

COMMITTEE/STANDING COMMITTEE - MEMBERSHIP:
Audit Committee
Table 5: Audit Committee membership and attendance
                              Number of meetings convened: 4
                 Members                                  Number of meetings attended
 Mr I A S Tayob Chairperson      Independent member                   3
 Mr C D Kneale Vice-Chairperson Independent member                    4
 Ms M Williams                   Independent member                   3
 Mr E Mfingwana                  Board member                         2
Notes to Table 5
Meeting attendance fees paid to external Audit Committee members:
Chairperson:               R 4000.00 per meeting attended (independent member)
Audit Committee member: R 3500.00 per meeting attended (independent member)
Board attendance:          R 500.00 per meeting attended


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     HWSETA - ANNUAL REPORT 2005-2006




                   Finance Standing Committee
                   Table 6: Committee Member attendance at Finance Standing Committee Meetings
                                                  Number of meetings convened: 4
                                     Board Members                          Number of meetings attended
                    Mr Ezra Mfingwana    (Chair) NUPSAW                                   4
                    Mr Dire Thomas       SA Optometric Association                        4
                    Mr Mohale Matsuma Dept Social Development, Free State                 4
                    Ms Sharon Slabbert Hospital Association of SA                         4
                    Mr Trevor Joseph     SA Gerontological Association                    4
                    Ms Nomsa Dhlamini NEHAWU                                              2

                   Tender Standing Committee
                   Table 7: Committee Member attendance at Tender Standing Committee Meetings
                                                    Number of meetings convened: 0
                                      Board Members                             Number of meetings attended
                    Ms Thea Cronje        National Pathology Group (NPG)                      0
                    Ms Yvonne Mbane       Dept. of Social Development, National               0
                    Mr Andrew Crichton Dept. of Health, National                              0
                    Mr Yonke Mahlati      NEHAWU                                              0
                    Ms Mary Moleko        DENOSA                                              0

                   ETQA Standing Committee
                   Table 8: Committee Member attendance at ETQA Standing Committee Meetings
                                                    Number of meetings convened: 4
                                                                                                            Number of
                                     Board Members                                                          meetings
                                                                                                             attended
                     Prof Marlene Viljoen (Chair)   Department of Health, Free State                             3
                     Ms Mary Moleko                 DENOSA                                                       4
                     Ms Santie Pruis                SA Council for Social Service Professions                    3
                     Ms Dorothy-Ann Howitson        National Council for Persons with Physical Disabilities      4
                     Stakeholder Representatives
                     Ms T Ngcobo                    SGB                                                       4
                     Ms T Majambe                   Learner Representative                                    2
                     Mr P Lebelo                    Community                                                 1
                     Ms T Peele                     Provider Representative                                   3
                     Mr J Coetzer                   HPCSA                                                     4


                   Governance/Business Plan Standing Committee
                   Table 9: Committee Member attendance at Governance/Business Plan Standing Committee Meetings
                                              Number of meetings convened: 3
                                       Board Members                                   No. of meetings attended
                    Ms Yvonne Mbane (Chair) Department of Social Development, National              3
                    Mr Andrew Crichton      Department of Health, National                          1
                    Ms Thea Cronje          National Pathology Group                                1
                    Ms Sharon Slabbert      Hospital Association of SA                              2
                    Ms Volene Werely        DENOSA                                                  2
                    Mr Yonke Mahlati        NEHAWU                                                  0




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PERFORMANCE APPRAISAL STANDING COMMITTEE
Table 10: Committee Member attendance at Performance Appraisal Standing Committee

                                Number of meetings convened: 2
                                                                          No. of meetings
                                Board Members                             attended
 Ms N Dhlamini              NEHAWU                                               2
 Ms Thea Cronje             National Pathology Group                             2

COMPENSATION STANDING COMMITTEE

Table 11: Committee Member attendance at Bargaining Unit
                                Number of meetings convened: 3
                                                                          No. of meetings
                              Board Members                               attended
 Mr Mohale Matsuma (Chair) Department of Social Development, Free State          3
 Ms Nomsa Dhlamini         NEHAWU                                                3
 Dr Sanjay Balkaran        NPSWU                                                 1
 Mr Ezra Mfingwana         NUPSAW                                                2




                                                                                            17
     HWSETA - ANNUAL REPORT 2005-2006




                                   Finance
                   Mr K Keys - Chief Financial Officer

                   The Finance division had set itself the following targets:

                        ! To encourage public sector employers within the health and social development
                            sector to make contributions to and participate in projects offered by the HWSETA,
                        ! To maximize the potential investment funds income from funds held at
                            recognised financial institutions,
                        !   To ensure that the administration costs remain within the funding limitations,
                        !   To ensure that proper control and monitor processes are in place,
                        !   To identify risk and implement processes to minimize the risk; and
                        !   To ensure that it is in compliance with the PFMA and Treasury Regulations.

                   1. Income

                      Contributions were received from the public sector employers to an amount of
                      R19,893 million.
                      Appreciation must be extended to all these employers that contributed to this year's
                      income.

                      HWSETA’s income for the financial year was R143, 460 million, which shows a
                      decrease of 1% in comparison with last year. This is mostly due to the demarcation of the
                      SETAs and the subsequent changing of the contribution levels by National Treasury.

                   2. Investments

                      HWSETA has made the strategic decision to invest in conservative investment accounts
                      so to minimise the risk. Funds are therefore invested in low-risk interest bearing
                      accounts with commercial banks.

                      The interest earned for the year was R 11,659 million.

                   3. Expenditure

                      The total expenditure for the year amounted to R170, 019 million. This represented an
                      increase of 86%. Of the total expenditure, the grant expenditure was
                      R136,527million and administration costs were R29, 244 million.

                   4. Surplus

                      a. Administration
                         The Administration surplus of R 4, 687 million is attributable to the surplus carried
                         over from the previous year. This will be transferred to discretionary funds.

                      b. Employer Grants
                         The surplus on employer grants reported last year changed to a deficit of R 7,114
                         million and is the net result of the reduction in revenue and higher expenditure on
                         grants.




18
5. Reserves

   The surplus of last year changed to a deficit for the year under review amounting to
   R26, 559 million. This is a decrease of 149% in comparison with the previous year.
   This deficit added to the reserves held at 31 March 2005, brings the reserves to a
   total R 208,752 million of which R12, 057 million is in the administration reserve;
   R 119,927 in the discretionary grant reserve and R 76,768 million in mandatory grant
   reserve. Provision is made for the payment of learnerships approved in 2005 -2006
   financial year, which total R 12,921 million.

Appreciation

Appreciation is extended to all stakeholders for their participation and support in the
interactions over the year. A special note of appreciation to all the staff at the HWSETA for
the support and hard work, which enables the HWSETA to achieve the results reported.




                                                                                                19
     HWSETA - ANNUAL REPORT 2005-2006




                   Skills Development Planning
                   Skills Development Planning Division

                   The skills development planning division has seen a change in management during the
                   course of the year.

                   The WSP Section has completely revolutionized its processes, procedures and customer
                   service. The success of this section is a collective effort of both internal and external
                   stakeholders, who continue to demonstrate support through this transformation process.
                   We have come a long way from WSPs faxed and hand delivered, drawn out timeframes for
                   disbursement and unhappy stakeholders. WSP applications are now mostly electronic,
                   providing efficient service to our stakeholders.

                   Graph 1: An illustration on the number of organisations targeted as compared to those
                           who submitted WSP is presented here.


                                                                           684
                    700
                    600
                    500
                    400                                                                       RECEIVED
                    300
                                                                                 300
                                                                                              TARGET
                    200
                    100
                                     87 56               84 71
                     0
                                     LARGE              MEDIUM               SMALL


                   Achievements on Business Plan targets

                   The target for WSP skills development facilitator training was achieved. A total of 45 Skills
                   Development Facilitators (SDFs) were trained nationally, this included registered HWSETA
                   SDFs and Unemployed Youth, who have subsequently been contracted to the HWSETA as
                   SDFs.

                   The HWSETA experienced an increase in the submittance of WSPs from small levy paying
                   firms (table 1). A total of 642 Work Skills Plans were received from levy paying
                   organisations (table 1) and 154 from levy exempt organisations (table 2). This is 20%
                   more than the expected target for the financial period. This could be contributed to the
                   ongoing effort in educating SMMEs to complete WSP/ATR plans.

                   In total the discretionary grants that were disbursed to the sector specific skills was
                   R 3,036m. An amount of R 902,851 was utilised of the R1,004m allocated (table 3).
                   Furthermore, an amount of R 962,512 has been disbursed for the HIV/Aids discretionary
                   grants.

                   A total of 67 workshops were conducted during the financial year. Most of these
                   workshops were held in peri-urban areas (table 4).




20
Table 1: WSP/ATR Levy Paying Organisations.
WSP’S/ATR’S received from levy paying organisations for the financial period 2004-2005 and 2005-2006
 Organisations with 150 + employees (large firms)
                                                                    Target          Actual Received
 Number of WSPs 2005-2006 received                                    64                   58
 Number of ATRs 2004-2005 received                                    55
 Organisations with 50 and 140 employees (medium firms)
 Number of WSPs 2005-2006 received                                    74                   72
 Number of ATRs 2004-2005 received                                    50
 Organisations with less than 50 (small firms)
 Number of WSPs 2005-2006 received                                   300                  512
 Number of ATRs 2004-2005 received                                   523

Table 2: WSP Levy Exempt Organisations.
                   Number of WSPs/ATRs submitted by levy exempt organisations
 Organisations with 150 + employees (large firms)                                   Actual Received
 Number of WSPs 2005-2006 received                                                 31
 Number of ATRs 2004-2005 received                                                 34
 Organisations with 50 and 140 employees (medium firms)
 Number of WSPs 2005-2006 received                                                 17
 Number of ATRs 2004-2005 received                                                 15
 Organisations with less than 50 (small firms)
 Number of WSPs 2005-2006 received                                               106
 Number of ATRs 2004-2005 received                                               105


Graph 2: Geographic spread of organisations which have submitted WSPs for the fincial period 2005-2006

                               366
  400                                                                          Eastern Cape
  350                                                                          Free State
  300                                                                          Gauteng
                                                                               KZN
  250
                                                                               Limpopo
  200                                                                          Mpumalanga
                    142                                       128              North West
  150
                                     100                                       Northern Cape
  100
                                                                               Undefined
  50
                          16               36 28 23
                                                                               Western Cape
                                                      8   8
   0
                                              WSPs received




                                                                                                         21
     HWSETA - ANNUAL REPORT 2005-2006




                  Table 3: The following levy exempt organizations have submitted WSPs which have been evaluated
                  and accepted for discretionary grant funding, for the financial period 2005-2006:


                     Organisation Name                                                         Amount Allocated

                    Bono Self Help Project                                                             6,000.00
                    Bessies Consultancy                                                                8,000.00
                    Booth Memorial Hospital                                                           19,000.00
                    Administration Homes and Services                                                 19,000.00
                    Afrikaanse Christelike Vroue Vereeniging                                             900.00
                    ACVV Oue Tehuis                                                                    9,000.00
                    Amukelani Resource Centre                                                         12,600.00
                    Anaconda Youth In Action                                                           9,600.00
                    Association for Northern Cape Rural Advancement                                   19,000.00
                    Echo Foundation                                                                   15,000.00
                    Soweto Care of the Aged                                                            6,780.00
                    Thusanang Child & Family                                                           2,600.00
                    Rhema Christian Service Foundation                                                17,500.00
                    Islamic Careline                                                                  19,000.00
                    Cape Peninsula Welfare Organisation                                               19,000.00
                    Crossroad Pharmacy                                                                19,000.00
                    Dr Marwha Pratice                                                                  7,500.00
                    Dzekula Development Organisation                                                   9,600.00
                    Denmar Specialist Psychiatric Hospital                                            19,000.00
                    Dr N Daya                                                                            800.00
                    Cancer Association of SA                                                          19,000.00
                    Sarepta Ags Outehuis                                                              11,500.00
                    Charles James Santa Centre                                                        19,000.00
                    Vuwani Victim Empowerment                                                         12,600.00
                    Cotlands Babies Sanctuary                                                         19,000.00
                    The Centre for the Study of Violence & Reconciliation                             19,000.00
                    Family Life Support Centre                                                         1,700.00
                    Muthande Society for the aged                                                     16,000.00
                    Sunshine Centre                                                                   19,000.00
                    South Western Jhb Society                                                         12,600.00
                    Hospice Assoc of the Witwatersrand                                                10,000.00
                    Youth for Christ                                                                  19,000.00
                    Zamukupila Development & Trading Trust                                            19,000.00
                    Ebeneza Home Based Care                                                           19,000.00
                    Focus Youth Organisation                                                           9,600.00
                    Hlayisanani Community and Training Centre                                          6,000.00
                    Herfsblaar                                                                        19,000.00
                    Intercare Managed Health                                                          19,000.00
                    Ikamva Labantu                                                                    19,000.00
                    Ikhwezilokusa Home                                                                19,000.00
                    James House                                                                       19,000.00
                    KOINONIA Weslyn                                                                   10,000.00
                    Kwamashu Christian Centre                                                         19,000.00
                    KZN Progressive                                                                    19,000.0
                    KZN Home Care Centres                                                             19,000.00
                    Lethukukhanya                                                                     19,000.00
                    Life Line                                                                            750.00
                    Mosiac Training Service and Healing                                                5,990.00
                    Mutale Victim Empowerment                                                          9,600.00
                    Munna Ndi Nnyi                                                                    12,000.00
                    Mashamba                                                                           9,600.00
                    Methodist Homes                                                                  19,000.000
22
  Organisation Name                                          Amount Allocated

   Network of Aids                                                 19,000.00
   Nomkhubulwane                                                   19,000.00
   Optical & Eye Site                                              19,000.00
   Peace Haven Community Services                                   2,800.00
   St Lukes Combined Hospice                                       19,000.00
   Seedat Pharmacy                                                 16,000.00
   Summerstrand Cheshire Homes                                     10,000.00
   Sarah Fox Childrens Convalescent                                   840.00
   Sharpeville Child & Family                                       1,000.00
   SA Nationale Raad vir Dowes                                     19,000.00
   Society for the Prevention of Cruelty to Prisoners              19,000.00
   Thokosa Training Centre                                         19,000.00
   The Somerset West Society                                       19,000.00
   The Valley Trust                                                19,000.00
   The Haven Night                                                  9,800.00
   The Haven Night - Wynberg                                          737.00
   The Association for the Aged                                     5,871.00
   Vleifontein Community Based Care                                12,000.00
   Vereniging Vir Kinders                                          19,000.00
   Youth for Christ                                                19,000.00
   Zimbambeleni                                                     8,000.00
   Entokozweni HIV Aids                                            19,000.00
   TOTAL                                                           1,003,868



Table 4: Total of WSP Levy Exempt Organisations

  #            Organisation Name                                Levy Number

  1        Bono Self Help Project                               L030757167
  2        Bessies Consultancy                                  L380752289
  3        Booth Memorial Hospital                              L090702582
  4        Administration Homes and Services                    L230702385
  5        Afrikaanse Christelike Vroue Vereeniging             L030706321
  6        ACVV Oue Tehuis                                      L270706015
  7        Amukelani Resource Centre                            L170757142
  8        Anaconda Youth In Action                             L550757183
  9        Association for Northern Cape Rural Advancement      L190704975
  10       Echo Foundation                                      L870705474
  11       Soweto Care of the Aged                              L520722184
  12       Thusanang Child & Family                             L560714521
  13       Rhema Christian Service Foundation                   L790735619
  14       Islamic Careline                                     L840738373
  15       Cape Peninsula Welfare Organisation                  L850702665
  16       Crossroad Pharmacy                                   L830728897
  17       Dr Marwha Pratice                                    L100734732
  18       Dzekula Development Organisation                     L580757203
  19       Denmar Specialist Psychiatric Hospital               L020712040
  20       Dr N Daya                                            L140718646
  21       Cancer Association of SA                             L270720859
  22       Sarepta AGS Outehuis                                 L300702042
  23       Charles James Santa Centre                           L140707664
  24       Vuwani Victim Empowerment                            L830749521


                                                                                23
     HWSETA - ANNUAL REPORT 2005-2006




                    #       Organisation Name                                      Levy Number

                    25     Cotlands Babies Sanctuary                               L400718427
                    26     The Centre for the Study of Violence & Reconciliation   L570728180
                    27     Family Life Support Centre                              L390741561
                    28     Muthande Society for the Aged                           L760708075
                    29     Sunshine Centre                                         L670722323
                    30     South Western Jhb Society                               L230722102
                    31     Hospice Assoc of the Witwatersrand                      L870719632
                    32     Youth for Christ                                        L880747284
                    33     Zamukupila Development & Trading Trust                  L490749007
                    34     Ebeneza Home Based Care                                 L600749412
                    35     Focus Youth Organisation                                L110757145
                    36     Hlayisanani Community and Training Centre               L610757173
                    37     Herfsblaar                                              L750712350
                    38     Intercare Managed Health                                L190716771
                    39     Ikamva Labantu                                          L050703232
                    40     Ikhwezilokusa Home                                      L870734227
                    41     James House                                             L580752188
                    42     KOINONIA Weslyn                                         L430741381
                    43     Kwamashu Christian Centre                               L220725149
                    44     KZN Progressive                                         L690736188
                    45     KZN Home Care Centres                                   L240748998
                    46     Lethukukhanya                                           L690730843
                    47     Life Line                                               L420728760
                    48     Mosiac Training Service and Healing                     L120726023
                    49     Mutale Victim Empowerment                               L410757142
                    50     Munna Ndi Nnyi                                          L500757176
                    51     Mashamba                                                L370757157
                    52     Methodist Homes                                         L940720420
                    53     Network of Aids                                         L310739158
                    54     Nomkhubulwane                                           L620755027
                    55     Optical & Eye Site                                      L270751987
                    56     Peace Haven Community Services                          L140757891
                    57     St Lukes Combined Hospice                               L840735767
                    58     Seedat Pharmacy                                         L830721835
                    59     Summerstrand Cheshire Homes                             L680705904
                    60     Sarah Fox Childrens Convalescent                        L680703032
                    61     Sharpeville Child & Family                              L100714494
                    62     SA Nationale Raad vir Dowes                             L740722311
                    63     Society for the Prevention of Cruelty to Prisoners      L880743085
                    64     Thokosa Training Centre                                 L230752414
                    65     The Somerset West Society                               L050702101
                    66     The Valley Trust                                        L030709770
                    67     The Haven Night                                         L530703166
                    68     The Haven Night - Wynberg                               L460728118
                    69     The Association for the Aged                            L930706736
                    70     Vleifontein Community Based Care                        L930757168
                    71     Vereniging Vir Kinders                                  L320710280
                    72     Youth for Christ                                        L840721536
                    73     Zimbambeleni                                            L460723929
                    74     Durban Coastal and Mental                               L110707207
                    75     Entokozweni HIV Aids                                    L840756854




24
         Table 5: Workshop schedule for the financial year 2005/6 - Skills Development Implementation

       PURPOSE                                               GAUTENG   W.CAPE      E.CAPE     MPUMALANGA   KZN   LIMPOPO FREE STATE   N.WEST   N.CAPE         DATE

     1. Skills Development Road show-                           2        2             2            2      2        2         2         2        1          April 2005
        to inform stakeholders on the submission
        dates for the WSP and ATRs
     2. Skills Development Facilitator Forum                    2        2             2            2      2        1         2         2        2          July 2005
     3. Contacted Skills development Facilitator                1                                                                                          August 2006
        training
     4. Government department meeting                           1                                                                                           August 2005
     5. Learnership implementation                              2        2             2            2      2        2         2         2        2        September 2005
        to inform employers of the criteria to participate
     6. Levy exempt workshop-                                   1        1             1                            1                                     September 2005
        to advise the levy exempt employers on
        the benefits of participating in learnerships
        as well how to participate
     7. Ancillary Health Care Employers meeting                 1                                                                                         November 2005
     8. Ancillary Health Care Providers meeting                 1                                                                                         November 2005
     9. Veterinary meeting                                      1                                                                                           August 2005
     10. Government department learnership                      1        1                                                              2        2      Aug-September 2005
         implementation training




25
     HWSETA - ANNUAL REPORT 2005-2006




                        Learnerships

                        The number of learners compared to the previous year has decreased from 6742 to 2330.
                        This is due to the reduction of funding received. The total amount of R 55,180m has been
                        paid for Nursing, Pharmacist Assistant and Diagnostic Radiography. The Discretionary
                        Funds available in this financial year to fund learnerships was also significantly less when
                        compared to the previous financial year.

                        Due to the new targets set with the changes to the NSDS II with the Department of Labour,
                        the HWSETA has committed itself to train 1319 (18.1) learners and 1319 (18.2) learners.
                        It should be noted in table 5 that the HWSETA did not achieve the set targets. The reason for
                        this was in the delay of the implementation of learnerships and MoAs which were received
                        late from employers. In total the HWSETA has 3 507 learners registered (table 8).

                        The budget allocated this year for the funding of learnerships in the Public and Large Private
                        Organisations was R51m and the budget allocated for learnerships in the SMME Sector was
                        R6m. The over expenditure in the Public and Large Private Organizations was due to an over
                        response in applications. The under expenditure in the SMME sector was due to an under
                        response in applications. In total for the sector 3 941 learners are currently undergoing
                        learnership training (see MoU)
         Table 6: Public and Large Private Organisations
                                                   18.1     Amount         18.2         Amount     Total         Total
                           Name
                                                           Approved                   Approved Learners       Amount
        AUXILIARY NURSING                 222               2,008,000.00    420   13,389,900.00     642 15,397,900.00
        BASIC PHARMACIST ASSISTANT        136               1,448,701.98     49    1,809,990.00     185 3,258,691.98
        BRIDGING YEAR ONE                 146               1,351,201.98    107    4,371,450.00     253 5,722,651.98
        BRIDGING YEAR TWO                 123               1,351,201.98    131    5,627,730.00     254 6,978,931.98
        CLINICAL SPECIALISATION: ICU       75                 696,500.00                             75    696,500.00
        DIAGNOSTIC RADIOGRAPHY YEAR ONE    10                 105,000.00     29    1,432,050.00      39 1,537,050.00
        DIAGNOSTIC RADIOGRAPHY YEAR TWO    10                 105,000.00     29    1,432,050.00      39 1,537,050.00
        DIAGNOSTIC RADIOGRAPHY YEAR THREE 10                  105,000.00     44    1,543,080.00      54 1,648,080.00
        ENROLLED NURSING                  302               2,517,403.96    277    8,333,100.00     579 10,850,503.96
        PHLEBOTOMY TECHNIQUE               31                 535,500.00     22      940,500.00      53 1,476,000.00
        POST BASIC PHARMACIST ASSISTANT   113               1,086,500.00     44    1,453,690.00     157 2,540,190.00
        TOTALS:                          1178              11,310,009.90   1152   40,333,540.00   2330 51,643,549.90

     Table 7: List of SMME Sector
                                             AMOUNT        AMOUNT        TOTAL       TOTAL                  TOTAL
                  Name                 18.1 APPROVED 18.2 APPROVED FUNDED 18.1 FUNDED 18.2                FUNDED
     Basic Pharmacist Assistant        174 10,500.00   13 35,490.00 1,827,000.00 461,370.00              2,288,370.00
     Diagnostic Radiography Year One                   15 32,550.00                 488,250.00             488,250.00
     Diagnostic Radiography Year Two                   15 32,550.00                 488,250.00             488,250.00
     Diagnostic Radiography Year Three                 15 35,070.00                 507,150.00             507,150.00
     Enrolled Nursing                     2 10,500.00                   21,000.00                            21,000.00
     Auxilliary Nursing                                15 30,450.00                 456,750.00             456,750.00
     Post Basic Pharmacist Assistant    38 10,500.00   12 35,490.00 399,000.00 425,880.00                  824,880.00
     Totals:                           214 31 500.00   85 201,600.00 2,247,000.00 2,827,650.00           5,074,650.00
     Note: Some employers accepted reduced learnership funding




26
     Table 8: Learnership Register
Learnership              Age          African        White      Coloured            Indian          Total      Grand
Description              Group   M       F D     M    F D      M F       D     M       F D    M       F D      Total

Certificate in General   < 35    98    512   7   5    52   0   12   70     0   2     11   2   117   645    9   762
Nursing: Auxiliary       35 +    12    239   5   0    4    0   0    20     0   0     0    0    12   263    5   275
Certificate in General   < 35    29    269   9   5    92   2   2    72     0   2     30   4    38   463   15   501
Nursing: Enrolled        35 +    11    147   2   0    20   1   5    41     0   0     4    0    16   212    3   228
Diploma in General       < 35    15    199   3   5    85   1   1    66     1   0     33   0    21   383    5   404
Nursing: Bridging        35 +    4     138   3   1    40   0   4    46     1   0     9    0     9   233    4   242
Post Basic Diploma in    < 35    0      8    0   0    14   0   0    3      0   0     4    0     0    29    0    29
Medical/Surgical
Nursing Elective:
Operating Theater        35 +    0      1    0   0     9   0   0    1      0   0     2    0    0    13    0     13
Nursing
Post Basic Diploma in    < 35    2      7    0   1    15   0   0    5      0   0     9    0    3    36    0     39
Medical/Surgical
Nursing Elective:        35 +    3     21    0   0    11   0   0    7      0   0     8    0    3    47    0     50
(Critical Care)
Certificate              < 35    49    77    1   5    46   0   12 17       0   13    18   1   79 158 2         237
Pharmacist               35 +    6     6     0   0    10   0   0 3         0   0     2    0    6 21 0           27
Assistant Basic
Post Basic               < 35    4     18    1   1     9   0   4    9      0   5     5    0   14    41    1     55
Pharmacist               35 +
Assistant Learnership            8     9     0   1     0   0   1    6      0   6     2    0   16    17    0     33
FET Certificate:         < 35    8     28    0   1     6   0   1    8      0   0     4    0   10    46    0     56
Phlebotomy               35 +    0     1     0   0     3   0   0    0      0   0     5    0    0     9    0      9
Techniques
Diagnostic               < 35    13 23 0         0     7   0   1    11     0   2     3    0   16 44 0           60
Radiography              35 +    0   0 0         0     0   0   0    0      0   0     0    0    0  0 0            0
GET Certificate in       < 35    29 373 10       2     1   0   3    25     1   0     1    0   34 400 11        434
Ancillary Health         35 +    2 42 2          0     1   0   0    7      0   0     1    0    2 51 2           53
Care
                                 293 2118 43     27 425    4   46 417      3   30 151     7   396 3111 57      3507
Totals


     Table 9: Learnerships implemented in 2005/06
Qualification Title                                            NQF Level
Certificate in General Nursing: Auxiliary                         4
Certificate in General Nursing: Enrolled                          4
Diploma in General Nursing: Bridging                              5
Diploma in Primary Health Care: Post Basic                        6
Post Basic Diploma in Medical/Surgical Nursing: Elective          6
: Critical Care
: Operating Theatre Nursing
Certificate Pharmacist Assistant: Basic                             3
Post Basic Pharmacist Assistant Learnership                         4
Ancillary Health Care Worker                                        1
Certificate in Social Auxiliary Work                                4
Diagnostic Radiography                                              6
Certificate Phlebotomy Technique                                    4




                                                                                                                     27
     HWSETA - ANNUAL REPORT 2005-2006




            Projects

            In the financial year the following were achieved:

            During the 2004-2005 financial period the HWSETA initiated the process of entering into
            Memoranda of Agreement with recipients of Discretionary Grants for the first time. By February 2005
            only a few of these MoAs had been signed off thus leading to a disruption in the paying out of
            discretionary grants. The MoAs have been revised in consultation with our lawyers and redistributed
            to interest parties. In total 105 MoAs have been received and approved at date of this report.

            Sector Skills Priorities Funding awarded in 2004-2005

            R9,015 million of the Discretionary Grant budget for 2004-2005 was allocated to Sector Skills
            Priorities. Attaining accurate lists of learners prior to approving the first payment of the grant proved a
            challenge for staff. Ultimately, thirty eight (38) organisations were approved for funding.

            Project for the Levy-Exempt Sector

            In the 2004-2005 financial year, the HWSETA Board approved R5 million for a Special Project to
            promote the participation of the levy-exempt sector through funding of their training needs as
            identified in their Workplace Skills Plans (WSP). We could only support sixteen levy exempt
            organisations. The reason for the low number of participation was that a large number of these
            organisations failed to comply with the requirements for the successful approval of the WSP.

            ABET

            An Expression of Interest inviting all registered stakeholders of the HWSETA to apply to participate in
            the training of workers in Adult Basic Education and Training was advertised in February 2006. The
            responses, however, revolved largely around applications to train non-workers. This led to the
            implementation being put on hold whilst the HWSETA raised this problem with the Department of
            Labour. The initiative has resulted in the target group now including workers as well as non-workers,
            and in addition, training may also occur across levels 1-4 of ABET in each year of implementation of
            the National Skills Development Strategy. An amount of R 8 million has been allocated to train 4000
            learners.

            Bursaries

            The HWSETA Board approved R15m but committed only R10,250 million for the implementation of
            Bursaries in the Public Sector. The funds allocated to the Social Development sector were centralised
            under the co-ordination of the National Department of Social Development and has culminated in
            scholarships being awarded to one hundred and ninety (190) students nationally. One of these
            students is deaf and is the first deaf person to read for a Bachelor of Arts Social Work degree at the
            University of Witwatersrand (Wits).

            NSF Projects

            The HWSETA was awarded R18,7m from NSF to train eight hundred (800) learners on the Ancillary
            Health Care learnership but only R6,880m was received in the current year. Implementation
            commenced in February 2006. Six hundred and sixty five (665) learners have been registered for this
            project. The balance could not be registered due to the employers not meeting with the requirements
            of site validation for the carrying out of accredited training in this qualification. A total amount of
            R4,248m was spent on special projects. The learners registered are from the Eastern Cape, Kwa-
            Zulu Natal, North West, Limpopo, Mpumalanga and Northern Cape provinces in keeping with our
            intention of decentralising our funding of training.
            The HWSETA applied for funding from the NSF during the Critical Skills Funding window. This

28
application was submitted by the deadline during January 2006. The Department of
Labour conducted a Due Diligence visit during March 2006 and the final outcome is
awaited.

There are challenges facing the HWSETA in the coming year, such as: Black Economic
Empowerment Grants, New Joint Venture Creation Grants, and Workplace Experience
Grants and ABET Grants. The HWSETA will be conducting relevant research in some of
these areas before initiation.




                                                                                     29
         HWSETA - ANNUAL REPORT 2005-2006




                                                                    MoU with Dol
                                                      ACHIEVEMENTS AGAINST TARGETS (2005 / 2006)
NSDS 2005-2010 Success Indicators, HWSETA Plan for 2005-2010 Five                          HWSETA Target                                Achievements to 31 March 2006
      National Target & Outcomes             Year Target & Outcome                          for 2005 - 2006
Indicator 1.1                            Target is the same for each year from The SSP or Annual Update is signed off                 The Sector Skills Plan is being developed
                                         2005 to 2010 as described under       by the:                                                and approval for extension has been
Skills development supports national and Annual Target.                                                                               granted for November 2006.
sectoral growth, development and equity                                        a) SETA Board Chairperson.
priorities.
                                                                               b) SETA/ DoL agreed growth, development
                                                                                  and equity strategy driver.

                                                                                       c) DoL Executive Manager responsible
                                                                                          for quality assurance of SSP.

                                                                                       The SSP or Annual update submitted on
                                                                                       time as per DoL Guidelines.

                                                Target is the same for each year from Annual guide on critical skills needs for the   A total number of 45 Skills Development
Indicator 1.2                                   2005 to 2010 as described under       sector developed and available to learners.     Facilitators were trained nationally.
                                                Annual Target.
Information on critical skills widely available                                       45 Sector Specialists trained in the sector
to learners. Impact of information                                                    for the year.
dissemination researched, measured and
communicated in terms of rising entry,                                                The TARGET for the large firms is 64 firms.
completion and placement of learners.           Target is set for each year from
                                                2005 to 2010 as described under       The TARGET for medium firms is 74 firms.
                                                Annual Target.
                                                                                      Two scores will be calculated, one for each
                                                                                      sub sector. Score 3a for Large companies
                                                                                      And Score 3b for medium companies.

Indicator 2.1                                  Target is set for each year from 2005   The TARGET for the large firms is 64 firms.    A total number of 58 large firms and 72
                                               to 2010 as described under                                                             medium firms' received skills development
By March 2010 at least 80% of large firms'     Annual Target.                          The TARGET for medium firms is 74 firms.       Grants.
and at least 60% of medium firms'
employment equity targets are supported                                                Two scores will be calculated, one for each
by skills development. Impact on overall                                               sub sector. Score 3a for Large companies
equity profile assessed.                                                               and Score 3b for medium companies.

Indicator 2.2                                Target is set for each year from 2005      The TARGET for the different number of         A total number of 512 small levy paying
                                             to 2010 as described under Annual          small firms is 300 firms (with reference       firms received skills development grants.
By March 2010 skills development in at least Target.                                    to number of small firms after 1st August
40% of small levy paying firms supported                                                2005).
and the impact of the support measured.
                                                                                        Target can only be verified after the end
                                                                                        of August 2005.

                                                                                        Change in levy thresholds needs to be
                                                                                        determined first.

                                                                                        8 500 small firms, will still need to be
                                                                                        serviced as they contributed levies up
                                                                                        to end July 2005. As of 1 August 2005
                                                                                        these firms will not contribute any
                                                                                        levies to the SETA.

Indicator 2.4                                  Target for the sector for the period     Not applicable for 2005 to 2006 0 (zero).      Not applicable for the 2005/ 06 financial
                                               2005 to 2006 is 33 enterprises.                                                         year.
By March 2010, at least 500 enterprises                                                 The Minister has not yet approved any
achieve a national standard of good                                                     standards of good practice.
practice in skills development approved
by the Minister of Labour.                                                              Until DoL has communicated more
                                                                                        information on indicator 2.4, it is
                                                                                        difficult to commit to any target for
                                                                                        the current year.


    30
                                                                   MoU with Dol
                                                ACHIEVEMENTS AGAINST TARGETS (2005 / 2006) (continued)
NSDS 2005-2010 Success Indicators, HWSETA Plan for 2005-2010 Five                                   HWSETA Target                     Achievements to 31 March 2006
   National Target & Outcomes         Year Target & Outcome                                         for 2005 - 2006
Indicator 2.5

Annually increasing number of small BEE          Target for the sector for the period   Not applicable for 2005 to 2006 0 (zero).   Not applicable for the 2005/ 06 financial
firms and BEE co-operatives supported            2006- 2010 will be established                                                     year.
by skills development. Progress measured         after completion of the first annual   DoL has not yet finalised guidelines and
through an annual survey of BEE firms            survey in 2005 2006.                   therefore indicator 2.5 cannot addressed
and BEE co-operatives within the sector                                                 in this current year.
from the second year onwards. Impact
of support measured.

Indicator 2.7                                    Target for the sector for the period   Target for the sector for the period         Not applicable for the 2005/06
                                                 2005 to 2010 is 4 000 learners for     2005 to 2006 is 0 (zero) learners.           financial year.
By March 2010 at least 700 000 workers           2010.
have achieved at least ABET Level 4.                                                    Most employers in the health and Social
                                                                                        Development sectors have outsourced
                                                                                        services that employ this category of
                                                                                        employees that need ABET training.
                                                                                        Most employees in the sectoral already
                                                                                        have NQF level 4 qualifications.

Indicator 2.8                                    Target for the sector for the period   Target for the sector for the period         2 057 workers were assisted to enter
                                                 2005 to 2010 is 8 368 Learners.        2005 to 2006 is 1 319 Learners.              programmes for 2005/ 06 financial year.
By March 2010 at least 125 000 workers
assisted to enter and at least 50%
successfully complete programmes,                                                       Equity Targets:                              Equity Target Achievements:
including learnerships and apprenticeships,                                             Baseline: 1 319                              Black learners: 1 509
leading to basic entry, intermediate and                                                Black learners: 1 121                        Female learners: 1 887
high level scarce skills. Impact of                                                     Female learners: 712                         Young learners: 1 253
assistance measured.                                                                    Disabled learners: 53                        Disabled learners: 105

Indicator 3.2                                    Target for the sector for the period   Target for the sector for the period         93 non levy paying enterprises received
                                                 2005 to 2010 is 134 enterprises.       2005 to 2006 is 20 enterprises.              skills development support.
By March 2010, at least 2000 non-levy
paying enterprises, NGOs, CBOs, and
community-based co-operatives supported
by skills development. Impact of support
on sustainability measured with a targeted
75% success rate.
Indicator 4.1                                    Target for the sector for the period     Target for the sector for the period      A total number of 1 874 unemployed
                                                 2005 to 2010 is 8 368 Learners.          2005 to 2006 is 1 319 Learners.           people were assisted to enter programmes
By March 2010 at least 125 000 unemployed                                                                                           for 2005/ 06 financial year. Of the 1 731
people assisted to enter and at least 50%                                                 NSF number of learners: 800               learners 464 are NSF learners and the
successfully complete programmes,                                                                                                   remaining 1 267 are unemployed people
including learnerships and apprenticeships,                                                                                         who entered programmes.
leading to basic entry, intermediate and high
level scarce skills.                                                                                                                Equity Target Achievements:
                                                                                          Equity Targets:
Impact of assistance measured.                                                                                                      Black learners: 1 165
                                                                                          Baseline: 1 319
                                                                                          Black learners: 1 121                     Female learners: 1 529
                                                                                          Female learners: 712                      Young learners: 1 465
                                                                                          Disabled learners: 53                     Disabled learners: 77
Indicator 4.2                                    Target for the sector for the period                                               Not applicable for the 2005/06
                                                                                          Target for the sector for the period
                                                 2005 to 2010 is 1 000 Learners.          2005 to 2006 is 0 (zero) Learners.        financial year.
100% of learners in critical skills
programmes covered by sector agreements
from FET and HET institutions assisted to
gain work experience locally or abroad, of
whom at least 70% find placement in
employment or self-employment.




                                                                                                                                                                  31
           HWSETA - ANNUAL REPORT 2005-2006




                                                                          MoU with Dol
                                                            ACHIEVEMENTS AGAINST TARGETS (2005 / 2006)
 NSDS 2005-2010 Success Indicators, HWSETA Plan for 2005-2010 Five                                      HWSETA Target                     Achievements to 31 March 2006
    National Target & Outcomes         Year Target & Outcome                                            for 2005 - 2006
Indicator 4.3                                        Target for the sector for the period     Target for the sector for the period      Not applicable for the 2005/06
                                                     2005 to 2010 is 669 young persons.       2005 to 2006 is 0 (zero) young persons.   financial year.
By March 2010, at least 10,000 young people
trained and mentored to form sustainable
new ventures and at least 70% of new
ventures in operation 12 months after
completion of programme.

Indicator 5.1                                        Target for the sector for the period   Target for the sector for the period        1 Institute of Sectoral or Occupational
                                                     2005 to 2010 is 5 institutes.          2005 to 2006 is 1 institute.                Excellence (ISOE) was recognised and
By March 2010 each SETA recognises and                                                                                                  supported for the 2005/ 06 financial year.
supports at least five Institutes of Sectoral
or Occupational Excellence (ISOE) within
public & private institutions and through
Public Private Partnerships (PPPs) where
appropriate, spread as widely as possible
geographically for the development of people
to attain identified critical occupational skills,
whose excellence is measured in the number
of learners successfully placed in the sector
and employer satisfaction ratings of their
training.

Indicator 5.2                                        Target for the sector for the period   Target for the sector for the period        Not applicable for the 2005/ 06 financial
                                                     2005 to 2010 is 2 institutes.          2005 to 2006 is 0 (zero) institutes.        year.
By March 2010, each province has at least
two provider institutions accredited to manage
the delivery of the new venture creation
qualification. 70% of new ventures still
operating after 12 months will be used as a
measure of the institutions' success.

Indicator 5.3                                        Target is set for each year from       Note: a measurement methodology with        Not applicable for the 2005/ 06 financial
                                                     2005 to 2010 as described under        outcomes, targets and criteria is to be     year.
By March 2010 there are measurable                   Annual Target.                         developed in conjunction with SAQA
improvements in the quality of the services                                                 and SETA ETQAs.
delivered by skills development institutions
and those institutions responsible for the
implementation of the NQF in support of the
NSDS.

Indicator 5.4                               Target is set for each year from                Note: the measurement methodology           Not applicable for the 2005/ 06 financial
                                            2005 to 2010 as described under                 with outcomes, targets and criteria         year.
By March 2010, there is an NSA constituency Annual Target.                                  is to be developed in conjunction with
based assessment of an improvement in                                                       the NSA.
stakeholder capacity and commitment to the
National Skills Development Strategy.




      32
                 Education and Training Quality
                 Assurance
 Mr. B Zulu - Executive Manager

In the period under review, the HWSETA set itself the following targets in order to deliver on
its mandate of quality assured education and training within the health and social
development sector:

!   Maintenance of the HWSETA Quality Management System.
!   Recognition and support of one (1) Institute of Sectoral or Occupational Excellence
    (ISOE).
!   Facilitation of the generation of unit standards and qualifications for 4 new
    learnerships and other strategic/critical learning programmes.
!   Provision of support for the implementation of 2 learnerships and other
    strategic/critical learning programmes.
!   Capacity building of 80 education and training providers to offer 4 new learnerships
    and other strategic/critical learning programmes.
!   Accreditation of 40 new education and training providers to support the delivery of 2
    learnerships and other strategic/critical learning programmes.
!   Training and registration of 40 assessors and 20 moderators with respect to the
    HWSETA primary focus.
!   Management of agreements signed with other SETA ETQA's, Band ETQAs and
    professional bodies.
!   Monitoring and evaluation of the delivery of learnerships and other strategic/critical
    learning programmes by 60 education and training providers.
!   Implementation of Recognition of Prior Learning within the health and social
    development sector.
!   Verification of assessments done by 20 accredited education and training providers.
!   Maintenance of the ETQA section of the HWSETA electronic Management
    Information System (MIS).
!   Certificating of learners, providers, assessors, and moderators upon meeting the
    stipulated requirements.
!   Benchmarking of education and training activities against national and international
    organisations doing similar work.

Achievements

The operations of the ETQA division during the period under review culminated in following
achievements:

    Maintenance of the HWSETA quality management system

    The maintenance of the HWSETA QMS gained momentum during the period under
    review. At the time of reporting, the implementation of the following activities had
    begun to take root:

    o   Holding of regular Management Review meetings
    o   Conduct of internal audits

    The activities mentioned above helped to entrench the culture of the QMS thereby
    ensuring that staff members began to execute their tasks in accordance with the
    requirements of the QMS in a uniform and consistent manner.
                                                                                                 33
     HWSETA - ANNUAL REPORT 2005-2006




                   !     Recognition and support of one (1) Institute of Sectoral or Occupational
                         Excellence (ISOE)
                         As a measure to meet the NSDS target mentioned above, the HWSETA invited
                         applications from seven (7) education and training institutions located in the
                         Eastern Cape and KwaZulu-Natal. Six (6) of these institutions are further education
                         and training (FET) colleges whilst one (1) is a nursing training college. From the
                         seven institutions invited to apply, only two applications from St Mary's Nursing
                         College in KwaZulu-Natal and King Hintsa FET College in the Eastern Cape were
                         received. Based on the motivation for funding and the fact that requested funding
                         was meant to support nursing training delivery, St Mary's Hospital was approved for
                         funding to the tune of R360, 000 as a measure to assist this institution attain the status
                         of being a learning centre of excellence. This funding was to be used by St Mary's to
                         create a clinical laboratory that would enable learners to acquire a broad range of skills
                         and expose them to cutting edge medical technology.

                   !     Facilitation of the generation of unit standards and qualifications for new
                         learnerships and other strategic/critical learning programmes

                         During the 2005/2006 financial period, the HWSETA channeled R995,000 to the
                         South African Qualifications Authority (SAQA) through a Joint Implementation Plan
                                                     ,
                         (JIP). In terms of the JIP the HWSETA provides funding for the generation of
                         qualifications required by its stakeholders and SAQA in return ensures acceleration
                         in the development of the qualifications in question.

                         The allocated funding was utilized in the generation of the following qualifications
                         which are now registered on the National Qualifications Framework (NQF):

                       Table 1: Qualifications Registered
                       Provisional Qualification Title                        NQF Level

                       Certificate : Auxiliary Nursing                           3
                       Certificate : Enrolled Nursing                            4
                       Professional Bachelor's Degree : Nursing Science          7
                       Master's Diploma: Nursing                                 7
                       Master's Degree: Nursing                                  8
                       PhD: Nursing                                              8
                       National Certificate :Occupational Health and Safety      3
                       FETC : Occupational Health and Safety                     4
                       FETC: Auxiliary Nursing                                   4
                       National Diploma: CYC                                     6
                       National Certificate: Emergency Care                      3
                       National diploma : Occupational Safety                    5
                       National Diploma : Occupational Hygiene                   5
                       FETC: Probation Work Assistance                           4



                   In a bid to increase the opportunities of participation by its diverse constituency,
                   the HWSETA is providing logistical support to SAQA in the scoping of a qualification(s)
                   for Traditional Health Practitioners.




34
The HWSETA was granted extension of accreditation by SAQA for the qualifications
mentioned below:
    Table 2: Extensions of Qualifications
    Provisional Qualification Title                           NQF Level

    National Certificate: Fundamental Ancillary Health Care      2
    National Certificate: Community Health Work                  3
    FETC: Community Health Care                                  4
    FETC: Social Security Administration                         4
    FETC: Child and Youth Care                                   4
    National Certificate: Occupational Safety, Hygiene and       2
    Environment
    National certificate: Victim empowerment and support         2
    National certificate: Victim empowerment and support         3

      The availability of these qualifications provides the HWSETA constituency providers
      with a broader scope of qualification and unit standard offering, thereby allowing
      learners better chances for progression and articulation.

!     Provision of support for the implementation of new learnerships and other
      strategic/critical learning programmes

      The HWSETA lent technical support to the development of the curriculum framework
      for the Home/Community Based Care NQF 3 skills programme which was done under
      the auspices of the Social Sector Expanded Public Works Programme (EPWP). The
      technical support pertained to the packaging of the skills programme which included
      the selection of unit standards that will cover the competencies of the caregiver-
      trainees to acquire from the learning programme as well as career pathing,
      progression and articulation related to the NQF level 4 qualifications.

!     Capacity building of 80 education and training providers to offer 4 new learnerships
      and other strategic/critical learning programmes

      A total of 44 capacity building and quality promotion workshops on provider
      accreditation, learning programme design and evaluation, and electronic learner data
      uploading by providers were conducted in seven provinces. Approximately 958
      people were reached through these initiatives. Most of these workshops were
      conducted in peri-urban areas and the target audience included:

      o    Education and training providers;
      o    HWSETA public and private employers;
      o    Provider Support Practitioners;
      o    Learning Programme Evaluators;
      o    Non Governmental Organisations (NGOs), Community Based Organisations
           (CBOs) and Faith Based Organisations (FBOs); and
      o    Traditional health practitioners.

      Further, as a measure to develop the capacity of education and training providers and
      to promote quality learning delivery, the HWSETA provided financial and technical
      support to the establishment of Provider Forums in KwaZulu-Natal and the Western
      Cape. These structures are viewed as a conduit for developing communities of quality
      practice with respect to the delivery of learning in the health and social development
      sector. The HWSETA initiated a process to encourage providers in other provinces to
      consider establishing their own forums.



                                                                                               35
     HWSETA - ANNUAL REPORT 2005-2006




                   !     Accreditation of 40 new education and training providers to support the delivery of
                         2 new learnerships and other strategic/critical learning programmes

                         During the period under review, the HWSETA granted accreditation to 75 education
                         and training providers. This resulted in the over-achievement of the target by 95%.
                         The distribution of these providers per province is as follows:

                   Table 3. Distribution of providers accredited during 2005/2006 per province
                   Province       EC       FS       Gau        KZN        Limp     MPU        NC      NW          WC
                   Number          3        2        34         15          1       4          0       2          14
                   Percentage     4%       3%       45%        20%         1%      5%         0%      3%         19%


                         Of the 75 providers that were accredited, 33 were granted provisional accreditation
                         whilst 42 received full accreditation.

                         The graphical representation of both provisionally and fully accredited providers is as
                         follows:

                       Graph 1

                             GAUTENG
                        EASTERN CAPE
                           FREE STATE
                         NORTH WEST
                         MPUMALANGA                                                                Fully Accredited
                            LIMPOPO
                        WESTERN CAPE
                       KWAZULU NATAL
                       NORTHERN CAPE

                                          0     5   10    15    20   25      30   35     40   45


                  In addition, approval was granted to 3 learning programmes submitted by education and
                  training providers accredited with other ETQAs.

                   !     Training and registration of 40 assessors and 20 moderators with respect to the
                         HWSETA primary focus

                         The HWSETA commissioned training involving a total of 130 assessor-learners and 45
                         moderator-learners. At the end of the financial period under review, 61 assessor-
                         learners and 36 moderators had been deemed competent. This has contributed
                         towards increasing the number of qualified assessors and moderators that are
                         accessible to the HWSETA constituent providers.

                         Furthermore, 153 assessors and 58 moderators were registered against the various
                         HWSETA qualifications and unit standards during the 2005/2006 financial period.

                   !     Memorandum of Agreement signed with other SETA ETQAs, Band ETQAs and
                         Professional Bodies

                         In a bid to promote a closer working relationship and entrench the letter and spirit of the
                         agreements that the HWSETA has with the professional bodies operating within the
                         health and social development sector, a meeting with these organisations was initiated


36
      where matters of mutual interest with respect to skills development and quality
      assurance were discussed. Participants unanimously agreed to establish a
      HWSETA/Professional Bodies (HPCSA, SAMAOOG) forum. Arrangements to put this
      structure in place are underway.

!     Monitoring and evaluation of the delivery of learnerships and other learning
      programmes by 60 education and training providers

      During the year under review, the 63 HWSETA constituent providers were audited with
      a view to monitor their education and training activities. The monitoring of 50 of these
      organisations was conducted by a contracted service provider whilst the remaining 13
      were monitored by the HWSETA staff.

      The monitoring intervention proved to be a valuable exercise as it accorded providers an
      opportunity to verify if they were on the right track with respect to NQF aligned learning
      delivery and also drew the attention of the HWSETA to quality assurance aspects that
      are apposing challenges to providers.

!     Implementation of Recognition of Prior Learning within the health and social
      development sector

      The appointment of a service provider that would administer RPL assessments to 1000
      individuals against the Home/Community Based Care (HCBC) NQF 1 skills programme
      will be finalized. This project is aimed at providing individuals with non-NQF aligned
      training or experience as caregivers, an opportunity to gain formal recognition of the
      knowledge and skills they possess. This project will be linked to the Social Sector EPWP
      skills development initiatives.

!     Verification of assessments done by 20 accredited education and training providers

      During the financial period 2005/2006, the learner results of 14 HWSETA constituent
      education and training providers were verified and endorsed. The endorsement of the
      results led to the outcomes mentioned below:
    Table 3: Verification and Endorsements
                                                                           Number of Learners
      Provider                                Learning Programme      Competent            Not Yet
                                                                                         Competent
      Michaelmas Trading Trust                Ancillary Health           140                 0
      Learnsys                                Home Based Care            184                 0
      Nchebeko Skills Consultancy             Home Based Care            34                  2
      Mamello Service Excellence              Ancillary Health            8                  2
      Netcom SA                               Ancillary Health           18                  0
      Huguenot College                        Social Auxiliary Work      91                  1
      Chrismorg Consulting cc                 Home Based Care            37                  0
      Dee & Duu Training Institute            Home Based Care            178                 8
      Kliptown Employment and Skills Centre   Home Based Care            36                  0
      Zanini Home Based Care                  Ancillary Health           55                  0
      Lethuthukanya Health Care Institute     First Aid                  17                  0
      Kathu Campus                            Ancillary Health           19                  0
      Light & Life Centre                     Home Based Care            33                  0
      Community Aids Response                 Home Based Care            47                  0

The above table indicated that of the 910 learners whose results were endorsed by the
HWSETA, 897 were declared competent and only 13 were found not yet competent, which
translates into an achievement rate of 98,6%.



                                                                                                     37
     HWSETA - ANNUAL REPORT 2005-2006




                   ! Certification of learners, providers, assessors, moderators and verifiers upon meeting
                      the relevant stipulated requirements

                       Certificates for the following categories were issued by the HWSETA during 2005/2006:

                       !   Learners:                           393
                       !   Providers:                           29
                       !   Assessors:                          153
                       !   Moderators:                          58
                                TOTAL                          633

                   ! Implementation of the Social Sector Expanded Public Works Programme (EPWP)
                      The HWSETA made some progress with respect to contributing towards the
                      implementation of the EPWP of the social sector. Technical support was given to the
                      development of the Home/Community Based Care (HCBC) NQF 3 skills programme, as
                      well as for the selection of lead service providers to facilitate the implementation of the
                      HCBC NQF 3 skills programme in Limpopo, Free State and the Western Cape. In an
                      effort to create enabling and supportive conditions for the implementation of this
                      programme a series of meetings were held with various EPWP roleplayers.

                      To increase the human resource capacity of the ETQA division funding from the
                      European Union (EU) through the National Department of Health was sourced. This
                      covered the appointment of 6 staff members for a period of two years. Further, the
                      HWSETA set aside funds to cover the appointment of a project manager on a one year
                      contract. The brief of the project manager is to develop a strategic implementation
                      framework for EPWP and to facilitate the implementation thereof. The appointment of
                      the project manager had been finalized and the interviews of candidates to fill the 6 EU
                      funded positions had been arranged.

                      Audit of the SAQA Holograms

                      In March 2006, SAQA conducted an audit on the HWSETA to establish the
                      mechanisms that were in place regarding the security, safekeeping and utilization of the
                      SAQA Holograms. The feedback received from SAQA regarding their conduct of this
                      exercise indicated that the HWSETA had provided sufficient evidence showing
                      acceptable controls for the security and safekeeping of the Holograms. In addition,
                      SAQA sought permission to share with other ETQAs those elements of the HWSETA
                      Hologram management processes which they had identified as best practices.

                      Challenges

                      The following issues proved to be challenges that the ETQA divisional staff had to
                      grapple with during the period under review:

                      !    Due to increased participation, the ETQA staff members found it difficult to respond
                           timeously to the needs of all stakeholders. These delays resulted in some
                           participants expressing their dissatisfaction with the pace of service delivery.

                      !    The training opportunities that became available within the health and social
                           development sector particularly with respect to initiatives aimed at addressing the
                           challenges presented by the HIV/AIDS pandemic, put the HWSETA in an invidious
                           position. Due to these developments, the HWSETA was expected by some
                           individuals to accredit their organisations in a very short space of time and to
                           overlook certain key requirements of accreditation. When it was explained to these
                           individuals that the ETQA was not in a position to bend the NQF requirements, this
                           resulted in a lot of unhappiness and strained relationships. Endeavors to mend the
                           broken relationships will continue inspite of staff shortages.

                      !    Progress with respect to the implementation of the Social Sector EPWP continued to
                           happen at a slow pace. It is envisaged that the appointment of the project manager

38
    will put the HWSETA in position to provide more dedicated leadership with respect
                                   ,
    to the training aspects of EPWP thereby creating conditions for accelerated delivery
    of this programme.

!   Besides the efforts embarked upon to enlighten the public about the HWSETA
    accredited providers and the qualifications they offer, some learners fell victim to
    some unaccredited organisations masquerading as institutions accredited by the
    HWSETA and to a few HWSETA accredited providers who conducted fraudulent
    activities. Whilst the HWSETA was able to penalise its accredited providers by de-
    accrediting them, it was difficult to bring the unaccredited providers implicated in
    fraudulent activities to book as the HWSETA has no jurisdiction over un-accredited
    providers. This stresses the need to educate the public about the HWSETA's roles
    and responsibilities as well as to conduct regular monitoring of the activities of
    providers.

Appreciation

I would like to thank the Board, the ETQA Standing Committee, the CEO, management,
staff and all HWSETA stakeholders for the guidance and support they have unselfishly
given me and my divisional staff members during the 2005/2006 financial period.




                                                                                           39
     HWSETA - ANNUAL REPORT 2005-2006




                                       Human Resources and
                                       Operations Division
                   Ms. E Netshivhongweni - Executive Manager: Human Resources and Operartions


                   HR SUB-DIVISION

                   1.1       Targets

                         The following targets were set for the period under review:

                         !   Facilitate the appointment of staff
                         !   Facilitate staff development
                         !   Update and amend policies and procedures ensuring compliance with legislative
                             requirements
                         !   Facilitate staff appraisal and performance management
                         !   Facilitate implementation of Organisational Development

                   1.2       Achievements

                         !   Staff complement

                             The manager, Ms S Pochee, who had been serving in a contract position as head of
                             the division, left the HWSETA in August 2005.

                             Ms E Netshivhongweni took up the position of Executive Manager: HR and
                             Operations in September 2005.

                             An amended HWSETA organogram was approved during the period under review to
                             reflect 89 positions including a new division, i.e. Monitoring and Evaluation. At the
                             end of the term under review 54% of these positions were occupied. The filling of
                             new positions was prioritised in terms of key positions taking limitations such as
                             office space and budget into consideration. Vacancies exist due to internal transfers
                             of employees and/or through employees leaving the organisation. In total four
                             employees resigned and one employee's services were terminated in the year under
                             review.




40
Staff profile per occupational category for the 2004 - 2005 financial year
                                   African           Coloured           Indian            White           Total
         JOB TITLE
                              M       F    D     M       F    D     M     F    D     M     F    D     M     F   D
     CEO                                                            1                                  1 0          0
     Executive Managers        1     1                                               1                 2 1          0
     Managers                  1     1           1      1           1     1                            3 3          0
     Accountant                      1                                                                 0 1          0
     SDTA                      2     1                                                     1           2 2          0
     Board Administrator                                                                   1           0 1          0
     IT Coordinator                                                                  1                 1 0          0
     Officers                  1     2                  1                            1     3           2 6          0
     Secretaries                                        2                 1                3           0 6          0
     Administrators            3     6       1   1      3           1                                  5 9          1
     Payroll Administrator           1                                                                 0 1          0
     Receptionist                    1                                                                 0 1          0
     Driver                    1                                                                       1 0          0
     Total                     9     14      1   2      7       0   3     2      0   3     8      0   17 31         1
    Total Staff Complement as of 31 March 2006                                                                     49
    Total Vacancies in accordance with new Organogram as of 31 March 2006                                          40
    Percentage approved positions filled as of 31 March 2006                                                      55%
M=male; F=female; D= person with a disability


 HWSETA Employment Equity Statistics per Occupational Level as of 31-March-2006

                                   African           Coloured           Indian            White           Total
        Female                     18.4%             4.1%               6.1%             6.1%          34.7%
        Male                       28.6%             14.3%              4.1%             16.3%         63.3%
        Disabled                   2.0%              0.0%               0.0%             0.0%          2.0%
        Total                      49.0%             18.4%              10.2%            22.4%         100.0%


!     Staff Development

      Various training initiatives to upgrade the skills base of HWSETA employees were
      undertaken. The training interventions were based on the HWSETA WSP which in turn
      was informed by the skills need within the organization. Some of the key training
      initiatives implemented were: IT, Business Management, ISO 9000 training, assessor
      training, software training in computerized HR systems; administrator training,
      secretarial training; Labour Relations Workshop, Leadership Training and Project
      Management training. Coaching programmes were introduced for the executive
      managers.

!     Organisational Development

      The Organisational Development recommendations were submitted in October 2005.

      An internal Culture Audit was performed by the department. The findings of the culture
      audit and the organizational development report were extensively debated at Board
      meetings and led to the establishment of a Board task team. Their findings will dictate
      the way forward.

      The Performance Management and Development Policy was reviewed and amended.

      Employees submitted signed performance agreements at the beginning of the period
      under review. Performance assessments were conducted in accordance with the
      Performance Management and Development policy.

                                                                                                                        41
     HWSETA - ANNUAL REPORT 2005-2006




                   !     Policy development

                         The amended PMDP was approved on 09 September 2005 by EXCO.

                         The following nine policies were approved by EXCO (24 November 2005):

                         !   Disciplinary Policy
                         !   Cell Phone Policy
                         !   Code of Conduct Policy
                         !   Communications Policy
                         !   Death while in the employment of the HWSETA Policy
                         !   Leave Policy
                         !   Recruitment Policy
                         !   Retrenchment Policy
                         !   Working Hours Policy

                   1.3       Challenges

                         The following are challenges facing the HR sub-division:

                         !   Development, review and approval of HR policies and procedures
                         !   Implementation and maintenance of an Employee Assistance and Wellbeing
                             Programme
                         !   Implementation and maintenance of a Talent Management plan
                         !   Implementation and maintenance of the Human Resource Information
                             Management System
                         !   Establishing an HR Strategy




42
2     Marketing and Communication Sub-Division

2.1       The following objectives were set for the financial year under review:

      !   Implementation of an effective and pro active media campaign
      !   To heighten stakeholder awareness of the HWSETA's services with a particular focus
          on semi-rural and rural areas
      !   Holding of the first ever national HWSETA Stakeholder Conference

2.2       Achievements

      !   Print media and radio

          The year under review started with an extensive radio campaign on 11 community
          radio stations countrywide which ran until mid-August. The HWSETA also
          advertised in community based newspapers in addition to the mainstream media.
          The impact of the radio spots three times a day could immediately be seen in the
          increased number of telephone calls received and would again peak after being re-
          inforced by the print media.

      !   Niche publications

          Advertorials and advertisements appeared in newspapers and magazines with a
          strong bias to publications in the health and social development sectors as well as
          career guidance booklets. The marketing mix selected was one which tried to
          balance the needs of opinion makers, practitioners in the health and social
          development sectors and learners at high schools in South Africa.

      !   Exhibitions

          We participated at SABC Career Fairs held in Port Elizabeth, Polokwane, Kimberley
          and Witbank which were well patronized as a result of the widespread coverage on
          SABC 2. Thousands of Grade 11 and 12 learners passed through these exhibition
          doors.

          One of the highlights of the year was the June 16 celebrations and exhibition
          organised by the National Youth Commission in Kimberley.

          In a bid to cement relationships with Government departments we also exhibited at
          IMBIZOs held by the Premier of Gauteng in Muldersdrift in November and in
          Riverlea in February. We were invited by the North West Provincial Government to
          exhibit in Mafikeng in June 2005. We exhibited at the invitation of two
          Department of Education Circuits addressing groups of 1000 learners in Volksrust
          and 250 learners in Emondlo, KZN respectively.

          More than 300 senior personnel from Government hospitals visited our exhibition
          stand at the Operational Hospital Management Conference held in Gauteng in
          September.

          Local Government and community organisations also engaged the HWSETA in
          community events such as Library Services public days held in Alexandria/Sandton,
          Johannesburg and a community exhibition in Vosloorus.




                                                                                                43
     HWSETA - ANNUAL REPORT 2005-2006




                      !   National Conference

                          A first for the HWSETA was the two day National Conference held in Polokwane in
                          September 2005. A booklet was published which records the conference
                          deliberations in an easy-to-read format. The booklet was posted to stakeholders and
                          was distributed at conferences.

                      !   Annual General Meeting

                          For the first time the HWSETA moved the venue for the Annual General Meeting to a
                          township venue in a province outside Gauteng, in New Brighton, Port Elizabeth. A
                          survey held of those who attended the conference came back with a resounding
                          affirmation that the next Annual General Meeting also be held in a township and/or
                          rural area.

                      !   Provincial Outreach

                          A meeting was organised with the MEC for Health in the Eastern Cape, Dr
                          Monwabisi Bevan Goqwana on 25 January 2006. The meeting was convened by
                          PR/Marketing to discuss some of the issues and sensitivities surround the Ancillary
                          Health Care qualification which is quality assured by the ETQA of the HWSETA.
                          The private meeting with the MEC allayed some of his concerns about the
                          qualification and opened the door for the ETQA Division to work closely with officials
                          in the department to find solutions to some of the problems which face the
                          Department and the HWSETA.

                          The private meeting with the MEC was followed by a public meeting which attracted
                          a record attendance of providers and learner representatives who came from the
                          length and breadth of the province.

                      !   Provincial Offices

                          The HWSETA came a step closer to having a provincial presence with the signing of
                          lease agreements for office space in Durban and Cape Town.

                      !   Corporate Social Investment

                          The HWSETA commemorated World Aids Day by collecting groceries and clothing
                          for needy families. The HWSETA participated in Cell C's “Take a Girl Child to Work
                          Day” by hosting 11 learners from a nearby secondary school.

                      !   Publications

                          Printing of publications and newsletters was on-going as was the maintenance of
                          the HWSETA website.

                      !   Stakeholder perception survey

                          A stakeholder perception survey was conducted with a sample of 20 providers, 20
                          companies and 20 Skills Development Facilitators. Key findings were that the
                          HWSETA needs to invest in building the HWSETA brand and that there is a need to
                          develop a new range of products (training) and to visit providers, companies and
                          facilitators more regularly.




44
2.3 Challenges

    The following are seen as key challenges:
    !To address the key findings of the stakeholder perception survey
    !To broaden exposure of the HWSETA in semi-rural and rural areas

   Appreciation

   I would like to extend my gratitude to the Board, CEO, Management and staff for their
   continuous invaluable inputs and support towards optimising Human Resources and
   Operations processes during the year under review.




                                                                                           45
     HWSETA - ANNUAL REPORT 2005-2006




                   Audit Committee Report

                   Report of the Audit Committee required by Treasury Regulations 27.1.7 and 27.1.10 (b)
                   and (c) issued in terms of the Public Finance Management Act 1 of 1999, as amended by
                   Act 29 of 1999
                   We are pleased to present our report for the financial year ended 31 March 2006.

                   AUDIT COMMITTEE REPORT FOR YEAR ENDED 31 MARCH 2006

                   The organisation has an audit committee whose chairperson and members are external and
                   independent. All members are financially literate and no relationships exist that could
                   interfere with the audit committee members' independence from management. The
                   internal and external auditors have unrestricted access to the audit committee. The
                   committee meets at least three times per annum. These meetings are attended by internal
                   and external auditors as well as members of management, by invitation. The audit
                   committee operates in accordance with a charter that is approved by the Board.

                   The primary function of the audit committee is to assist the members of the Board in
                   fulfilling its oversight responsibility by reviewing:

                       =   The financial reports and other financial information provided by the HWSETA to
                           any governmental body or the public;
                       =   The HWSETA's systems of internal controls regarding finance, accounting, legal
                           compliance and ethics that management and the board have established; and
                       =   The HWSETA's auditing, accounting, and financial reporting processes generally.

                   Consistent with this function, the audit committee encourages the promotion of continuous
                   improvement of, and adherence to, the HWSETA's policies, procedures and practices at all
                   levels.

                   The audit committee's primary duties and responsibilities are to:

                       =   Serve as an independent and objective party to monitor the HWSETA's financial
                           reporting process and internal control system;
                       =   Review and appraise the audit efforts of the HWSETA's independent auditors
                           (Auditor-General) and internal audit function; and
                       =   Provide an open avenue of communication among the independent auditors
                           (Auditor-General), financial and senior management, the internal auditing function
                           and the members of the Board.

                   The current audit committee's tenure has expired and a recruitment process has
                   commenced. The new audit committee has to address various financial control and
                   management process deficiencies identified and review the internal audit plan.




                   ______________________________
                   I Tayob
                   Chairperson: Audit Committee

46
REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE FINANCIAL
STATEMENTS OF THE HEALTH AND WELFARE SECTOR EDUCATI0N AND TRAINING
AUTHORITY (HWSETA) FOR THE YEAR ENDED 31 MARCH 2006.

1. AUDIT ASSIGNMENT

  The financial statements as set out on pages 50 to 85 for the year ended 31 March
  2006, have been audited in terms of section 188 of the Constitution of the Republic of
  South Africa, read with sections 4 and 20 of the Public Audit Act, 2004 (Act No.25 of
  2004) and section 14(6)(a) of the Skills Development Act,1998 (Act No.97 of 1998).
  These financial statements, the maintenance of effective control measures and
  compliance with relevant laws and regulations are the responsibility of the accounting
  authority. My responsibility is to express an opinion on these financial statements,
  based on the audit.

2. SCOPE

  The audit was conducted in accordance with the International Standards on Auditing
  read with General Notice 544 of 2006. issued in Government Gazette no 28723 of 10
  April 2006 and General Notice 808 of 2006, issued in Government Gazette no 28954
  of 23 June 2006. Those standards require that I plan and perform the audit to obtain
  reasonable assurance that the financial statements are free of material misstatement.

  An audit includes:
   !     Examining, on a test basis, evidence supporting the amounts and disclosures in
         the financial statements.
   !     Assessing the accounting principals used and significant estimates made by
         management.
   !     Evaluating the overall financial statement presentation.

  I believe that the audit provides a reasonable basis for my opinion.

3. BASIS OF ACCOUNTING

  The entity's policy is to prepare financial statements on the basis of accounting
  determined by the National Treasury, as described in note 1 to financial statements.

4. AUDIT OPINION

  In my opinion, the financial statements present fairly, in all material respects, the
  financial position of the Health and Welfare Sector Education and Training Authority
  (HWSETA) at 31 March 2006 and the results of its operations and its cash flows for the
  year then ended, in accordance with the basis of accounting determined by the National
  Treasury of South Africa, as described in note 1 to the financial statements, and in the
  manner required by the Public Finance Management Act, 1999 (Act No.1 of
  1999)(PFMA)

5. EMPHASIS OF MATTER

  Without qualifying the audit opinion, attention is drawn to the following matters:

  5.1      Non-compliance with PFMA

           Adequate monitoring controls have not been implemented by the HWSETA to
           ensure that the financial statements submitted for auditing purposes as required
           by section 55(1) of the PFMA and per Treasury Regulation 28.1.6 comply with
           Statements of GAAP and approved GRAP Standards. This is evident from a
           number of audit adjustments and disclosure changes made to the annual
           financial statements submitted for audit purposes on 31 May 2006.



                                                                                              47
     HWSETA - ANNUAL REPORT 2005-2006




                      5.2     Special Investigation

                              Subsequent to year-end, the chief executive officer and chief financial officer
                              were suspended, pending a special investigation requested by the HWSETA
                              Board.

                   6. APPRECIATION

                      The assistance rendered by the staff of the HWSETA during the audit is sincerely
                      appreciated.




                   N Manik for Auditor-General
                   Pretoria
                   29 July 2006




                      A U D I T O R - G E N E R A L




48
HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
ANNUAL FINANCIAL STATEMENTS




Contents

REPORT OF THE ACCOUNTING AUTHORITY FOR THE YEAR ENDING 31ST MARCH 2006   50 - 53

STATEMENT OF FINANCIAL PERFORMANCE                                       54

STATEMENT OF FINANCIAL POSITION                                          55

STATEMENT OF CHANGES IN NET ASSETS                                       56

CASH FLOW STATEMENT                                                      57

NOTES TO THE ANNUAL FINANCIAL STATEMENTS                                 58 - 85




                                                                                   49
     HWSETA - ANNUAL REPORT 2005-2006




                   HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
                   ANNUAL FINANCIAL STATEMENTS
                   REPORT OF THE ACCOUNTING AUTHORITY
                   FOR THE YEAR ENDED 31ST MARCH 2006

                   Report by the Accounting Authority to the Executive Authority and Parliament of the
                   Republic of South Africa.

                   General review of the state of affairs

                   The accompanying Annual Financial Statements reflect that the HWSETA remains
                   financially strong and viable.

                   The decline in the cash reserves of 8,5% is the result of increased participation by the
                   employers coupled with the disbursement of discretionary grants committed in prior years.
                   However, the commitments made by the HWSETA for discretionary funding has increased
                   marginally by 1,1% as indicated in Note 15.

                   Corporate Governance and Internal Controls
                   A number of Internal Audit reviews were conducted during the year under review and results
                   thereof were submitted to the Audit Committee who, in turn, report directly to the HWSETA
                   Board. These reports reflect that the controls adopted by the HWSETA are efficient and
                   reduce any risk exposure.

                   Comprehensive reports on the performances of the HWSETA are contained in the reports of
                   the Chief Executive Officer, Education Training Quality Assurance, Finance, Skills
                   Development and Planning, Governance and Human Resources Divisions contained in the
                   Annual Report.

                   Audit Committee

                   The Accounting Authority reviewed the committee's Terms of Reference during the course of
                   the year under review and is of the opinion that the committee complied with the terms
                   stated therein.

                   No issues were raised by the Audit Committee.

                   Risk Management

                   Appropriate systems of control and risk management are maintained together with high
                   standards being set for good governance and ethical behaviour. The HWSETA is committed
                   to an open and transparent culture and to disclose any relevant information to its
                   stakeholders. Risk management plans and reviews are employed aimed at preventing any
                   prejudice to the financial interest of the state.

                   Services rendered by the HWSETA

                   The HWSETA acts as the conduit between employers, training providers and learners.

                   The public entity endeavours to meet the skills requirements of the sector it serves by
                   interacting with the employers registered in the sector. These employers advise the
                   HWSETA of skills shortages and requirements within the sector, which guides this
                   organisation in the direction of which learnerships to fund as well as which additional
                   learnership standards, curriculum and material requires development and registration to
                   meet these needs.




50
HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
ANNUAL FINANCIAL STATEMENTS
REPORT OF THE ACCOUNTING AUTHORITY
FOR THE YEAR ENDED 31ST MARCH 2006

Capacity constraints

The slow growth in participation by the employers within this sector, together with the need
to develop additional learnerships has retarded the distribution of funding from the
Discretionary Grants Reserve.

Business address

The physical address of this public entity is -

2 Bradford Road,
Corner of Bradford Road and Smith Street,
Bedfordview.


The postal address of the entity is -

Private Bag X15,
Bedfordview.
2047




                                                                                               51
     HWSETA - ANNUAL REPORT 2005-2006




                        HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
                        ANNUAL FINANCIAL STATEMENTS
                        REPORT OF THE ACCOUNTING AUTHORITY (Continued)


                                            SALARY/       REIMBURSIVE  2005/06   2004/05
                                          ALLOWANCE        ALLOWANCE
                                                      TRAVEL CELLPHONE
                                             R’000     R’000     R’000   R'000     R'000
         Executive                             685     26       12         723       673
         Dr. K.P. Govender (CEO)               406     15        7         428       401
         Mr. B.K. Zulu                         304      7        5         316       391
         Ms. I. Masilela                       203      1        2         206         -
         Ms. E. Netshivhongweni                513      8        5         526       495
         Mr. K.W. Keys (CFO)                 2 111     57       31       2 199     1 960

         Non-Executive
         Ms M B M Khan                          -       -        -          -         34
         Mr E Mfingwana                        16       5        6         27         49
         Ms J Sibanyoni                         -       -        -          -         27
         Ms Y Mbane                            14       6        7         27         15
         Dr V Van Wyk                          18      11       14         43         31
         Ms R Moonilal                          -       -        -          -         11
         Ms N Geyer                             1       -        -          1         39
         Mr A Ramukumba                         -       -        -          -         32
         Ms H Ally                              -       -        -          -          9
         Mr E Spencer                           -       -        -          -          9
         Mr J Carapinha                         -       -        -          -          8
         Ms T Gumbi                             6       1        -          7          3
         Ms T Mngomezulu                        1       -        -          1         34
         Mr G Moultrie                          9       -        3         12         20
         Ms N Sibiya                            -       -        -          -          2
         Ms N Dlamini                          26       8       14         48         34
         Mr Y Mahlati                          11       6        -         17         12
         Ms S Samuel                            4       -        -          4          6
         Mr R Johnson                           -       -        -          -         42
         Mr N Petersen                          -       -        -          -         17
         Mr J Van Blommenstein                  -       -        -          -         17
         Ms H Subedar                           -       -        -          -          5
         Dr D Theron                            -       -        -          -         12
         Mr. M. Matsuma                        13       -        -         13          -
         Mr. A. Crichton                       12       2        7         21          -
         Mr. D. Thomas                         17       1        7         25          -
         Ms. S. Slabbert                       12       1        -         13          -
         Dr. L. Tsiu                           10       5        -         15          -
         Ms. T. Cronje                         10       2        7         19          -
         Ms. D.A. Howitson                     13       4        -         17          -
         Ms. V. Werely                         16       6        7         29          -
         Ms. M. Moleko                         11       4        -         15          -
         Mr. S. Balkaran                       20       2        9         31          -
         Mr. P. Bangani                        12       9        -         21          -
         Mr. L. van der Merwe                   6       -        -          6          -
         Ms. S. Pruis                          10       2        -         12          -
         Mr. T. Joseph                          8       -        -          8          -
         Ms M. Viljoen                          6       -        -          6          -
         Ms L. Nkomo-Mthembu                    6       -        -          6          -
                                              288      75       81        444        468




52
HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
ANNUAL FINANCIAL STATEMENTS
REPORT OF THE ACCOUNTING AUTHORITY (Continued)



Events after the reporting date

Your attention is drawn to Note 17 of the Annual Financial statements wherein notice is given of events
occurring after the reporting date.

Approval

The Annual Financial Statements for the year ended 31 March, 2006, set out on pages 54 to 85, have been
approved by the Accounting Authority in terms of Section 51(1)(f) of the Public Finance Management Act, 1999
(Act No. 1 of 1999) as amended on 31 May, 2006, and are signed on their behalf by -




Ms D.C. Cronje                                                Dr. V. van Wyk
Acting Chief Executive Officer                                Chairperson


Date: 14 July 2006                                            Date: 14 July 2006




                                                                                                          53
     HWSETA - ANNUAL REPORT 2005-2006




                   HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
                   ANNUAL FINANCIAL STATEMENTS
                   STATEMENT OF FINANCIAL PERFORMANCE
                   FOR THE YEAR ENDED 31 MARCH 2006


                                                                             2005/06    2004/05
                                                                              R’000      R’000
                  Revenue                                            Note
                  Non exchange revenue                                       130 987    133 633
                   Skills Development Levy: income                    3      125 615    132 464
                   Skills Development Levy: penalties and interest             1 124      1 169
                   Government Grants and Donor Funding                20       4 248          -

                  Exchange revenue                                            12 473     11 777
                    Investment income                                 4       11 659     11 134
                    Other income                                      5          814        643

                  Total revenue                                              143 460    145 410

                  Expenses                                                  (170 019)   (91 468)
                    Employer grant and project expenses               6     (136 527)   (66 792)
                    Administration expenses                           7      (29 244)   (24 676)
                    Government Grants and Donor Funding               20      (4 248)          -

                  Net (deficit)/surplus for the year                  2      (26 559)    53 942




54
HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
ANNUAL FINANCIAL STATEMENTS
STATEMENT OF FINANCIAL POSITION
AS AT 31 March 2006




FUNDS AND LIABILITIES                                       2005/06     2004/05
                                                     Note    R’000       R’000
ASSETS

 Non-current assets                                             2 610     3 617
 Property, plant and equipment                        8         2 610     3 617


 Current assets                                               223 144   247 629
 Accounts receivable: non-exchange transactions                17 992    23 222
 VAT receivable                                                     -       265
 Cash and cash equivalents                            9       205 118   224 142
 Prepayments                                                       34         -

TOTAL ASSETS                                                  225 754   251 246

LIABILITIES

 Current liabilities                                           16 056    14 672
 Grants payable                                      12        11 299     9 391
 Trade & other payables: non-exchange transactions   12         1 010     3 820
 VAT payable                                                      175         -
 Deferred government grants                           20        2 632         -
 Current provisions                                   13          374       516
 Short term portion of finance lease                 11.6         355       308
 Short term portion of smoothing liability            21          211       637

 Non- Current liabilities                                        946      1 263
 Finance lease obligation                            11.6        946      1 263

TOTAL LIABILITIES                                              17 002    15 935

Total Net Assets                                              208 752   235 311

NET ASSETS
Funds and reserves
Administration reserve                                         12 057     7 370
Employer grant reserve                                         76 768    84 000
Discretionary reserve                                         119 927   143 941
Net Assets                                                    208 752   235 311




                                                                                  55
56
     HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
     ANNUAL FINANCIAL STATEMENTS
     STATEMENT OF CHANGES IN NET ASSETS
     FOR THE YEAR ENDED 31 MARCH, 2006
                                                                                                                                       HWSETA - ANNUAL REPORT 2005-2006




                                                  Notes    Administration   Employer grant   Discretionary   Accumulated
                                                             reserve           reserve          reserve        surplus       Total
                                                              R’000             R’000            R’000          R’000        R’000


     Balance as previously reported at 1 April                  1 739          118 772           61 490             -       182 001
     Prior Period Error                             11.5        (632)                -                -                       (632)
     Balance as restated as at 1 April 2004                     1 107          118 772           61 490                     181 369
     Net surplus per Statement of Financial Performance                                                           53 942     53 942
     Allocation of unappropriated surplus                       6 263           57 398           (9 719)         (53 942)         -
     Excess reserves transferred to
     Discretionary reserve                                                     (92 170)          92 170
     Balance at 31 March 2005                                   7 370            84 000         143 941             -       235 311
     Net (deficit) per Statement of
     Financial Performance                                          -                 -               -          (26 559)   (26 559)
     Allocation of unappropriated surplus                       4 687           (7,114)        (24 132)           26 559
     Balance at 31 March 2006                                  12 057           76 886         119 809               -      208 752

     .
   HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
   ANNUAL FINANCIAL STATEMENTS
   CASH FLOW STATEMENT
   FOR THE YEAR ENDED 31 MARCH 2006



                                                                 2005/06    2004/05
                                                                  R’000      R’000
                                                         Note

CASH FLOW FROM OPERATING ACTIVITIES

Operating activities

 Cash receipts from stakeholders                                 130 542     141 286
   Levies, interest and penalties received                       128 516     137 195
   Other cash receipts from stakeholders                           1 586         633
   VAT received                                                      440       3 458
 Cash paid to stakeholders, suppliers and
 employees                                                      (159 975)    (85 894)
   Grants and project payments                                  (132 597)    (60 301)
   Special projects                                               (4 248)           -
   Compensation of employees                                     (11 220)     (9 412)
   Payments to suppliers and other                               (11 910)    (11 180)
   Vat paid                                                             -      (5001)
 Cash generated from (utilised in)operations             22      (29 433)      55 392
 Interest Received                                       4         11 659      11 134
Net cash (outflow)/inflow from operating activities              (17 774)      66 526

CASH FLOW FROM INVESTING ACTIVITIES
 Purchase of property, plant and equipment               8.1        (722)     (1 187)
 Proceeds from disposal of property, plant
 and equipment                                                          -          13
Net cash (outflow) from investing activities                        (722)     (1 174)

CASH FLOW FROM FINANCING ACTIVITIES
 Payment in lease liabilities                                       (528)             -
Net cash (outflow) from financing activities                        (528)             -

Net (decrease)/increase in cash and cash equivalents             (19 024)     65 352
Cash and cash equivalents at the beginning of the year   10       224 142    158 790
Cash and cash equivalents at the end of the year         10       205 118    224 142




                                                                                          57
     HWSETA - ANNUAL REPORT 2005-2006




                  HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
                  ANNUAL FINANCIAL STATEMENTS
                  NOTES TO THE ANNUAL FINANCIAL STATEMENTS
                  FOR THE YEAR ENDED 31 MARCH 2006

                  1. Accounting policies to the Annual Financial Statements

                  The annual financial statements have been prepared in accordance with the South African
                  Statements of Generally Accepted Accounting Practice and the Public Finance Management
                  Act , 1999 (Act No. 1 of 1999) as amended.

                  The principal accounting policies adopted in the preparation of these financial statements
                  are set out below and are, in all material respects, consistent with those of the previous year,
                  except as otherwise indicated.

                  1.1Basis of preparation

                     The financial statements have been prepared in accordance with the South
                     African Statements of Generally Accepted Accounting Practice (GAAP) including any
                     Interpretations of such Statements issued by the Accounting Practices Board, with the
                     prescribed Standards of Generally Recognised Accounting Practice (GRAP) issued by
                     the Accounting Standards Board replacing the equivalent GAAP Statements as follows:

                     Standard of GRAP                                        Replaced Statement of GAAP

                     GRAP 1:      Presentation of financial statements       AC101: Presentation of financial
                                                                                      Statements
                     GRAP 2:      Cash Flow Statements                       AC118: Cash Flow Statements
                     GRAP 3:      Accounting policies, changes in            AC103: Accounting policies,
                                  Accounting estimates and errors            changes in accounting estimates
                                                                             and errors

                     The recognition and measurement principles in the above GRAP and GAAP
                     Statements do not differ or result in material differences in items presented and
                     disclosed in the financial statements. The implementation of GRAP 1,2 & 3 has resulted
                     in the following significant changes in the presentation of the financial statements:

                     1. Terminology differences:

                          Standard of GRAP                                  Replaced Statement of GAAP
                          Statement of financial performance                Income statement
                          Statement of financial position                   Balance Sheet
                          Statement of changes in net assets                Statement of changes in equity
                          Net assets                                        Equity
                          Surplus/deficit for the period                    Profit/loss for the period
                          Accumulated surplus/deficit                       Retained earnings
                          Contributions from owners                         Share capital
                          Distributions to owners                           Dividends
                          Reporting date                                    Balance sheet date

                     2. The cash flow statement can only be prepared in accordance with the direct
                        method.




58
HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


      3. Specific information such as:
         (a) receivables from non-exchange transactions, including taxes and transfers;
         (b) taxes and transfers payable;
         (c) trade and other payables from non-exchange transactions;
             Must be present separately on the statement of financial position

      4. The amount and nature of any restrictions on cash balances are required to be
         disclosed

         The annual financial statements have been prepared on the historical cost basis
         except where a specific statement of Generally Recognised Accounting Practises
         (GRAP) and Generally Accepted Accounting Practises (GAAP) requires different
         treatment.

1.2       Currency

         These financial statements are presented in South African Rands since that is the
         currency in which the majority of the entity transactions are denominated. Figures
         are rounded to the nearestonethousand
.
1.3.     Revenue recognition

         Revenue is recognised when it is probable that future economic benefits will flow to
         the enterprise and these benefits can be measured reliably.

         1.3.1 Levy income

                 In terms of section 3(1) and 3(4) of the Skills Development Levies Act, 1999
                 (Act No. 9 of 1999), registered member companies of the SETA pay a skills
                 development levy of 1% of the total payroll cost to the South African Revenue
                 Services (SARS).

                 Eighty percent of skills development levies are paid over to the HWSETA (net
                 of the twenty percent contribution to the National Skills Fund).

                 Levy income is recognised on the accrual basis.

                 A net receivable/payable is recognised for levies accrued as well as
                 estimated SARS adjustments.An estimate due to retrospective adjustments
                 by SARS and outstanding levies due at year-end is based on prior year
                 trends. Changes to prior year estimates are accounted for in revenue in the
                 current period.

                 The HWSETA refunds amounts to employers in the form of grants, based on
                 information from SARS. Where SARS retrospectively amends the
                 information on levies collected, it may result in grants that have been paid to
                 certain employers that are in excess of the amount the SETA is permitted to
                 have granted to employers. A receivable relating to the overpayment to the
                 employer in earlier periods is raised at the amount of such grant over



                                                                                                   59
     HWSETA - ANNUAL REPORT 2005-2006




                  HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
                  ANNUAL FINANCIAL STATEMENTS
                  NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


                                payment, net of bad debts and provision for irrecoverable amounts.
                                Revenue is adjusted for interseta transfers due to employers changing
                                SETAs. Such adjustments are separately disclosed as interseta transfers.
                                The amount of the interseta adjustment is calculated according to the
                                Standard Operating Procedure issued by the Department of Labour issued
                                June 2001.
                                When a new employer is transferred to the HWSETA, the levies transferred
                                by the former SETA are recognised as revenue and allocated to the respect
                                category to maintain its original identity.

                         1.3.2 Interest and penalties

                                Interest and penalties on the skills development levy are recognised on
                                the accrual basis.

                         1.3.3 Government grants and other donor income

                                Funds transferred by the National Skills Fund (NSF) are accounted for in the
                                financial statements of the HWSETA as a liability until the related eligible
                                special project expenses are incurred, when the liability is extinguished and
                                revenue recognised.

                                Property, plant and equipment acquired through government projects are
                                capitalised in the financial statements of the HWSETA, as the HWSETA
                                controls such assets for the duration of the project. Such assets are disposed
                                of in terms of agreement.

                                Conditional government grants and other conditional donor funding received
                                are recorded as deferred income when they become receivable and are then
                                recognised as income on a systematic basis over the period necessary to
                                match the grants with the related costs which they are intended to
                                compensate. Unconditional grants received are recognised when the
                                amounts have been received.

                         1.3.4 Investment income

                                Interest income is accrued on a time proportion basis, taking into account
                                the principal outstanding and the effective interest rate over the period to
                                maturity.

                   1.4   Grants and project expenditure

                         A registered company may recover a maximum of 70% of its total levy payment by
                         complying with the grant criteria in accordance with the Skills Development
                         Regulations issued in terms of the Skills Development Act 1999 (Act No 9 of 1999).

                         Mandatory grants

                         The grant payable and the related expenditure are recognised
                         when the employer has submitted an application for a grant in the prescribed

60
HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


      form within the agreed upon cut-off period and the application has been
      approved as the payment then becomes probable. The grant is equivalent to
      50% (2005: 15% and 45%) of the total levies paid by the employer during the
      corresponding financial period for the skills planning grant and skills
      implementation grant.

      Discretionary grants and project expenditure

      A SETA may, out of any surplus monies, determine and allocate discretionary grants
      to employers, education and training providers and workers of the employers who
      have submitted an application for a discretionary grant in the prescribed form within
      the agreed upon cut-off period. The grant payable and the related expenditure are
      recognised when the application has been approved and the conditions are met.

      Project expenditure comprise:

      - costs that relate directly to the specific project;
      - costs that are attributable to contract activity in general and can be allocated to
        the project; and
      - such other costs as are specifically chargeable to the SETA under the terms of the
        contract.

      Such costs are allocated using methods that are systematic and rational and are
      applied consistently to all costs having similar characteristics.

      Discretionary grants and project costs are recognised as expenses in the period
      in which they are incurred. A receivable is recognised net of a provision for
      irrecoverable amounts for incentive and other payments made to the extent of
      expenses not yet incurred in terms of the contract.

1.5   Irregular and fruitless and wasteful expenditure

      Irregular expenditure means expenditure incurred in contravention of, or not in
      accordance with, a requirement of any applicable legislation, including:

      -The PFMA and
      -The Skills Development Act.

      Fruitless and wasteful expenditure means expenditure that was made in vain and
      would have been avoided had reasonable care been exercised.

      All irregular and fruitless and wasteful expenditure is charged against the respective
      class of expenditure in the period in which they are incurred and disclosed in a note
      in the period that it is identified.

1.6   Property, plant and equipment

      Property, plant and equipment (owned and leased) are stated at cost less any
      subsequent accumulated depreciation and adjusted for any impairments.
      Depreciation is calculated on the straight-line method to write off the cost of each
      asset to estimated residual value over its estimated useful life as
      follows:                                                                                 61
     HWSETA - ANNUAL REPORT 2005-2006




                  HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
                  ANNUAL FINANCIAL STATEMENTS
                  NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


                   (Continued)

                                                                2006               2005
                          - Computer Software                   33.33%             33.33%
                          - Computer equipment                  33%                33.33%
                          - Office furniture and fittings       10%                16.67%
                          - Office equipment                    10%                33.33%
                          - Motor Vehicles                      20%                20%

                   1.6   Property, plant and equipment

                         The estimated useful life of the assets are limited to the remaining period of the
                         licence issued to the HWSETA by the Minister of Labour. For the current year the
                         remaining period is 4 years (2005: 5 years). The useful lives and residual values
                         are estimated on an annual basis.

                         Where the carrying amount of an asset is greater than its estimated recoverable
                         amount, it is written down immediately to its recoverable amount (i.e. impairment
                         losses are recognised).

                         Gains and losses on disposal of property, plant and equipment are determined by
                         reference to their carrying amount and are taken into account in determining
                         operating profit.

                   1.7   Leasing

                         Finance leases as per the Treasury Regulations refers to a contract that transfers the
                         risks, rewards, rights and obligations incident to ownership to the lessee and is
                         recorded as a purchase of equipment by means of long-term borrowing. All other
                         leases are classified as operating leases.

                         The SETA as a lessor

                         Amounts due from lessees under finance leases are recorded as receivables at the
                         amount of the HWSETA's net investment in the leases. Finance lease income is
                         allocated to accounting periods so as to reflect a constant periodic rate of return to
                         the HWSETA's net investment outstanding in respect of the leases.

                         Rental income from operating leases is recognised on a straight-line basis over the
                         term of the relevant lease.

                         The SETA as a lessee

                         Assets held under finance leases and the corresponding liability is recognised at
                         their present value of the minimum lease payments at the date of acquisition. The
                         corresponding liability to the lessor is included in the balance sheet as a finance
                         lease obligation. Finance costs, which represent the difference between the total
                         leasing commitments and the estimated present value of the assets acquired, are
                         charged to the income statement over the term of the relevant lease so as to produce
                         a constant periodic rate of interest on the remaining balance of the obligations for
                         each accounting period.
62
HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


       Operating leases

       Rentals payable under operating leases are charged to profit or loss on a straight-line
       basis over the term of the relevant lease

1.8.   Provisions

       Provisions are recognised when the HWSETA has a present obligation as a result of a
       past event and it is probable that this will result in an outflow of economic benefits
       that can be estimated reliably. Long-term provisions are discounted to net present
       value.

       1.8.1 Provision for employee entitlements

       The cost of other employee benefits is recognised during the period in which the
       employee renders the related service. Employee entitlements are recognised when
       they accrue to employees. A provision is made for the estimated liability as a result
       of services rendered by employees up to the balance sheet date. Provisions included
       in the balance sheet are provisions for leave (based on the current salary rates) and
       bonuses.

       1.8.2 Grant payments

       A provision is recognised for grant payments once the specific criteria set out in the
       regulations to the Skills Development Act, 97 of 1998 have been complied with by
       member companies and it is probable that the HWSETA will approve the payment.
       The measurement of the obligation involves an estimate, based on the established
       pattern of past practice of approval for each type of grant.

       1.8.3 Projects

       No provision is made for projects approved at year-end, unless the service in terms
       of the contract has been delivered or the contract is of an onerous nature. Where a
       project has been approved, but has not been accrued for or provided for, it is
       disclosed as commitments in the notes to the financial statements.

1.9    Financial instruments

       Recognition

       Financial assets and financial liabilities are recognised on the HWSETA's balance
       sheet when the HWSETA becomes a party to the contractual provisions of the
       instrument.

       All arms length purchases and sales of financial assets are initially recognised using
       trade date accounting.

       Measurement

       Financial instruments are initially measured at fair value plus transaction costs
       directly attributable to the acquisition or issue of the financial asset or liability.
                                                                                                 63
     HWSETA - ANNUAL REPORT 2005-2006




                  HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
                  ANNUAL FINANCIAL STATEMENTS
                  NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


                         Financial assets

                         The HWSETA's principle financial assets are accounts and other receivables and
                         cash and cash equivalents.

                         Accounts and other receivables

                         Accounts and other receivables are measured at amortised cost, using the effective
                         interest rate method, where considered applicable. Impairment losses are
                         recognised in an allowance account where the carrying value exceeds the present
                         value of estimated future cash flows discounted at the original effective interest
                         rate.

                         Cash and cash equivalents

                         Cash and cash equivalents are measured at fair value.

                         Financial liabilities

                         The HWSETA's principal financial liabilities are accounts and other payables.

                         All financial liabilities are measured at amortised cost, comprising original debts
                         less principle payments and amortisations.

                         Gains and losses on subsequent measurement

                         Gains and losses arising from a change in the fair value of financial instruments are
                         included in net profit or loss in the period in which it arises.

                   1.9   Financial instruments (Continued)

                         Derecognition

                         A financial asset or a portion thereof is derecognised when the HWSETA realises the
                         contractual rights to the benefits specified in the contract, the rights expire, and the
                         HWSETA surrenders those rights or otherwise loses control of the contractual rights
                         that comprise the financial asset. On derecognition, the difference between the
                         carrying amount of the financial asset and the sum of the proceeds receivable and
                         any prior adjustment to reflect the fair value of the asset that had been reported in
                         equity is included in net profit or loss for the period.

                         A financial liability or a part thereof is derecognised when the obligation specified in
                         the contract is discharged, cancelled, or expires. On derecognition, the difference
                         between the carrying amount of the financial liability, including related unamortised
                         costs, and the amount paid for it is included in net profit or loss for the period.

                         Fair value considerations

                         The fair values at which financial instruments are carried at the balance sheet date
                         have been determined using available market values. Where market values are not
                         available, fair values have been calculated by discounting expected future cash
                         flows at prevailing interest rates. The fair values have been estimated using

64
HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


       available market information and appropriate valuation methodologies, but are not
       necessarily indicative of the amounts that the HWSETA could realise in the normal
       course of business. The carrying amounts of financial assets and financial liabilities
       with a maturity of less than one year are assumed to approximate their fair value due
       to the short-term trading cycle of these items.

       Offsetting

       Financial assets and financial liabilities are offset if there is any intention to realise
       the asset and settle the liability simultaneously and a legally enforceable right to set
       off exists.

1.10   Reserves

       Equity is sub-classified in the balance sheet between the following funds and
       reserves:
       - Administration reserve
       - Employer grant reserve
        - Discretionary grant reserve
       - Accumulated surplus

       This sub-classification is made based on the restrictions placed on the distribution
       of monies received in accordance with the Regulations issued in terms of the Skills
       Development Act, 1998 (Act No. 97 of 1998).
       Accrual basis of accounting is used to calculate the reserves and thus reserves are
       not an indication of the cash used or available at the end of the year.

       Member employer company levy payments are set aside in terms of the Skills
       Development Act and the regulations issued in terms of the Act, for the purpose
       of:

                                                        2005/06         2004/05
                                                              %               %

       Administration costs of the HWSETA                       10               10
       Employer Grant Fund Levy                                 50               60
       Mandatory Workplace Skills Planning Grant                50               15
       Mandatory Workplace Skills Implementation Grant           0               45
       Discretionary grants and projects                        20               10
                                                                80               80

       In addition, contributions received from public service employers in the national or
       provincial spheres of government may be used to pay for its administration costs.

       Interest and penalties received from SARS as well as interest received on
       investments are utilised for discretionary grants and projects. Other income
       received are utilised in accordance with the original source of the income.

       The net surplus/deficit is allocated to the administration reserve, the mandatory
       grant reserve and the discretionary fund reserve based on the above.




                                                                                                    65
     HWSETA - ANNUAL REPORT 2005-2006




                  HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
                  ANNUAL FINANCIAL STATEMENTS
                  NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


                          Surplus funds are moved to the discretionary fund reserve from the administration
                          reserve on the HWSETA's board approval (after prior written approval from National
                          Treasury) and from the mandatory grant on fulfilment of the HWSETA's payment
                          obligations.

                   1.11   Comparative figures

                          Where necessary, comparative figures have been adjusted to conform to changes in
                          presentation in the current year.




66
     HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
     ANNUAL FINANCIAL STATEMENTS
     NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)




        2. Allocation of net surplus for the year to reserves 2005/06
                                                                                                                                                                 Discretionary
                                                                                                                   Employer grants reserve                          reserve
                                                                      Total per Administration              Mandatory Mandatory                                                      Government
                                                                       Income     reserve                      skills       skills         Total                 Discretionary       Grants and
                                                                                                             planning implementation                                grants             Donor
                                                                     Statement                                 grant        grant                                                     Funding
          Total revenue                                                143 460      33 931                    65 377              -        65 377                         39 904         4 248
            Skills development levy: income
            Administration levy income (10%)                            33 117              33 117                  -                  -                 -                     -                -
            Grant levy income (70%)                                     96 746                   -             65 377                  -            65 377                27 121            4 248
            Skills development levy: penalties and interest              1 124                   -                  -                  -                 -                 1 124                -
            Investment income                                           11 659                   -                  -                  -                 -                11 659                -
            Other income                                                   814                 814                  -                  -                 -                     -                -

         Total expenses                                              (170 019)            (29 244)           (33 402)          (39 089)           (72 491)              (64 036)          (4 248)

           Administration expenses                                      29 244              29 244                  -                -                   -
           Employer grants and project expenses                        140 775                   -             33 402           39 089              72 491                64 036            4 248

         Net surplus/(deficit)per Income Statement allocated           (26 559)              4 687             31 975          (39 089)             (7 114)             (24 132)                 0

          The amounts reflected on the note do not represent actual cash flows. Instead, these amounts were prepared on an accrual basis in line with Generally Recognised Accounting Practice (GRAP).




67
68
     HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
     ANNUAL FINANCIAL STATEMENTS
     NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)
                                                                                                                                                                  HWSETA - ANNUAL REPORT 2005-2006




         2. Allocation of net surplus for the year to reserves 2004/05
                                                                                                   Employer grants reserve            Discretionary reserve
                                                                 Total per Administration   Mandatory Mandatory
                                                                  Income     reserve           skills        skills        Total    Discretionary     Total
                                                                                             planning implementation                   grants     discretionary
                                                                Statement                      grant         grant
          Total revenue                                           145 410      30 939         21 892        65 677         87 569       26 902        26 902
            Skills development levy: income
            Administration levy income (10%)                      30 296        30 296             -            -              -             -             -
            Grant levy income (70%)                              102 168             -        21 892       65 677         87 569        14 599        14 599
            Skills development levy: penalties and interest        1 169             -             -            -              -         1 169         1 169
            Investment income                                     11 134             -             -            -              -        11 134        11 134
            Other income                                             643           643             -            -              -             -

          Total expenses                                         (91 468)     (24 676)       (9 061)      (21 110)       (30 171)     (36 621)       (36 621)

            Administration expenses                               24 676        24 676             -            -              -             -
            Employer grants and project expenses                  66 792             -         9 061       21 110         30 171        36 621        36 621

          Net surplus/(deficit)per Income Statement allocated     53 942         6 263        12 831       44 567         57 398       (9 719)        (9 719)
HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


 3.   SKILLS DEVELOPMENT LEVY INCOME
                                                                      2005/06    2004/05
                                                                        R'000      R'000
      The total levy income per the Income Statement is as follows:
      Levy income: Administration                                      33 117     30 296
        Levies received                                                33 604     31 171
          Levies received from SARS                                    13 386     13 299
          Government levies received                                   19 893     17 907
          Interseta transfers in                                          456           27
          Interseta transfers out                                       (131)        ( 62)
        Movement in Levies accrued                                      (487)      ( 875)

      Levy income: Employer Grants                                     65 377    87 569
        Levies received                                                70 641    89 882
          Levies received from SARS                                    68 939    90 123
          Interseta transfers in                                        2 474        180
          Interseta transfers out                                       (772)     ( 421)
          Movement in Levies accrued                                  (5 264)    (2 313)

      Levy income: Discretionary Grants                                27 121     14 599
         Levies received from SARS                                     25 828     14 973
         Levies received                                               25 257     15 010
         Interseta transfers in                                           716           10
         Interseta transfers out                                        (145)        ( 47)
         Movement in Levies accrued                                     1 293      ( 374)
                                                                      125 615    132 464

 4.   INVESTMENT INCOME                                               2005/06    2004/05
      Interest income                                                   R'000      R'000
        Bank deposits                                                  11 659     11,134
                                                                       11 659     11,134

 5.   OTHER INCOME                                                    2005/06    2004/05
      Other income comprises:                                           R'000      R'000

         Buildings rental income                                          814        633
         Profit on disposal of property, plant and equipment                -         10
                                                                          814        643

                                                                      2005/06    2004/05
                                                                        R'000      R'000
 6.   EMPLOYER GRANT AND PROJECT EXPENSES
      Mandatory grants                                                  72 491    30 171
          Disbursed                                                     68 560    31 048
          Movement in provisions and accruals                            3 931     ( 877)
      Discretionary grants                                              64 036    36 621
          Disbursed                                                     66 059    29 253
          Movement in provisions and accruals                          (2 023)     7 368
                                                                      136 527     66 792

                                                                                             69
     HWSETA - ANNUAL REPORT 2005-2006




                  HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
                  ANNUAL FINANCIAL STATEMENTS
                  NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)




                  7. ADMINISTRATION EXPENSES                                      2005/06   2004/05
                                                                                    R'000     R'000

                    Depreciation as reported                               11.4       843     1 091
                    Operating lease rentals (minimum lease payments)                2 979     2 978
                    Buildings                                              11.2     2 967     2 784
                    Plant, machinery and equipment                         11.3        12       194
                    Maintenance, repairs and running costs                            175       225
                    Property and buildings                                             13        79
                    Machinery and equipment                                           162       146
                    Advertising, marketing and promotions, communication            1 635       959
                    Consultancy and service provider fees                           1 627     2 358
                    Legal fees                                                        602       222
                    Cost of employment                                      7.1    11 220     9 412
                    Travel and subsistence                                          2 678     2 156
                    Staff training and development                                    356       236
                    Remuneration to members of the accounting authority               304       310
                    Remuneration to members of the audit committee                     69        73
                    External auditor's remuneration                                   256        87
                    Other                                                           6 500     4 569
                      Workshops                                                     1 756     1 263
                      Internal audit fees                                             449       453
                      Courier and postage                                              66       122
                      Learnership monitoring and certification                          -        28
                      Telephone                                                       735       509
                      Printing and stationery                                       1 155       679
                      Staff welfare                                                    62        50
                      SDF contractor fees                                              66       149
                      Office cleaning                                                 122        86
                      Insurance                                                       222       224
                      Motor vehicle expenses                                           18        14
                      Software licences                                               572       409
                      Subscriptions                                                    32        21
                      Security                                                        223       193
                      Water and electricity                                           210       114
                      Workmens compensation                                             -        32
                      Recruitment costs                                                68       168
                      Interest paid                                                   132         2
                      RSC levies                                                       40        28
                      Bank charges                                                     61        25
                      Annual conference                                               511         -
                                                                                   29 244    24 676




70
HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


        7.1 Cost of employment
                                                                                     2005/06              2004/05
                                                                                       R'000                R'000
               Salaries and wages                                                     11 163                9 366
                  Basic salaries                                                      10 182                8 857
                  Performance awards                                                    (68)                  272
                  Temporary staff                                                        860                  218
                  Leave payments                                                         189                   19
               Social contributions
                  UIF                                                                       57                  46
                                                                                        11 220               9 412

               Average number of employees                                                  55                   50
              Refer to the report by the Accounting Authority for disclosure concerning the emoluments of members of
              the accounting authority, the Chief Executive Officer; the Chief Financial Officer and Senior Managers.



8.      PROPERTY, PLANT AND EQUIPMENT

                                                      Accumulated depreciation/               Closing carrying
 Year ended 31 March 2006                     Cost                 impairment                          amount
                                             R'000                       R'000                          R'000

 Computer equipment                          1 060                              (787)                       273
 Computer software                           1 011                              (659)                       352
 Office furniture and fittings               1 029                              (518)                       511
 Office equipment                            2 416                              (990)                     1 426
 Motor vehicles                                282                              (234)                        48
 Balance at end of period                    5 798                            (3 188)                     2 610
 Made up as follows:
 - Owned assets                              4 039                            (2 230)                     1 809
 - Leased assets                             1 759                              (958)                       801

                                                      Accumulated depreciation/               Closing carrying
 Year ended 31 March 2005                     Cost                 impairment                          amount
                                             R'000                       R'000                          R'000

 Computer equipment                          1 130                            ( 558)                         572
 Computer software                           1 258                            ( 415)                         843
 Office furniture and fittings                 974                            ( 422)                         552
 Office equipment                            2 352                            ( 807)                       1 545
 Motor vehicles                                282                            ( 177)                         105
 Balance at end of period                    5 996                           (2 379)                       3 617
 Made up as follows:
 - Owned assets                              4 268                            (2 124)                      2 144
 - Leased assets                             1 728                              (255)                      1 473




                                                                                                                        71
72
      HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
      ANNUAL FINANCIAL STATEMENTS
      NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


     8. PROPERTY, PLANT AND EQUIPMENT (Continued)        Carrying                           Depreciation/   Accumulated     Carrying
                                                                                                                             amount
                                                                                                                                       HWSETA - ANNUAL REPORT 2005-2006




        Movement summary 2006                             amount    Additions   Disposals    Amortisation Depreciation on
                                                            2004       R'000        R'000         charge       disposals       2006
                                                           R'000                                    R'000           R'000     R'000
        Computer equipment                                    572        212        (251)           (260)               -        273
        Computer software                                     843        389        (635)           (246)               -        351
        Office furniture and fittings                         552         56                         (97)               -        511
        Office equipment                                    1 545         65                        (183)               -      1 427
        Motor vehicles                                        105          -                         (57)               -         48
        Balance at end of period                            3 617        722        (886)           (843)               -      2 610


                                                         Carrying                           Depreciation/   Accumulated     Carrying
                                                          amount    Additions   Disposals    Amortisation Depreciation on    amount
        Movement summary 2005                               2003       R'000        R'000         charge       disposals       2004
                                                           R'000                                    R'000           R'000     R'000
        Computer equipment                                   406         411         (20)           (242)              17        572
        Computer software                                    415         636            -           (208)                        843
        Office furniture and fittings                        601         107            -           (156)                        552
        Office equipment                                     213          33            -           (174)                         72
        Motor vehicles                                       161           -            -            (56)                        105
        Prior year lease adjustment (Refer to note 11)                 1 728                        (255)                      1 473
        Balance at end of period                           1 796       2 915         (20)         (1 091)              17      3 617
HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


       8.2      Change in Accounting Estimate

                During the current financial period, management has revised the estimated
                useful lives of office equipment and office furniture and fittings to ten years.
                In prior periods, management had estimated the useful lives of office
                equipment and office furniture and fittings to be three and six years
                respectively. The revision of these assets' useful lives has been treated as a
                change in estimate in line with IAS 8. This has resulted in adjustments to the
                current year depreciation by R321 566. Of this balance R33 248 pertains to
                current year and R288 318 to prior year.


9.   ACCOUNTS RECEIVABLE                                             2005/06           2004/05
                                                                       R'000             R'000

     Skills development levy debtors                                   15 567            21 517
        Admin levy debtors                                              1 889             2 681
        Employer grant levy debtors                                     9 671            15 889
        Penalties and interest                                            153                69
     Discretionary grant debtors                                        3 854             2 878
     Prepaid expenses                                                   2 425             1 705
     Other receivables                                                     36                12
        Staff study assistance                                            306             1 693
        Employers overpaid                                              2 083                 -
        Inter SETA debtor                                              17 992            23 222


     9.1 Retrospective amendments by SARS

       Included in Skills Development Levy Debtors is:               2005/06            2004/05
                                                                       R'000              R'000
       SARS receivable/(payable)
         Opening carrying amount                                        1 578              1 671
         Estimated adjustments included in levies received              1 908                153
         Net effect of SARS adjustments for the current year          (5 466)              (246)
         Closing carrying amount                                      (1 980)            (1 578)




                                                                                                   73
     HWSETA - ANNUAL REPORT 2005-2006




                  HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
                  ANNUAL FINANCIAL STATEMENTS
                  NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


                  10.    CASH AND CASH EQUIVALENTS                                   2005/06            2004/05
                                                                                       R’000              R’000
                         Cash at bank and in hand
                          Cash at bank                                                205 118           224 142
                         Cash and cash equivalents at end of year                     205 118           224 142


                         As required in Treasury Regulation 31.2, National Treasury approved the banks where
                         the bank accounts are held.

                         Cash includes cash on hand and cash with banks. Cash equivalents are short term,
                         highly liquid investments that are held with registered banking institutions with
                         maturities of three months or less and that are subject to an insignificant risk of
                         change in value.

                         For the purposes of the cash flow statement, cash and cash equivalents c o m p r i s e
                         cash on hand, deposits held at call with banks, and investments in money market
                         instruments, net of bank overdrafts. In the balance sheet, bank overdrafts are
                         included in borrowings in current liabilities.


                  11. FINANCE LEASE OBLIGATIONS

                        11.1   Prior period errors

                               The HWSETA has incorrectly classified its equipment leases as operating leases
                               in prior years.
                               The leases of the photo copiers and their ancillary items should be classified as
                               finance leases to comply with Treasury requirements and GRAP     .
                               This statement requires leases to be classified as finance leases if it transfers
                               substantially all the risks and rewards incidental to ownership.
                               An asset and corresponding lease liability were recorded for each leased.
                               The effect on net income for current and prior years were as follows:

                                                                                 Notes    2005/06       2004/05
                        11.2   Buildings Operating Leases                                   R’000         R’000
                               Operating lease expense as previously reported               3 392         2 692
                               Prior Period Error                                           (425)            92
                               Restated                                              7      2 967         2 784

                        11.3   Property Plant and Equipment Operating Leases
                               Operating lease expense as previously reported                     475       438
                               Prior Period Error                                               (463)     (244)
                               Restated                                              7             12       194

                        11.4   Depreciation Expenses
                               Depreciation expense as previously reported                        813       836
                               Prior Period Error                                                 352       255
                               Revision in Estimate                                             (322)         -
                               Restated                                             8.1           843     1 091

                        11.5   Effect on the 2005 opening Retained Earnings                                632
                               Add 2004 Depreciation                                                       102
                               Less 2004 operating lease expenses                                          (28)
                               Add finance lease interest expense                                            14
                               Add smoothing lease expenses                                                544
74
HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


       11.6     Minimum lease payments
                                                           R’000                          R’000
                                                   Minimum Lease payments     PV of Minimum Lease payments
                                                    2005/06      2004/05          2005/06       2004/05
       Amount payable under finance leases:
       Within one year                                   473         446                 355        308
       In the second to fifth year inclusive           1 068       1 498                 946      1 263
                                                       1 541       1 944               1 301      1 571
       Less future finance charges                     (240)       (373)                 N/A        N/A
       Present value of lease obligations            (1 301)       1 571               1 301      1 571
       Less short term portion of finance lease                                        (355)      (308)
       Amount due for settlement after 12 months                                         946      1 263

It is the HWSETA's policy to lease certain of its fixtures and equipment under finance leases.
The average lease term is 5 years. For the year ended 31 March 2006, the average effective
borrowing rate was 10.5 percent (2004:11 percent). Interest rates are based on prime
rates, and thus expose the Group to fair value interest rate risk. All leases are on a fixed
repayment basis and no arrangements have been entered into for contingent rental
payments. All lease obligations are denominated in Rand units. The fair value of the Group's
lease obligations approximates their carrying amount.

12.    ACCOUNTS PAYABLE
       Grants and Transfers Payable                                         2005/06            2004/05
                                                                              R’000              R’000
       Non-exchange transactions
       Discretionary Grants Payable                                               -               2 023
       Mandatory Grants Payable                                              11 299               7 368
                                                                             11 299               9 391
       Exchange transactions
       Service provider fees outstanding                                        957               3 767
       Lessee deposit                                                            53                  53
                                                                              1 010               3 820
                                                                             12 309              13 211


13.    CURRENT PROVISIONS
                                           Employee leave Employee bonus       2005/06         2004/05
                                             provision      provision            R’000           R’000
       Open carrying amount                         243           273              516             278
       Amounts utilised                           (243)         (273)            (516)               -
       Change in estimate                           374                            374             238
       Closing carrying amount                      374            (0)             374             516

       Non-current
       Current                                       374             (0)              374         516
       Total                                         374             (0)              374         516

       The leave provision is calculated by apportioning the annual salary to a daily
       cost which is then multiplied by the number of leave days accumulated.

14.    CONTINGENCIES

       In terms of the PFMA, all surplus funds as at year-end may be forfeited to
       National Treasury. No formal approval has been obtained from National Treasury
       to retain surplus funds.

                                                                                                             75
76
     HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
     ANNUAL FINANCIAL STATEMENTS
     NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)

     15.   COMMITMENTS
                                                                                                                                                                   HWSETA - ANNUAL REPORT 2005-2006




     15.1 Discretionary reserve

           Of the balance of R 119,835m available in the Discretionary Reserve at the end of March 2006, R12,921m has been approved and allocated for
           future projects and skills priorities as set out below. Amounts for expenses that have already been contracted or incurred, and therefore included in
           grant expenses in the Income Statement, are also indicated. A request for the accumulation of these funds has been submitted to National
           Treasury. At the time of compiling the financial statements, no reply had been received.
                                                         Approved                            Approved
                                              Opening           by                Opening           by
                                              balance   Accounting                balance   Accounting
                                              2004/05     Authority    Utilised   2005/06     Authority    Utilised     Total
                                                R'000        R'000       R'000      R'000        R'000       R'000     R'000
           Learnerships                             -       26 903    (26 903)          -       55 433    (53 789)     1 644
           Sector skills priorities                 -        9 015     (9 015)          -        8 764     (6 302)     2 462
           Standards generating bodies              -          703       (703)          -          995       (335)       660
           Bursaries                                -             -           -         -       10 250     (2 556)     7 694
           Institute of Sectoral Excellence         -             -           -         -          360            -      360
           NGO/CBO support                          -             -           -         -        1 004       (903)       101
           BEE Research                             -             -           -         -             -           -         -
           Sector specialist training               -             -           -         -          118       (118)          -
           Standard of good practice                -             -           -         -           33         (33)         -
           Total project expenditure                -       36 621    (36 621)          -       76 957    (64 036)    12 921
HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


15.    COMMITMENTS

       15.2      OPERATING LEASES
                                                                            2005/06   2004/05
       HWSETA as lessee:                                                      R’000     R’000

       Minimum lease payments under operating
       Leases recongised as an expense in the year                            3 393     2 658

       At the balance sheet date, the HWSETA has outstanding commitments
       under non-cancellable operating leases, which fall due as follows:

       After one year                                                         1 480     3 393
       In the second to fifth years inclusive                                     -     1 480
                                                                              1 480     4 873


The operating lease relates to the Bradford Corner (Pty) Ltd buildings premises used for
office. The lease agreement was entered into, effective from 1 Sept 2001. The period
is five years ending 30 Aug 2006. No provision was made for an option to renew the
lease agreement. The rentals escalates by 12% annually.
                                                                 2005/06         2004/05
                                                                   R’000           R’000
         After one year                                              369             790
         In the second to fifth years inclusive                        -             369
                                                                     369           1 159


16.    MATERIAL LOSSES THROUGH CRIMINAL CONDUCT, IRREGULAR,
       FRUITLESS, WASTEFUL EXPENDITURE

       The following material losses through criminal conduct, irregular, fruitless and
       wasteful expenditure were incurred during the year ended 31 March 2006:

       Material losses through criminal conduct:

       The HWSETA entered into an agreement with a training provider for the purposes of
       training 185 learners on the Auxiliary Nursing, Enrolled Nursing and Bridging
       Learnerships.

       Investigations revealed that the provider did not adhere to the terms and conditions
       of the agreement resulting in the case going to arbitration.

       Fruitless and wasteful expenditure:

       Fruitless and wasteful expenditure of R440 000 was undertaken for an electronic
       document management system. A forensic investigation is currently being
       conducted.




                                                                                                77
     HWSETA - ANNUAL REPORT 2005-2006




                  HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
                  ANNUAL FINANCIAL STATEMENTS
                  NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


                   17.   EVENTS AFTER BALANCE SHEET DATE

                         17.1   MATERIAL LOSS

                         With reference to Note 16 (above), the arbitrator found in favour of the HWSETA and
                         made an award of R 968,800. The HWSETA is endeavouring to recover these
                         funds from a supplier through normal legal process.

                         In the event that the training provider is unable to fulfil its obligations, the HWSETA
                         has decided that civil claims will be lodged.

                         17.2 SUSPENSION OF THE CEO & CFO

                         Subsequent to year end, the CEO and CFO were suspended. The outcome of the
                         forensic investigation has been received and disciplinary action will be conducted
                         for gross negligence.




78
HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


18.    FINANCIAL INSTRUMENTS

       In the course of the Seta operations it is exposed to interest rate, credit,
       liquidity and market risk. The Seta has developed a comprehensive risk strategy in
       terms of TR 28.1 in order to monitor and control these risks. The risk management
       process relating to each of these risks is discussed under the headings below.

       Interest rate risk

       The SETA's exposure to interest rate risk and the effective interest rates on financial
       instruments at balance sheet date are as follows:

                                                                          Non       Total
                                               Floating rate            interest    R’000
                                                                        bearing
                                      Amount            Effective       Amount
      Year ended 31 March 2005         R’000          interest rate      R’000
       Assets
      Cash                           205 118           6.05%                -      205 118
      Accounts receivable                                              18 026       18 026

      Total financial assets         205 118                           18 026      223 144

      Liabilities

      Accounts payable                                                (12 309)     (12 309)

      Total financial liabilities          -                          (12 309)     (12 309)


      Year ended 31 March 2004
      Total financial assets         224 142                            23 222     247 364
      Total financial liabilities          -                          (13 211)     (13 211)
                                     224 142                            10 011     234 153




                                                                                                 79
     HWSETA - ANNUAL REPORT 2005-2006




                  HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
                  ANNUAL FINANCIAL STATEMENTS
                  NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


                   18.   FINANCIAL INSTRUMENTS (Continued)

                         Credit risk
                         Financial assets, which potentially subject the HWSETA to the risk of non
                         performance by counter parties and thereby subject to credit concentrations of
                         credit risk, consist mainly of cash and cash equivalents, investments and accounts
                         receivable.

                         The HWSETA manage limits its treasury counter-party exposure by only dealing
                         with well-established financial institutions approved by National Treasury.

                         Credit risk with respect to levy paying employers is limited due to the nature of the
                         income received. The HWSETA does not have any material exposure to any
                         individual or counter-party. The HWSETA's concentration of credit risk is limited to
                         the health and social development sector in which the HWSETA operates. No
                         events occurred in the health and social development sector during the financial
                         year that may have an impact on the accounts receivable that has not been
                         adequately provided for. Accounts receivable are presented net of allowance for
                         doubtful debt.

                         Liquidity risk
                         The HWSETA manages liquidity risk through proper management of working
                         capital, capital expenditure and actual vs. forecasted cash flows. Adequate
                         reserves and liquid resources are also maintained.

                         Market risk
                         The HWSETA is exposed to fluctuations in the employment market for example
                         sudden increases in unemployment and changes in the wage rates. No significant
                         events occurred during the year that the HWSETA are aware of.

                         Fair values

                         The HWSETA's financial instruments consist mainly of cash and cash equivalents,
                         account and other receivables, and account and other payables. No financial
                         instruments were carried at an amount in excess of its fair value. The following
                         methods and assumptions are used to determine the fair value of each class of
                         financial instrument:

                         Cash and cash equivalents
                         The carrying amount of cash and cash equivalents approximates fair value due to
                         the relatively short-term maturity of these financial assets.

                         Accounts receivable
                         The carrying amount of accounts receivable, net of allowance for bad debt,
                         approximates fair value due to the relatively short-term maturity of these financial
                         assets.

                         Accounts payable
                         The carrying amount of account and other payables approximates fair value due to
                         the relatively short-term maturity of these financial liabilities.




80
HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


19. Related Party Transactions

    Transactions with other SETA’s

    Interseta transactions and balances arise due to the movement of
    employers from one SETA to another. No other transactions occurred
    during the year with other SETAs.

    The balances at year-end included in receivables and payables are:

                                           2005/06                          2004/05
                                             R'000                            R'000
                                  Transfers            Amount        Amount           Amount
                                     in(out)       receivable/        of the      receivable/
                                 during the          (payable)   transaction        (payable)
                        Note            year
     Receivables          13           3,646             2 083          237                 -
     Fasset                                -                             50
     Poslecseta                            -                              2
     Services Seta                         -                            165
     Unknown                             152                              -
     ETDP SETA                           196                              -
     MQA                                  70                             20
     W&R SETA                          3,228             2 083            -

     Payables             20          1058                   -         (530)                -
     Poslecseta                          -                              (15)
     Merseta                           211                              (81)
     Inseta                            148                             (201)
     Theta                               6                              (38)
     Chieta                             89                              (19)
     Fasset                              -                              (10)
     Unknown                            76
     W & R Seta                        238                             (166)
     FOODBEV SETA                        5
     SASSETA                            17
     TETA                               10
     MAPPPSETA                         144
     ISETT                              81
     PAETA                              14
     CETA                               19

     Total                           2,588              2 083           293                 -


No provision has been made for taxation, as the HWSETA is exempt from
income tax in terms of Section 10 of the Income Tax Act.




                                                                                                81
     HWSETA - ANNUAL REPORT 2005-2006




                  HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
                  ANNUAL FINANCIAL STATEMENTS
                  NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


                  19.1    RELATED PARTY TRANSACTIONS (Continued)     LEVIES    GRANTS
                                                                   RECEIVED       PAID
                                                                      R'000      R'000

                         National
                         Health                                         209           -
                         Social development                             305           -

                         Provincial
                         Western Cape
                         Health                                        1,947      5,950
                         Social development                              180          -

                         Eastern Cape
                         Health                                        2,226      1,959

                         Gauteng
                         Health                                        4,865      3,683
                         Social development                              230          -

                         Free State
                         Health                                        1,771       158
                         Social development                              162         -

                         Northern Cape
                         Social development                             135           -

                         Mpumalanga
                         Health & Social development                       -      2,344

                         Limpopo
                         Health                                        2,156          -
                         Social development                              160          -

                         KwaZulu Natal
                         Health                                        3,525       984
                         Social development                              204         -

                         North West
                         Health                                        1,649          -
                         Social development                              169          -

                         Grand Totals                                 19,893     15,078




82
HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


19.2   During the year members of the accounting authority and employees were required
       to disclose their interest in any contracts that the SETA is entering into with an
       outside party. As a result the SETA entered into the following transaction with
       related parties.

                                                                              2005/2006
                                                                                   R’000
                                                   Transaction        Amount of the    Amount
       Related party      Nature of Relationship    Type                Transaction    Payable
       Mr. T. Joseph      SA Gerontological        Levy Exempt                 903           0
                          Association
       Mrs. D.C. Cronje   SA Radiography Society   Diagnostic                1,218        250
                                                   Radiography
       Y.D. Mbane,        Department of Social     SSP Social Work           1,830        260
       M.S. Matsuma,      Development
       V.H. van Wyk

       M.J. Viljoen       Department of Health     Bursaries                   817       1,703
                                                   Nursing                     907         368
                                                   Learnerships              9,242       3,951
                                                   Bursaries                   458         681
                                                   SSP, HIV/Aids & ABET      1,713       2,418

                                                                            17,088      9,631




                                                                                                 83
     HWSETA - ANNUAL REPORT 2005-2006




                  HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
                  ANNUAL FINANCIAL STATEMENTS
                  NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


                  20.      DEFERRED GOVERNMENT GRANTS                              2005/06          2004/05
                                                                                     R’000            R’000

                  National Skills Funds: Ancillary Health Care
                  Opening balance                                                    6 880                 -
                  Received during the year
                  Interest received
                  Utilised and recognised as revenue-
                       conditions met:                                               4 248                 -
                       Learner allowance                                             1 778                 -
                       Training provider fees                                        1 976                 -
                       Learner uniforms                                                494                 -
                  Closing balance                                                    2 632                 -

                  During the current year conditional funds of R6.88m were received from the National
                  Skills Fund for the purposes of learner allowance. This amount was recognised as a
                  liability until the conditions attached were met. During the year, R4.248m eligible project
                  special expenses were incurred and a corresponding amount was recognised as revenue.
                  At year end, R2.632m continues to be accounted for as a liability until the remaining
                  conditions attached have been met.

                  21. LEASE SMOOTHING LIABILITY

                  The lease of the office premises was smoothed over the lease term to equalise the future
                  escalations in the lease payments. The smooth escalations in the lease payments. The
                  smoothing liability for the year was as follows:
                                                                                     R’000            R’000
                                                                                   2005/06          2004/05
                  Liability                                                            211              637
                  Less: Short term portion of smoothing liability                    (211)            (637)
                                                                                         -                -


                  As the HWSETA has not accounted for this liability in prior years, an adjustment was made
                  against opening retained income and the liability was raised. The rand amounts of the
                  liability raised above had an opposite but equal effect on the opening retained income.




84
HEALTH AND WELFARE SECTOR EDUCATION AND TRAINING AUTHORITY
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)


22.   RECONCILIATION OF NET CASH FLOW FROM
      OPERATING ACTIVITIES TO NET SURPLUS/(DEFICIT)



                                                                     2005/06    2004/05
                                                                       R'000      R'000

      Net (deficit)/surplus as per Income Statement                  (26,559)    53,942
      Adjusted for non-cash items:
        Depreciation                                                     843      1,091
      Non cash adjustment on leases                                        -      (152)
        Non-cash portion of asset adjustments (note & 10)                886          -
        (Profit)/loss on disposal of property, plant and equipment         -       (10)
        Increase/(decrease) in provisions                                           238
        Special project income recognised                            (24,830)    55,109
      Adjusted for items separately disclosed
      Investment income                                              (11,659)   (11,134)
      Adjusted for working capital changes:
         Decrease/(increase) in receivables                             5,196     1,966
         Increase/(decrease) in payables                                1,420     9,398
      Movement in VAT receivable/payable                                  440        54
      Cash (utilised in)/ generated from operations                  (29,433)    55,393




                                                                                           85
     HWSETA - ANNUAL REPORT 2005-2006




                  Acronyms and Abbreviations
                       18.1       Employed Learners
                       18.2       Unemployed Learners
                       ABET       Adult Basic Education and Training
                       ANASA      Association of Nursing Agencies of South Africa
                       ATR        Annual Training Report
                       CCMA       Commission for Conciliation Mediation and Arbitration
                       CEO        Chief Executive Officer
                       CFO        Chief Financial Officer
                       DENOSA     Democratic Nursing Organisation of South Africa
                       ETD        Education Training and Development
                       ETQA       Education and Training Quality Assurance
                       HASA       Hospital Association of South Africa
                       HEQC       Higher Education Quality Committee (of the CHE)
                       HIV/AIDS   Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome
                       HOSPERSA   Health and Other Service Personnel Trade Union of South Africa
                       HPCSA      Health Professions Council of South Africa
                       HWSETA     Health and Welfare Sector Education Training Authority
                       HR         Human Resources
                       MoU        Memorandum of Understanding
                       NEHAWU     National Education Health and Allied Workers Union
                       NGO        Non-Governmental Organisation
                       NPG        National Pathology Group
                       NPSWU      National Public Sector Workers Union
                       NQF        National Qualifications Framework
                       NSA        National Skills Authority
                       NSF        National Skills Fund
                       NUPSAW     National Union of Public Service and Allied Workers
                       PAB        Professional Accreditation Body for Health and Skincare
                       PAWUSA     Public and Allied Workers Union of South Africa
                       PFMA       Public Finance Management Act, 1999
                       PSA        Public Servants Association of South Africa
                       PSSA       Pharmaceutical Society of South Africa
                       QMS        Quality Management System
                       RPL        Recognition of Prior Learning
                       SACSSP     South African Council for Social Services Professions
                       SAMA       South African Medical Association
                       SAQA       South African Qualifications Authority
                       SARS       South African Revenue Service
                       SDF        Skills Development Facilitator
                       SETA       Sector Education Training Authority
                       SGB        Standards Generating Body
                       SMME       Small, Medium and Micro Enterprise
                       SSP        Sector Skills Plan
                       VAT        Value Added Tax
                       WSP        Workplace Skills Plan
                       SADA       South African Dental Association
                       JIP        Joint Implementation Plan
                       EPWP       Expanded Public Works Programme
                       HCBC       Home/Community Based Care
                       SDP        Skills Development Planning
                       AGM        Annual General Meeting
                       ASGISA     Accelerated and Shared Growth Initiative for South Africa
                       JIPSA      Joint Initiative for Priority Skills Acquisition
                       NPSWU      National Public Service Workers Union

86
HWSETA
Office of the Chief Executive Officer:

Physical Address:
2 Bradford Road
Corner Bradford Road & Smith Streets
Bedfordview, Gauteng
2047

Postal Address:
Private Bag X15
Gardenview, Gauteng
2047

Telephone number:         (011) 607-6900
Fax number:               (011) 616-8939

e-mail address:           hwseta@hwseta.org.za
web site address:         www.hwseta@org.za


Board Administration Office

Physical Address:
2 Bradford Road
Corner Bradford Road & Smith Streets
Bedfordview, Gauteng
2047

Postal Address:
P O Box 75399
Gardenview, Gauteng
2047

Telephone number:         (011) 622-9786
Fax number:               (011) 622-5693

e-mail address: boardsec@mweb.co.za



For your information: Annual General Meeting

The Annual General Meeting for 2005/2006 reporting year will be held on
Friday 24th November 2006.




                                                                          87
     HWSETA - ANNUAL REPORT 2005-2006




                  Notes




88

				
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