Annual Report FOREST INDUSTRY EDUCATION & TRAINING … · 2014. 10. 16. · Annual Report 2010 – 2011 FOREST INDUSTRIES EDUCATION & TRAINING AUTHORITY Forum II, 4th Floor, Braampark

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Minister BN NzimandeMP, Minister of Higher Education and Training

Honourable Minister

It is my pleasure and privilege to present to you this Annual report of the Forest Industries Education and

Training Authority for the period 1 April 2010 to 31 March 2011.

I thank you and your Ministry for the support we have received during the reporting period and trust

you will find this report in order and share in our suc-cesses for the reporting period.

Yours faithfullyMr Simangaliso Mkhwanazi

To promote and facilitate the establishment and management of an education and train-

ing system, which will produce one of the smartest, best motivated and prosperous workforces in the world

To position the South African Forest Industries and related sectors, as the global leader, now and in the future.

Design & Layout: Mamashela ConsultingPrinting: Mamashela Consulting

Email: [email protected]

Annual Report

2010 – 2011

FOREST INDUSTRIES EDUCATION & TRAINING AUTHORIT Y

Forum II, 4th Floor, Braampark33 Hoofd Street, Parktown, 2193

Johannesburg

Tel: 011 712 0600/1Fax: 011 339 1166

Email: [email protected]. zaWebsite: w w w.fieta.org. za

ISBN: 978-0-621-40292-6RP185/2011

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Chairperson’s Report 4Chief Executive Officers Report 5

Chapter 1 - Visibility and Relevance of the FIETA 7Chapter 2 - An Efficient and Effective Administrative System 9Chapter 3 - National Skills Development Strategy Report 12Chapter 4 - The Audit Committee Report 27Chapter 5 - Report of the Auditor General 29Chapter 6 - Accounting Authority Report 33

Annual Financial Statements 36

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ABET Adult Basic Education & TrainingBBBEE Broad Based Black Economic EmpowermentBEE Black Economic EmpowermentCBO Community Based OrganisationsCEO Chief Executive OfficerCOE Centres of ExcellenceDoL Department of LabourDHET Department of Higher Education & TrainingETQA Education and Training Quality AssuranceFET Further Education &TrainingFVTPL Fair value through profit or lossGAAP Generally Accepted Accounting PracticeGRAP Generally Recognised Accounting PracticeHDI Historically Disadvantaged IndividualISOE Institute of Sectoral ExcellenceNGO Non Governmental OrganisationsNSDS National Skills Development StrategiesNSF National Skills FundNQF National Qualifications FrameworkNVC New Venture CreationPFMA Public Finance Management ActPSDF Provincial Skills Development ForumQCTO Quality Council for Trades & OccupationsSAQA South African Qualifications AuthoritySDF Skills Development FacilitatorsSDLA Skills Development and Levies ActSDL Skills Development LevySETA Sector Education and Training AuthoritySLA Service Level AgreementSME Small and Medium EnterprisesSSP Sector Skills PlanWSP Workplace Skills Plan

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Honourable Minister, it is with pleasure that we present to you the Annual Report of the Seta for the Forest Industries Education and Training Authority for the period 1 April 2010 to 31 March 2011.

The year under review was our eleventh year of operation and the sixth year of FIETA’s functioning in terms of the Department of Labour’s NSDSII and our first year under the department of Higher Education and Training.

In my humble opinion we have proven once again the value of leveraging a small dedicated industry body which has the vision, focus and passion for working with our diversity to make a difference in the lives of all our stakeholders.

The Seta management has to be commended in dealing with significant industry and Ministerial demands often placed with little notification. Although this balancing act has been trying, they have on the whole kept the credibility of the FIETA on a growth path and managed the inevitable pressure from all the role players. The FIETA is fortunate to have strong and productive relationships with its stakeholders.

The focus required on balancing resources with the demands on a comprehensive score card has been handled admirably by the Seta and we are proud to have been part of so many successful projects across the country. The joy and pride displayed by graduating learners across our four sub sectors is a privilege to behold and the hope stimulated from this, needs to be nurtured by all our social

partnerships to convert this start into worthwhile employment and entrepreneurial opportunities.

My term as Chairperson has drawn to a close. I would like to express my gratitude to the Management Board. I have really enjoyed working with people who are passionate about skills development and committed to improving skills levels within the sector. On that note I would also like to take this opportunity to welcome the Chairperson of the new Fibre Processing & Manufacturing Seta, Mr Sipho Ngidi, and the interim Management Board members, who have assumed office on 1 May 2011.

It is also important to recognise that our achievements would not have been possible without the ongoing commitment and support of all our stakeholders, organised business, organised labour, professional bodies, the FIETA Staff, our service providers and the learners themselves.

As the FIETA board, we step down from the role we played in the 2010/2011 financial year. As we do so we look forward to the creation of the new FP&M SETA. We thank each and every one of you for your commitment and hard work over the past year.

_________________Mr. Michael MokoanaFIETA Chairperson

Report of the Chairperson of the Accounting Authority

Chairperson’s Report

Mr. Michael MokoanaFIETA Chairperson

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The year 2010 – 2011 was the most challenging year in my experience as the Chief Executive Officer of the Forest Industries Education and Training Authority.

One year relicense certificate

The Minister of Higher Education and Training, honourable Blade Nzimande announced his intention to review the seta landscape. He extended the lifespan of all Sector Education and Training Authorities (SETAs) including FIETA by only a year. Normally, SETAs are extended for a full five year period.

This presented a number of new challenges. The first challenge related to planning. This decision made it extremely difficult to ensure long term planning. We had to base all operations we were doing on a year’s duration. Leases on buildings, photocopiers and other business administrative tools had to be contracted for a year resulting in a loss of savings procured from long term contracts.

The extension for a year also meant that the provision of education and training to the sector was based on one-year assumptions thus limiting the SETAs commitment to interventions and projects that were less or equal to a year. Industries in the sector were also cautious of long term investments in the training and development of the workers.

It became extremely difficult to motivate staff not only to perform their duties but to keep them from joining industries which were more solid and more secure. Creative measures had to be implemented to manage the flight of staff.

The process of convincing the National Skills Authority of the need of the sector to continue to operate albeit in a different form was challenging and time consuming. Numerous stakeholder discussions had to be implemented to get the support of these groups and their views towards the impending changes of the landscape of post school worker training. Some stakeholders also saw it as an opportunity to look for new seta homes.

The pleasing thing about this period is that the momentum to provide skills development in the sector did not diminish, and the sector (SETA)

assessed it’s viability and longevity in earnest.

Year of the review of the Seta landscapeWith the review of the seta landscape, the FIETA was to be dissolved in its current form and promulgated to amalgamate with the Clothing, Textiles, Footwear and Leather SETA (CTFL) and three sectors (Packaging, Printing and Publishing) from the MAPPP SETAs to establish a new seta called Fibre Processing and Manufacturing Sector Education and Training Authority (FP&M Seta) as of 1 April 2011. This merger presents new opportunities and challenges, including the retaining of competent staff and integrating FIETA systems with those of the other two SETAs. Final year in the existence of the Forest Industries Education and Training AuthorityThe Authority has established and developed best practices in fulfilling its mandate of managing skills development in the forest industries. All partners in the Authority, including member companies and organised trade unions, had given un-reimbursed time and effort to the effective running of the administration of the seta. With the sacrifice of time and effort, the Authority has never experienced “walk-outs” by stakeholders or legal challenges amongst members. The Authority operated smoothly and in unison on most of the decisions it has implemented.

Some of the decisions taken included plans to retain staff and efforts to influence the ultimate form the new seta. 2010 Soccer Wold CupThe FIFA soccer World cup was hosted by South Africa in 2010. The tournament invigorated the “rainbow nation” spirit amongst South Africans and made South Africa the focus of the world. South Africans worked together to make this the best FIFA World Cup tournament ever hosted.

Running stakeholder meetings and implementing training interventions became increasingly challenging. There were many holidays and South Africans took leave from work to host the thousands of visitors that landed on our shores.

Report of the Chief Executive Of ficer

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a) Visibility and relevance of the FIETA

GovernanceFIETA successfully implemented its constitutional requirements with a maximum of 5 Authority meetings, 4 Audit Committee meetings, 7 chamber meetings and 5 Executive Committee meetings.

Participation in the sectorFIETA was completely involved in the sector process. FIETA is a signatory of the Forestry BBBEE and Transformation Charter. We were involved in the development of the skills development section of the “Reader guidelines” of the Charter.

FIETA continued to participate in the processes of the Department of Water and Forestry (DWAF) and later Department of Agriculture, Forestry and Fisheries. Some of the participation was realized in projects like the ABET for all DWAF level 1 to 4 workers in all the provinces, with a monthly stipend for students to have practical experience at DWAF offices and plantations.

FIETA also assisted companies who were confronted by the impact of the economic recession through the reskilling of retrenched workers. Companies assisted included; York Timbers in Mpumalanga, Mondi at Merebank, and Suiderland Charka in Limpopo.

FIETA also worked with various communities in developing local community skills, local economies and job creation. Notable amongst those communities assisted are; Mkhuhlu (Mpumalanga), Nkungumathe, Inkandla (KZN North Coast),

Mitchell’s Plain (Western Cape), Reiger Park, Daveyton (Ekurhuleni, Gauteng), Libode (Eastern Cape) and Greytown (KZN).

FIETA continued to support land claimants in skilling them to manage their new resources through business and silvicultural training.

In conclusion, I extend my sincere appreciation to the Department of Higher Education and Training for its ongoing support and assistance and the new FP&M SETA since FIETA seizes to exist in it’s current form post 31 March 2011.

I remain committed to the new FP&M SETA. I would like to thank my staff, senior management and the Board for their assistance and guidance throughout the year.

Thank you

Simangaliso Mkhwanazi CHIEF EXECUTIVE OFFICER

Report of the Chief Executive Officer - continue

Simangaliso MkhwanaziCHIEF EXECUTIVE OFFICER

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Chapter 1

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Chapter 1

Visibilit y and Relevance of the FIETAResearch - Mid 2010, the Forest Industries Education and Training Authority established a research unit coupled with monitoring and evaluation. The primary purpose of the unit was to provide support to projects, in the process providing monitoring support to the Monitoring Department of the FIETA. Secondly, it was to ensure that the FIETA’s impact in the sector was measured, timeously and accurately. FIETA embarked on a process of aligning the research unit to all the FIETA operations. The unit’s operations involved an impact analyses of training interventions the FIETA embarked on.

During the course of these interventions, the FIETA research unit was involved with the study of tracking and tracing of all learners who participated in FIETA learning programmes. A large number of learners were tracked and traced. Some were found to have started their own business, others found employment and sadly others were still unemployed, but they all had a skill and that alone means the FIETA has made an impact in society.

A study of the impact was launched coupled with the tracing and tracking of learners for the period starting 01 April 2010 to 31 April 2011, a large number of learners had participated in the FIETA training interventions and the summary of the results from the study is presented.

RACE

Breaking down the racial numbers in percentiles, the FIETA has trained only 1% of the Indian community, 7% of the white community, 8% from the colored community and a majority of 84% from the black community.

The FIETA has trained more youth than non-youth, in all its training intervention, almost 70% of the training in skills programme has been done by the youth, while only 30% was training focused on non-youth. This shows that most funds are being allocated to young people. This will help in terms of government priorities to reduce youth unemployment and up-skill the youth of the

country.

For the financial year under review, KwaZulu Natal has enjoyed more allocation of resources compared to all the other provinces by large amounts, followed by Mpumalanga and Limpopo. The FIETA is proud to have made such an impact, particularly in KZN seeing that most of our stakeholders are in that province. This goes to show that the FIETA is serving its sector as it should.

This graph represents the number of companies per province.

Placement of Learners

With respect to the placement of learners, 1430 learners were counted amongst those that were participating in the economy formally and had found employment after participating in FIETA training interventions. A large number had also started their own businesses and the rest were either still looking for employment or had taken up further training either through FIETA or other institutions.

COLOURED 8%

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Chapter 2

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Chapter 2

Administration

During the year under review, both the mandatory and discretionary grant expenditure was less than the previous year.

In an effort to streamline the administration and to improve the quality and risk management of projects, a projects monitoring team was set up to assist FIETA with the review of its projects methodology and to improve delivery. To this end, a lot of project management information was gathered and new experiences for managing community projects were developed. The tracking and tracing of learners was also made easy through this effort.

According to the SDA, 10% of funds may be used for administration allocation. FIETA exceeded its administration allocation as a result of increased internal and external audit fees, increased stakeholder participation in the consultations for a new seta landscape, strategies to retain competent staff and the managing of the amalgamation process.

The SETA Management System (SMS) continues to function well, with most stakeholders submitting their reports online. The quality of data submitted for WSPs and Annual Training Reports has improved, and provides reliable data against which individual companies can benchmark themselves. This information is further used as one of the sources for the compilation of the Sector Skills Plan.

Human Resources

The cornerstone of any efficient and effective administration system is made up of a full complement of qualified and committed staff members. As at 31 March 2011, the FIETA has an average number of 31 employees.

The focus areas for 2010/2011 was to pro-actively manage the impact that the changing SETA landscape may have on staff as well as expanding

talent management, retention and staff wellness initiatives.

Another focus area was to broaden training and development practices through competency assessments as well as group training sessions for management and staff.

A number of changes occurred during the year which included resignation, re-deployment, promotion and the creation of new positions. As part of its attraction and retention strategy, the FIETA benchmarks itself against other SETAs and the Forest Industries Sector.

The SETA did, however, lose its project manager to the Transport Seta.

Balanced Scorecard

The balanced scorecard system was introduced and implemented. Individual and department scorecards were developed to ensure symmetry between energy, resource spend and strategic objectives. Individual employees recognize that their daily activities contribute to the FIETA’s overall performance, which leads to improved customer service, stakeholder alignment and employee empowerment.

Information Technology

The goal for the IT department for this financial year 2010/2011 was to improve our service delivery to our stakeholders by1. Efficiently and effectively addressing internal

and external requests;2. Maintaining a high quality of service at all

times;3. Improving access to information; and ,4. Improving system up-time and reduce the risk

of data loss.

An Ef ficient and Ef fective Administrative System

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Chapter 2

Marketing and Communications

The Marketing and Communications unit promotes the products and services of the FIETA using a wide range of channels and instruments to stakeholders and the general public.

During the financial year, the FIETA focused its publicity campaigns around the ministerial priorities of career development and graduate training & placement using print, electronic and radio channels to learners to ensure that they make informed career choices. General branding in targeted industry publications for stakeholders was also effected, particularly in the media aimed at the Forestry and Wood industries.

In addition the FIETA produced 4 high quality newsletters that were disseminated to stakeholders. This was well received as it reflected the successes and challenges in the industry as well as the 100% pass rates of our bursars and the heartfelt graduation stories from learners that were funded on our various skills programmes.

In addition more than 10 000 brochures were printed on the FIETA learnerships and bursary opportunities, and these were distributed at the many career exhibitions that the FIETA participated in and or organised.

FIETA was proud to host the first Winter School Programme in PE. This FIETA funded programme ensured that during the school break teachers and learners got together to ensure extra lessons were given to Grade 12 learners in an effort to increase the matric pass rate.

In addition the unit was also responsible for content management and updating of the FIETA website, with a turnaround time of 24-hours for updates and new documentation to be available to stakeholders.

Events & Exhibitions

During this financial year the FIETA participated in events and exhibitions in all the provinces, including the SABC Career Expo (nationally), People living with disability Expo at Birchwood Hotel and Conference

Centre (Boksburg) and PAMSA’s Mathematics and Science project in KwaZulu Natal and Gauteng (Pretoria) and the National Youth Development Agency (NYDA) roadshow in Hammanskraal.

Print Media Coverage

The FIETA ensured that it stakeholders were kept abreast of latest developments in the industry as well as skills development through industry publications including the informative and widely circulated Wood SA and SA Forestry. Further media coverage was exerted in career publications that included; Learnerships SA, The Graduate, Life after Matric and ACE Career Guide for Matric

FIETA also took part in radio shows hosted by UkhoziFM and SAFM.

Procurement and Supply Chain

The objective of procurement and supply chain management is to ensure the effective and uniform planning for the procurement of all services and goods required by the FIETA. We have committed ourselves to ensuring the implementation of strategic policies, processes and systems to improve management of contracts, particularly for the training interventions we engaged in throughout the year. This has meant the difference between achieved and over-achieved targets on our scorecard.

In the broader picture, we have strived to support government strategy in terms of rural development through employment creation and poverty reduction. Through projects implemented in various rural communities nationally, the immediate communities not only benefited through skills development but also, small businesses mainly in the catering arena were promoted and uplifted as a result of such interventions.

We continue to strive to uplift and promote the principles of Supply Chain Management as contemplated in the SCM guidelines and all applicable legislation. We continually seek ways to improve our processes to efficiently serve our stakeholders and ensure quality in the services we provide.

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Chapter 3

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Chapter 3

EDUCATION AND QUALITY ASSURANCE

FIETA successfully carried out its quality assurance mandate including its statutory requirements of: • Provider accreditation• Programme approval• Monitoring of providers• Evaluations of learning programmes• Verification of the learning programmes

During the period of 1st April 2010 to 31st March 2011, various interventions were conducted by the ETQA: provider workshops; site visits; monitoring; and road shows.

The ETQA findings and FIETA ETQA’s interventions after analysis of providers after the above men-tioned intervention are as follows:

FIETA PROVIDER CAPACITY BUILDING 2010The purpose of these workshops was to primarily capacitate FIETA emerging, provisional and full ac-credited providers on three modules as outlined below:

MODULE 1: (2 DAYS) TRAINING PROVIDER ROLES AND RESPONSIBILITIES• What is the NQF and outcomes based educa-

tion?• Understanding the roles and responsibilities of

training providers in terms of the requirements of SAQA, the NQF, FIETA and other stakehold-ers

• Provider accreditation requirements,• Qualifications, skills programmes, unit stand-

ards.• Assessment and moderation.

MODULE 2: (3 DAYS) QUALITY MANAGEMENT SYS-TEMS• What is ‘quality’?• What is a Quality Management System (QMS)?• The benefits of a QMS;• FIETA requirements of training providers in

terms of a QMS;• Drafting and reviewing your organization’s

QMS (Practical exercises to enable providers to develop and refine their own effective Quality Management System).

MODULE 3: (3 DAYS) CAPACITY BUILDING – USING FIETA STANDARDIZED TRAINING PACKS Candidates were introduced to the standardized training materials issued. Discussion focused on:• the unit standards covered in the training ma-

terials;• training methods; and • timeframes for activities;• safety considerations; • assessmentsAll modules were practical and interactive. Emphasis was on simplicity, efficiency and effectiveness in practical application of learning. Candidates were required to provide evidence to prove understanding and competence.

Candidates were required to bring their current QMS documentation to the training to be able to apply discussion and learning to make immediate improvements to their systems in terms of their specific needs.Provider capacity building intervention workshops were conducted in all provinces. And this interventions included;

FIRE LOOKOUT & BASIC FIRE FIGHTINGCHAINSAWBRUSH CUTTERFURNITURE L1 to L3

FIETA also developed new and ground breaking learning materials as witnessed in the table below;

Name of As-sociations or Organization

Learning Pro-grammes Devel-oped

NQF Level

PAMSA Tissue Conver-sion

NQF Level 2,3 and 4

Umgungund-lovu FET Col-lege

National Cer-tificate: General Forestry

NQF Level 4

SAFCA Supervisor Development Programme (SDP), Only the generic modules are development at this stage

Generic Modules

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MOU’sFIETA signed Memorandums of Understanding (MoUs) with the following SETAs and band ETQAs:

• UMALUSI• AgriSETA• CHIETA• CETA• ETDP SETA• ESETA• HWSETA• ISETT• BANKSETA

• INSETA• MAPPP• MERSETA• MQA• PSETA• SASSETA• SERVICES• THETA• TETA

At least three of accredited forest sector providers were assisted in acquiring the NVC programme approval with the Services SETA, they are detailed in the table below:

Name of the Training Provider Province NQF Level

Furniture World Training Cen-tre

Gauteng 2

Vicmat Consultants Gauteng 4Umgungundlovu FET College KwaZulu

Natal2

Provider accreditation and programme approvals:As of 31st March 2011, a total of 222 providers of which 36 were programme approvals and 78 were accreditations were included in the FIETA Database of accredited providers.

Providers per subsector:

Subsector No of ProvidersFurniture 106Wood Products 5Forestry 100Pulp & Paper 11

Providers per province:

Province No of ProvidersGauteng 100KZN 45Western Cape 17Mpumalanga 28Limpopo 08

Eastern Cape 06Free state 04Northern cape 03North West 11

Assessment and ModerationAs of 1 April 2010 to 31 March 2011, a total of 411 assessors and 64 moderators were registered by FIETA. These candidates had met the FIETA registra-tion requirements which are:• Subject matter specialisation• Experience• Relevant minimum qualification• ETDP qualification which includes plan and

conduct assessment

Certification and hologramsBelow is a table indicating the number of certifi-cates issued during the year in review:

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No of Learners

610 50 106 22

Below is a table indicating number of holograms issued during the year in review:

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610 50 106 22 14

Institutes of Occupational Excellence (ISOEs):The FIETA signed ISOEs Memorandum of Under-standings (ISOE MoUs) with two FET Colleges;

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Chapter 3

• Capricorn FET College, Limpopo• Ekurhuleni East FET College, Gauteng

During the period April 2010 to March 2011, the following FET colleges were supported with pro-grammes in Assessor and Facilitation training:• Umfolozi FET College in KZN: pulp and paper

skills programmes and qualifications.• Sekhukhune FET in Limpopo: furniture mak-

ing skills programmes and qualifications.• Ikhala FET in Eastern Cape: furniture making

skills programmes and qualifications• The Furniture Technology Centre Trust: furni-

ture making skills programmes and qualifica-tions

• Umgungundlovu FET College: furniture mak-ing skills programmes and qualifications

Learnerships

Learnership Learner Profile

<35 of age 72%>35 of age 28%Male 63%Female 37%18.1 (Employed) 65%18.2 (Unemployed) 35%Blacks (including Col-oureds and Indians)

94%

Whites 06%

Skills Programmes and Apprenticeships

The table below reflects the number of Skills Pro-grammes and Apprenticeships interventions re-ported and supported by FIETA

Intervention Skills Programmes learners registered with FIETA

Skills Programmes (18.1)

812

Skills Programmes (18.2)

913

Apprenticeships (18.1) 10Apprenticeships (18.2) 09

Equity

The learners are still predominantly male and opportunities for people living with disabilities are still limited but improvement during this past year has been noted. This number of People living with Disabilities participating in our programmes has increased as a result of our partnership with a number of associations like the Deaf Association of South Africa.

FIETA has in this financial year signed two MOUs through PAMSA to participate in the Pulp and Paper NC(V) programmes intervention. Hundred and twenty (120) learners where recruited into enter the programme using Umfolozi and Ekurhuleni East FET Colleges.

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LearnershipsList of the Forest Industries Education and Training Authority Learnerships:� � �

Learnership Title Qualification Title Registration number

SAQA ID

FORESTRY LEARNERSHIPS

General Education and Training Cer-tificate (GETC): General Forestry Level 1

General Education and Train-ing Certificate (GETC): General Forestry

10Q100080451201 50225

National Certificate: Forestry: Silvicul-ture Level 3

National Certificate: Forestry: Silviculture

10Q100078321233 50266

National Certificate: Forestry: Timber Harvesting: Tractor Level 3

National Certificate: Forestry: Timber Harvesting

10Q100068341323 48988

National Certificate: Forestry: Timber Harvesting: Skidder Level 3


10Q100067331273 48988

National Certificate: Forestry: Timber Harvesting: Harvester Level 3


10Q100066341743 48988

National Certificate: Forestry: Timber Harvesting: Forwarder Level 3


10Q100065311323 48988

National Certificate: Forestry: Timber Harvesting: Feller Buncher Level 3


10Q100064341303 48988

National Certificate: Forestry: Timber Harvesting: Cable Yarding Level 3


10Q100063341283 48988

PULP AND PAPER LEARNERSHIPS

National Diploma: Pulp and Paper Technology

National Diploma: Pulp and Paper Technology

10Q100070003636 49690

National Certificate: Pulp and Paper Technology

National Certificate: Pulp and Paper Technology

10Q100069001455 49079

Further Education and Training Certificate: Pulp and Paper Chemical Recovery: Convert Magnesium Sul-phite Organic and Inorganic Pulping By-products NQF Level 4

Further Education and Train-ing Certificate: Pulp and Paper Chemical Recovery

10Q100044261584 48645

Further Education and Training Certificate: Pulp and Paper Chemical Recovery: Convert Kraft Organic and Inorganic Pulping By-products NQF Level 4


10Q100045271674 48645

Further Education and Training Certificate: Pulp and Paper Chemical Recovery: Convert Spent Organic and Inorganic Pulping By-products NQF Level 4


10Q100043261584 48645

Further Education and Training Cer-tificate: Chemical Pulp Manufacturing: Batch Digester NQF Level 4

Further Education and Train-ing Certificate: Chemical Pulp Manufacturing

10Q100042331764 48643

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Chapter 3

Further Education and Training Cer-tificate: Chemical Pulp Manufacturing: Horizontal Continuous Digester NQF Level 4


10Q100040341684 48643

Further Education and Training Cer-tificate: Chemical Pulp Manufacturing: Vertical Continuous Digester NQF Level 4


10Q100041341734 48643

Further Education and Training Cer-tificate: Paper, Board or Tissue Manu-facturing NQF Level 4

Further Education and Train-ing Certificate: Paper, Board or Tissue Manufacturing

10Q100009371764 48644

Nat. Cert.: Pulp and Paper Woodyard Operations NQF Level 3

National Certificate: Pulp and Paper Woodyard Operations

10Q100039301203 35939

Nat. Cert.: Pulp and Paper Manufac-turing NQF Level 2

National Certificate: Pulp and Paper Manufacturing

10Q100004451412 35941

FURNITURE LEARNERSHIPS

National Certificate (GETC): Manu-facturing, engineering and Related Activities (Furniture Production)

National Certificate (GETC): Manufacturing, Engineering and Related Activities

10Q100053421431 23253

National Certificate: Furniture Making: Wood: Upholstery NQF Level 2

National Certificate: Furniture Making: Wood

10Q100052161272 49091

National Certificate: Furniture Making: Wood: Wood Finishing NQF Level 2


10Q100051161252 49091

National Certificate: Furniture Making: Wood: Wood Machining and Cabinet Making NQF Level 2


10Q100050191392 49091

National Certificate: Furniture Making: Wood: Upholstery NQF Level 3


10Q100049151223 49105

National Certificate: Furniture Making: Wood: Wood Finishing NQF Level 3


10Q100048141223 49105

National Certificate: Furniture Making: Wood: Wood Machining NQF Level 3


10Q100046171223 49105

National Certificate: Furniture Making: Wood: Cabinet Making NQF Level 3


10Q100047171243 49105

Further Education and Training Cer-tificate: Furniture Making NQF Level 4

Further Education and Training Certificate: Furniture Making

10Q100079281554 49092

WOOD PRODUCTS LEARNERSHIPS

General Education and Training Cer-tificate: Wood Products Processing: Bulk Bin Manufacturing NQF Level 1

General Education and Train-ing Certificate: Wood Products Processing

10Q100062261381 49082

General Education and Training Cer-tificate: Wood Products Processing: Charcoal Manufacturing NQF Level 1


10Q100061291381 49082


SAQA ID

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General Education and Training Cer-tificate: Wood Products Processing: Fibreboard and Chipboard Manufac-turing NQF Level 1


10Q100060301381 49082

General Education and Training Cer-tificate: Wood Products Processing: Match Manufacturing (Board Process-ing and Packaging) NQF Level 1


10Q100059341381 49082

General Education and Training Certificate: Wood Products Process-ing: Match Manufacturing (Timber Processing) NQF Level 1


10Q100058271381 49082

General Education and Training Cer-tificate: Wood Products Processing: Tannin Extraction NQF Level 1


10Q100056241381 49082

General Education and Training Cer-tificate: Wood Products Processing: Truss Manufacturing NQF Level 1


10Q100057251381 49082

General Education and Training Cer-tificate: Wood Products Processing: Veneer and Plywood Manufacturing NQF Level 1


10Q100055251381 49082

General Education and Training Cer-tificate: Wood Products Processing: Wood Preservation NQF Level 1


10Q100054241431 49082

National Certificate: Wood Products Processing: Charcoal Manufacturing Level 3

National Certificate: Wood Products Processing

10Q100077211303 49083

National Certificate: Wood Products Processing: Fibreboard and Chip-board Manufacturing Level 3


10Q100076261303 49083

National Certificate: Wood Products Processing: Match Manufacturing (Board Processing and Packaging) Level 3


10Q100075251303 49083

National Certificate: Wood Products Processing: Tannin Extraction Level 3


10Q100073201303 49083

National Certificate: Wood Products Processing: Truss Manufacturing Level 3


10Q100074211303 49083

National Certificate: Wood Products Processing: Veneer and Plywood Manufacturing Level 3


10Q100072301303 49083



SAQA ID

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Chapter 3

National Certificate: Wood Products Processing: Wood Preservation Level 3


10Q100071271303 49083

Nat. Cert. in Wood Technology: Lum-ber Milling (Dry Lumber Processing) SpeNQF Level 1

National Certificate: Dry Lum-ber Processing

10Q100035321461 21493

Nat. Cert. in Wood Technology: Lum-ber Milling (Dry Lumber Processing) NQF Level 2


10Q100036331302 21494



10Q100037391443 21495



10Q100038241214 21496

Nat. Cert. in Wood Technology: Lumber Milling (Lumber Drying) NQF Level 1

National Certificate: Lumber Drying

10Q100031341461 21489



10Q100032331222 21490



10Q100033271243 21491



10Q100034231214 21492

Nat. Cert. in Wood Technology: Lum-ber Milling (Saw Doctoring) NQF Level 1

National Certificate: Lumber Saw Doctoring

10Q100013171411 21485



10Q100011261252 21486



10Q100014291363 21487



10Q100012211314 21488


SAQA ID

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THE NATIONAL SKILLS DEVELOPMENT STRATEGY REPORT: 2010-2011

Success Indica-tors

NSDS Success Indicator SETA SLA Target for 2010 - 2011

Actual Seta Achievement

Comments

1.1 Skills Development sup-ports National and Secto-ral growth, development and equity principles.

Annual update of the Sector Skills Plan.

A Sector Skill Plan was submitted to the Department of Higher Education however since this took place during the amalgamation of seta’s we have to work together with CTFL, PPP to write a collaborated SSP for the FP&M seta and the forest industries, scarce and critical skills list for FP&M to be updated.

SSP for FP&M was submitted however there were chal-lenges as the sector was not given ample time to syner-gize the value chain of the SSP. However FP&M seta is planning to make sure that an update that is due in Au-gust 2011 is a well researched document.

1.2 Number of SDF or Sector Specialist who carry out skills development facilita-tion in the sector training in the use of the guide of the year.

50 165 SDF target has been ex-ceeded because we have noticed that some SDF’s need training to be able to submit correct WSP/ATR documents to the sector, the more we train them the more compa-nies will be submitting their WSP/ATR.

2.1 Number of large firms re-ceived Mandatory grants for 2010/2011 financial year.

128 70 The target was not achieved the industries were going through recession.

2.1 Number of medium firms received Mandatory grants for 2010/11 financial year.


2.2 Small levy paying firms supported by SETAs for 2010/2011 financial year.


2.5 Number of small BEE firms and BEE cooperatives sup-ported.

20 32 The target has been exceed-ed through the participation of nongovernmental organi-zations in FIETA`s projects.

2.7 At least 700 000 workers have achieved at least ABET Level 4.

1000 registered ABET level 1-4 500 achieved ABET level 1-4

1527 learners registered and 413 Completed on ABET Level 1-4

Operational challenges at the employer level contributed to high drop-off of learners.


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Chapter 3

2.8 At least 125 000 work-ers assisted to enter and at least 50% successfully complete programmers, including learnerships, ap-prenticeship and leading to basic entry intermediate and high level scare skills.

225 Entered learning pro-grammes and128 completed learning pro-grammes.

951 learning en-tered learning programmes and 728 completed learning pro-grammes.

The target has been exceed-ed through increased invest-ments to employed workers, and through determination of workers to excel and be promoted to higher posi-tions.

3.2 At least 2000 non levy pay-ing enterprises, NGO, CBO and Community-based cooperatives supported by skills development

60 16 The target has not been achieved because some of the enterprise were uncertain with the amalgation process-es if the sector had sufficient funding

4.1 At least 125000 unem-ployed people assisted to enter and at least 50% successfully complete programmes, including learnership, apprentice-ship and leading to basic entry, intermediate and high level scare skills

3000 Entered learning pro-grammers and 2500 completed learning pro-grammers

1394 learners en-tered learning pro-grammes and 1773 completed learning programmes

The target has not been achieved on other pro-grammes although there are other fields where there was a lot of drop outs.

4.2 100% of learners in criti-cal skills program covered by sector agreement from FET and HET institutions assisted to gain work ex-perience locally or abroad, of whom at least 70% find placement in employment or self-employment.

200 number of learners in critical skills programme to find placement in employment or self-employment as reflected in SLA 2010/11140 number of learners in critical skills programmes to be assisted to gain work experi-ence as reflected in SLA 2010/11

0 learners in critical skills programmes were assisted to gain work experi-ence0 learners in critical skills programmes were assisted to find placement in employment or self-employment

Industries assisted by getting these learners to gain work experience and also to be placed as permanent workers and some open their small businesses.

4.3 Young people trained and monitored to from sustain-able new Ventures and at least 70% New Venture in operation 12 months after completion

50 People have entered. 35 in op-eration 12 month after completion

84 people have entered. 35 in operation 12 months after they completed 35 Sus-tained

The target has been exceed-ed due to the support given to young people in rural communities

5.1 Number of Institutions as-sisted, type of support and linked to criteria.

3 2 The target was not achieved because there was a need for the sectors to have their own NVC qualifications registered, unlike before when the sec-tor had to rely on using other seta’s institutions

5.2 Number of Institution accredited to manage delivery of new venture creation qualification.

2 3 The target has been achieved because there was a need for the sectors to have their own NVC qualifications registered, unlike before the sector had to rely on using other seta’s institutions

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– Indicator 2.1

Details per quarterly reports

Success Indicator QR 1 QR 2 QR 3 QR 4 Total

Indicator 2.1 – large firms 0 38 31 1 70Indicator 2.1 – medium firms

0 30 31 0 61

Indicator 2.1 –

Small firms 28 30 1 59

- Indicator 2.5 Small BEE/BEE-Co-ops



Number of small BEE firms 0 0 0 13 13Number of BEE Co-opera-tives supported.

0 0 0 3 3

- Indicator 2.7 Entered

Entered QR 1 QR 2 QR 3 QR4 Total

Level 1 674 3 0 184 861Level 2 157 10 0 161 328Level 3 76 6 0 170 252Level 4 23 0 0 98 121TOTAL 1527

- Indicator 2.7 Completed

Completed QR 1 QR 2 QR 3 QR4 Total

Level 1 151 20 90 0 270Level 2 37 0 52 0 89Level 3 23 0 3 19 45Level 4 0 0 0 9 9TOTAL 413

- Indicator 2.8 Entered


Bursary 0 0 0 0 0Internship 1 0 0 0 1SDA Section 18(1) 0 0 0 0 0Section 13 0 0 0 0 0Section 28 0

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Chapter 3

Unemployed Learner - Learnership

0 12 106 20 138

Unemployed Learner – Skills programme

88 313 103 308 812

TOTAL 951

- Indicator 2.8 Completed

Completed QR 1 QR 2 QR 3 QR4 Total

Bursary 0 0 0 0 0Internship 0 0 0 0 0SDA Section 18(1) 0 0 0 0 0Section 13 0 0 0 0 0Section 28 0Unemployed Learner - Learnership

0 0 0 188 188

Unemployed Learner - UNIT STD

9 82 445 4 540

TOTAL 728

- Indicator 3.2 NLPE,NGO,CBO and Co-op



Non Levy Paying Organisations

0 0 0 6 6

Non Government Organisations

0 0 0 5 5

Community Based Organisations

0 0 0 5 5

Co-operatives 0 0 0 0 0 TOTAL 0 0 0 16 16

Table 4 - Indicator 4.1 – entered


Bursary 0 0 0 0 0Internship 0 17 9 8 25SDA Section 18(1) 0 0 0 0 0Section 13 0 0 0 10 10Section 28 0 0 0 0 9Unemployed Learner - Learnership

147 43 328 0 475

Unemployed Learner – Skills programme

285 231 0 0 516

Learnership 0 43 9 154 206Unit STD skills 0 0 0 153 153TOTAL 1394

Table 4 - Indicator 4.1 - completed


Bursary 0 0 0 4 4Internship 0 0 0 19 19Learnership 19 0 0 403 422SDA Section 18(1)

0 0 0 0 0

Section 13 0 23 0 0 23Unit Skills programme

202 378 255 461 1 296

Section 28 0 9 0 0 9TOTAL 1 773

Indicator 4.2 – Learners assisted to gain work experience in critical skills programme

Unemployed learners Target per Strategic Plan Actual achievement

Learners in critical skills program cov-ered by sector agreement from FET and HET institutions assisted to gain work experience locally or abroad

200 number of learners in critical skills programme to find place-ment in employment or self-employment as reflected in SLA 2010/11

0 learners placed and em-ployed or self employed

140 number of learners in critical skills programmes to be assisted to gain work experience as re-flected in SLA 2010/11

0 learners in critical skills programme assisted to gain work experience

Indicator 4.3 – Learners NVC Entered and Sustained

Unemployed people Target per Strategic Plan

Target per Strategic Plan

Achievement per quarterly reports

Learners in critical skills - Entered

50 50 84

Sustained after 12 months

35 35 35

ISOEs and NVC Institutions

ISOEs and NVC Target per Quarterly Report

Target per Strategic Plan

Achievement per quar-terly reports

ISOEs 3 3 2NVC Institutions 2 2 3

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Highlighted Sector Projects Mitchells Plain: This community was identified with a large number of unemployed and unskilled youth. A member of the Western Cape Parliament Portfolio Committee had arranged for a workshop extending a welcome to all SETA’s.

A commitment and pledge was requested by all SETA’s towards skills development in this area. FIETA without question fully committed to this opportunity, going as far as assisting in opening the Mitchells Plain Training Centre and contributing towards to the equipment to ensure that the centre was fully functional.

A total of 150 learners have been trained in cabinet making and upholstery on a NQF 2 & 3 level.

ABET: With a large number of unschooled and illiterate adults across the country, especially in the rural areas, FIETA embarked on a Basic Adult Education Training programme.

Over 1000 adults of various ages have been trained and FIETA is happy to announce that yet another tender has been awarded adding another 500 adult learners onto this already successful programme.

There were hundreds of learners which then went on to graduate from Pre-Abet to level 3 and with some going on to level 4.

Projects for people living with disabilities: FIETA has always placed emphasis on projects that equip people living with disabilities with skills so that they become employable. In line with the country’s transformation policies this year several projects were carried out. In the area of Nqutu and Nkandla in KZN as well learners were trained in furniture making as well as well as upholstery NQF level 2.

DEAFSA (Deaf Federation of South Africa) has also through FIETA funding developed technology training centres in Limpopo and the Eastern Cape to train these learners.

Rural development projects: In keeping with one of the ministerial priorities FIETA carried out training projects in the following rural areas: These learners were equipped with various skills in forestry as well furniture manufacturing.

Military Veterans: FIETA became aware of unemployed ex-military veterans in Gauteng. With several service providers arranged by FIETA, these veterans were then trained in various furniture making, coffin making as well as upholstery skills.

It was a special occasion when these 30 learners half of which were women graduated in Soweto on the 4th March 2011.

PAMSA NCV: A first for the Pulp and Paper industry and with the assistance of FIETA a Vocation Learning Programme was created.

Sector Projects

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Chapter 3

Additional FIETA funding included:• The development of all the training material• All textbooks for the 63 learners • 45% of the tuition fee for the 63 learners

This could not have been possible without working closely with the Umfolozi FET College in KZN.

Bursaries: Throughout the SETA`s existence, FIETA has sponsored bursaries to previously disadvantaged students who showed a committed interest in completing their university studies.

Objective of the bursary scheme:To address the National Skills Development Strategy and Fieta objectives. To improve the employment prospects of individuals previously disadvantaged by unfair discrimination and to redress those disadvantages through training and education.

Within the current financial year, Fieta has sponsored students at four universities in South Africa

Nelson Mandela Metro-politan University

National Diploma in Forestry/ Wood Tech-nology

Stellenbosch University Bsc ForestryUniversity of Venda Bsc Forestry Durban University of Technology

National Diploma in Pulp and Paper

FIETA is proud to congratulate students from the following universities for their excellent pass rate:

Nelson Mandela Metropolitan University: 5University of Venda: 5

Challenges noted: finding work placements for graduates and difficulty in placing 2nd year students for work experience.

Western Cape Furniture Design Competition: The Western Cape Furniture Initiative aims to develop and grow the local furniture industry in a sustainable manner. By implementing various programmes and applying different interventions they hope to grow and improve industry skills such that the local furniture industry will be able to compete in the global market.

Each year a national competition is held in Cape Town, where local and national furniture design talent could display their designs in a live theme environment. Seeking a creative take on furniture, which forms part of the everyday living environment.

FIETA was pleased to contribute to the funding of the competition. FIETA’s CEO Mr Simangaliso Mkhwanazi acknowledged the achievement of the winner with an award at the Cape Town Design Indaba Expo.

The Training Layoff SchemeThe Training Layoff Scheme was a national government programme aimed at providing training and assistance in the case of the temporary suspension of employees for training purposes and as an alternative to retrenchment. It enabled employees to be kept in training during the economic downturn whilst being re-skilled as an investment for future economic recovery.

On approval by the CCMA, companies would, via the relevant SETA, claim for an allowance of up to 50%, of their monthly wage from the National Skills fund (NSF) for the duration of the layoff period.

The FIETA actively promoted the Training Layoff Scheme through its website and industry publications. Although this was not well received by companies as most of them had already retrenched workers, FIETA rose to this challenge by offering alternate training for these already retrenched workers in order to ensure that the industry did not lose the valuable skills of these workers.

FIETA is proud of this achievement of assisting the following companies in the Training Layoff Scheme.• Suiderland Charka• Hans Merensky• Mondi (Merebank)

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Chapter 4

Au

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ep

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We are pleased to present our report for the financial year ended 31 March 2011 in terms of Treasury Regulations 3.1.1.9 and 10. whereby the Audit Committee is required to report amongst others on the effectiveness of the internal controls, the quality in year management and monthly reports submitted in terms of the Division of Revenue Act as well as its own evaluation of the Annual Financial Statements.

Audit Committee Members and Attendance

The Audit Committee consisted of four external members listed hereunder and held four meetings for the current year under review. Mr. D.Sidaki, the independent member continued as the chairman of the Audit Committee for the year.

Nam

es a

nd S

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nam

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Num

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Dat

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at

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Duke Sidaki Independent 4

18 May 2010

Roger Gods-mark

Forestry South Africa

3

30 July 2010

Andre Botha Mondi 1

18 Janu-ary 2011

M. Mokoana CEPPWAWU 3

25 May 2011

J. Fourie Sonae Novo Board

2

Peter Nchabe-leng

CEPPWAWU 1

Audit Committee responsibility

The audit committee reports that it has complied with its responsibilities arising from section 51(1) (a) (ii) and 76 (4) (d) of the PFMA, and Treasury Regulation 27.1. The Audit Committee has adopted appropriate Terms of Reference, and has regulated its affairs in compliance with these Terms of Reference and has discharged all its responsibilities as contained therein.

The effectiveness of internal control

The system of internal control is designed to provide cost effective assurance that assets are safeguarded and that liabilities and working capital are efficiently managed. From the various reports issued by the internal audit function, the external audit report on the annual financial statements and management letters of the Auditor General, it was noted that no significant or material non-compliance with prescribed policies and procedures have been reported, except for matters reported in the audit report.

In line with the PFMA and Corporate Governance, the Internal Audit function provided the Audit Committee and management with assurance that the internal controls are appropriate and effective. This is achieved by means of the risk management process, as well as the identification of corrective actions and suggested enhancements to the controls and processes. Accordingly the committee reports that the systems of internal controls for the year under review were effective and efficient.

Evaluation of Annual Financial Statements

The Audit Committee has:a) Reviewed and discussed the Audited Annual

Financial Statements to be included in the an-nual report with the Auditor General and the Accounting Officer;

b) Reviewed the Auditor General’s management letters and management’s responses thereto;

c) Reviewed the accounting policies, andd) Reviewed significant adjustments resulting

from the audit.

The Audit Committee concurs and accepts the au-ditor general’s conclusions on the annual financial statements and is of the opinion that the audited Annual Financial Statements be accepted and read together with the report of the Auditor General.

Duke Sidaki (ACMA)31 May 2011.

Audit Committee Report

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Chapter 4

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Chapter 5

REPORT OF THE AUDITOR-GENERAL TO PARLIA-MENT ON THE FOREST INDUSTRIES SECTOR EDUCA-TION AND TRAINING AUTHORITY REPORT ON THE FINANCIAL STATEMENTS

Introduction 1. I have audited the accompanying financial

statements of the Forest Industries Sector Education and Training Authority (FIETA), which comprise the statement of financial position as at 31 March 2011, and the statement of financial performance, statement of changes in net assets, statement of comparison of budget and actual amounts and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 37 to 76.

Accounting authority’s responsibility for the financial statements2. The accounting authority is responsible for

the preparation and fair presentation of these financial statements in accordance with South African Standards of Generally Recognised Accounting Practice (SA Standards of GRAP), and for such internal control as management determines necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor-General’s responsibility 3. As required by section 188 of the

Constitution of the Republic of South Africa, 1996 (Act No. 108 of 1996), section 4 of the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA) and section 14(6)(a) of the Skills Development Act, 1998 (Act No. 97 of 1998), my responsibility is to express an opinion on these financial statements based on my audit.

4. I conducted my audit in accordance with International Standards on Auditing and General Notice 1111 of 2010 issued in Government Gazette 33872 of 15 December 2010. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

5. An audit involves performing procedures to obtain audit evidence about the

amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

6. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion7. In my opinion, the financial statements

present fairly, in all material respects, the financial position of FIETA as at 31 March 2011, and its financial performance and cash flows for the year then ended in accordance with SA Standards of GRAP.

Emphasis of mattersI draw attention to the matters below. My opinion is not modified in respect of these matters:Restatement of corresponding figures8. As disclosed in note 27 to the financial

statements, the corresponding figures for 31 March 2010 have been restated as a result of an error discovered during the year ended 31 March 2011 in the financial statements of FIETA at, and for the year ended, 31 March 2010.

Irregular expenditure 9. As disclosed in note 20.2 to the financial

statements, FIETA incurred irregular expenditure of R1 696 000, as the administration expenditure incurred by FIETA exceeded the legislative limit of 12,5% of its levy income. Permission to exceed the 12,5% limit was requested after the limit was exceeded, representing the contravention of section 3(3) of the Skills Development Act, 1998.

Report of the Auditor-General

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Chapter 5

ADDITIONAL MATTER PARAGRAPHSI draw attention to the matter below. My opinion is not modified in respect of this matter:Amalgamation of the SETA10. The SETAs were established for a five-year

period until 31 March 2010. This SETA’s licence was renewed by the Department of Higher Education and Training until 31 March 2011. Changes to the SETA landscape were announced in November 2010, whereby FIETA, the CTFL SETA and MAPPP SETA are to be amalgamated and form the new Fibre Processing and Manufacturing SETA from 1 April 2011.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS 11. In accordance with the PAA and in terms

of General Notice 1111 of 2010, issued in Government Gazette 33872 of 15 December 2010, I include below our findings on the annual performance report as set out on pages 20 to 21 and material non-compliance with laws and regulations applicable to FIETA.

Predetermined objectives 12. There are no material findings on the

annual performance report concerning the presentation, usefulness and reliability of the information.

Compliance with laws and regulations Annual financial statements, performance and annual reports13. The accounting authority submitted

financial statements for auditing that were not prepared in all material respects in accordance with generally accepted accounting practice as required by section 55(1)(b) of the PFMA. The material misstatements identified by the AGSA with regard to irregular expenditure, discretionary grant commitments and classification of finance leases were subsequently corrected.

Expenditure management14. The accounting authority did not take

effective and appropriate steps to prevent irregular, fruitless and wasteful expenditure as per the requirements of section 51(1)(b) of the PFMA.

Procurement and contract management15. Goods and services with a transaction

value between R10 000 and R500 000 were procured without inviting at least three written price quotations from prospective suppliers as per the requirements of TR

16A6.1 and National Treasury Practice Note 8 of 2007-08.

Skills Development Act16. FIETA used more than 12,5% of its levy

income received in any year to pay for its administration costs, in contravention of section 3 of the SETAs’ Grant Regulations in terms of the Skills Development Act, 1998.

INTERNAL CONTROL 17. In accordance with the PAA and in terms

of General Notice 1111 of 2010, issued in Government Gazette 33872 of 15 December 2010, I considered internal control relevant to my audit, but not for the purpose of expressing an opinion on the effectiveness of internal control. The matters reported below are limited to the significant deficiencies that resulted in the findings on compliance with laws and regulations included in this report.

Leadership18. Policies and procedures to address internal

controls over the recording and monitoring of commitments were not established, resulting in material adjustments to the commitments note to the financial statements.

Financial and performance management19. Sufficient controls and reviews by

management were not implemented to ensure disclosure notes for commitments and irregular expenditure were complete, resulting in material adjustments to the financial statements.

20. Compliance with procurement laws and regulations and the Skills Development Act was not effectively monitored during the year, resulting in irregular expenditure.

Pretoria31 July 2011

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Chapter 5

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Chapter 6

Acc

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Accounting Authorit y Report

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Chapter 6

HONOURABLE MINISTER, IT IS WITH PLEASURE THAT THE ACCOUNTING AUTHORITY PRESENTS TO YOU THE ANNUAL FINANCIAL STATEMENTS OF THE FOREST INDUSTRIES SECTOR EDUCATION AND TRAINING AUTHORITY FOR THE PERIOD 1 APRIL 2010 TO 31 MARCH 2011.

GOVERNANCE

As FIETA’s Accounting Authority, it is the Management Board’s responsibility to prepare financial statements that fairly present FIETA’s financial position at 31 March 2011, and also the financial performance and summary of cash flow activities for the year ended 31 March 2011. Once again, the Board of FIETA is of the opinion that appropriate accounting policies, supported by reasonable and prudent judgment and estimates, have been applied on a consistent, going concern basis and the financial statements comply with Generally Recognised Accounting Practices (GRAP) and with the Public Finance Management Act (PFMA) (Act no.1 of 1999) as amended.

With regard to systems and controls, these include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties. Further, the management of these financial affairs has been undertaken in accordance with the financial and procurement policies which have been put in place, and which comply with Corporate Governance. In addition, all necessary structures, policies and procedures are in place in order to ensure compliance with the requirements of the PFMA. These include an independent audit committee, a fraud prevention plan and internal auditors. FIETA therefore complies with best practice, and with all legislation with regard to governance, and this continues to be a crucial and very serious aspect of the functioning at the Seta “except for non compliance matters as listed in the audit report of AGSA”.

GOING CONCERN

The Minister of the Department of Higher Education and Training, after consultation with the National Skills Authority, in terms of section 9A of the Skills Development Act, 1998 resolved in Government Gazette No. 33756 GNR 1056 that the Media, Advertising, Publishing, Printing and Packaging Education and Training Authority (MAPPP SETA), The Clothing, Textiles, Footwear and Leather Sector Education and Training Authority (CTFL SETA) and Forest Industries Education and Training Authority (FIETA) shall be amalgamated on

the 1st April 2011 to become the Fibre Processing and Manufacturing Sector (FP&M) Education and Training Authority subject to the approval of a constitution and confirmation of the scope of coverage for the amalgamated SETA.

All assets, rights, liabilities and obligations of the FIETA will dissolve upon and vest in the FP&M SETA, when the conditions for establishing the FP&M SETA are met. Since the SDA Act requires in section 9A (4) that when the condition for establishing the FP&M SETA are met that all assets, rights, liabilities and obligations of the amalgamating SETA’s will dissolve upon and vest in the FP&M SETA. While Fieta will not continue to exist in its current format but rather in a modified form it is considered appropriate to continue preparing the financial statements on a going concern basis.

NSDS

FIETA’s achievements in terms of NSDS targets are reflected in the report on NSDS strategy in Chapter 3.

REMUNERATION

In terms of FIETA Board Policy, the Management Board is not remunerated. The remuneration of the CEO who is a full-time employee, is reflected in the table below.

CEO remuneration

2010/2011 2009/2010

Basic salary R718 645 R666 920Bonus R160 764 R67 202Allowances R12 000 R12 000Travel expense R60 000 R60 000Total R951 409 R806 122

__________________

M MokoanaBoard Chairperson

Financial Statementsfor the year ended

31 March 2011

Contents Page Statement of Financial Performance 37Statement of Financial Position 38Statement of Changes in Net Assets 39Cash Flow Statement 40Statement of Comparison of Budget and Actual Amounts 41Accounting Policies to the Annual Financial Statements 42Notes to the Annual Financial Statements 48

Forest Industries Sector Education and Training Authority

ANNUAL FINANCIAL STATEMENTS

�

The Annual Financial Statements for the year ended 31 March 2011, set out on pages 37 to 76, have been approved by the Accounting Authority in terms of section 51(1) (f ) of the Public Finance Management Act (PFMA), No 1 of 1999,

as amended, on 31 July 2011, and are signed on their behalf by:

SP Mkhwanazi

CEO

M Mokoana

Board Chairperson

SP Mkhwanazi

2010/11 2009/10

Restated

Notes R’000 R’000

REVENUE

Skills Development Levy: income from non-exchange transactions 2 72 803 69 616

Skills Development Levy: penalties and interest from non-exchange transactions

705 779

National Skills Fund income 14 651 12 800

Investment income 3 1 969 3 902

Skills Development Grant received - 16

Total revenue 76 128 87 113

EXPENSES

Employer grant and project expenses 4 (77 777) (86 388)

Administration expenses 5 (10 780) (8 337)

Finance costs 6 ( 47) ( 38)

National Skills Fund expenses 14 ( 651) (12 800)

Total expenses (89 255) (107 563)

NET DEFICIT FOR THE YEAR 1 (13 127) (20 450)

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STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2011



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STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2011

2010/11 2009/10

Restated


ASSETS

Non-current assets

Property, plant and equipment 7 856 614

Intangible assets 8 3 -

859 614

Current assets

Accounts receivable from non-exchange transactions 9 947 161

Accounts receivable: other 10 173 626

Cash and cash equivalents 11 41 364 50 401

42 484 51 188

Total assets 43 343 51 802

LIABILITIES

Non-current liabilities

Finance lease obligations 16 & 19.2 211 172

Current liabilities

National Skills Fund received in advance 14 1 263 1 912

Current portion of finance lease obligations 16 & 19.2 111 63

Trade and other payables from non-exchange transactions 12 19 805 8 192

Trade and other payables from exchange transactions 13 6 361 12 800

Provisions 15 114 58

Total liabilities 27 865 23 197

NET ASSETS 15 478 28 605

Funds and reserves

Administration reserve 859 614

Employer grant reserve 30 39

Discretionary reserve 14 589 27 952

TOTAL FUNDS AND RESERVES 15 478 28 605

Note Administration

reserve

Employer

grant reserve

Discretionary

reserve

Unappropri-

ated surplus

Total

R’000 R’000 R’000 R’000 R’000

Balance at 31 March 2009 355 93 48 624 - 49 072

Prior period error 27 ( 17) ( 17)

Balance at 31 March 2009 (Restated)

338 93 48 624 - 49 055

Net deficit per Statement of Financial Performance

- - (20 450) (20 450)

Allocation of unappropriated surplus

491 13 525 (34 466) 20 450 -

Excess reserves transferred to discretionary reserve

(215) (13 579) 13 794 - -

Balance at 31 March 2010 614 39 27 952 - 28 605

Net deficit per Statement of Financial Performance

- - - (13 127) (13 127)

Allocation of unappropriated surplus

1 (1 454) 16 280 (27 953) 13 127 -

Excess reserves transferred to discretionary reserve

1 699 (16 289) 14 590 - -

Balance at 31 March 2011 859 30 14 589 - 15 478

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STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED 31 MARCH 2011

The employer grant reserve of R30 000 (2010:R39 000) relates to newly registered member companies participating after legislative cut off date. An amount of R859 000 (2010:R614 000) is retained in the administration reserve equal to the carrying value of property, plant and equipment and intangible assets. � � � � � � � ��



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CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2011

2010/11 2009/10

Restated


CASH FLOWS FROM OPERATING ACTIVITIES

Operating activities

Cash receipts from stakeholders 72 831 89 524

Levies, interest and penalties received 72 825 70 395

Special projects 14 6 19 129

Cash paid to stakeholders, suppliers and employees (83 250) (100 535)

Grants and project payments (72 603) (75 808)

Special projects ( 655) (12 804)

Compensation of employees (3 577) (2 854)

Payments to suppliers and other (6 415) (9 069)

Cash utilised in operations 17 (10 419) (11 011)

Interest received 3 1 915 3 851

Net cash outflow from operating activities (8 504) (7 160)

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment 7 (403) (235)

Purchase of intangible assets 8 ( 4) -

Net cash outflow from investing activities (407) (235)

CASH FLOW FROM FINANCING ACTIVITIES

Payment of Finance Lease Liabilities ( 126) ( 81)

Net cash outflow from financing activities (126) (81)

Net decrease in cash and cash equivalents (9 037) (7 476)

Cash and cash equivalents at beginning of year 11 50 401 57 877

Cash and cash equivalents at end of year 11 41 364 50 401

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STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS FOR THE YEAR ENDED 31 MARCH 2011

Notes to the statement of comparison of budget and actual amounts.

1. Skills development levy income from non-exchange transactions The skills development levy income from non-exchange transactions is lower than the budgeted figure by 0.3%. This is due to a slight decrease in growth during the second half of the year. 2. National Skills Fund income and expenses

FIETA does not budget for National Skills Fund income and expenses because these items are not funded by FIETA. 3. Employer grant and project expenditure

Employer grant and project expenditure is higher than budget by 13.7% due to timing differences between the financial year and the duration of contracts. Project expenditure was incurred during the current year for which the related income was received during past financial years. 4. Investment Income

The investment income is less than the budgeted figure as there was a decrease in interest rates during the year and a decrease in cash equivalents.

Approved

budget

Adjustments Final

Budget

Actual Favourable/

(Unfavourable)

variance

2010/11 2010/11 2010/11 2010/11 2010/11

Explanatory Notes R’000 R’000 R’000 R’000 R’000

REVENUE

Skills Development Levy: income from non-exchange transactions

1 73 041 - 73 041 72 803 (238)

Skills Development Levy: penalties and interest from non-exchange transactions

515 - 515 705 190

National Skills Fund income 2 - - - 651 651

Investment income 3 982 - 3 982 1 969 (2 013 )

Total revenue 77 538 - 77 538 76 128 (1 410)

EXPENSES

Employer grant and project expenses

3 68 408 - 68 408 77 777 (9 369)

Administration expenses 9 130 - 9 130 10 780 (1 650)

Finance Costs - - - 47 (47)

National Skills Fund expenses 2 - - - 651 ( 651)

Total expenses 77 538 - 77 538 89 255 (11 717)

NET DEFICIT FOR THE YEAR - - - (13 127) (13 127)



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1.Basis of preparation The principal accounting policies adopted in the preparation of these Annual Financial Statements are set out below and are, in all material aspects, consistent with those of the prior year, except as otherwise indicated. The annual financial statements have been prepared on the historical cost basis, except where adjusted for present/fair values as required by the respective accounting standards. The financial statements have been prepared in accordance with the effective Standards of Generally Recognised Accounting Practices (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board. 2. Revenue recognition

2.1 Revenue from non-exchange transactions Non-exchange revenue transactions result in resources being received by the FIETA, usually in accordance with a binding arrangement. When the FIETA receives resources as a result of a non-exchange transaction, it recognises an asset and revenue in the period that the arrangement becomes binding and when it is probable that FIETA will receive economic benefits or service potential and it can make a reliable measure of the resources transferred. Where the resources transferred to the FIETA are subject to the fulfilment of specific conditions, it recognises an asset and a corresponding liability. As and when the conditions are fulfilled, the liability is reduced and revenue is recognised. The asset and the corresponding revenue are measured on the basis of the fair value of the asset on initial recogni-tion. Non-exchange revenue transactions include the receipt of levy income from the Department of Higher Educa-tion, income from the National Skills Fund, and grants from the national government. 2.1.1 Levy income The accounting policy for the recognition and measurement of skills development levy income is based on the Skills Development Act, Act No 97 of 1998, as amended and the Skills Development Levies Act, Act No 9 of 1999, as amended. In terms of section 3(1) and 3(4) of the Skills Development Levies Act, 1999 (Act No. 9 of 1999) as amended, reg-istered member companies of the Seta pay a skills development levy of 1% of the total payroll cost to the South African Revenue Services (SARS), who collect the levies on behalf of the Department. Companies with an annual payroll cost less than R500 000 are exempted in accordance with section 4(b) of the Levies Act as amended, effective 1 August 2005. 80% of Skills Development Levies are paid over to the Seta (net of the 20% contribution to the National Skills Fund (NSF)). The Seta was not in a position to verify that SARS has collected all potential skills levy income. Skills Development Levy (SDL) transfers are recognised on an accrual basis when it is probable that future economic benefits or service potential will flow to the Seta and these benefits can be measured reliably. This occurs when the Department makes an allocation to the Seta as required by Section 8 of the Skills Development Levies Act, 1999 (Act No. 9 of 1999) as amended. Revenue is adjusted for transfers between the SETAs due to employers changing SETAs. Such adjustments are separately disclosed as inter-SETA transfers. The amount of the inter-SETA adjustment is calculated according to the most recent Standard Operating Procedure issued by the Department. Skills Development Levy (SDL) transfers are recognised on an accrual basis when it is probable that future economic benefits or service potential will flow to the SETA and these benefits can be measured reliably. This occurs when the Department makes an allocation to the FIETA, as required by Section 8 of the Skills Development Levies Act, 1999 (Act No. 9 of 1999) as amended.

ACCOUNTING POLICIES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011

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2.1.2 Interest and penalties Interest and penalties received on the skills development levy are recognised on the accrual basis. 2.1.3 Funds allocated by the National Skills Fund for Special Projects Funds transferred by the National Skills Fund (NSF) are accounted for in the financial statements of the Seta as a li-ability until the related eligible special project expenses are incurred, when the liability is extinguished and revenue recognised. Property, plant and equipment acquired for NSF Special Projects are capitalised in the financial statements of the Seta, as the Seta controls such assets for the duration of the project. Such assets could however only be disposed of in terms of agreement and specific written instructions by the NSF. 2.2 Revenue from exchange transactions Revenue from exchange transactions is recognised when it is probable that future economic benefits or service potential will flow to the Seta and these benefits can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable. The only exchange revenue received by the FIETA is the interest earned on the investment. 2.2.1 Investment income Interest income is accrued on a time proportion basis, taking into account the principal outstanding and the effec-tive interest rate over the period to maturity. 3. Grants and project expenditure A registered employer may recover a maximum of 50% of its total levy payment as a mandatory employer grant (excluding interest and penalties) 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 Grants are equivalent to 50% of the total levies received by the Seta during the corresponding financial period. Discretionary grants and project expenditure A Seta may out of surplus monies and in accordance with criteria as defined in the Seta Grant Regulations allocate funds to employers and other associations or organisations. The criteria for allocating funds are approved by the Seta Board. Where necessary it can be required of interested employers, associations or organisations to complete and submit a funding application for consideration and approval by the Seta. A Seta may allocate discretionary grants to employers who have submitted an application for a discretionary grant in the prescribed form within the agreed upon cut-off period. Project expenditure comprise: - costs that relate directly to the specific contract; - 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 hav-ing similar characteristics.




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Project costs are recognised as expenses in the period in which they are incurred. Retrospective adjustments by SARS The Seta refunds amounts to employers in the form of grants, based on information from SARS. Where SARS retro-spectively amends the information on levies collected, it may result in grants that have been paid to certain employ-ers 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 payment, net of bad debts and provision for irrecoverable amounts. 4. 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, - The Skills Development Act. All irregular and fruitless and wasteful expenditure is recognised against the respective class of expense in the pe-riod in which they are incurred. 5. Property, plant and equipment Property, plant and equipment 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 esti-mated residual value over its estimated useful life. The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.

Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immedi-ately to its recoverable amount (i.e. impairment losses are recognised.) The gain or loss on disposal of property, plant and equipment is determined as the difference between the sale proceeds and the carrying amount and are taken into account in determining operating surplus. 6. Intangible assets Intangible assets are stated at cost less any subsequent accumulated amortisation and adjusted for any impair-ments. Amortisation is charged so as to write off the cost of assets over their estimated useful lives, using the straight line method. The estimated useful lives, residual values and amortisation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immedi-ately to its recoverable amount (i.e. impairment losses are recognised.) The gain or loss on disposal of intangible assets is determined as the difference between the sale proceeds and the carrying amount and are taken into account in determining operating surplus. 7. Leasing


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Finance leases as per the Treasury Regulations refers to a contract that transfers the risks, rewards, rights and obliga-tions incident to ownership to the lessee and is recorded as a purchase of property, plant and equipment by means of long-term borrowing. All other leases are classified as operating leases. Payments made under operating leases (leases other than finance leases) are charged to the Statement of Financial Performance on a straight-line basis over the period of the lease. When an operating lease is terminated before the lease period has expired, any payment require to be made to the lessor by way of penalty is recognized as an expense in the period in which termination takes place. 8. Provisions Provisions are recognised when the Seta 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 discount-ed to net present value. 8.1 Provision for employee entitlements The cost of 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 liabil-ity as a result of services rendered by employees up to the Statement of Financial Position date. Provisions included in the Statement of Financial Position are provisions for bonuses. Termination benefits are recognised and expensed only when the payment is made. No provision has been made for retirement benefits as the Seta does not provide for retirement benefits for its em-ployees. 9. Grants and projects Mandatory and discretionary grant payments A liability is recognised for grant payments once the specific criteria set out in the Seta Grant Regulation has been complied with by member companies and it is probable that the Seta will approve the grant application for pay-ment. The liability is measured at the net present value of the expected future cash outflow as determined in ac-cordance with the Act. The measurement of the obligation involves an estimate, based on the amount of the levies received. Discretionary projects Where a project has been approved, but has not been accrued for or provided for, it is disclosed as approved and allocated for future projects in the notes to the financial statements. Commitments are disclosed where the Seta has, in the normal course of its operations, entered into a contractual agreement with entities related to project expenses which have not yet become due for payment. 10. Financial instruments Recognition Financial assets and financial liabilities are recognised on the Seta’s Statement of Financial Position when the Seta becomes a party to the contractual provisions of the instrument. Financial assets




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Investments are recognised and derecognised on a trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market con-cerned, and are initially measured at fair value, net of transaction costs except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value. All financial assets of the Seta were categorised as loans and receivables. Loans and receivables Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables where the recognition of interest would be immaterial. Effective interest method The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating in-terest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period. Impairment of financial assets Financial assets are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. For financial assets car-ried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in the surplus or deficit. Financial liabilities All financial liabilities of the Seta were classified as other financial liabilities. The classification depends on the nature and purpose of the financial liabilities and is determined at the time of initial recognition. Other financial liabilities Other financial liabilities are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period. 11. Reserves


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Equity is classified based on the restrictions placed on the distribution of monies received in accordance with the Regulations issued in terms of the Seta Grant Regulations as follows: - Administration reserve - Employer grant reserve - Discretionary reserve - Capitalisation reserve - Unappropriated surplus Employer 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:

2010/11 2009/10

% %

Administration costs of the Seta 10 10

Employer Grant Fund Levy 50 50

Discretionary grants and projects 20 20

Received by the Seta 80 80

Contribution to the National Skills Fund 20 20

100 100

In addition, contributions received from public service employers in the national or provincial spheres of govern-ment 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 grant projects. Surplus funds in the administration reserve and unallocated funds in the employer grant reserve are moved to the discretionary fund reserve. Provision is made in the mandatory grant reserve for newly registered companies, par-ticipating after the legislative cut-off date. 12. Comparative figures Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year. 13. Taxation No provision has been made for taxation, as the Seta is exempt from income tax in terms of Section 10 of the In-come Tax Act , 1962 (Act 58 of 1962). 14. Consumable inventory Individual consumable purchases, in excess of R1000, are recognised as an asset on the date of acquisition and it is measured at the cost of the acquisition. It is subsequently recognised in surplus or deficit as it is consumed.




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NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011

1. ALLOCATION OF NET DEFICIT FOR THE YEAR TO RESERVES:

Employer grants reserve

Discretionary reserve

To

tal

pe

r S

tate

me

nt

of

Fin

an

cia

l

Pe

rfo

rma

nce

20

09

/10

To

tal

pe

r S

tate

me

nt

of

Fin

an

cia

l

Pe

rfo

rma

nce

20

10

/11

Ad

min

istr

ati

on

re

serv

e

Ma

nd

ato

ry g

ran

t

To

tal

Dis

cre

tio

na

ry g

ran

ts

Sp

ec

ial

pro

jec

ts

Pro

jec

ts

To

tal

dis

cre

tio

na

ry

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

Total revenue 87 113 76 128 9 373 45 273 45 273 18 157 651 2 674 21 482

Skills Development Levy: income from non-exchange transactions

Admin levy income (10%)

8 850 9 373 9 373 - - - - - -

Grant levy income (70%)

60 766 63 430 - 45 273 45 273 18 157 - - 18 157

Skills Development Levy: penalties and interest from non-ex-change transactions

779 705 - - - - - 705 705

National Skills Fund income

12 800 651 - - - - 651 - 651

Investment income 3 902 1 969 - - - - - 1 969 1 969

Skills Development Grant received

16 - - - - - - - -

Total expenses 107 563 89 255 10 827 28 993 28 993 ( 27) 651 48 811 49 435

Administration ex-penses

8 337 10 780 10 780 - - - - - -

Finance costs 38 47 47 - - - - - -

National Skills Fund expenses

12 800 651 - - - - 651 - 651

Employer grants and project expenses

86 388 77 777 - 28 993 28 993 ( 27) - 48 811 48 784

Net deficit per Statement of Financial Performance allocated

(20 450) (13 127) (1454) 16 280 16 280 18 184 - (46 137) (27 953)

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2. SKILLS DEVELOPMENT LEVY: INCOME FROM NON-EXCHANGE

TRANSACTIONS

2010/11 2009/10

R’000 R’000

The total levy income per the Statement of Financial Performance is as follows:

Levy income: Administration 9 373 8 850

Levies received from the Department of Higher Education and Training 9 072 8 545

Government levies received 332 274

InterSeta transfers in - 29

InterSeta transfers out (31) 2

Levy income: Employer Grants 45 273 43 336




Levy income: Discretionary Grants 18 157 17 430




72 803 69 616

3. INVESTMENT INCOME

2010/11 2009/10

R’000 R’000

Interest income

Accruals on bank deposits 54 51

Bank deposits 1 915 3 851

1 969 3 902



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4. EMPLOYER GRANT AND PROJECT EXPENSES

2010/11 2009/10

R’000 R’000

Mandatory grants 28 993 29 811

Disbursed 18 436 25 628

Movement in provisions and accruals 10 557 4 183

Discretionary grants ( 27) (2)

(Refunded)/Disbursed ( 1) ( 17)

Movement in provisions and accruals ( 26) 15

Project expenditure 48 811 56 579

Disbursed 55 306 50 197

Movement in provisions and accruals (6 495) 6 382

77 777 86 388

5. ADMINISTRATION EXPENSES

2010/11 2009/10

Restated

Note R’000 R’000

Depreciation/Amortisation 327 201

Operating lease rentals 534 384

Buildings 534 384

Equipment - -

Maintenance, repairs and running costs 167 50

Machinery and equipment - 1

Other 167 49

Advertising, marketing and promotions, communication 10 -

Consultancy and service provider fees 2 702 2 632

Cost of employment 5.1 3 633 2 848

Travel and subsistence 414 410

Remuneration to members of the audit committee 8 8

External auditor’s remuneration 1 332 791

Allowance for doubtful debts ( 102) ( 99)

Other 1 755 1 112

Insurance 144 154

Internal audit fees 636 208

Telephone expenses 381 255

Other administration expenses 594 495

10 780 8 337

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5.1 Cost of employment

2010/11 2009/10

R’000 R’000

Salaries and wages 3 367 2 674

Basic salaries 2 973 2 577

Performance awards 394 97

Social contributions 266 174

Retirement annuity contributions 9 9

Provident fund contributions 175 110

Unemployment Insurance Fund 30 20

Skills Development Levies 52 35

3 633 2 848

Average number of employees 31 20

Refer to the Accounting Authority Report for disclosure concerning the emoluments of the Chief Executive Officer.

6. FINANCE COSTS 2010/11 2009/10

Restated

R’000 R’000

Lease Finance Costs 47 38

7. PROPERTY, PLANT AND EQUIPMENT

Cost Accumulated

depreciation/

impairment

Closing carrying

amount

Year ended 31 March 2011 R’000 R’000 R’000

Computer equipment 1 070 (825) 245

Office furniture and fittings 579 (261) 318

Office equipment 787 (494) 293

Balance at end of period 2 436 (1 580) 856

Year ended 31 March 2010 (restated) Cost Accumulated

depreciation/

impairment

Closing carrying

amount

R’000 R’000 R’000

Computer equipment 883 (660) 223

Office furniture and fittings 388 (218) 170

Office equipment 598 (377) 221

Balance at end of period 1 869 (1 255) 614



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Movement summary 2011

Carrying

amount

2010

Additions Disposals Depreciation/

Amortisation

charge

Carrying

amount

2011

R’000 R’000 R’000 R’000 R’000

Computer equipment 223 187 - (165) 245

Office furniture and fittings 170 191 - (43) 318

Office equipment 221 190 - (118) 293

Balance at end of period 614 568 - (326) 856


(restated)

Carrying

amount

2009

Additions Disposals Depreciation/

Amortisation

charge

Carrying

amount

2010

R’000 R’000 R’000 R’000 R’000

Computer equipment 144 165 - (86) 223

Office furniture and fittings 159 49 - (38) 170

Office equipment 285 21 - (85) 221

Balance at end of period 588 235 - (209) 614

7.1 Total Assets

Made up as follows:

Year ended 31 March 2011 R’000 R’000 R’000

Cost Accumulated

Depreciation

Carrying

Amount

Owned 1 959 (1 344) 615

Leased Assets 477 (236) 241

2 436 (1 580) 856

Year ended 31 March 2010 (restated) R’000 R’000

Cost Accumulated

Depreciation

Carrying

Amount

Owned 1 557 (1 115) 442

Leased Assets 312 (140) 172

1 869 (1 255) 614

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7.2 PPE which have been fully depreciated but are still in use

Gross carrying value 2010/11 2009/10

R’000 R’000

Computer equipment 502 817

Furniture and fittings 194 -

Office Equipment 197 154

Balance at end of the year 893 971

8. INTANGIBLE ASSETS

Year ended 31 March 2011 Cost Accumulated

amortisation/

impairment

Closing

carrying

amount

R’000 R’000 R’000

Computer software 38 (35) 3

Balance at end of period 38 (35) 3

Year ended 31 March 2010 Cost Accumulated

amortisation/

impairment

Closing

carrying

amount

R’000 R’000 R’000

Computer software 34 (34) -

Balance at end of period 34 (34) -


Carrying

amount

2010

Additions Disposals Amortisation

charge

Carrying

amount

2011

R’000 R’000 R’000 R’000 R’000

Computer software - 4 - (1) 3

Balance at end of period - 4 - (1) 3


Carrying amount

2009

Additions Disposals Amortisation charge

Carrying amount

2010

R’000 R’000 R’000 R’000 R’000

Computer software - - - - -

Balance at end of period - - - - -

Computer Software with a gross carrying value of R 34 000 (2010: R34 000) have been fully amortised, but was still in use.



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9. ACCOUNTS RECEIVABLE FROM NON-EXCHANGE

TRANSACTIONS

2010/11 2009/10


InterSeta debtors 25 4 7

Employer receivables 9.1 1 011 325

Allowance for doubtful debts 9.1 (68) (171)

947 161

9.1 Employer Receivables

Overpayment to employers 1 011 325

Allowance for doubtful debt (68) (171)

Net effect of SARS adjustments on affected employers 943 154

R1 011 000 (2010: R325 000) was recognised as a receivable relating to the overpayment to the employer in earlier periods, and is based on the amount of such grant over payments. An amount of R68 000 (2010: R171 000) was provided for as a doubtful debts.

10. ACCOUNTS RECEIVABLE: FROM EXCHANGE TRANSACTIONS 2010/11 2009/10

R’000 R’000

Deposits 70 73

Interest receivable 54 51

Prepaid expenses 45 499

Other receivables 4 3

173 626

11. CASH AND CASH EQUIVALENTS

2010/11 2009/10

R’000 R’000

Cash at bank and in hand 1 860 4 695

Cash at bank 1 858 4 693

Cash on hand 2 2

Short term investments 39 504 45 706

Cash and cash equivalents at end of year 41 364 50 401

As required in Treasury Regulation 31.2, National Treasury approved the banks where the bank accounts are held. The weighted average interest rate on short term bank deposits was 6% (2010: 7.2%).

As the Seta was exempted by the National Treasury from the requirement of Treasury Regulation 31.3 to invest sur-plus funds with the Corporation for Public Deposits, surplus funds were invested in an institution with an invest-ment grade rating and in line with an investment policy as required by Treasury Regulation 31.3.5.

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12. TRADE AND OTHER PAYABLES FROM NON EXCHANGE TRANSACTIONS

2010/11 2009/10


Skills development grants payable - mandatory 15 816 4 225

SARS Payable 12.1 2 595 2 185

InterSeta payables 25 446 199

Employer payables 383 756

Levy creditors 565 827

19 805 8 192

12.1 SARS payable R’000 R’000 R’000 R’000

Opening Change in Closing

Year ended 31 March 2011 balance estimate Addition balance

Provision for levies incorrectly received 2 185 226 184 2 595

2 185 226 184 2 595

Opening Change in Closing

Year ended 31 March 2010 balance estimate Addition balance

Provision for levies incorrectly received 1 797 68 320 2 185

1 797 68 320 2 185

An amount of R2 595 000 (2010:R2 185 000) relates to levies incorrectly contributed by employers, and paid over by SARS and the Department, after being exempted from contributing skills development levies due to new legis-lation which came into effect 1 August 2005.

13. TRADE AND OTHER PAYABLES FROM EXCHANGE TRANSACTIONS

2010/11 2009/10

Restated

R’000 R’000

Project creditors 5 303 11 798

Service provider fees outstanding - 554

Sundry payables 1 058 448

Trade payables 401 26

Other accruals and National Skills Fund accruals 380 146

Employee leave accrual 277 247

Rent equalization - 29

6 361 12 800

Employee leave accrual is calculated based on leave days outstanding at year and end and the total cost of em-ployment.



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14. NATIONAL SKILLS FUND: SPECIAL PROJECTS

2010/11 2009/10

R’000 R’000

Opening balance 1 912 (4 413)

Received during the year - 19 121

Transfer from Fieta to cover bank charges - 181

Repayment of NSF Loan account to Fieta - 4 599

NSF Vul’amathuba project - 14 341

Interest received 6 8

Utilised and recognised as revenue-

conditions met: ( 655) (12 804)

Bank charges ( 4) ( 4)

NSF Vul’amathuba project ( 651) (12 800)

NSF Loan account - amount due to Fieta - -

Closing balance 1 263 1 912

During the current year conditional funds of Rnil (2010: R14 341 000) was received from the National Skills Fund (NSF) for the purposes of the ”NSF Vul’amathuba project”. This amount was recognised as a liability un-til the conditions attached were met. During the year, R651 000 (2010: R12 800 000) eligible project special expenses were incurred and a corresponding amount was recognised as revenue. Fieta paid these service providers as it is awaiting the drawdown funds from the Department. An amount of Rnil (2010: R4 599 000) was refunded back to Fieta.

15. PROVISIONS

2010/11 2009/10

Employee bonus provision R’000 R’000

Open carrying amount 58 140

Amounts utilised (225) (240)

Addition 281 158

Closing carrying amount 114 58

Bonus provision

The bonus provision is calculated using the total cost of employment and is based on performance evalua-tion conducted by the CEO of the Seta and the accounting authority as appropriate

16. FINANCE LEASE LIABILITY

2010/11 2009/10

Restated

R’000 R’000

Finance Lease Liabiltiy 322 235

Less: Short Term Portion disclosed under current Liabilities (111) (63)

Non-Current Lease Liability 211 172

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17. RECONCILIATION OF NET CASH FLOW FROM OPERATING ACTIVITIES TO NET

DEFICIT

2010/11 2009/10

Restated

R’000 R’000

Net Deficit as per Statement of Financial Performance (13 127) (20 450)

Adjusted for non-cash items:

Depreciation/Amortisation 327 209

Allowance for doubtful debts ( 102) ( 99)

Increase/(Decrease) in provisions relating to employment 56 ( 82)

Interest received (1 969) (3 902)

Adjusted for working capital changes:

(Decrease)/Increase in receivables non-exchange transactions ( 630) 136

Increase/(Decrease) in receivables -other 453 ( 270)

( Decrease)/Increase in National Skills Fund payable ( 648) 6 325

Increase in payables non-exchange transactions 11 613 1 231

(Decrease)/Increase in payables exchange transactions (6 392) 5 891

Cash utilised in operations (10 419) (11 011)

18. CONTINGENCIES

18.1 Surplus funds

In terms of the PFMA, all surplus funds as at year-end may be forfeited to National Treasury should an appli-cation for retention of surplus funds be denied. We submit an application to the Department for the reten-tion of surplus funds. As in the previous year Fieta expects that National Treasury will approve the retention of surplus funds.

18.2 Contingent liabilities

First time employer registrations

The Skills Development legislation allows an employer, registering for the first time, 6 months to submit an application for a mandatory grant.

At the reporting date it is estimated, as a result, additional mandatory grant expenditure of R30 000 (2009/10 R39 000) will be payable. The amount is contingent on the number of submission received and approved.

New scheme year levies received

At the reporting date levies were received in respect of the new scheme year, for which, the Skills Develop-ment legislation allows an employer until 30 June 2011 to submit an application for a mandatory grant.

At the reporting date it is estimated, as a result, that additional mandatory grant expenditure of Rnil (2009/10 R474) will be payable. The amount is contingent on the number of submission received and ap-proved.



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19 COMMITMENTS

19.1 Discretionary reserve

Of the balance of R14 589 000 (2010: R27 952 000) available in the discretionary reserve at the end of March 2011, R11 074 000 (2010:R23 848 000) has been approved and allocated for future projects and skills priorities as set out below and R9 153 000 had been contracted . Amounts for expenses that have already been in-curred, and therefore included in grant expenses in the Statement of Financial Performance, are also indicated. A request for the accumulation of these funds has been submitted to National Treasury.

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Authority 15 071 14 898 21 763 8 205 9 049 12 881 4 374 2 515

Chamber 40% Contribution to Authority

5 888 9 508 16 018 ( 622) 10 626 5 679 4 325 1 940 4. 1

Learnership - 7 7 - - - - - 2. 8

New Venture Creation Project: Recycling Industry

195 359 554 - - - - - 2. 8

Quality Management System FIETA and Providers

9 1 9 1 - - 1 - 2. 8

Strategic Disability Project 6 - - 6 - - 6 - 2. 8

Training of master assessors 257 663 962 ( 43) 800 635 122 299 2. 8

NSF Vul’amathuba 7 028 - 1 824 5 203 (3 577) 1 668 ( 42) 114 2. 8

Amahlati Emerging Contrac-tors Project

1 155 60 1 249 ( 34) 300 255 11 - 3. 2

Discretionary Grant ABET 178 134 312 ( 0) - - - - 3. 2

Working for Fire & Woodlands: Contractor training

356 ( 60) 2 294 - 259 35 - 4. 1

Research and Impact Studies - 926 88 838 330 1 161 7 - 4. 1

Training Layoff Scheme - 3 300 737 2 563 420 3 165 ( 182) 162 4. 1

Amalgamation Project - - - - 150 59 91 - 4. 1

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Forestry Chamber 18 840 2 607 13 835 7 612 8 287 12 680 3 218 1 129

Allocated for promotion of Forestry Chamber Objectives

24 382 406 - 150 77 73 - 1. 1

Generation of Unit Standards and Qualifications in Forestry

248 138 287 99 - 19 80 - 1. 1

Bursaries for PDI Learners in Tertiary Education

24 ( 11) 14 - - - - - 1. 1

Saasveld Bridging Course - 300 - 300 90 387 3 - 1. 2

Saasveld second year 3 months practical

1 300 - 300 - 179 121 - 1. 2

ABET 499 ( 59) 441 - - - - - 1. 2

NSDS exhibitions 0 300 298 2 200 196 6 - 2. 5

Forestry discretionary projects 0 ( 4) ( 5) 1 - - 1 - 2. 7

Adult Basic Education Training facilitator training

92 42 134 1 - - 1 - 2. 8

BBBEE Basic business skills 37 ( 6) 32 - - - - - 2. 8

University of Stellenbosch - contractor project

45 - 2 43 - 1 42 - 2. 5

Training of SDFs 359 ( 359) - - - - - - 2. 8

Scarce and critical skills project 14 ( 3) 11 - - - - - 2. 8

Development of Scarce and Critical Skills guides

470 500 968 2 250 254 ( 2) - 2. 8

Development and support for Broad Based BEE

249 ( 200) - 49 - 19 30 - 2. 8

SDF capacity building on scarce and critical skills

33 - 35 ( 1) 46 44 1 - 2. 8

Support for NGOs, CBO, Com-munity-based cooperatives

197 - 107 89 - 48 41 - 2. 8

Work Experience grant for FET and HET graduates

- 320 30 290 - 141 149 - 2. 8

New venture creation project 117 - 23 94 - 16 78 - 2. 8

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Development & support for Sectoral or Occupational Excellence

427 ( 100) 181 146 120 251 15 - 2. 8

NSF constituency capacity building and advocacy

47 - 18 29 - 28 1 - 2. 8

Research and impact studies 34 99 133 - 225 466 ( 241) - 2. 8

NQF Insitutions Support Project

70 - 61 9 119 127 1 - 2. 8

Project disability - DEAF SA (Mpumalanga)

1 ( 1) - - - - - - 2. 8

Strategic ABET Interventions 188 ( 14) - 174 83 256 1 48 2. 8

Discretionary grants - March 2006

- 22 22 - - - - - 2. 8

SME Support Programme 14 - 10 4 - 5 ( 1) - 2. 8

SMME 3 650 - 604 46 - 23 23 - 2. 8

Cost & Management Account-ing for Forestry contractors

748 ( 150) 400 198 - 160 38 - 2. 8

FAWU Shopfloor Leadership Development Programme

47 ( 38) 9 - - - - - 2. 8

DWAF Fieta Skills Forum 48 ( 35) 13 - - - - - 3. 2

Land Claimants Capacity Building Project

1 806 ( 300) 908 598 384 990 ( 8) 147 3. 2

Small Employer Direct Grant Support

9 ( 9) - - - - - - 3. 2

Learnerships in support of NSDS 2.8 and 4.1

620 - 299 321 215 535 1 - 3. 2

Artisan (Apprentice/Interns) Development Project

30 - 22 8 1 700 947 761 327 3. 2

Sector Bursaries 440 - 274 166 - 3 163 - 3. 2

Forestry Community-based-projects Upskilling Project

- 200 - 200 - 60 140 - 3. 2

Scarce Skills Learnership Project 2007-2008

1 286 ( 100) 756 430 1 069 1 488 11 - 4. 1

Discretionary grants - January 2008

- ( 4) ( 5) - - - - - 4. 1

ABET-DWAF 148 500 674 ( 26) 300 274 - - 4. 1

Working on Fire 491 - - 491 - 295 196 180 4. 1

Learner tracking 209 ( 100) - 109 - 106 3 - 4. 1

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Fire Managers Hand Book 483 ( 200) 21 262 - 113 149 100 4. 1

Ground Based Harvesting Hand Book

191 - - 191 61 251 1 - 4. 1

DWAF Experiential Learners 186 100 230 56 168 222 2 95 4. 1

Small Forest Enterprise Pro-gramme

579 100 649 30 18 47 1 - 4. 1

Lands Claims Initiative 1 491 ( 100) 329 1 062 - 913 148 - 4. 1

Municipalities Fire Fighting Project

1 488 ( 600) 35 853 - 604 249 - 4. 1

Arboriculture Qualification 391 - 3 388 11 398 1 - 4. 1

Programme for the Disabled 1 100 ( 300) 611 190 40 228 2 29 4. 1

ABET 1 500 109 1 587 22 150 171 1 177 4. 1

Bursary’s 1 210 511 1 716 5 1 950 1 097 858 - 4. 1

Capacity Building - Labour 500 305 779 26 - 20 6 - 4. 1

Disability Learnerships - 800 442 358 168 527 ( 1) - 4. 1


- 272 272 - 50 50 - - 4. 1

Ministerial Priorities - - - - 520 519 1 - 4. 1

Monitoring of Projects - - - - 200 125 75 26 4. 1

Furniture Chamber 5 830 5 679 8 171 3 338 7 839 7 607 3 567 4 862

Unallocated expenditure 2 187 - - 2 187 - - 2 183 - 1. 2

Development of Stand-ards, Qualifications and Learnerships

- 3 2 - 1 - 1 - 1. 2

ABET - 153 25 128 6 133 1 - 1. 2

Learnerships - 1 517 2 043 ( 526) 2 145 1 285 333 909 1. 2

Stakeholder communication - 541 487 53 30 79 4 - 1. 2

NSDS exhibitions 79 301 378 2 250 241 11 - 2. 5

Shintsha - support for incuba-tors

4 - 4 - - - - - 2. 8

KZN Furniture Industry Cluster 8 15 23 ( 1) - - - - 2. 8

DEAFSA 1 ( 1) - - - - - - 2. 8

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Usizolwetho - Cabinet making / Carpentry

7 8 16 ( 1) - - - - 2. 8

Adult Basic Education Train-ing facilitator development project

153 ( 153) - - - - - - 2. 8

University of Stellenbosch: Marketing and student recruit-ment

2 ( 2) - - - - - - 2. 7

Usindiso Ministries Upholstery for Abused Women

103 255 258 100 - 60 40 - 2. 8

Scarce and critical skills project 162 200 313 49 43 92 1 - 2. 8


35 61 96 ( 1) 64 63 1 - 2. 8

Research and impact studies 123 34 158 - 225 214 11 - 2. 8

Usindiso Strategic Women Project (Upholstery)

- 218 218 - 21 25 ( 4) - 2. 8

Strategic 18.2 Scarce Skills Project

26 6 32 - - - - - 2. 8

KZN 18.2 Scarce Skills Project 18 18 36 - - - - - 2. 8

Discretionary grants - Oct 2006

- (5) (5) - - - - - 2. 8

Artisan Development: MTA Section 28 Project 2007-2008

50 - 18 32 250 53 229 - 4. 1

Labour Capacity Building on NQF Furnwood Chamber

10 ( 3) 6 - - - - 225 4. 1

Learner tracking 250 - 126 124 - 100 24 - 4. 1

Furnwood Bursaries 1 236 ( 150) 877 209 2 209 2 - 4. 1

Women’s Disability Program - SFI

176 ( 32) 144 - - - - - 4. 1

Skills Training for Society for the Blind

202 100 168 134 205 338 1 - 4. 1

Learnerships 1 000 1 135 2 135 - 94 94 - 1 025 4. 1

SA Timber and Recovery - 500 250 250 5 254 1 - 4. 1

Disability Learnerships - 800 203 597 492 1 067 22 - 4. 1


- 160 160 - - - - - 4. 1

Ministerial Priorities - - - - 2 106 2 105 1 1 133 4. 1

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Monitoring of projects - - - - 700 842 ( 142) 4. 1

Unemployed Youth Qwaqwa - - - - 1 200 353 847 1 570 4. 1

Pulp and Paper Chamber 5 305 4 088 6 870 2 523 3 644 6 771 ( 606) 177

Allocated for promotion of Pulp and Paper Chamber objectives

2 159 161 - 234 233 1 - 1. 2

Subvention of the B Tech pro-gramme at Natal Technikon

93 - 56 37 - - 37 - 1. 2


17 ( 17) - - - - - - 1. 2

Learnerships for artisans 815 - 120 695 - 978 ( 283) - 2. 1

Training of SDF’s - 1 209 1 207 2 160 161 1 148 2. 2

Develop,implement and incentivise

1 - - 1 7 7 1 - 2. 5

Adult Basic Education Training 27 14 40 - - - - - 2. 5

NSDS exhibitions - 360 268 92 42 132 2 - 2. 5

Industry Training School 11 400 98 313 105 408 10 - 2. 5

Scarce and critical skills project 19 33 52 - - - - - 2. 8


1 222 125 98 7 105 - - 2. 8


2 - - 2 11 12 1 - 2. 8


- 50 - 50 - 40 10 - 2. 8


120 200 130 190 10 210 ( 10) - 2. 8


15 50 8 57 - - 57 - 2. 8

Research and impact studies 123 163 286 1 225 286 ( 61) - 2. 8


24 100 16 108 100 313 ( 105) 19 2. 8

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Pulp & Paper Disability Project - DEAFSA (Western Cape)

73 100 25 148 100 217 31 - 2. 8

Strategic Pulp & Paper ABET Project

26 - - 26 - - 26 - 2. 8

Pulp & Paper Learnership on L5

300 - 300 - - - - - 2. 8

Material Development 116 - 177 ( 62) 63 80 ( 79) - 3. 2

Coaching, Mentoring & Asses-sor Training

1 686 ( 363) 1 075 248 1 100 1 326 22 - 3. 2

Certificate in Pulp & Paper 1 298 - 887 411 91 801 ( 299) - 3. 2

Discretionary Grants - ( 5) ( 5) - - - - - 4. 1

New Venture Creation 6 200 131 75 86 160 1 - 4. 1

Project Sort It - PAMSA PRASA 530 - 500 30 - - 30 - 4. 1


- 1 213 1 213 - - - - - 4. 1

Ministerial Priorities - - - - 1 303 1 302 1 10 4. 1

Wood Products Chamber 2 633 5 476 5 939 2 170 7 218 8 872 522 470

Allocated for promotion of Wood Chamber objectives

20 ( 11) 9 - - - - - 1. 2

SMME Charcoal project - 200 - 200 - 219 ( 19) 40 1. 2

Wood products SGB - 87 88 - 2 - 2 - 1. 2

Adult Basic Education Training 235 200 854 ( 419) 1 000 582 - - 2. 2

Low cost sawmilling network initiative

- 500 5 495 700 866 330 40 2. 2

PDI Bursaries 6 49 55 - - - - - 2. 5

University of Stellenbosch: Wood Technology Degree (marketing and student re-cruitment)

- ( 1) - ( 1) - - - - 2. 5

Nelson Mandela Metropolitan University: Practical Training

2 ( 2) - - - - - - 2. 6

Discretionary: Chris Hani Dis-trict Municipality

1 713 474 241 - 224 17 - 2. 6

CEPPWAWU - Capacity Build-ing

253 - 240 13 - 3 10 - 2. 8

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Adult Basic Education Training Practioner Development

10 ( 10) - - - - - - 2. 8

DEAFSA - Skills programmes / learnerships

23 ( 23) - - - - - - 2. 8

Skills programme 32 52 84 - - - - - 2. 5

Scarce and critical skills project 1 ( 1) - - - - - - 2. 8


20 9 29 - 91 91 1 - 2. 8

Development and support for Broad Based BEE

35 - - 35 - - 35 - 2. 8


72 ( 72) - - 38 35 3 - 2. 8


4 - - 4 - 1 4 - 2. 8


69 120 130 59 350 427 ( 18) - 2. 8

New venture creation project 175 562 821 ( 84) 200 19 97 - 2. 8

Development & support for Sectoral or Occupational Excellence

18 100 15 103 - 54 49 - 2. 8


13 - 8 5 - - 5 - 2. 8

Research and impact studies 123 60 184 ( 1) 225 265 ( 41) - 2. 8


17 - - 17 100 85 32 - 2. 8

Gender project - Masonite (KZN)

353 ( 3) 350 - - - - - 2. 8

Strategic 18.2 Youth Project (East Rand)

34 400 - 434 500 821 113 - 2. 8

Strategic ABET Interventions 625 ( 625) - - - - - - 2. 8

Discretionary grants - March 2006

15 ( 15) - - - - - - 2. 8

SME Support Programme 101 300 238 163 500 611 52 - 2. 8


- ( 1) - - - - - - 2. 8

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- ( 5) - - - - - - 4. 1

Strategic ABET Interventions 250 625 110 765 - 765 - - 4. 1

Furniture design: e-Learning 42 100 - 142 51 192 1 - 4. 1

WFW: Furniture 75 ( 3) 72 - - - - - 4. 1

Furnwood Bursaries 9 ( 9) - - - - - - 4. 1


- 2 180 2 180 - 241 240 1 - 4. 1

Ministerial Priorities - - - - 3 220 3 372 ( 152) 390 4. 1

Total project expenditure 47 679 32 748 56 579 23 848 36 037 48 811 11 074 9 153

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19.2 Finance Lease Commitments

Present

Value

Interest Payment

R’000 R’000 R’000

Due not later than one year (current liabilities) 111 34 145

Due not later than one year and not later than five years 211 28 239

322 62 384

FIETA has entered into finance lease agreements for rental of photocopying and printing equipment with the latest agreement due to expire in 2015. The lease agreements have an escalation rate of 15%. These have been accounted for in terms of GRAP 13.

20. MATERIAL LOSSES THROUGH FRUITLESS AND WASTEFUL EXPENDITURE AND

IRREGULAR EXPENDITURE

20.1 Fruitless and Wasteful Expenditure

Late Payment of Invoices

2010/11 2009/10

R’000 R’000

Reconciliation of Fruitless and Wasteful Expenditure

Relating to Prior Year not Condoned - -

Relating to Current Year 17 -

Less: Amounts Condoned - -

Less: Amount Recovered - -

Fruitless and Wasteful Expenditure awaiting condonation 17 -

During the year FIETA had to pay interest to Service Providers on invoices that were paid beyond the speci-fied credit terms. A decision will need to be made by the Board about the recoverability of the amount. In future, management will implement processes to pay invoices within the stipulated credit period.

20.2 Irregular Expenditure

Legislative limit on administration expenditure exceeded

2010/11 2009/10

R’000 R’000

Reconciliation of Irregular Expenditure


Relating to Current Year 1 696 -



Fruitless and Wasteful Expenditure awaiting condonation 1 696 -



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During the year FIETA used more than 12.5% of its levy income to pay for its administration costs. FIETA sub-mitted a letter to the Minister requesting permission to exceed the 12.5% limit. The letter was sent after the limit was exceeded,this is non compliant to section 3(3) of the Skills Development Act. FIETA is still awaiting feedback from the Minister. In future, management will make the necessary budgetary intervention and apply to Minister before the expenditure limit is exceeded.

Discretionary grant contracts awarded without evaluation of proposal and Non-compliance with SCM policy

2010/11 2009/10

R’000 R’000

Reconciliation of Discretionary grant contracts awarded without evaluation of proposal


Relating to Current Year 376 -



Discretionary grant contracts awarded without evaluation of proposal

376 -

During the financial year FIETA awarded discretionary related contracts to suppliers without a proper evaluation process complying with supply chain management policy. Furthermore they did not obtain three quotations or document the deviation. Management will endeavour to comply with the supply chain regulation for future contracts.

21. EVENTS AFTER REPORTING DATE

As of the 1st April 2011, FIETA seizes to exist as a Seta as it will be merging with two other Seta to form the new Seta called the Fibre Processing and Manufacturing Seta (FP&M Seta)

22. 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 manages its interest rate risk by effectively investing Seta surplus cash in term deposits with differ-ent financial institutions according to the Seta’s investment policy.

The Seta’s exposure to interest rate risk and the effective interest rates on financial instruments at reporting sheet date are as follows:

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Floating rate Non-interest bearing

Amount

R’000

Effective

interest

rate

Amount

R’000

Weighted average

period until

maturity in years

TOTAL

R’000

Year ended 31 March 2011

Assets

Cash 41 364 6.0% - - 41 364

Accounts receivable - - 173 - 173

Total financial assets 41 364 - 173 - 41 537

Liabilities

Accounts payable - - (6 361) - (6 361)

Total financial liabilities - - (6 361) - (6 361)

Year ended 31 March 2010

Assets

Cash 50 401 7.2% - - 50 401

Accounts receivable - - 626 - 626

Total financial assets 50 401 - 626 - 51 027

Liabilities

Accounts payable - - (12 800) - (12 800)

Total financial liabilities - - (12 800) - (12 800)

Financial instruments have not been discounted as they will all be settled or recovered within 3 months. The effect of discounting was considered and found not to be material.

Credit risk

Financial assets, which potentially subject the Seta 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, invest-ments and accounts receivable.

The Seta limits its treasury counter-party exposure by only dealing with well-established financial institu-tions approved by National Treasury through the approval of their investment policy in terms of Treasury Regulation TR 28. The Seta’s exposure is continuously monitored by the accounting authority.

Credit risk with respect to levy paying employers is limited due to the nature of the income received. The Seta does not have any material exposure to any individual or counter-party. The Setas concentration of credit risk is limited to the industry (forestry and related industries) in which the Seta operates. No events occurred in the industry (forestry and related industries) 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.



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The ageing of other receivables from exchange transactions:

2010/11 2009/10

Gross Impairment Gross Impairment

Not past due 173 - 626 -

Past due 1 - 30 days - - - -

Past due 31 - 120 days - - - -

Past due 120 - 365 days - - - -

More than one year - - - -

Liquidity risk

The Seta 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.

2010/11 Carrying

Amount

Contractual

Cash Flows

6 months

or less

6 - 12

months

1 - 2 years More

than 2

years

Trade and other pay-ables from exchange transactions

(6 361) (6 361) - ( 6 083) ( 278) -

2009/10 Carrying

Amount

Contractual

Cash Flows

6 months

or less

6 - 12

months

1 - 2 years More

than 2

years

Trade and other pay-ables from exchange transactions

(12 800) (12 800) (12 693) ( 47) ( 19) ( 79)

In case of liquidity problems, funding resources might be available in terms of the Department and National Treasury approval for borrowing requirements in the open market.

Market risk

The Seta is exposed to fluctuations in the employment market, for example sudden increases in unemploy-ment and changes in the wage rates. No significant events occurred during the year that the Seta is aware of.

Fair values

The Seta’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 their fair value.

Fair values could be reliably measured for all financial instruments.

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The following methods and assumptions are used to determine the fair value of each class of financial instruments:

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 is net of allowance for any doubtful debt, estimated by the Accounting Authority based on prior experience. The carrying amount of these assets approximates their fair value.

Accounts payable

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

The effect of discounting considered and found to be immaterial.

23. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Seta’s accounting policies management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other fac-tors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting esti-mates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncer-tainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Useful lives of property, plant and equipment and Intangible Assets

The Seta reviews the estimated useful lives of property, plant and equipment at the end of each annual reporting period, refer note 6 and note 7 for the respective carrying values. As of the 1st April 2011, FIETA seizes to exist as a Seta as it will be merging with two other Seta to form the new Seta called the Fibre Processing and Manufacturing Seta (FP&M Seta). The new Seta’s license is valid for five years.

Management determined, consistent with the prior year, that the useful life of assets should not be limited by the new Seta’s establishment until 31 March 2016. Managements determination of useful life also im-pacts the determination of the residual value of assets. Residual values are reviewed annually.



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The following estimated useful lives are used for the depreciation of property plant and equipment/intangi-ble assets:

- Computer equipment 3 years

- Computer software 2 years

- Office furniture and fittings 10 years

- Office equipment 5 years

24. NEW ACCOUNTING PRONOUNCEMENTS EFFECTED IN THE CURRENT YEAR

At the date of the authorisation of these financial statements there are standards and interpretations in issue but not yet effective. These include the following standards and interpretations that are applicable to the Seta and may have an impact on future financial statements.

Effective Date

Impairment of Non-cash-generating Assets GRAP 21 1 April 2012

Revenue from Non-exchange Transactions (Taxes and Transfers) GRAP 23 1 April 2012

Presentation of Budget Information in Financial Statements GRAP 24 1 April 2012

Impairment of Cash-generating Assets GRAP 26 1 April 2012

Segment Reporting GRAP 18 No date determined

Employee Benefits GRAP 25 No date determined

Financial Instruments GRAP 104 No date determined

Transfer of Function between Entities Under Common Control GRAP 105 No date determined

Transfer of Function between Entities Not Under Common Control GRAP 106 No date determined

Mergers GRAP 107 No date determined

An entity shall apply Standards of GRAP for Annual Financial Statements covering periods beginning on or after a date to be determined by the Minister of Finance in a regulation to be published in accordance with section 91(1)(b) of the PFMA.

GRAP 21 : Impairment of Non-cash Generating Assets

This standard prescribes the accounting treatment for the impairment of non-cash generating assets and does not significantly differ from IAS 36 except for some terminology differences. It is not expected that this standard will significantly impact future disclosures .

GRAP 23: Revenue from Non-exchange Transactions (Taxes and Transfers)

The standard prescribes requirements for the financial reporting of revenue arising from non-exchange transactions. Accounting policies have been amended to clearly distinguish between exchange and non ex-change transactions. It is not expected that the initial application will significantly impact the Seta’s financial statements.

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GRAP 24: Presentation of Budget Information in financial Statements

The standard prescribes the presentation of a comparison of budget and actual amounts in the financial statements of entities that are publicly accountable for the use of their funds. The presentation may be in the form of additional financial statement or additional budget columns in their financial statements. The standard becoming effective is not expected to significantly impact future disclosures since we have applied the principles outlined in GRAP 24 to inform our current disclosure

GRAP 26: Impairment of cash Generating Assets

This standard prescribes the accounting treatment for the impairment of cash generating assets and does not significantly differ from IAS 36. It is not expected that this standard will significantly impact future disclosures.

GRAP 25: Employee Benefits

This standard prescribes the accounting treatment for employee benefits. The changes prescribed from the current applicable standard relate mainly to the accounting requirements of defined benefit plans and as such is not expected to significantly impact the current accounting policies or disclosures.

GRAP 104: Financial Instruments

GRAP 104 prescribes recognition, measurement, presentation and disclosure requirements for financial instruments and makes significant modifications to the principles in the previous standards applied in order to: · simplify the recognition, measurement and disclosure of financial instruments; and · accommodate the types of financial instruments entered into in the public sector. The definitions of the various categories of financial instruments in IAS 39 have been streamlined and re-placed which will require us to change our accounting policy accordingly. The following disclosures required under IAS are encouraged but not required: · The disclosure of fair values for financial instruments. · Certain disclosures about the use of the fair value using the three tiered hierarchy. · A market sensitivity analysis.

25. RELATED PARTY TRANSACTIONS

25.1 Transactions with the controlling entity

The Seta was controlled by the Department of Labour, for the period up until 31 October 2009, and since 1 November 2009 by the Department of Higher Education and Training. The departments were controlled, respectively by the Minister of Labour and Minister of Higher Education and Training.

There were transactions relating to revenue with the Department (Note 2)

25.2 Transactions with entities under common control

By virtue of the fact that FIETA is a National Public Entity related to other entities and departments in the National sphere of government it is considered related to Telkom, Eskom, South African Airways, other Setas and the National Skills Fund. The transactions are consistent with normal operating relationships between the entities, and are undertaken on terms and conditions that are normal for such transactions. Where there were transactions and balances arising due to the movement of funds between entities under the common control of the Department, these amounts were disclosed below.



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2010/11 2009/10

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

R’000 R’000

Amount of the

transaction

Amount receiv-

able/(payable)

Amount of the

transaction

Amount

receivable/

(payable)

Receivables 9 7 4 510 7

SERVICES Seta - - 122 -

CETA - - 31 -

AgriSeta 4 4 80 4

W&R Seta 3 - 3 3

INSeta - - - -

Department of Water Affairs - - 274 -

Payables 12 446 446 18 957 2111

FOODBEV 11 11 - 11

MAPPP 14 14 1 14

MERSeta 44 44 9 20

AgriSeta 66 66 - 61

W&R Seta 97 97 10 70

SERVICES 191 191 - -

CETA 23 23 (3) 23

National Skills Fund - - 18 940 1912

Note the amount of the transaction includes interest and penalties transferred to or from the Seta.

25.3 Remuneration of Key Management

The key management personnel (as defined by IPSAS 20, Related Party Disclosures) of the Seta are: the members of the accounting authority and the members of the senior management group.

The accounting authority consists of members appointed in terms of its constitution; the chief executive officer attends meetings of the accounting authority but is not a member of the accounting authority. The aggregate remuneration of members of the accounting authority and the number of members receiving remuneration within this category, are:

2010/11 2009/10

R’000 R’000

Aggregate remuneration - -

Number of persons 15 13

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The senior management group consists of the Seta’s chief executive officer. The aggregate remuneration of members of the senior management group and the number of managers receiving remuneration within this category are:

2010/11 2009/10

R’000 R’000

Aggregate remuneration 951 806

Number of persons 1 1

Refer to the report by the Accounting Authority for detail disclosure concerning the emoluments of the Chief Executive Officer.

26 TRANSACTIONS WITH STAKEHOLDERS REPRESENTED ON THE ACCOUNTING AUTHORITY

The Seta has, in the normal course of its operations, entered into certain transactions with entities either re-lated to the Department or which had a nominated representative serving on the Seta accounting author-ity.

2010/11 2009/10

R’000 R’000

Related

party

Nature of relation-

ship

Transaction

type

Amount

of the

transaction

Amount

receiv-

able/(pay-

able)

Amount

of the

transaction

Amount

receiv-

able/(pay-

able)

Payables

Masonite Martin Birtwistle (Au-thority Member)

Discretion-ary Grant

120 - 2 165 -

Paper Man-ufacturer’s Association of South Africa

Mike Truelock, Jane Molony (Authority Members)


1 916 (1 916) 1 575 -

Forestry South Africa

Roger Godsmark (Au-thority Member)


300 ( 30) - -

Admin ex-penditure

2 ( 2) - -

Mondi Denis Gerson (Au-thority Member)


2 ( 2) 3 515 -

S.A. Forestry Contractors Association

Pam Naidoo (Author-ity Member)


71 ( 71) - -

Admin ex-penditure

21 ( 21) 35 -



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CEPPWAWU Michael Mokoana, Phillip Khalo (Author-ity Members)


480 ( 480) - -

Admin ex-penditure

2 ( 2) - -

Sappi Calvin Mashifane (Au-thority Member)

Discretion-ary Grant/ Admin ex-penditure

- - 2 529 -

The above transactions occurred under terms that were no less favorable than those available in similar arm’s length dealings.

2010/11 2009/10

R’000 R’000

Related

party

Nature of relation-

ship

Transaction

type

Amount

of the

transaction

Amount

receiv-

able/(pay-

able)

Amount

of the

transaction

Amount

receiv-

able/(pay-

able)

Payables

27 PRIOR PERIOD ERROR

During the 2010/2011 financial year it was picked up that a lease contract for printer was incorrectly treated as an operating lease and instead of a finance lease. This has been corrected the effect is as follows:

Increase in Finance cost 38

Decrease in Admin cost (30)

Impact on statement of financial performance 8

Decrease in opening balance of reserves 17

Increase in finance lease liability (235)

Increase in Property,Plant and Equipment 172

Decrease in Trade and other payables from exchange transac-tions

38

Impact on statement of financial position (8)

28 SOCCER WORLD CUP AND TICKETS

The Standing Committee on Public Accounts (SCOPA) has requested that the SETA disclose all expenditure relating to the Soccer World Cup. FIETA spend R35 625 on Soccer World Cup apparel and memorabilia.

Notes

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Annual Report2010-2011

Postal Address: PO Box 31276, Braamfontein, 2017

Physical Address: 33 Hoofd Street, Braampark, Forum II, 4th

floor, Parktown, 2193, Johannesburg

Tel: (011) 712 0600Fax: (011) 339 1166

E-mail: [email protected]: www.fieta.org.za

Annual Report FOREST INDUSTRY EDUCATION & TRAINING … · 2014. 10. 16. · Annual Report 2010 – 2011 FOREST INDUSTRIES EDUCATION & TRAINING AUTHORITY Forum II, 4th Floor, Braampark

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