ANNUAL REPORT 2014/2015 - National Government...QcTO Annual Report 2014/2015 01 PART A: GENERAL...
Transcript of ANNUAL REPORT 2014/2015 - National Government...QcTO Annual Report 2014/2015 01 PART A: GENERAL...
ANNUAL REPORT 2014/2015
LOOKINGAFTER THE
PUBLIC INTEREST
Quality Council for Trades and Occupations
Annual Report2014/15 Financial Year
ANNUAL REPORT 2014/2015
QCTO Annual Report 2014/2015
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PART A: GENERAL INFORMATION
1. Public Entity’s General Information
2. List of Abbreviations/Acronyms
3. Foreword by the Chairperson
4. Chief Executive Officer’s overview
5. Statement of Responsibility and Confirmation of accuracy for the Annual Report
6. Strategic Overview
6.1. Vision
6.2. Mission
6.3. Values
7. Legislative and other mandates
7.1. Constitutional Mandate
7.2. Legislative Mandate
8. Organisational structure
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PART B: PERFORMANcE INFORMATION
1. Auditor’s Report: Predetermined Objectives
2. Situation Analysis
2.1. Service delivery environment
2.2. Organisational environment
2.3. Key policy developments and legislative changes
2.4. Strategic outcome oriented goals
3. Performance Information by Programme
3.1. Programme 1: Occupational Qualifications
3.2. Programme 2: Quality Assurance
3.3. Programme 3: Administration
4. Revenue Collection
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PART c: GOVERNANcE
1. Introduction
2. Portfolio committees
3. Executive authority
4. The accounting authority
5. Risk management
6. Internal control unit
7. Internal audit and audit committees
8. Compliance with laws and regulations
9. Unsolicited proposal
10. Fraud and corruption
11. Minimising conflict of interest
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12. Code of conduct
13. Health safety and environmental issues
14. Secretary
15. Social responsibility
16. Audit and Risk Committee report
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PART D: HUMAN RESOURcE MANAGEMENT
1. Introduction
2. Human resource oversight statistics
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PART E: FINANcIAL INFORMATION
Accounting Authority’s Responsibilities and Approval
Report of the external auditor
Report of the Audit and Risk Committee
Report of the Council
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2014
Statement of Financial Position
Statement of Financial Performance
Statement of Changes in Net Assets
Cash Flow Statement
Statement of Comparison of Budget and Actual Amounts
Accounting Policies
Notes to the Annual Financial Statements
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TAbLE Of cONTENTs
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GENERALINfORmATION
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1. PUbLIc ENTITY’s GENERAL INfORMATION
REGISTERED NAME: Quality Council for Trades and Occupations
REGISTRATION NUMBER (if applicable): Not applicable
PHYSIcAL ADDRESS: 256 Glyn Street Hatfield Pretoria 0083
POSTAL ADDRESS: Private Bag X278 Pretoria 0001
TELEPHONE NUMBER/S: +27 12 003 1800
EMAIL ADDRESS: [email protected]
WEBSITE ADDRESS: www.qcto.org.za
EXTERNAL AUDITORS: Auditor-General of South Africa PO Box 446 Pretoria 0001
BANKERS: ABSA, 2nd Floor, Lourie Place Hillcrest Office Park 177 Dyer Street Hillcrest 0083
SEcRETARY: Ms Adri H Solomon, Director: Governance and Secretariat
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2. LIsT Of AbbREVIATIONs / AcRONYMs
AGSA Auditor-General of South Africa
APP Annual Performance Plan
AQP Assessment Quality Partner
BBBEE Broad Based Black Economic Empowerment
cAT Credit Accumulation Transfer
cEO Chief Executive Officer
cD Chief Directorate
cFO Chief Financial Officer
cHE Council on Higher Education
cOIDA Compensation for Occupational Injuries and Diseases Act
DBE Department of Basic Education
DG Director General
DHET Department of Higher Education and Training
DoL Department of Labour
EISA External Integrated Summative Assessment
ETQA Education and Training Quality Assurance Body
FET Further Education and Training
IT Information Technology
ITc Information Technology and Communication
HR Human Resources
INDLELA Institute for the Development of Learnerships, Employment Skills and Labour Assessments
MHET Minister of Higher Education and Training
MOA Memorandum of Agreement
MoL Minister of Labour
MSP Master Systems Plan
MTEF Medium Term Expenditure Framework
N/A Not applicable
NAMB National Artisan Moderating Body
NATED National Education Report 191 (Part 2) N4 to N6
NcV National Certificate Vocational
NLRD National Learner Records Database
NQF Act National Qualifications Framework Act (No. 67 of 2008)
NSA National Skills Authority
OQA Occupational Quality Assurance
OQM Occupational Qualifications Management
OQSF Occupational Qualifications Sub-Framework
PAYE Pay As You Earn
PFMA Public Finance Management Act
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PPPFA Preferential Procurement Policy Framework Act
QA Quality Assurance
QAP Quality Assessment Partner
Qc Quality Council
QcTO Quality Council for Trades and Occupations
SAQA South African Qualifications Authority
SARS South African Revenue Services
ScM Supply Chain Management
SDA Skills Development Act (No. 97 of 1998)
SDP Skills Development Provider
SETA Sector Education and Training Authority
SLA Service Level Agreement
SOP Standard Operating Procedure
TVET Technical Vocational Education and Training
UIF Unemployment Insurance Fund
Umalusi Council for Quality Assurance in General and Further Education and Training
WIL Work Integrated Learning
2. LIsT Of AbbREVIATIONs / AcRONYMs (CONTINUED)
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3. FOREWORD BY THE CHAIRPERSON
31 March 2015 marked the end of the term for the first Quality Council for Trades and Occupations (QCTO). I have been honoured and privileged to be a part of this august group. Together we have driven a mission to “Look After the Public Interest”. With this theme as our guiding light the Council has spearheaded the following QCTO accomplishments:
l 44 occupational qualifications registered with the South African Qualifications Authority (SAQA) where more than 50% have been developed for the trades
l28 Assessment Quality Partners (AQPs) approved for the occupational qualifications registered on the OQSF (Occupational Qualifications Sub-framework) (NB: AQPs are responsible for such things as developing and administering assessments)
lIssuance of a single trade certificate in terms of the Skills Development Act (SDA)
lIntroduction of a more stringent service provider accreditation system
lConducting a focused advocacy campaign at all public Technical Vocational and Training (TVET) college campuses
lRelocation to new premises located at 256 Glyn Street in Hatfield, Pretoria
lWebsite, with a variety of information, open to the public
lPublishing of the Occupational Qualification Sub- Framework (OQSF)
The White Paper for Post-School Education and Training remains a critical guidepost for the QCTO. Strong relations between educational institutions (including service
providers) and industry remains a goal for which the QCTO must strive. This critical component of occupational qualifications must be achieved.
Yours sincerely,
Prof Peliwe P Lolwana
chairperson of the council
Quality council for Trades and Occupations
Date: 29 July 2015
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4. OVERVIEW BYTHE CHIEF EXECUTIVE
The 2014/2015 financial year was the first full year that all senior managers (save the Director of Information Technology) were in place. This situation has made a significant difference in the QCTO’s performance. Another important contributor to the QCTO’s success has been the vast improvement in its Strategic Plan and the processes associated with its development. This year’s Strategic Plan focused on the core business operations where all four core elements of the QCTO’s operations:
1. Qualifications development and review;
2. Skills development provider accreditation;
3. The provision of assessments, with its two key points - appropriately developed and implemented assessment tools and accreditation of assessment centres; and
4. A reliable certification system that received dedicated attention.
At this time I wish to extend my sincerest gratitude to the outgoing Council without the support and dedication of which, the QCTO could never have achieved the many successes reported over the years. While we will miss this highly motivated group of individuals, we are certain that the new Council will be no less dedicated.
In closing, as is my custom, I take this opportunity to thank all our partners whose support and interactions are so very vital to the QCTO. We look forward to working with
them in 2015/16 in order to make greater strides in the education and training sector. Lastly, to the staff- “Ke a leboga kudu kudu”.
Yours sincerely,
Ms G Joyce Mashabela
chief Executive Officer
Quality council for Trades and Occupations
Date: 29 July 2015
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5. STATEMENT OF RESPONSIBILITY AND cONFIRMATION OF AccURAcY FOR THE ANNUAL REPORT
The Accounting Authority is responsible for the preparation of the public entity’s annual financial statements (AFS) and for the judgements made in this information.
The Accounting Authority is responsible for establishing, and implementing a system of internal control designed to provide reasonable assurance as to the integrity and reliability of the annual financial statements.
In my opinion, the financial statements fairly reflect the operations of the public entity for the financial year ended 31 March 2015.
The external auditors are engaged to express an independent opinion on the AFS of the public entity.
The QCTO Annual Financial Statements for the year ended 31 March 2015 have been audited by the external auditors and their report is presented on page 65.
The Annual Financial Statements of the public entity set out on page 71 to page 103 have been approved.
Ms G Joyce Mashabela
cHIEF EXEcUTIVE OFFIcER
Quality council for Trades and Occupations
Date: 29 July 2015
Prof Peliwe P Lolwana
cHAIRPERSON OF THE cOUNcIL
Quality council for Trades and Occupations
Date: 29 July 2015
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7. LEGISLATIVE AND OTHER MANDATES
On 31 December 2010 the QCTO was listed as a Schedule 3A Public Entity under the Public Finance Management Act (PFMA), effective retrospectively from 1 April 2010 (Gazette Notice 33900), as per section 26(G)(1) of the Skills Development Act (SDA).
7.1 constitutional mandate
The QCTO is not directly referenced in the Constitution. However there are two sections in the Bill of Rights to which its functions relate:
6. STRATEGIc OVERVIEW
The Quality Council for Trades and Occupations (QCTO) reviewed its Strategic Plan 2012/13 to 2016/17 substantially as the first version was found to be too operational. This also impacted on the layout of the Annual Performance Plan (APP). Changes includes the revision of the vision, mission, strategic outcome oriented goals, programmes, strategic objectives, performance indicators and targets. The Minister approved the revised Strategic Plan and Annual Performance Plan 2014/15. In view of the total revision of the Strategic Plan, alignment between 2013/14 and 2014/15 strategic objectives and performance indicators are not possible. Programme 1: Qualifications Management for 2013/14 APP has been split into two programmes for the 2014/15 APP so numbering does also not align between the two financial years.
6.1 Vision
The QCTO’s vision is to qualify a skilled and capable workforce.
6.2 Mission
The QCTO’s mission is to effectively and efficiently manage the occupational qualifications sub-framework in order to set standards, develop and quality assure national occupational qualifications for all who want a trade or occupation and, where appropriate, professions.
6.3 Values
Innovation and Excellence We rise to opportunities and challenges, we continuously learn, we are innovative and we consistently produce work of distinction and fine quality, on time, and in line with our clients’ needs
Empowerment and Recognition We enable people to make things happen, we encourage and support one another when and where needed, and we celebrate successful accomplishment of work
Respect and Dignity We value and show consideration for all the people we work with, treat one another with kindness and thoughtfulness, and embrace inclusivity
Ethics and Integrity We embrace and practice a moral code of trustworthiness, honesty and truthfulness in everything we say and do, and we honour our promises and commitments
Ownership and Accountability We take ownership of our responsibilities and we answer for our decisions and actions
Authenticity We protect the public by issuing authentic, quality qualifications
22. Freedom of trade, occupation and profession
Every citizen has the right to choose their trade, occupation or profession freely.
The practice of a trade, occupation or profession may be regulated by law.
29. Education
Everyone has the right
a) to a basic education, including adult basic education; and
b) to further education, which the state, through reasonable measures, must make progressively available and accessible.
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In ensuring the quality of occupational qualifications, which include qualifications leading to trades, other occupations and professions, the QCTO contributes to Section 22.
In developing and quality assuring occupational qualifications that augment the menu of qualifications in the various sub-frameworks of the National Qualifications Framework, it also contributes to Section 29(1)(b).
And in so far as its Foundational Learning programmes contribute to adult basic education, the QCTO also contributes to Section 29(1)(a).
7.2 Legislative mandate
National Qualifications Framework Act and the Skills Development Act
The QCTO has been established in order to accommodate the unique learning requirements for building occupational competence. The QCTO is responsible for Occupational Qualifications development and monitoring.
Both the National Qualifications Framework (NQF) Act, No 67 of 2008 and the Skills Development Act (SDA), No 97 as amended in 2008 outline the functions of the QCTO.
The NQF Act specifies that the QCTO should:
l Develop and manage its sub-framework, make recommendations and advise the Minister on matters relating to its sub-framework
lConsider and agree level descriptors ensuring that they remain current and appropriate
lDevelop and recommend qualifications to SAQA for registration
lDevelop and implement quality assurance policy for registered qualifications
lMaintain a database of learner achievements and submit learners achievement data to SAQA for recording on the National Learner Records Database (NLRD)
lConduct or commission and publish research
lInform the public about its sub-framework
The Skills Development Act, in Chapter 6C (Sections 26F – J), stipulates that the QCTO must:
lAdvise the Minister on all matters of policy concerning occupational standards and qualifications.
lPerform its functions in terms of the Skills Development Act and the National Qualifications Framework Act
lSubject to any policy issued by the Minister in terms of Section 26F:
- Design and develop occupational standards and qualifications and submit them to the South African Qualifications Authority for registration on the National Qualifications Framework;
- Establish and maintain occupational standards and qualifications;
- Ensure the quality of occupational standards and qualifications and learning in and for the workplace;
- Promote the objectives of the National Qualifications Framework;
- Liaise with the National Skills Authority (NSA) on the suitability and adequacy of occupational standards and qualifications and on the quality of learning in and for the workplace; and
- Perform any other prescribed function.
Memorandum of Agreement (MOA) between the QcTO and Department of Higher Education and Training (DHET)
The QCTO and the DHET entered into a Memorandum of Agreement (MOA) during the 2011/12 financial year with the understanding that for the transition, the QCTO will use the DHET’s infrastructure and systems to support it while becoming fully operational. Towards the end of the financial year under reporting the QCTO was able to completely wean itself from DHET in terms of Finance, SCM, IT, Administration, and the HR functions including payroll.
Public Finance Management Act
The QCTO also ensures compliance to the Public Finance Management Act, Treasury Regulations, Preferential Procurement Policy Framework Act (PPPFA) and the Framework for Supply Chain Management.
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8. ORGANISATIONAL STRUcTURE
QCTO ChairpersonProf PP Lolwana
CEOMs GJ Mashabela
Chief Director: Occupational Qualifications Management
Mr TM Lata
Chief Director: Corporate Services and CFOMs N Madilonga
Chief Director: Occupational Quality Assurance
Mr V Naidoo
Director: Occupational Qualifications Development
Mr S Mkhonza
Director : Finance and
Procurement: Mr I Gumbachoma
Director: Information Technology:
vacant
Director: Governance,
Strategy, Secretariat Services and
Appeals: Ms A Solomon
Director: Quality Assurance: Ms B Mtintsilana
Director: Certification:
Ms A Janse Van Rensburg
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PERfORmANCEINfORmATION
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1. AUDITOR’S REPORT: PREDETERMINED OBJEcTIVES
The AGSA/auditor currently performs the necessary audit procedures on the performance information to provide reasonable assurance in the form of an audit conclusion. The audit conclusion on the performance against predetermined objectives is included in the report to management, with material findings being reported under the Predetermined Objectives heading in the Report on other legal and regulatory requirements section of the auditor’s report.
Refer to page 65 of the Auditors Report, published as Part E: Financial Information.
2. SITUATIONAL ANALYSIS
2.1 Service Delivery Environment
The South African Qualifications Authority (SAQA) Act brought into being the National Qualifications Framework (NQF) and a range of standard setting and quality assurance arrangements, by means of which all South African qualifications were to be registered on a single framework. The Skills Development Act (SDA) brought Sector Education and Training Authorities (SETAs) into being which were legally required to be accredited by SAQA as Education and Training Quality Assurance (ETQA) bodies. ETQAs were responsible for the quality assurance of a specified range of qualifications registered on the NQF. The design and registration of qualifications was, however, seen as the responsibility of SAQA.
In 2008 the SAQA Act was repealed and replaced by the NQF Act, No 67 of 2008. SAQA was given a broad oversight role. SAQA was no longer required to perform standard setting function, as this had been devolved to three quality councils namely, the Council on Higher Education (CHE), Umalusi and the Quality Council for Trades and Occupations (QCTO) which now perform both standard setting and quality assurance functions. Furthermore, in 2008 the Skills Development Amendment Act, establishing the QCTO, was promulgated.
The publication of Proclamation 44 of 2009 led to the creation of the Department of Higher Education and Training (DHET), separate from the Department of Basic Education (DBE), which is exclusively responsible for schooling. The entire skills development function of the Department of Labour (DoL) was incorporated into the DHET-including the SETAs and the QCTO.
On 31 March 2015, the QCTO completed its first 5 year Strategic Plan period. During this period the QCTO changed
Council Chairpersons only once and since September 2011, Council membership (including the service of the Chairperson), has been stable. The 5 year Strategic Plan period was also characterised by a shortage of funds until the 2013/2014 financial year when the SETA Grant Regulations came into effect.
Two other critical issues impacting negatively on the QCTO was the need to develop and implement the necessary policies required of a public entity and the lack of sufficient staff.
The most significant challenge facing the QCTO to date, and for quite some time in the foreseeable future, is the transitioning from the former system where a variety of bodies were responsible for occupational qualifications. The QCTO has to now combine the management of these qualifications under the umbrella of its systems which are still quite new. Thus at present the QCTO manages several systems, as each of the various types of qualifications had different quality assurance regimes. Thus under the QCTO’s aegis are:
l Unit standards based qualifications whose development and quality assurance were under the auspices of SAQA and the former ETQAs;
l National Education Report 191 (part 2) N4 to N6 (NATED) (more commonly known as N-courses) offerings;
l Provider based qualifications for which SAQA provided oversight;
l Trades recorded on the National Qualifications Framework; and
l The newly developed occupational qualifications using the QCTO development model and processes.
In conducting its work the QCTO is extremely cognizant of government’s initiatives with respect to economic and social development. Thus the organisation pays particular attention to the qualifications it prioritises for development, the strengthening and expansion of offerings of the Technical and Vocational Education and Training (TVET) colleges, improving accreditation and monitoring systems with respect to skills providers and assessment centres.
Finally, the QCTO is establishing a vibrant certification system which issues all Trade certificates, conducts verifications of Trade certificates and working diligently to manage the back log of certificates issued by SETAs.
All processes related to the QCTO’s core business (qualifications development and review, skills development provider accreditation, quality assurance of the provision of assessments and certification) have received enormous attention which has resulted in the setting of standardised practices which is making interaction and engagement with stakeholders more meaningful.
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2.2 Organisational environment
The QCTO finalised an organisational structure in 2011/2012. The Chief Executive Officer of the QCTO assumed duty on 1 April 2012. For half of the year the QCTO functioned without any senior staff. Towards the end of the 2012/13 the Chief Director: Corporate Services, Chief Director: Qualifications Management and the Director: Governance were appointed. These appointments propelled the QCTO to positively deliver on its mandate, but showed a significant gap in the structure, that of the need to divide the work of Qualifications Management into two functions, namely management and quality assurance. Thus in February 2014 a Chief Director of Quality Assurance was engaged and later the Director for Certification. These appointments along with that of the Directors IT, Finance, Quality Assurance and Qualifications Development have contributed substantially towards building a stable environment for the QCTO. Moreover, with the recent review of the QCTO Strategic Plan it is clear that there is a need to have an extensive review of the QCTO organogram so that there is better alignment to the QCTO’s work.
In terms of the governance structure, there existed during the period under review a Council that possessed the necessary experience and expertise, and that functioned on the basis of a number of committees, including the Executive Committee, Finance Committee, the Audit and Risk Committee, the Qualifications Committee and the Quality Assurance Committee. The existence of a functioning Council ensures that the organisation is well governed and that mission-critical decisions for its success are made. The Council’s term of Office ended on 31 March 2015. A new Council will be appointed from 1 April 2015.
Excellent progress has been made in relation to the development of systems to support the work of the organisation. The QCTO now has all the required policies and systems in place and thus since September 2014, when the organisation made its own payroll run for the very first time, no longer was there need of the Memorandum of Agreement (MoA) with the DHET. The organisation must acknowledge sincerely its appreciation of the DHET in this respect as the MoA enabled the QCTO to operate as a standalone entity. As stated above, now that the organisation has a better understanding of its mandate and operational activities, there is need to review the organisational structure to ensure such a structure exists that will support and enhance operations.
In December 2013 the QCTO moved to its new premises. This move gave staff sufficient space to operate and provided an environment that demonstrates to stakeholders that the QCTO is “ready to do business.” As the organisation continues to grow, there is a further need to acquire additional office space. This will be considered in the forthcoming year.
The marketing and communications unit was established towards the end of the financial year. Since its
establishment, it has succeeded building the QCTO brand and has created a platform for communication with QCTO stakeholders. The vigorous roll out of an intense marketing drive is expected to take place during the 2015/16 financial year.
In 2014 a revised website was launched where data is regularly updated to inform stakeholders of information vital to their lives. This information includes a total listing of registered qualifications, accredited providers, qualifications in development, etc. The existence of a more vibrant website and engagement of a Deputy Director of Marketing and Communication has addressed concerns about the organisation’s ability to handle internal and external communication effectively.
It is worth mentioning that for the first time in its history, the QCTO achieved a 100% spending on the allocated 2014/15 budget and this is evidence that the QCTO has established its operations and is reaching an acceptable level of maturity.
With the staff complement having been stabilised, performance planning and management aligned to strategy has taken centre stage, facilitated through rigorous operational planning at unit level. Performance planning and management will assist the organisation in its efforts to focus on its mandate. At the same time, the implementation of plans and policies related to staff development will enable all staff to reach the desired level of capability to deliver on the QCTO’s strategy. The QCTO has been working with staff to entrench better strategic planning processes as well as risk management, the latter strengthened by the services of the QCTO’s Internal Auditors. A new internal auditor was appointed on 1 February 2015.
An area that still needs serious attention is the development of an appropriate Management Information System. In 2014 the Council approved an Information Technology Master System Plan the implementation of which is being driven by the QCTO IT Steering Committee.
2.3 Key policy developments and legislative changes
Outside of the publishing of the Occupational Qualifications Sub-Framework (OQSF) Policy (Government Gazette No. 37879) no new policy developments or legislative changes were experienced this year; however the three initiatives below still have significant impact on the QCTO’s operation:
2.3.1 The Government Gazette 34932 R20 2 (5 which makes provision for SETAs to: “monthly from 1 October 2012 transfer as part of its administration costs as contemplated in sub regulation (1) and approved in the annual SETA strategic plan, a maximum of 0,5% of the total levy received by the SETA to QCTO for quality assurance functions as contemplated in section 26H of the Act;”
2.3.2 Government Gazette published in August 2013
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on Amendments to the Determination of the National Qualifications Framework’s Sub-frameworks (Gazette 36 803 published on 30 August 2013); and
2.3.3 White Paper for Post-School Education and Training launched on 16 January 2014 by the Minister.
2.4 Strategic Outcome Oriented Goals
2.4.1 The Quality Council for Trades and Occupations (QCTO) reviewed its Strategic Plan 2012/13 to 2016/17 substantially as the first version was found to be too operational. This also impacted on the layout
of the Annual Performance Plan (APP). Changes include the revision of the vision, mission, strategic outcome oriented goals, programmes, strategic objectives and performance indicators and targets. The Minister approved the revised Strategic Plan and Annual Performance Plan 2014/15. In view of the total revision of the Strategic Plan, alignment between 2013/14 and 2014/15 strategic objectives and performance indicators are not possible. Programme 1: Qualifications Management for 2013/14 APP has been split into two programmes for the 2014/15 APP so numbering does also not align between the two financial years.
The QCTO made the following progress in terms of its Strategic Outcome Oriented Goals:
STRATEGIc OUTcOMES ORIENTED GOAL 1 Competent people in priority trades and occupations.
Goal Statement
Competent people in priority trades and occupations for employment opportunities that are available in the labour market.
Indicator Number of certificates issued in priority occupational qualifications
(trades and non-trades) after recommendation by Assessment Quality Partner.
Progress
Occupational Qualifications
A notable improvement has been observed in the registration of QCTO qualifications, in this financial year a total of 25 occupational qualifications were registered by SAQA on the Occupational Qualifications Sub Framework. To date 44 qualifications are registered and available to be utilised.
For the 2014/2015 financial year, twenty two (22) occupational qualifications were approved by the QCTO for recommendation to SAQA for registration.
At the end of the financial year a total of 32 occupational qualifications were receiving attention for registration by SAQA.
If the above occupational qualifications were registered, all in all 76 occupational qualifications would be registered on the Occupational Qualifications Sub Framework (OQSF).
In July 2014 the Occupational Qualification Sub-framework policy was published via gazette. Each of the three QCs is required to publish a policy statement that describes the character of the sub-framework which contextualizes the sub-framework’s purpose, scope and application, qualification types, etc.
Accreditation process of Skills Development Providers (SDPs) that want to offer newly registered occupational qualifications is conducted directly by the QCTO. The baseline to accredit SDPs has been established to be 45 working days.
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STRATEGIc OUTcOMES ORIENTED GOAL 1 (cONTINUED)
Competent people in priority trades and occupations. (cONTINUED)
If accreditation status is granted, the SDP will commence in enrolling learners and provide necessary support on teaching and learning. The learner will then be entered for writing External Integrated Summative Assessment (EISA) which could be a trade test and or formal assessment. If a learner is affirmed competent then a learner is awarded a national certificate.
A total of 143 legacy qualifications were identified for deregistration or deactivation on the OQSF. SAQA has been approached to deregister these qualifications as they are no longer active. All relevant stakeholders have been alerted about this move. More legacy qualifications will be deregistered as new qualifications are registered.
As the White Paper made it emphatically clear that Technical and Vocational Education and Training (TVET) Colleges were central to the post school expansion strategy and as the N4 to N6 programmes make up an essential part of the TVET Colleges’ programme mix, the QCTO immediately assumed the challenge of converting the programmes into occupational qualifications where the Financial Management (N4 to N6) programme conversation to 1 qualification called Bookkeeper (Financial Administration Officer) has been approved by the QCTO Qualifications Committee. In future more N4-N6 programmes will be converted to occupational qualifications and part qualifications.
The QCTO visited all public TVET Colleges in order to conduct research on how colleges understand and will add in their programme mix and offering occupational qualifications.
The next visits to colleges will focus on the Work Integrated Learning (WIL) strategies of colleges in an effort to remind colleges of opportunities available to partner with industry, SETAs and parastatal organisations in the local college environment.
Monitoring and Evaluation Officers visited Provincial Skills Development Forums. These forums are influential in drawing industry, government, NGO and other stakeholders together to discuss a variety of issues (including education and training as well as employment needs). The Forums are hosted by the Premier’s office in the relevant province.
Quality Assurance
The approval of Assessment Quality Partners started slowly with the “Criteria and Guidelines for Assessment Quality Partners” (AQPs) being approved by Council in 2012. In the 2012 reporting period eight AQPs were approved. As at the end of the 2014/15 reporting period there are 28 AQPs approved for registered Occupational Qualifications. This includes the National Artisan Moderating Body (NAMB) as the AQP for trades. The AQP forum has been established and this forum has been instrumental in helping shape the AQP policies and processes. AQPs are at various stages of implementing their processes. The Health
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Progress (continued)
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STRATEGIc OUTcOMES ORIENTED GOAL 1 (cONTINUED)
Competent people in priority trades and occupations. (cONTINUED)
Progress (continued)
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and Welfare SETA for example is at an advanced stage with the development of assessments for the Community Health Worker Qualification being rolled out to almost 900 learners across the country during 2015. The South African Institute of Tax Practitioners conducted their first external summative assessments at the end of 2014 with successful candidates due to graduate early 2015.
In 2012, the QCTO inherited the In-Magic trade test certification system from the DHET. This system was fraught with difficulties due to its outdated technology and poor maintenance. Together with this system, the QCTO also inherited the DHET project to migrate the data from the In-Magic system to a new platform. The migration was successfully completed in November 2014. The QCTO also began issuing a single trade certificate in terms of the Skills Development Act (SDA) as from October 2013. This represented a significant milestone in that the new certificate replaced the previous certificates issued under the Manpower Training Act. In November 2014, the EXCO approved the format for the issue of replacement certificates. The certification processes with NAMB as the AQP is functional and effective. Much of the backlog in the issuing of trade certificates as well as outstanding applications for replacement certificates has been resolved. An upgraded apprentice certification system and template was approved and implemented. The turnaround time for producing certificates is now well within the 21 day period as specified in policy. In addition, the certification unit also conducted a substantial number of verifications.
The Monitoring and Evaluation Unit conducted planned monitoring visits to Quality Assurance Partners (QAPs). Monitoring reports for each of the QAPs were developed and QAPs are being monitored against the Improvement plans submitted.
The N4-N6 examinations were monitored for the first time in 2014. 75 Examination centres and 14 marking centres were monitored for compliance. The QCTO has been involved in the moderation of the N4-N6 results since 2012.
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STRATEGIc OUTcOMES ORIENTED GOAL 2
Create a sustainable organisation.
Goal Statement
Lay the foundation for creating a sustainable organisation.
Indicator
Management systems developed, implemented and maintained by March 2017
Progress
Financial systems were introduced and implemented toward the end of the financial year. The status reached a highlight during 2014/15 when the QCTO was able to fully function independently in terms of all support systems and wean itself from the Department of Higher Education and Training’s (DHET) Memorandum of Agreement (MoA) entered into July 2011 to use DHET’s systems, policies and procedures. By the end of the 2014/15 financial year Human Resources, ICT, Finance and SCM, and Administration policies and systems were all in place.
The QCTO HR Policy Manual with 33 HR Policies and Procedures was developed, approved and implemented.
QCTO’s own payroll system was implemented with effect from September 2014.
The achievements with regards to the QCTO HR Policy manual and the implementation of QCTO own payroll as proffered above has enabled the QCTO to fully function independently and be weaned from the DHET in terms of HR matters.
HR Strategy has been developed.
To date, 18 Finance and SCM policies are in place.
The development of a 5 year Master Systems Plan (MSP) was completed and approval was granted during 2014/15. The plan will have yearly determined implementation milestones dependent on business priorities and the availability of funds. The following elements of the MSP were implemented:
lEstablishment of the ICT Steering Committee
lDisaster Recovery Plan
lImplementation of the HR Payroll systems
lUpdate and optimize bandwidth
l
l
l
l
l
l
l
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3. PERFORMANcE INFORMATION BY PROGRAMME
3.1 Programme 1: Occupational Qualifications
The purpose of Programme 1:
To ensure availability of relevant qualifications on the occupational qualifications sub-framework to promote the NQF objectives.
The following strategic objective links to Programme 1:
Strategic objective 1.1: Prioritised Occupational Qualifications recommended to SAQA for registration on the Occupational Qualification Sub-framework
Strategic objectives, performance indicators planned targets and actual achievements
Programme 1: Occupational Qualifications in the QCTO performed as follows:
From 2013/14 Annual Performance Plan:
Programme / Sub-programme:
PERFORMANcE INDIcATOR (PI)
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
Programme Name 2: Occupational Qualification Management
Sub-programme: Occupational Qualifications Development and Review
STRATEGIc OBJEcTIVE 2.1.1 Policies for occupational qualifications development and review are developed, operationalised and implemented
2.1.1.1 Policies adopted by Council as per agreed list
Not achieved
The two policies are available in draft format and must still be approved by Council
Indicator discontinued (See par 2.4.1 above)
2.1.1.2 Completion of guidelines for the implementation of processes for each policy
Not achieved
The two sets of criteria and guidelines are available in draft format and must still be approved
Indicator discontinued (See par 2.4.1 above)
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PERFORMANcE INDIcATOR (PI)
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
Programme Name 2: Occupational Qualification Management (continued)
Sub-Programme: Occupational Qualifications Development And Review (continued)
STRATEGIc OBJEcTIVE 2.1.2 A user focused and user-friendly Trades and Occupations sub-framework is finalised and maintained
2.1.2.1 Turn-around time (weeks) from final qualification received by QCTO to submission to SAQA
Not achieved Indicator discontinued (See par 2.4.1 above)
2.1.2.2 Finalise Occupational Qualifications Sub-framework
Achieved
Council approved the Occupational Qualifications Sub-framework
Indicator discontinued (See par 2.4.1 above)
STRATEGIc OBJEcTIVE 2.1.3 Occupational qualifications are developed, reviewed and recommended for registration
2.1.3.1 Number of new applications for new and improved qualifications in the development process
Achieved
Target exceeded a total of 165 applications were received
Indicator discontinued (See par 2.4.1 above)
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PERFORMANcE INDIcATOR (PI)
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
Programme Name 2: Occupational Qualification Management (cONTINUED)
Sub-programme: Occupational Qualifications Development and Review (cONTINUED)
2.1.3.2 Number of qualifications developed and recommended to SAQA for registration
Not achieved
The QCTO received an overall total of 82 qualifications for evaluation. Of this overall total 59 qualifications were recommended for registration (52 being the qualifications and 7 being the (N4-N6 re-curriculated subjects)
Two (2) qualifications could not be processed further because of there were no Assessment Quality Partners in place. Twenty one (21) qualifications were sent back to Development Quality Partners for amendments to cover gabs that were identified during the evaluation
See Indicator 1.1.1 below
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PERFORMANcE INDIcATOR (PI)
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
Programme Name 2: Occupational Qualification Management (cONTINUED)
Sub-programme: Occupational Qualifications Development and Review (cONTINUED)
STRATEGIc OBJEcTIVE 2.2.4 A system for provider and programme accreditation, including for FLC, is developed and implemented by 2012/13
2.2.4.1 A system for provider and programme accreditation is developed and implemented
Achieved
Policy for Accreditation of Skills Development Providers approved
Processes and systems in place to give effect to 2.2.4.2 below
Indicator discontinued (See par 2.4.1 above)
2.2.4.2 At least one provider accredited per new occupational qualification registered
Not achieved
2 providers accredited for new qualifications
Indicator discontinued (See par 2.4.1 above)
STRATEGIc OBJEcTIVE 2.2.5 The occupational foundational learning part qualification is implemented by 2012/13
2.2.5.1 Number of learners assessed
Not achieved
(4531 learners assessed)
Indicator discontinued (See par 2.4.1 above)
2.2.5.2 Number of learners passed the qualification
Not achieved
(2421 learners passed)
Indicator discontinued (See par 2.4.1 above)
STRATEGIc OBJEcTIVE 2.2.6 Historically registered qualifications managed and phased out
2.2.6.1 Number of historically registered qualification managed
Achieved
1000 qualifications
Indicator discontinued (See par 2.4.1 above)
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Programme 1: Occupational Qualifications
STRATEGIc OBJEcTIVE 1.1 Prioritised Occupational Qualifications recommended to SAQA for registration on the Occupational Qualification Sub-framework
1.1.1 Number of prioritised occupational qualifications recommended to SAQA for registration on the OQSF
See PI 2.1.3.2 above
60 prioritised occupational qualifications
Not achieved
22 of 60 prioritised occupational qualifications recommended to SAQA
38 The non-achievement of the target was due to:
- External factors that were out of the unit’s control.
- A moratorium that suspended the submission of new applications. This enabled the unit to understand in-house process and challenges
- Qualifications Committee meeting that had to be rescheduled as it clashed with the Council meeting date. Qualifications could not be presented to the Council as the Committee sat after the Council.
- An addendum was requested to review the target but no response was received from Minister.
PERFORMANcE INDIcATOR (PI)
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
STRATEGIc OBJEcTIVE 2.2.6 Historically registered qualifications managed and phased out (continued)
2.2.6.2 Number of reduced historically registered qualifications
Not achieved
A total of 81 qualifications are replaced by newly developed qualifications, Of this total 33 have been replaced as new qualifications are registered by SAQA
Indicator discontinued (See par 2.4.1 above)
From 2014/15 Annual Performance Plan:
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PERFORMANcE INDIcATOR (PI)
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
Programme 1: Occupational Qualifications (cONTINUED)
STRATEGIc OBJEcTIVE 1.1 Prioritised Occupational Qualifications recommended to SAQA for registration on the Occupational Qualification Sub-framework (CONTINUED)
1.1.2 % of registered occupational qualifications with uptake monitored
New indicator No target
Strategy to overcome areas of under-performance
The following strategy will be put in place to address areas of under-performance:
l A developed and implemented year planner should be strictly adhered to.l Activities and reporting to be aligned to the strategic objectives of the organisation.l Review the target and set a realistic targetl Introduce learning field experts that will bring some work performed by quality partners (external) in-house.l Reduce the number of steps to register an occupational qualification and part qualification.l Improved communication with quality partners and other stakeholders
Linking performance with budgets
Hereunder is an analysis of the 2014/15 budget for Programme 1:
PROGRAMME 1: OccUPATIONAL QUALIFIcATIONS MANAGEMENT (OQM)
2014/15
R’000
Adjusted budget
Compensation 5 500
Goods and Services 3 400 Capital expenditure 450
9 350
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3.2 Programme 2: Quality Assurance
The purpose of Programme 2:
To ensure currency and quality assurance of relevant qualifications and certificates on the occupational qualifications sub-framework to promote the NQF objectives.
The following strategic objectives link to Programme 2:
Strategic objective 2.1: Implementation of registered occupational qualifications quality assured
Strategic objective 2.2: Competent learners externally assessed are certificated
Strategic objectives, performance indicators planned targets and actual achievements
Programme 2: Quality Assurance in the QCTO performed as follows:
From 2013/14 Annual Performance Plan:
Programme / Sub-programme:
PERFORMANcE INDIcATOR
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
Programme Name 2: Occupational Qualification Management
Sub-programme: Occupational Qualifications Development and Review
STRATEGIc OBJEcTIVE 2.1.4 A system for the ongoing monitoring, evaluation, quarterly and annual reporting of the development of occupational qualifications is developed and implemented
2.1.4.1 Number of monitoring and evaluation reports
Achieved
A total of 25 reports as planned is in place
Indicator discontinued (See par 2.4.1 above)
Sub-programme: Occupational Qualifications, Quality assurance (Assessment, Provision, Accreditation, certification, Foundational Learning, Monitoring and evaluation)
STRATEGIc OBJEcTIVE 2.2.1 Policies for occupational qualification quality assurance are developed, operationalised and implemented by 2012/13
2.2.1.1 Policies adopted by Council as per agreed list
Not achieved
Assessment Policy approved by Council (19 May 2014)
Indicator discontinued (See par 2.4.1 above)
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PERFORMANcE INDIcATOR (PI)
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
Programme Name 2: Occupational Qualification Management (cONTINUED)
Sub-programme: Occupational Qualifications, Quality assurance (Assessment, Provision, Accreditation, certification, Foundational Learning, Monitoring and evaluation) (cONTINUED)
2.2.1.2 Completion of guidelines for implementation of policies and processes for each policy
0 Indicator discontinued (See par 2.4.1 above)
2.2.1.3. Policies for occupational qualification quality assurance are developed, operationalised and implemented
Achieved
QCTO staff served on SAQA reference groups for the development of the Assessment, RPL and CAT policies. All 3 policies developed
Indicator discontinued (See par 2.4.1 above)
STRATEGIc OBJEcTIVE 2.2.2 An effective assessment and moderation system is developed and implemented by 2013/14
2.2.2.1 Assessment and moderation system developed and implemented
Achieved
System for the accreditation of assessment centres in place
Indicator discontinued (See par 2.4.1 above)
2.2.2.2 Number of AQPs assessment systems evaluated to be valid, reliable and fair
Not achieved
(13 AQP’s approved)
Indicator discontinued (See par 2.4.1 above)
STRATEGIc OBJEcTIVE 2.2.3 An efficient verification and certification system is developed and implemented by 2013/14
2.2.3.1 Verification and Certification system developed and implemented
Not achieved
Verification and Certification system implemented for Trade Certificates only
Indicator discontinued (See par 2.4.1 above)
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PERFORMANcE INDIcATOR (PI)
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
Programme Name 2: Occupational Qualification Management (cONTINUED)
Sub-programme: Occupational Qualifications, Quality assurance (Assessment, Provision, Accreditation, certification, Foundational Learning, Monitoring and evaluation) (cONTINUED)
STRATEGIc OBJEcTIVE 2.2.7 Monitoring and Evaluation of Quality Assurance Partners through the establishment of a monitoring and evaluation team
2.2.7.1 Number of Monitors and support staff employed
Not achieved Indicator discontinued (See par 2.4.1 above)
2.2.7.2 Number of Quality Assurance Partners monitored
Achieved
15 Quality Assurance Partners monitored
Indicator discontinued (See par 2.4.1 above)
From 2014/15 Annual Performance Plan:
Programme 2: Quality Assurance
STRATEGIc OBJEcTIVE 2.1 Implementation of registered occupational qualifications quality assured
2.1.1 Turnaround time from date of receipt of recommendation to date of accreditation of skills development providers offering occupational qualifications
New Indicator Establish a baseline turnaround time for accrediting skills development providers
Achieved
An average of 10 working days is the baseline turnaround time from the date of receipt of recommendation to the date of accreditation of skills development providers offering occupational qualifications
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PERFORMANcE INDIcATOR (PI)
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
Programme 2: Quality Assurance (cONTINUED)
2.1.2 Turnaround time from date of receipt of recommendation to date of accreditation of assessment centres offering external summative assessment for occupational qualifications
New Indicator Establish a baseline turnaround time for accreditation of assessment centres
Achieved
Average turnaround time of 14 days. This confirms the 21 days turnaround as prescribed in the Accreditation Policy is achievable
None -
2.1.3 Percentage of Quality Assurance Partners and Assessment Quality Partners monitored for compliance
New Indicator 100% Achieved 100%
28 Assessment Quality Partners and 21 Quality Assessment Partners monitored
None -
2.1.4 Percentage of Quality Assurance Partners (QAPs) and Assessment Quality Partners (AQPs) that have been assisted to achieve compliance standards
New Indicator 50% compliance by monitored quality partners (QAPs and AQPs)
For AQPs Achieved 100% (12 AQP applications received and approved)
For QAPs Achieved 95% (20 QAPs monitored against remediation plans)
For AQPs 50%
For QAPs 45%
100% (12 out of 12) AQP applications were received and approved and 95% (20 out of 21) QAPs were assisted to achieve compliance standards
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PERFORMANcE INDIcATOR (PI)
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
STRATEGIc OBJEcTIVE 2.2 Competent learners externally assessed are certificated
2.2.1 Turnaround time for issuing certificates after receiving recommendations from Assessment Quality Partners and Quality Assurance Partners (all types of certificates)
New Indicator Establish a baseline turnaround time for the four different certification systems
Achieved
Average turnaround time of 16 days for trade certificates. This confirms the 21 days turnaround as prescribed in the Certification Policy is achievable and will be applicable to all certificates to be issued by the QCTO as and when the Occupational Qualifications are implemented
None -
Programme 2: Quality Assurance (cONTINUED)
2.2.2 Percentage of learner achievement data submitted to National Learner Records Data base in relation to certificates issued and verified
New Indicator 100% learner achievement uploaded and verified
Not achieved 0%
100% QCTO has not issued certificates for the newly registered occupational qualifications as these are being implemented this year 2015, hence no data submitted to NLRD. For the legacy qualifications, QCTO has delegated the function to the SETAs who have complied with submission of data to the NLRD as per the NLRD requirements.
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Strategy to overcome areas of under performance
The following strategy will be put in place to address areas of under-performance:
l The 2015/16 APP prioritises the development of the QCTO Quality Assurance and certification system so that the QCTO is in a position to upload learner achievements to the NLRD as the newly registered Occupational Qualifications are implemented.
Linking performance with budgets
Hereunder is an analysis of the 2014/15 budget for Programme 2:
PROGRAMME 2: OccUPATIONAL QUALITY ASSURANcE (OQA)
2014/15
R’000 classification Adjusted budget
Compensation 15 000
Goods and Services 9 500
Capital expenditure 1 000
25 500
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PERFORMANcE INDIcATOR (PI)
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
Programme 1: Administration
Sub-programme: cEO/Governance, Strategy, Secretariat Services and Appeals
STRATEGIc OBJEcTIVE 1.1.1 QCTO contributes continuously through written submissions, presentations and active participation to the collective efforts of SAQA, CHE and Umalusi towards the achievement of NQF objectives
1.1.1.1 % attendance of SAQA, CHE, Umalusi Council meetings as well as CEO Committee and NQF Forum meetings by the QCTO CEO against agreed meeting schedules of different councils/committee
Not achieved
12 out of 16 meetings were attended
Indicator discontinued (See par 2.4.1 above)
STRATEGIc OBJEcTIVE 1.1.2 A Strategic Risk Management Strategy is developed, implemented and updated annually to minimise risk for the QCTO
1.1.2.1 Risk Management Strategy developed and implemented
Not achieved
updating of document, however a Risk Register for 2013/14 has been approved by Council
Indicator discontinued (See par 2.4.1 above)
3.3 Programme 3: Administration
The purpose of Programme 3:
To enable QCTO performance through strategic leadership and reliable delivery of management support services.
The following strategic objectives link to Programme 3:
Strategic objective 3.1.1: ICT system in place
Strategic objective 3.1.2: Two (2) Management support systems in place
Strategic objectives, performance indicators planned targets and actual achievements
Programme 3: Administration in the QCTO performed as follows:
From 2013/14 Annual Performance Plan:
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PERFORMANcE INDIcATOR (PI)
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
Programme 1: Administration (cONTINUED)
Sub-programme: cEO/Governance, Strategy, Secretariat Services and Appeals (cONTINUED)
1.1.2.2 QCTO risks monitored on quarterly basis
Achieved
Updated and presented to Audit and Risk Committee
Indicator discontinued (See par 2.4.1 above)
STRATEGIc OBJEcTIVE 1.1.3 A five year strategic plan and annual performance plan (APP) for the QCTO is developed
1.1.3.1 Strategic plan & APP approved by Council and submitted to the Minister by 30 November annually
Not achieved Indicator discontinued (See par 2.4.1 above)
STRATEGIc OBJEcTIVE 1.1.4 A system to conduct quarterly and annual monitoring and reporting developed and implemented
1.1.4.1 Adhere to Public Entities Calendar (wrt document submission) as the system used for quarterly and annual monitoring and reporting
Achieved
All due date required on Public Entities Calendar were achieved which includes plans and reports
Indicator discontinued (See par 2.4.1 above)
STRATEGIc OBJEcTIVE 1.1.5 Support services are effectively and efficiently provided to the Council
1.1.5.1 Number of working days before Council meetings when documents are circulated to all Council
Achieved
Council members received packs as required
Indicator discontinued (See par 2.4.1 above)
1.1.5.2 Number of Council meetings held during the financial year
Achieved
4 meetings and 1 strategic planning workshop was held
Indicator discontinued (See par 2.4.1 above)
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PERFORMANcE INDIcATOR (PI)
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
Programme 1: Administration (cONTINUED)
Sub-programme: Financial Management
STRATEGIc OBJEcTIVE 1.2.1 PFMA and Treasury Regulations compliant financial management policies, procedures and systems are developed and implemented
1.2.1.1 Number of PFMA and Treasury Regulation compliant QCTO financial policies, procedures and systems developed and implemented in line with agreements from Council or QCTO Management Committee
Not achieved Indicator discontinued (See par 2.4.1 above)
STRATEGIc OBJEcTIVE 1.2.2 PFMA, Treasury Regulations and PPPFA compliant supply chain management policies, procedures and systems developed and implemented
1.2.2.1 Number of PFMA and Treasury Regulation and PPPFA compliant QCTO supply chain management policies, procedures and systems developed and implemented in line with agreements from Council or QCTO Management Committee
Achieved Indicator discontinued (See par 2.4.1 above)
STRATEGIc OBJEcTIVE 1.2.3 A sustainable financial model and plan are developed and implemented
1.2.3.1 % of income over and above ENE transfer
No target Indicator discontinued (See par 2.4.1 above)
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PERFORMANcE INDIcATOR (PI)
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
Programme 1: Administration (cONTINUED)
Sub-programme: Financial Management (cONTINUED)
STRATEGIc OBJEcTIVE 1.2.4 Internal audit systems are developed and implemented
1.2.4.1 Number of internal audit committee meetings to put systems in place and oversee internal audit
Not achieved
Two meetings could not take place
Indicator discontinued (See par 2.4.1 above)
Sub-programme: Human Resources Management
STRATEGIc OBJEcTIVE 1.3.1 QCTO human resources management capacities, policies, procedures and systems are developed and implemented
1.3.1.1 Number of planned posts filled
Not achieved
34 posts were filled
Indicator discontinued (See par 2.4.1 above)
1.3.1.2 Number of QCTO human resources management (HRM)policies, procedures and systems developed and implemented in line with agreements from Council or QCTO Management Committee
Not achieved Indicator discontinued (See par 2.4.1 above)
1.3.1.3 % of staff undergoing performance assessment
Not achieved Indicator discontinued (See par 2.4.1 above)
STRATEGIc OBJEcTIVE 1.3.2 A mechanism and systems to secure a conducive working environment at the QCTO is developed and maintained
1.3.2.1 % staff attrition rate not to be exceeded
Achieved Indicator discontinued (See par 2.4.1 above)
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PERFORMANcE INDIcATOR (PI)
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
Programme 1: Administration (cONTINUED)
Sub-programme: Human Resources Management (cONTINUED)
STRATEGIc OBJEcTIVE 1.3.3 Systems and processes for staff development are designed and implemented
1.3.3.1 % of new staff inducted and oriented
Not achieved Indicator discontinued (See par 2.4.1 above)
1.3.3.2 % staff attend capacity building sessions
Achieved Indicator discontinued (See par 2.4.1 above)
Sub-programme: Information Technology
STRATEGIc OBJEcTIVE 1.4.1 Master systems plan and master technical plan developed during 2012/13
1.4.1.1 % completion of the master systems plan and master technical plan
Not achieved Indicator discontinued (See par 2.4.1 above)
STRATEGIc OBJEcTIVE 1.4.2 QCTO ICT policies, procedures and systems are developed and implemented
1.4.2.1 QCTO Information and Communication Technology(ICT) policies, procedures and systems developed
Achieved Indicator discontinued (See par 2.4.1 above)
1.4.2.2 QCTO Information and Communication Technology(ICT) policies, procedures and systems implemented
No target See 3.1.1 below
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PERFORMANcE INDIcATOR (PI)
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
Programme 1: Administration (cONTINUED)
Sub-programme: Information Technology (cONTINUED)
STRATEGIc OBJEcTIVE 1.4.3 QCTO website developed, implemented and maintained during 2012/13
1.4.3.1 % establishment of the QCTO website
Achieved Indicator discontinued (See par 2.4.1 above)
1.4.3.2 Number of visitors per month to the website
Not achieved Indicator discontinued (See par 2.4.1 above)
Sub-programme: Marketing and communication
STRATEGIc OBJEcTIVE 1.5.1 A marketing and communication strategy is developed and implemented
1.5.1.1 Draft marketing and communication strategy developed
Not achieved Indicator discontinued (See par 2.4.1 above
1.5.1.2 Marketing and communication strategy implemented
0 Indicator discontinued (See par 2.4.1 above)
STRATEGIc OBJEcTIVE 1.5.2 A QCTO marketing and communication exhibits and publications developed and used
1.5.2.1 Prepare and print publications
Not achieved Indicator discontinued (See par 2.4.1 above)
1.5.2.2 Number of events exhibited at
Achieved Indicator discontinued (See par 2.4.1 above)
Sub-programme: Administration
STRATEGIc OBJEcTIVE 1.6.1 Knowledge and records are effectively managed, and easily accessible to all internal and external stakeholders
1.6.1.1 Develop and implement a QCTO document management system
Not achieved Indicator discontinued (See par 2.4.1 above)
PART B: PERFO
RMA
NCE iN
FORM
ATiON
QCTO Annual Report 2014/2015
37
From 2014/15 Annual Performance Plan:
PERFORMANcE INDIcATOR (PI)
AcTUAL AcHIEVEMENT 2013/14
PLANNED TARGET 2014/15
AcTUAL AcHIEVEMENT 2014/15
DEVIATION FROM PLANNED TARGET TO AcTUAL AcHIEVEMENT FOR 2014/15
cOMMENT ON DEVIATIONS
Programme 3: Administration
STRATEGIc OBJEcTIVE 3.1 Institutional capability in place to enable QCTO to deliver its products and services
3.1.1 ICT system in place
See 1.4.2.2 above 30% of the ICT system implemented as determined by the implementation milestones of the Master Plan)
1 ICT Policy developed
Achieved
ICT Policy already developed and approved
MSP was approved by EXCO in October 2014. Implementation has begun.
The following elements of MSP were implemented:
Establishment of the ICT Steering Committee
Disaster Recovery Plan (DRP)
HR Payroll system
Update and optimise bandwidth
3.1.2 Two (2) Management support systems in place
New indicator 1 HR strategy developed
Add 4 HR Policies to the Manual
Achieved
HR Strategy developed
HR Manual with 33 policies and procedures developed and approved
18 Financial Policies implemented
Achieved
18 Finance and SCM Policies already approved and in place
QCTO Annual Report 2014/2015
38
Linking performance with budgets
Hereunder is an analysis of the 2014/15 budget for Programme 3:
PROGRAMME 3: ADMINISTRATION
Strategy to overcome areas of under performance
Not applicable
4. REVENUE cOLLEcTION
SOURcES OF REVENUE ESTIMATE
AcTUAL AMOUNT
cOLLEcTED
(OVER)/UNDER
cOLLEcTION ESTIMATE
AcTUAL AMOUNT
cOLLEcTED
(OVER)/ UNDER
cOLLEcTION
R’000 R’000 R’000 R’000 R’000 R’000
Government Grant
21 747 21 747 - 23 168 (23 168) -
Finance Income 0 1 314 (1 314) 0 (1 375) (1 375)
Other Income 0 0 0 0 (18) (18)
SETA Grant 15 428 15 428 - 28 500 28 500 -
NSF 939 280 659 - (500) (500)
Total 38 114 38 769 (655) 51 668 53 561 (1 893)
2014/15
R’000 classification Adjusted budget
Compensation 8 395
Goods and Services 13 100
Capital expenditure 675
22 170
2013 / 2014 2014 / 2015
PART B: PERFO
RMA
NCE iN
FORM
ATiON
QCTO Annual Report 2014/2015
39
QCTO Annual Report 2014/2015
40
GOVERNANCE
PART C
PART c: g
ov
eRnA
nce
QCTO Annual Report 2014/2015
41
1. INTRODUcTION
Corporate governance embodies processes and systems by which public entities are directed, controlled and held to account. In addition to legislative requirements based on a public entity’s enabling legislation, corporate governance with regard to public entities is applied through the precepts of the Public Finance Management Act (PFMA).
Parliament, the Executive and the Accounting Authorities of the QCTO are responsible for corporate governance.
2. PORTFOLIO cOMMITTEE ON HIGHER EDUcATION AND TRAINING
The Quality Council for Trades and Occupations (QCTO) met with the Portfolio Committee on Higher Education and Training on 4 July 2014 and presented its Annual Performance Plan and budget for 2014/15. The QCTO’s Chairperson, Prof Peliwe Lolwana, the Chief Executive Officer, Ms G. Joyce Mashabela and the Chief Financial Officer, Ms Ndivhu Madilonga attended the meeting.
The same three individuals attended a second meeting with the Portfolio Committee on 17 October 2014 to present the QCTO’s Annual Report for the financial year 2013/14.
Both meetings with the Portfolio Committee were useful as it gave the QCTO the opportunity to understand the Portfolio Committee’s expectations and needs.
3. EXEcUTIVE AUTHORITY
The QCTO submitted the final 2013/14 Annual Report to the Minister via the Department of Higher Education and Training on 31 July 2014 which was delivered to Parliament
on 29 August 2013 and tabled in Parliament on 23 September 2014.
The QCTO has also submitted all four of the QCTO’s Quarterly Performance Reports for the 2014/15 financial year to the Minister via the Director-General: Higher Education and Training as required by the Department. Submission dates were as follows:
l Quarter 1 Performance Report: 30 July 2014
l Quarter 2 Performance Report: 24 October 2014
l Quarter 3 Performance Report: 28 January 2015
l Quarter 4 Performance Report: 28 April 2015
The Executive Authority raised the following concern:
Quarter 2 Performance Report: The non-achievement on the target for Qualifications Development.
4. THE AccOUNTING AUTHORITY
Introduction
The purpose of the QCTO is to establish, maintain and quality assure occupational standards and qualifications and learning in and for the work place as referred to in its mandate and legislative requirements. The QCTO is one of three Quality Councils (QCs) tasked with the role of standards setting and quality assurance.
Board charter
The requirements of the QCTO’s Constitution are provided for in the Skills Development Act (SDA). The second Constitution was approved by the Minister in 2011. The outgoing Council has commenced with a discussion to identify areas which need to be revised and made a recommendation to the new incoming Council to review the Constitution.
QCTO Annual Report 2014/2015
42
NA
ME
DES
IGN
ATIO
N
(IN T
ERM
S O
F TH
E BO
ARD
ST
RUcT
URE
)D
ATE
APP
OIN
TTED
DAT
E RE
SIG
NED
QU
ALI
FIcA
TIO
NS
ARE
A O
F EX
PERT
ISE
BOA
RD
DIR
EcTO
RSH
IPS
(LIS
T TH
E EN
TITI
ES)
OTH
ER
cOM
MIT
TEES
(E
.G: A
UD
IT
cOM
MIT
TEE)
NO
. OF
MEE
TIN
GS
ATTE
ND
ED
(4 O
RDIN
ARY
cO
UN
cIL
MEE
TIN
GS
HEL
D)
Prof
Pel
iwe
Lolw
ana
Chai
rper
son
26 S
ept 2
011
N/A
Ph.D
.Kn
owle
dge
of
educ
atio
n an
d
trai
ning
Re
sear
ch
Polic
y de
velo
pmen
t Le
ader
ship
and
M
anag
emen
t G
over
nanc
e
Nat
iona
l Re
sear
ch
Foun
datio
n
Hum
an R
esou
rces
D
evel
opm
ent o
f SA
Co
unci
l
Met
ropo
litan
M
omen
tum
In
sura
nce
Foun
datio
n
Hot
azel
Man
gane
se
Min
es
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atio
n Tr
ust
Uni
vers
ity o
f For
t H
are
Coun
cil
Exec
utiv
e Co
mm
ittee
(C
hairp
erso
n)
3 pr
esen
t 1
apol
ogy
rece
ived
Mr M
ales
ela
Mal
eka
Dep
uty
Chai
rper
son
Nom
inat
ed
by N
EDLA
C to
repr
esen
t or
gani
satio
ns o
f co
mm
unity
and
de
velo
pmen
t in
tere
sts
20 Ja
n 20
10N
/APr
ofes
sion
al
Cert
ifica
te
in P
ublic
M
anag
emen
t
Mem
ber o
f the
Co
mm
issi
on o
n Em
ploy
men
t Equ
ity
Mem
ber o
f Ban
k SE
TA B
oard
Exec
utiv
e Co
mm
ittee
Qua
lifica
tions
Co
mm
ittee
(C
hairp
erso
n)
4 pr
esen
t
com
posi
tion
of t
he c
ounc
il
PART c: g
ov
eRnA
nce
QCTO Annual Report 2014/2015
43
NA
ME
DES
IGN
ATIO
N (I
N
TERM
S O
F TH
E BO
ARD
STR
UcT
URE
)D
ATE
APP
OIN
TTED
DAT
E RE
SIG
NED
QU
ALI
FIcA
TIO
NS
ARE
A O
F EX
PERT
ISE
BOA
RD
DIR
EcTO
RSH
IPS
(LIS
T TH
E EN
TITI
ES)
OTH
ER
cOM
MIT
TEES
(E.G
: A
UD
IT c
OM
MIT
TEE)
NO
. OF
MEE
TIN
GS
ATTE
ND
ED
(4 O
RDIN
ARY
cO
UN
cIL
MEE
TIN
GS
HEL
D)
Ms
G Jo
yce
Mas
habe
laCE
O: Q
CTO
1 A
pr 2
012
N/A
MA
, MS,
MBA
Teac
hing
Man
agem
ent
Adm
inis
trat
ion
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A
Coun
cil o
n H
ighe
r Ed
ucat
ion
(CH
E)
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alus
i
Nat
iona
l Ski
lls
Auth
ority
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utiv
e Co
mm
ittee
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nce
Com
mitt
ee
4 pr
esen
t
Mr J
oe
Sam
uels
CEO
: SAQ
A1
Mar
201
2N
/ABS
c H
ons
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siol
ogy)
, M
Phil
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lt Ed
ucat
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lifica
tions
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amew
ork,
pol
icy,
ad
ult e
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tion
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alus
i
QC
TO
SAQ
A
NSA
Non
e4
pres
ent
Mr A
hmed
Es
sop
CEO
: CH
E7
Dec
201
028
Feb
20
15H
onou
rs d
egre
e in
Soc
iolo
gy
Mas
ters
in
Inte
rnat
iona
l D
evel
opm
ent
Educ
atio
n
Hig
her E
duca
tion
Um
alus
i
SAQ
A
QC
TO
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Mut
ual
Educ
atio
n Tr
ust
Non
e2
pres
ent
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olog
y re
ceiv
edTh
e M
arch
201
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eetin
g
was
att
ende
d by
Act
ing
CEO
, Dr D
enis
e W
ebbs
tock
com
posi
tion
of t
he c
ounc
il (c
onti
nued
)
QCTO Annual Report 2014/2015
44
NA
ME
DES
IGN
ATIO
N (I
N
TERM
S O
F TH
E BO
ARD
STR
UcT
URE
)D
ATE
APP
OIN
TTED
DAT
E RE
SIG
NED
QU
ALI
FIcA
TIO
NS
ARE
A O
F EX
PERT
ISE
BOA
RD
DIR
EcTO
RSH
IPS
(LIS
T TH
E EN
TITI
ES)
OTH
ER
cOM
MIT
TEES
(E.G
: A
UD
IT c
OM
MIT
TEE)
NO
. OF
MEE
TIN
GS
ATTE
ND
ED
(4 O
RDIN
ARY
cO
UN
cIL
MEE
TIN
GS
HEL
D)
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afu
Rako
met
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O: U
mal
usi
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n 20
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/APh
.DH
isto
ry o
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ucat
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um,
exam
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and
as
sess
men
t
SAQ
A
QC
TO
CHE
Mem
ber o
f H
elde
rber
g Co
llege
Co
unci
l
Non
e3
pres
ent
1 ap
olog
y re
ceiv
ed
Vaca
ntEx
ecut
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Offi
cer:
NSA
Vaca
nt
sinc
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Apr
20
11. D
HET
to
app
oint
Ex
ecut
ive
Offi
cer:
NSA
N/A
Ms
Mal
ebo
Mog
opod
iN
omin
ated
by
NED
LAC
to re
pres
ent
orga
nise
d la
bour
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ct 2
010
N/A
ABE
T Ce
rtifi
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NIS
A
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Prac
titio
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t lea
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d te
achi
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Skill
s de
velo
pmen
t and
tr
aini
ng p
ract
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Co
mm
unity
de
velo
pmen
t Pr
ojec
t M
anag
emen
t
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seta
Boa
rd
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di B
adiri
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imar
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-op
erat
ive
3 pr
esen
t
1 ap
olog
y re
ceiv
ed
com
posi
tion
of t
he c
ounc
il (c
onti
nued
)
PART c: g
ov
eRnA
nce
QCTO Annual Report 2014/2015
45
NA
ME
DES
IGN
ATIO
N
(IN T
ERM
S O
F TH
E BO
ARD
ST
RUcT
URE
)D
ATE
APP
OIN
TTED
DAT
E RE
SIG
NED
QU
ALI
FIcA
TIO
NS
ARE
A O
F EX
PERT
ISE
BOA
RD
DIR
EcTO
RSH
IPS
(LIS
T TH
E EN
TITI
ES)
OTH
ER
cOM
MIT
TEES
(E
.G: A
UD
IT
cOM
MIT
TEE)
NO
. OF
MEE
TIN
GS
ATTE
ND
ED
(4 O
RDIN
ARY
cO
UN
cIL
MEE
TIN
GS
HEL
D)
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la
Cart
hyN
omin
ated
by
NED
LAC
to re
pres
ent
orga
nise
d bu
sine
ss
20 Ja
n 20
10N
/AQ
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ed
teac
her
-
prim
ary
scho
ol
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Dip
lom
a -
HR
Labo
ur R
elat
ions
Tr
aini
ng
Skill
s D
evel
opm
ent
NSA
Exec
utiv
e Co
mm
ittee
Occ
upat
iona
l Q
ualit
y A
ssur
ance
Co
mm
ittee
(C
hairp
erso
n)
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esen
t
Mr W
illy
Edua
rd
Mat
thia
e
Nom
inat
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by N
EDLA
C to
repr
esen
t or
gani
sed
busi
ness
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n 20
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/AN
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nal T
echn
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iplo
ma
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neer
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m.
(Bus
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s m
anag
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t &
Indu
stria
l Ps
ycho
logy
)
Man
agem
ent
Dev
elop
men
t D
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ma
Engi
neer
ing,
M
anag
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t, Pr
ojec
t m
anag
emen
t, Tr
aini
ng a
nd
Dev
elop
men
t
Non
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ecut
ive
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mitt
ee
Fina
nce
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mitt
ee
(Cha
irper
son)
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lifica
tions
Co
mm
ittee
Audi
t and
Ris
k Co
mm
ittee
3 pr
esen
t
1 ap
olog
y
com
posi
tion
of t
he c
ounc
il (c
onti
nued
)
QCTO Annual Report 2014/2015
46
NA
ME
DES
IGN
ATIO
N
(IN T
ERM
S O
F TH
E BO
ARD
ST
RUcT
URE
)D
ATE
APP
OIN
TTED
DAT
E RE
SIG
NED
QU
ALI
FIcA
TIO
NS
ARE
A O
F EX
PERT
ISE
BOA
RD
DIR
EcTO
RSH
IPS
(LIS
T TH
E EN
TITI
ES)
OTH
ER
cOM
MIT
TEES
(E
.G: A
UD
IT
cOM
MIT
TEE)
NO
. OF
MEE
TIN
GS
ATTE
ND
ED
(4 O
RDIN
ARY
cO
UN
cIL
MEE
TIN
GS
HEL
D)
Mr.
Thul
ane
Mab
uza
Nom
inat
ed
by N
EDLA
C to
repr
esen
t or
gani
satio
ns o
f co
mm
unity
and
de
velo
pmen
t in
tere
sts
20 Ja
n 20
10N
/AN
ot a
vaila
ble
at
time
of p
rintin
gN
ot a
vaila
ble
at
time
of p
rintin
gN
ot a
vaila
ble
at ti
me
of p
rintin
g4
abse
nt
Dr B
heki
M
ahlo
bo
App
oint
ed b
y th
e M
inis
ter t
o re
pres
ent t
he
inte
rest
s of
pub
lic
educ
atio
n an
d tr
aini
ng p
rovi
ders
20 Ja
n 20
10N
/APh
.DCu
rric
ulum
Pl
anni
ngN
one
4 ap
olog
ies
rece
ived
Dr M
arin
a le
G
rang
e M
embe
r no
min
ated
by
the
priv
ate
prov
ider
s of
edu
catio
n an
d tr
aini
ng to
re
pres
ent t
he
inte
rest
s of
priv
ate
educ
atio
n an
d tr
aini
ng p
rovi
ders
w
hich
pro
vide
rs
are
accr
edite
d pr
ovid
ers
in te
rms
of th
e SD
A
20 Ja
n 20
10N
/ABA N
HO
D
B(ed
)
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d)
D(e
d)
Educ
atio
n
Man
agem
ent a
nd
Lead
ersh
ip
APP
ETD
Boa
rd
mem
ber
Dire
ctor
: Exp
erie
ntia
l Te
chno
logi
es
Qua
lifica
tions
Co
mm
ittee
, th
en m
oved
to
Ass
essm
ent a
nd
Accr
edita
tion
Com
mitt
ee
4 pr
esen
t
com
posi
tion
of t
he c
ounc
il (c
onti
nued
)
PART c: g
ov
eRnA
nce
QCTO Annual Report 2014/2015
47
NA
ME
DES
IGN
ATIO
N
(IN T
ERM
S O
F TH
E BO
ARD
ST
RUcT
URE
)D
ATE
APP
OIN
TTED
DAT
E RE
SIG
NED
QU
ALI
FIcA
TIO
NS
ARE
A O
F EX
PERT
ISE
BOA
RD
DIR
EcTO
RSH
IPS
(LIS
T TH
E EN
TITI
ES)
OTH
ER
cOM
MIT
TEES
(E
.G: A
UD
IT
cOM
MIT
TEE)
NO
. OF
MEE
TIN
GS
ATTE
ND
ED
(4 O
RDIN
ARY
cO
UN
cIL
MEE
TIN
GS
HEL
D)
DH
ET: V
acan
tM
embe
r to
repr
esen
t the
in
tere
sts
of th
e st
ate
Vaca
nt: J
an
2012
Ms
Pula
ne
Mas
ebe
Mem
ber t
o re
pres
ent t
he
inte
rest
s of
the
stat
e
25 A
ug 2
011
N/A
B.Ad
min
Hon
ours
de
gree
(Indu
stria
l Ps
ycho
logy
)
Hum
an R
esou
rce
Dev
elop
men
tBo
ard
Mem
ber
in th
e Ae
rosp
ace
Cent
re o
f Exc
elle
nce,
U
nive
rsity
of
Witw
ater
sran
d
Qua
lifica
tions
Co
mm
ittee
3 pr
esen
t
1 ap
olog
y re
ceiv
ed
Co-o
pted
Mr T
habo
M
asho
n-go
ane
Co-o
pted
from
N
SA
16 N
ov 2
011
N/A
M Te
ch B
usin
ess
Adm
inis
trat
ion
Skill
s D
evel
opm
ent
Non
eN
/A3
pres
ent
1 ap
olog
y re
ceiv
ed
Ms
Ger
da
Mag
nus
Co-o
pted
from
Vo
catio
nal B
ranc
h (C
urric
ulum
and
Pr
ogra
mm
es
Supp
ort t
o FE
T Co
llege
s)
25 A
pril
2013
N/A
BA H
onou
rs
Hum
an re
sour
ce
Dev
elop
men
t
Skill
s D
evel
opm
ent
HR
Educ
atio
n an
d Tr
aini
ng
Non
eN
one
2 pr
esen
t
2 ap
olog
ies
rece
ived
Mr M
aliv
iwe
Lum
kaCo
-opt
ed
from
Ski
lls
Dev
elop
men
t Br
anch
25 A
pril
2013
N/A
2 pr
esen
t
2 ap
olog
ies
com
posi
tion
of t
he c
ounc
il (c
onti
nued
)
QCTO Annual Report 2014/2015
48
QcTO council
From left to right: Ms Stella carthy, Dr Mafu Rakometsi, Ms Malebo Mogopodi (Lebona), Mr Malesela Maleka, Ms Pulane Masebe, Ms G Joyce Mashabela, Dr Denyse Webbstock, Mr Joe Samuels, Prof Peliwe Lolwana, Mr Willy Eduard Matthiae, Dr Marina le Grange
Absent members: Mr Thulani Mabuza, Mr Ecliff Tantsi, Dr Bheki Mahlobo
Absent co-opted members: Mr Thabo Mashongoane, Ms Gerda Magnus, Mr Maliviwe Lumka
PART c: g
ov
eRnA
nce
QCTO Annual Report 2014/2015
49
committees
The Council had appointed the following Committees below. Quarterly reports from the Committees are presented to Council.
cOMMITTEE
NO. OF MEETINGS
HELDNO. OF
MEMBERS NAMES OF MEMBERS
NO. OF MEETINGS ATTENDED
NO. OF APOLOGIES
REcEIVED
Executive Committee
4 6 members
(5 members plus 1 vacant)
Mr Willy Matthiae as Chairperson of FINCOM, was appointed as a member of EXCO on 8 May 2014
Prof Peliwe Lolwana (Chairperson)
Mr Malesela Maleka (Deputy Chairperson of QCTO)
Ms Joyce Mashabela CEO)
Ms Stella Carthy
Mr Zwelitsha (Ecliff) Tantsi
Mr Willy Matthiae
4
3
4
4
0
3
N/A
1
N/A
N/A
3 absent and declined 1
1
Finance Committee
2 5 members
(3 members plus two vacancies)
Mr Willy Matthiae (Chairperson)
Mr Gitesh Mistry
Ms Joyce Mashabela
2
2
2
N/A
N/A
N/A
Qualifications Committee
5 9 members Mr Malesela Maleka (Chairperson)
Mr Willy Matthiae
Mr Louis Schutte
Ms Nomathemba Kubheka
Dr Allyson Lawless
Prof Paul Nicholas German Beard
Mrs Kalawathie Bella Sattar
Ms Pulane Masebe
Mr Louis Coetzer
5
5
5
4
4
2
4
4
2
N/A
N/A
N/A
1
1
3
1
1
3
Occupational Quality Assurance Committee (previously called Assessment and Accreditation Committee)
4 10 members
(8 members plus two vacancies)
Ms Stella Carthy (Chairperson)
Dr Tholsia Naiker (Naidoo)
Mr Phineas Sibanyoni
Mr Bogoshi Tshehla
Ms Margaret Machaba
Ms Mary Pieters
Mr Rod Harker
Dr Marina le Grange
3
3
3
4
4
3
2
2
1
1
1
N/A
N/A
1
2
2
*The data of the Audit and Risk committee appears later.
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Remuneration of council members
The QCTO Council members are remunerated as per National Treasury rates. Reimbursement is in accordance to the Subsistence and Traveling Policy of the DHET. Members from the public sector do not receive remuneration.
NAME REMUNERATION
R OTHER ALLOWANcE
R
OTHER RE-IMBURSEMENT
RTOTAL
R
Dr Peliwe Lolwana (Chairperson)
23 136.00 - 1 381.14 24 517.14
Mr Malesela Maleka (Deputy Chairperson)
16 400.00 - - 16 400.00
Ms Malebo Mogopodi 12 192.00 - - 12 192.00
Mr Ecliff (Zwelitsha) Tantsi
- - - -
Ms Stella Carthy 18 288.00 3 145.06 21 433.06
Mr Willy Eduard Matthiae
- - 2 167.16 2 167.16
Mr Thulane Mabuza - - - -
Dr Marina le Grange 15 240.00 - - 15 240.00
Ms Pulane Masebe N/A N/A N/A N/A
Dr Bheki Mahlobo N/A N/A N/A N/A
Ms Joyce Mashabela (CEO)
N/A N/A N/A N/A
Mr. Joe Samuels N/A N/A N/A N/A
Mr Ahmed Essop N/A N/A N/A N/A
Dr Mafu S Rakometsi N/A N/A N/A N/A
Total 85 256 - 6 693.36 91 949.36
* The above amounts constitute of remuneration, subsistence and travelling of council meetings.
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NAME REMUNERATION
R OTHER ALLOWANcE
R
OTHER RE-IMBURSEMENT
RTOTAL
R
Dr Peliwe Lolwana (Chairperson)
23 136.00 - 1 381.14 24 517.14
Mr Malesela Maleka (Deputy Chairperson)
16 400.00 - - 16 400.00
Ms Malebo Mogopodi 12 192.00 - - 12 192.00
Mr Ecliff (Zwelitsha) Tantsi
- - - -
Ms Stella Carthy 18 288.00 3 145.06 21 433.06
Mr Willy Eduard Matthiae
- - 2 167.16 2 167.16
Mr Thulane Mabuza - - - -
Dr Marina le Grange 15 240.00 - - 15 240.00
Ms Pulane Masebe N/A N/A N/A N/A
Dr Bheki Mahlobo N/A N/A N/A N/A
Ms Joyce Mashabela (CEO)
N/A N/A N/A N/A
Mr. Joe Samuels N/A N/A N/A N/A
Mr Ahmed Essop N/A N/A N/A N/A
Dr Mafu S Rakometsi N/A N/A N/A N/A
Total 85 256 - 6 693.36 91 949.36
5. RISK MANAGEMENT
The Council approved the QCTO’s Risk Management Policy in May 2013. The agreed Risk Management Framework and Strategy was available in the QCTO but due to limited staff could not be fully implemented, however progress has been made.
A Risk Manager has also been appointed to drive the process in the QCTO. A risk assessment workshop was conducted which resulted in an updated Risk Register against the 2014/15 Annual Performance Plan. This Risk Register was approved by Council and is updated on a quarterly basis where progress is reported to the Audit and Risk Committee.
Planning workshops were held at the directorate levels to ensure operational alignment with strategic objectives. During this process teams were encouraged to list risks against operational plans and capture actions that will mitigate these risks which are to become part of individual’s performance agreements. Detailed financial risks that could affect the organisation have been disclosed in the Annual Financial Statements.
6. INTERNAL cONTROL UNIT
Continued progress was made to improve internal controls. Audit Action Plans with findings raised by the Auditor General of South Africa (AGSA) as well as Internal Audit are in place and are being closely monitored by the Audit and Risk Committee. These findings are also followed up by Internal Audit on a regular basis and reported to the Audit and Risk Committee.
7. INTERNAL AUDIT AND AUDIT cOMMITTEES
Key activities and objectives of Internal Audit
The objective of the internal audit function is to provide independent, objective assurance designed to add value and improve the QCTO operations. It helps the QCTO accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.
The scope of the Internal Audit function includes, but is not limited to an evaluation of:
l The reliability and integrity of financial and operating information and the means used to identify, measure, classify and report such information;
l The systems established to ensure compliance with those policies, plans, procedures, laws and regulations that could have a significant impact on operations and reports;
l The means of safeguarding assets and, where appropriate, verification of the existence of such assets;
l The economic and efficient management of the company’s financial, human and other resources, and the effective conduct of its operations; and
l Operations or programs to ascertain whether or not results are consistent with established objectives and goals and whether or not the operations are being carried out as planned.
The Internal Audit function objectives, defined in terms of audit focus areas, are:
l Financial auditing: which aims to ensure that reliable information is produced for both management purposes and external publication and that adequate controls exist to safeguard assets;
l Operational auditing: which focuses on the effectiveness and efficiency of the substructure’s operations;
l compliance auditing: which addresses compliance with relevant national laws and regulations, best practice and the QCTO’s established policies and procedures;
l IT Auditing: which reviews the controls over information technology and whether IT supports the QCTO’s objectives and
l Performance Auditing: to evaluate measures instituted by management to ensure economic acquisition of resources and efficient and effective utilization of resources.
Audit work
The following activities as per audit plan were completed during 2014/15 financial year:
l Performance and Compliance Monitoring Review (Q1, Q2 and Q3)
l Review of draft Annual Performance Information 2013/14
l Review of unaudited Annual Financial Statements 2013/14
l Review of draft 2015/16 Strategic and Annual Performance Plans
l Review on Critical Financial Controls
l Information Technology General Controls Review
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l Supply Chain Management Review
l Pastel Post Implementation Review
l Fraud Maturity Assessment, drafting of Fraud Prevention Implementation plan and review of the QCTO Fraud Prevention Plan
l Follow up review on previous raised findings from Internal audit and Auditor-General
l Enterprise Risk Management Facilitation
l Facilitation of completion of Auditor General Quarterly Dashboard
l Development of a Performance Information Policy and Standard Operating Procedures (SOP)
l Root cause analysis workshops
l Development of draft Compliance Policy
Objectives of the Audit and Risk committee
1.1 The objective of the Audit and Risk Committee is to assist the QCTO in the discharge of its responsibilities for financial and management reporting, corporate governance and corporate control including the review of internal controls and the management and mitigation of risks.
1.2 It should also review the QCTO’s procedures in complying with relevant laws, regulations and ethics.
1.3 The Committee has an advisory role to the Council.
Key activities of the Audit and Risk committee
The Audit and Risk Committee should assist the Council in carrying out its responsibilities as they relate to the QCTO’s:
a) financial, management and other reporting practices;
b) internal controls and management of risks;
c) compliance with laws, regulations, and ethics;
d) should report to the Council any matter identified during the course of carrying out its duties that it considers significant; and
e) perform or undertake on behalf of the Council any such other tasks or actions as the Council may from time to time authorise.
Other main activities are:
l Consider the effectiveness of the internal control and risk management system
lUnderstand the scope of internal and external auditor’ review of internal control over financial reporting, and obtain reports on significant findings and recommendations together with management’s responses
l Review the QCTO risk profile on an annual basis and ensure management is effectively managing the risks
lReview the Materiality and Significance Framework and Fraud Prevention Plan of the QCTO
lReview the effectiveness of the system for monitoring compliance with laws and regulations and the results of management’ investigation and follow-up (including disciplinary action) of any instances of non-compliance
lReview the adequacy, reliability and accuracy of the financial information provided to management and other users of such information and annually review the Annual Financial Statements
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7. INTERNAL AUDIT AND AUDIT cOMMITTEES (cONTINUED)
The table below discloses relevant information on the QCTO Audit and Risk Committee members:
NAME QUALIFIcATIONSINTERNAL OR
EXTERNAL DATE APPOINTED DATE RESIGNED
NO. OF MEETINGS ATTENDED (4
MEETINGS HELD)
Mr Paul Slack (Chairperson)
CA (SA) – 1981B.Com (Hons) (Financial Management
External 8 June 2012 NA 4
Mr Theuns Tredoux
BCom (Hons)Acc
MBL (Unisa)
External 8 June 2012 NA 1
3 apologies
Mr Velile Kweyama
Senior Secondary Teachers Diploma (SSTD)
Bachelor of Accounting Sciences (BCompt)
CIA and CCSA
External 31 January 2013 NA 4
Ms Thobeka Njozela
B. Com
B. Compt (Hons)
MBA
Executive Development Programme
CIA, CCSA, CRMA
Certificate in Management Practice
External 15 April 2014 NA 3
1 apology
Mr Willy Matthiae
National Technical Diploma Mechanical Engineering
B Com ( Business management & Industrial Psychology)
Management Development Diploma
External 8 May 2014 NA 4
From left: Mr Willy Eduard Matthiae, Ms Thobeka Njozela, Mr Paul Slack
Absent: Mr Theuns Tresoux, Mr Velile Kweyama
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8. cOMPLIANcE WITH LAWS AND REGULATIONS
To date the QCTO has ensured that it complied with all required documentation in terms of the PFMA and Treasury Regulations, as required by the DHET’s Compliance Calendar.
The QCTO also attends various other Council and committee meetings to keep abreast of laws and regulations that need to be complied with. The QCTO works closely with the Department to ensure it is continuously updated with latest laws and regulations
The QCTO’s Assessment and Accreditation Committee has taken on a strategic role to ensure the proposed draft Trade Test Regulations meet the needs of the QCTO and promote the development of competent artisans.
The Chief Financial Officer (CFO) also attends the CFO Forum and meetings arranged by National Treasury to keep abreast with new developments.
9. UNSOLIcITED PROPOSAL
There was no unsolicited proposal engaged during the 2014/15 financial year.
10. FRAUD AND cORRUPTION
The QCTO has its own fraud prevention plan which has been developed and agreed to by the Audit and Risk Committee.
To start implementing the fraud prevention plan the following activities were undertaken:
l A Fraud Maturity Assessment
l A Fraud Prevention Campaign
l The development of a draft implementation plan
The QCTO and public may use the Public Service Anti-Corruption Hotline to report fraud.
No cases of fraud have become known to the QCTO during the last year.
11. MINIMISING cONFLIcT OF INTEREST
In the past year no conflict of interest was declared.
12. cODE OF cONDUcT
The QCTO has its own approved Code of Conduct for employees which every employee signed.
13. HEALTH SAFETY AND ENVIRONMENTAL ISSUES
The QCTO moved to own office space mid - December 2013. The building is generally compliant to health and safety imperatives as assessed by the landlord and therefore there are no major issues of concern identified thus far.
14. SEcRETARY
The QCTO does not fall under the Companies Act and therefore this section is not applicable to the QCTO (no Company Secretary). The QCTO does have a Director: Governance and Secretariat and staff that form the secretariat to Council and most of its Committees
15. SOcIAL RESPONSIBILITY
Not applicable to the QCTO for the 2014/15 financial year
16. AUDIT AND RISK cOMMITTEE REPORT
We are pleased to present our report for the financial year ended 31 March 2015 on page 67.
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PART d
HUmAN RESOURCE mANAGEmENT
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1. INTRODUcTION
Overview of HR matters at the public entity
Quality Councils for Trades and Occupations (QCTO) approved structure provides for 47 permanent positions. Of the 47 permanent post 42 were filled during 2014/15. Additional 40 contract posts were filled during the year under review. Also with the drive to review the QCTO structure, a decision was taken that not all permanent posts should be filled pending the review of the QCTO structure that will align with the revised strategy. This process of structure review has kicked off in 2014/15 and is expected to conclude by not later than February 2016. The result of the structure review will to a greater extent minimise the need for the filling of contract posts.
Policies, procedures and systems used for the year under review were those of the Department of Higher Education and Training (DHET) up until August 2014. From September 2014, the QCTO made use and implemented its own HR policies, procedures and payroll systems.
Set HR priorities for the year under review and the impact of these priorities
The main HR focus was to capacitate the entity by filling of positions and the development of own HR policies and systems. This has enabled the QCTO to fully function independently from the DHET.
Workforce planning framework and key strategies to attract and recruit a skilled and capable workforce
The QCTO’s own HR Policies, procedures, and systems were implemented as from 1 September 2014. These approved HR policies and procedures include elements of staff retention, such as training and development, and bursaries for staff.
Employee performance management framework
In the beginning of the financial year under reporting, QCTO did not have its own Performance Management Policy, however the framework of DHET was utilized to guide planning and management of performance up until the approval of the QCTO’s own Performance Management Policy in November 2014. Implementation of the QCTO Performance Management commenced during the third quarter of the financial year.
Employee wellness programmes
Employee wellness day was held in December 2014. This remarked the initial phase of the employee wellness programmes. More programmes are planned for 2015/16.
Achievements
The QCTO’s approved Human Resource Policies and Procedures Manual is in place as from September 2014.
The QCTO was registered as an employer with the South African Revenue Service (SARS) for pay as you earn (PAYE), Compensation of Occupational Injuries and Disease Act (COIDA) and Unemployment Insurance Fund (UIF)
A separate pension fund from the DHET was established and approved by the Government Pension Fund
QCTO implemented its own payroll system (VIP) separate from the DHET with effect from September 2014.
The QCTO as an employer is registered with SARS for PAYE, COIDA and UIF etc.
QCTO has been fully weaned from the DHET in-terms of all Human Resources functions.
A substantial increase of staff appointments (permanent posts), from 28 to 42.
challenges faced by the public entity
More than 50% of positions are filled on contract basis. This situation has adverse implications on the stability of the organisation. These posts are funded mainly from the Sector Education and Training (SETA) grant, however as these funds are allocated annually, based on a submission made to the DHET, the amount received (if any) can vary considerably. The uncertainty this creates has negative consequences for the QCTO, since a large number of employees can only be employed on contract basis as opposed to permanent contracts.
Future HR plans /goals
The QCTO’s structure review process is in progress and scheduled for completion approximately by February 2016. With the finalisation of the structure review process, this will allow for the phasing out the engagement of contract posts.
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2. HUMAN RESOURcE OVERSIGHT STATISTIcS
Personnel cost by programme
PROGRAMME
TOTAL EXPENDITURE
FOR THE ENTITY (R’000)
PERSONNEL EXPENDITURE
(R’000)
PERSONNEL EXP. AS A %
OF TOTAL EXP. (R’000)
NO. OF EMPLOYEES
AVERAGE PERSONNEL
cOST PER EMPLOYEE
(R’000)
QCTO 60 950 30 840 51% 82 376
Note: The total number of 82 employees includes 40 contract employees
Personnel cost by salary band
LEVEL PERSONNEL
EXPENDITURE (R’000)
% OF PERSONNEL EXP. TO TOTAL PERSONNEL
cOST (R’000) NO. OF EMPLOYEES
AVERAGE PERSONNEL cOST PER EMPLOYEE
(R’000)
Top Management 1 266 4% 1 1 266
Senior Management
7 133 23% 9 793
Professional qualified
14 896 48% 29 514
Skilled 4 242 14% 16 265
Semi-skilled 3 003 10% 24 125
Unskilled 300 1% 3 100
TOTAL 30 840 100% 82 376
Note: The total number of 82 employees includes 40 contract employees.
Performance Rewards
Finalisation of the long outstanding 2013/14 appraisals was done and completed during 2014/15. No performance bonuses were paid for the year under review since the appraisals were yet to be finalized by year end. A provision has been raised in the financials for the estimated costs of performance rewards to be paid.
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Training costs
DIREcTORATE/ BUSINESS UNIT
PERSONNEL EXPENDITURE
(R’000)
TRAINING EXPENDITURE
(R’000)
TRAINING EXPENDITURE
AS A % OF PERSONNEL
cOST.
NO. OF EMPLOYEES
TRAINED
AVERAGE TRAINING cOST
PER EMPLOYEE(R’000)
QCTO 30 840 198 1% 60 3.3
Employment and vacancies
PROGRAMME
2013/2014 NO. OF
EMPLOYEES
2013/2014 APPROVED
POSTS
2014/2015NO. OF
EMPLOYEES
2014/2015 APPROVED
POSTS % OF VAcANcIES
QCTO 28 46 82 47 11%
Notes:
1. The total number of 82 employees includes 40 contract employees which are not on the formal approved structure for permanent posts.2. An additional post of IT technician was created and approved during the year. This increased the total establishment from 46 to 47.3. Of the 47 approved permanent posts, 42 posts were filled.
PROGRAMME
2013/2014 NO. OF
EMPLOYEES
2014/2015 APPROVED
POSTS2014/2015
VAcANcIES % OF VAcANcIES
Top Management 1 1 - 0%
Senior Management
6 7 1 14.29%
Professional qualified
14 16 1 6.25%
Skilled 5 14 2 14.29%
Semi-skilled 1 8 1 12.50%
Unskilled 1 1 - 0%
TOTAL 28 47 5 11%
All approved positions and contract posts have been budgeted accordingly throughout the MTEF period.
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Employment changes
The table below provides information on changes in employment over the financial year. Turnover rates provide an indication of trends in employment profile of the QCTO.
SALARY BAND
EMPLOYMENT AT BEGINNING
OF PERIOD APPOINTMENTS
PROMOTIONS OF EXISTING EMPLOYEES TERMINATIONS
EMPLOYMENT AT END OF
THE PERIOD
Top Management 1 - - - 1
Senior Management 6 4 - (1) 9
Professional qualified 14 21 (2) (4) 29
Skilled 5 13 - (2) 16
Semi-skilled 1 31 - (8) 27
Unskilled 1 2 - - 3
Total 28 71 (2) (15) 82
Reasons for staff leaving
REASON NUMBER% OF TOTAL NUMBER OF STAFF TURNOVER
OUT OF 82 STAFF ESTABLISHMENT
Death 1 6.66%
Resignation 7 46.67%
Dismissal - -
Retirement - -
Ill health - -
Expiry of contract 7 46.67%
Other - -
TOTAL 15 100%
Labour Relations: Misconduct and disciplinary action
There were no misconduct cases nor disciplinary actions for the year under reporting.
Equity Target and Employment Equity Status
The Employment Equity Policy had just been approved together with other Human Resources policies. The policy will provide a framework and then inform the development of the plan in 2015/16.
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ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
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fINANCIAL INfORmATION
PART E
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ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
Accounting Authority’s Responsibilities and Approval 64
Report of the external auditor 65
Audit and Risk Committee Report 67
Report of the Council 68 – 70
Statement of Financial Position 71
Statement of Financial Performance 72
Statement of Changes in Net Assets 73
Cash Flow Statement 74
Statement of Comparison of Budget and Actual Amounts 75 – 76
Accounting Policies 77 – 86
Notes to the Annual Financial Statements 87
INDEXThe reports and statements set out below comprise the Annual Financial Statements presented to the parliament:
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
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AccOUNTING AUTHORITY’S RESPONSIBILITIES AND APPROVAL
The Council is required by the Public Finance Management Act (Act 1 of 1999), to maintain adequate accounting records and are responsible for the content and integrity of the Annual Financial Statements and related financial information included in this report. It is the responsibility of the Council to ensure that the Annual Financial Statements fairly present the state of affairs of the entity as at the end of the financial year and the results of its operations and cash flows for the period then ended. The external auditors are engaged to express an independent opinion on the Annual Financial Statements and was given unrestricted access to all financial records and related data.
The Annual Financial Statements have been prepared in accordance with Standards of Generally Recognised AccountingPractice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board.
The Annual Financial Statements are based upon appropriate accounting policies consistently applied and supported byreasonable and prudent judgements and estimates.
The Council acknowledge that they are ultimately responsible for the system of internal financial control established by theentity and place considerable importance on maintaining a strong control environment. To enable the Council to meet these responsibilities, the accounting authority sets standards for internal control aimed at reducing the risk of error or deficit in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the entity and all employees are required to maintain the highest ethical standards in ensuring the entity’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the entity is on identifying, assessing, managing and monitoring all known forms of risk across the entity. While operating risk cannot be fully eliminated, the entity endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.
The Council is of the opinion, based on the information and explanations given by management, that the system of internalcontrol provides reasonable assurance that the financial records may be relied on for the preparation of the Annual FinancialStatements. However, any system of internal financial control can provide only reasonable, and not absolute, assuranceagainst material misstatement or deficit.
Although the Accounting Authority is primarily responsible for the financial affairs of the entity, they are audited by the entity’s external auditors.
The external auditors are responsible for independently reviewing and reporting on the entity’s Annual Financial Statements. The Annual Financial Statements have been examined by the entity’s external auditors and their report is presented on page 65.
The Annual Financial Statements set out on pages 71 to 103, which have been prepared on the going concern basis, wereapproved by the accounting authority on 29 July 2015 and were signed on its behalf by:
Ms Joyce Mashabela (cHIEF EXEcUTIVE OFFIcER) 29 JULY 2015
Prof Peliwe Lolwana (cHAIRPERSON) 29 JULY 2015
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ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
Report of the auditor-general to parliament on the Quality council for Trades and Occupations
Report on the financial statements
Introduction
I have audited the financial statements of the Quality Council for Trades and Occupations set out on pages 71 to 103 , which comprise the statement of financial position as at 31 March 2015, the statement of financial performance, statement of changes in net assets, cash flow statement and the statement of comparison of budget information with actual information for the year then ended, as well as the notes, comprising a summary of significant accounting policies and other explanatory information.
Accounting authority’s responsibility for the financial statements
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 the requirements of the Public Management Finance Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA) and the Skills Development Act, 1998 (Act No 97 of 1998) (SDA), and for such internal control as the accounting authority determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor-general’s responsibility
My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with International Standards on Auditing. 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.
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.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
Opinion
In my opinion, the financial statements present fairly, in all material respects, the financial position of the Quality Council for Trades and Occupations as at 31 March 2015 and its financial performance and cash flows for the year then ended, in accordance with the SA Standards of GRAP and the requirements of the PFMA and SDA.
Report on other legal and regulatory requirements
In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA) and the general notice issued in terms thereof, I have a responsibility to report findings on the reported performance information against predetermined objectives for selected programmes presented in the annual performance report, non-compliance with legislation and internal control. The objective of my tests was to identify reportable findings as described under each subheading but not to gather evidence to express assurance on these matters. Accordingly, I do not express an opinion or conclusion on these matters.
1.
4.
5.
6.
7.
2.
3.
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
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Report of the auditor-general to parliament on the Quality council for Trades and Occupations (cONTINUED)
PretoriaDate: 29 July 2015
Predetermined objectives
I performed procedures to obtain evidence about the usefulness and reliability of the reported performance information for the following selected programmes presented in the annual performance report of the public entity for the year ended 31 March 2015:
• Programme 1: Occupational Qualifications on pages 23 to 24
• Programme 2: Quality Assurance on pages 27 to 29
I evaluated the reported performance information against the overall criteria of usefulness and reliability.
I evaluated the usefulness of the reported performance information to determine whether it was presented in accordance with the National Treasury’s annual reporting principles and whether the reported performance was consistent with the planned programmes. I further performed tests to determine whether indicators and targets were well defined, verifiable, specific, measurable, time bound and relevant, as required by the National Treasury’s Framework for managing programme performance information (FMPPI).
I assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.
I did not identify any material findings on the usefulness and reliability of the reported performance information for the following programmes:
• Programme 1: Occupational Qualifications
• Programme 2: Quality Assurance
compliance with legislation
I performed procedures to obtain evidence that the public entity had complied with applicable legislation regarding financial matters, financial management and other related matters. I did not identify any instances of material non-compliance with specific matters in key legislation, as set out in the general notice issued in terms of the PAA.
Internal control
I considered internal control relevant to my audit of the financial statements, annual performance report and compliance with legislation. I did not identify any significant deficiencies in internal control.
8.
13.
14.
9.
10.
11.
12.
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ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
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AUDIT AND RISK cOMMITTEE REPORT
We are pleased to present our report for the financial year ended 31 March 2015.
Audit and Risk committee Responsibility
The Audit and Risk Committee reports that it has complied with its responsibilities arising from Section 51(1)(a)(ii) of the Public Finance Management Act (PFMA) and Treasury Regulation 27.1. The Audit and Risk Committee also reports that it has adopted appropriate formal terms of reference as its Audit and Risk Committee Charter, has regulated its affairs in compliance with this charter and has discharged all its responsibilities as contained therein.
The Effectiveness of Internal control
The Director-General (DG) of the DHET approved that the QCTO could share in the competitive tender through which DHET had appointed an Internal Audit service provider. The Internal Auditor (Ernst and Young) made good progress during 2014/15. However their contract expired on 15 December 2014. A tender was published and the new Internal Auditor, O.M.A Chartered Accountants commenced in Quarter 4.
The following internal audit work was completed during the year under review:
l Performance and Compliance Monitoring Review (Q1, Q2 and Q3)
l Review of draft Annual Performance Information 2013/14
l Review of unaudited Annual Financial Statements 2013/14
l Review of draft 2015/16 Strategic and Annual Performance Plans
l Review on Critical Financial Controls
l Information Technology General Controls Review
l Supply Chain Management Review
l Pastel Post Implementation Review
l Fraud Maturity Assessment, drafting of Fraud Prevention Implementation plan and review of the QCTO Fraud Prevention Plan
l Follow up review on previous raised findings from Internal audit and Auditor-General
l Enterprise Risk Management Facilitation
l Facilitation of completion of Auditor-General Quarterly Dashboard
l Development of a Performance Information Policy and Standard Operating Procedures (SOP)
l Root cause analysis workshops
l Development of draft Compliance Policy
Internal Audit identified some weaknesses through the year and these were reported to the Audit and Risk Committee. These items were added to the Audit Action Plan for continuous follow up by Internal Audit as they conduct their regular fieldwork.
Given the pervasive nature of the IT System in the QCTO and the inherent risks regarding data in these systems, the IT function requires urgent and continual attention. Future Audit and Risk Committees should ensure that this remains on their agenda.
In-Year Management and Quarterly Report
The QCTO has reported quarterly to the DHET as is required by the PFMA.
The Audit and Risk Committee is satisfied with the content and quality of quarterly reports prepared and issued by the Chief Executive Officer of the QCTO. The Committee considered the risk register and ensured that this informed the Internal Audit Plan. On-going monitoring of the progress against the risk register was conducted quarterly
Evaluation of Financial Statements
We have reviewed the annual financial statements prepared by the QCTO and have recommended them to Council for approval.
Auditor’s Report
We have reviewed the QCTO’s Audit Action Plans for audit issues raised in the prior year and report that the majority of items had been cleared to audit satisfaction in the year. This will be addressed by the audit committee going forward
The Audit and Risk Committee concurs and accepts the conclusions of the external auditor 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.
Mr Paul Slack
chairperson of the Audit and Risk committee
Quality council for Trades and Occupations
Date: 29 July 2015
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
68
1. INcORPORATIONOn 31 December 2010, the QCTO was listed as a Schedule 3A Public Entity under the Public Finance Management Act, effective retrospectively from 01 April 2010 (Gazette Notice 33900), as per section 26 (G) (1) of the Skills Development Act.
2. REVIEW OF AcTIVITIESMain business and operations
The QCTO has been established in order to accommodate the unique learning requirements for building occupational competence. The QCTO is responsible for Occupational Qualifications development and monitoring. Both the National Qualifications Framework Act, No 67 of 2008 and the Skills Development Act, No 97 as amended in 2008 outline the functions of the QCTO.
Net deficit of the entity was R7 389 000 (2014: surplus of R1 883 000). The deficit was mainly as a result of non cash items i,e Depreciation and amortisation expenses R2 573 000 and Provisions additions for R2 189 000 and approved surplus of R5 353 000 in the prior year which was utilised to amend the initial budget. The overall spending is normal and that can be attributed to the compensation of employees as most posts were only filled at the begining of the financial year and also due to increased operating expenses after the QCTO relocated to new office premises.
3. SUBSEQUENT EVENTSThe Council is not aware of any matter or circumstance arising since the end of the financial year that would require an adjustment of the financial statements.
4. cOUNcIL MEMBERS’ INTERESTThere were no conflict of interest declared for the year under review.
5. AccOUNTING AUTHORITYThe Council of the entity during the year and to the date of this report was as follows:
Name
Prof Peliwe Lolwana (Chairperson)Mr Malesela Maleka (Deputy Chairperson)Ms Joyce Mashabela (Chief Executive Officer)Mr Ahmed EssopMr Joe SamuelsDr Mafu S RakometsiMs Stella Ruth CarthyMr Zwelitsa Ecliff TantsiMr Willy Eduard MatthiaeDr Malvina Johanna Le GrangeMs Malebo MogopodiMr Thulane MabuzaDr Bheki MahloboMs Pulane MasebeMr Thabo MashongoaneMr Maliviwe LumkaMs Gerda Magnus
6. SEcRETARYThe secretary of the entity is Ms. Adri H Solomon:
Business address 256 Glyn Street Hatfield Pretoria 0083
Postal address Private Bag X278 Pretoria 0001
REPORT OF THE cOUNcIL
The Council submit their report for the year ended 31 March 2015.
PART E: FIN
AN
cIAl sTATEm
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69
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
REPORT OF THE cOUNcIL (cONTINUED)
7. MEMBER AND EXEcUTIVE MANAGERS EMOLUMENTS
Economic entity
cOUNcIL MEMBERS R’ 000 R’ 000
Prof Peliwe Lolwana (Chairperson) 24 517 18 815
Mr Malesela Maleka (Deputy Chairperson) 16 400 18 007
Ms SR Carthy 21 433 17 124
Dr MJ Le Grange 15 240 14 246
Ms S Mogopodi 12 192 5 606
Mr WE Matthiae 2 167 5 907
91 949 79 705
TOTAL FEES2015
TOTAL FEES2014
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
70
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REPO
RT O
F TH
E cO
UN
cIL
(cO
NTI
NU
ED)
PART E: FIN
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cIAl sTATEm
ENTs
71
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
STATEMENT OF FINANcIAL POSITION AS AT 31 MARcH 2015
NOTE(s) 2015
R ’0002014
R ’000
Assets
current Assets
Cash and cash equivalents 5 10 463 30 015
Receivables from exchange transactions 3 141 50
Receivables from non-exchange transactions 4 302 99
10 906 30 164
Non-current Assets
Infrastructure, plant and equipment 6 8 172 9 431
Intangible assets 7 69 94
8 241 9 525
Total Assets 19 147 39 689
Liabilities
current Liabilities
Payables from exchange transactions 8 1 699 16 178
Provisions 9 2 037 1 182
Operating lease liability 21 893 224
Unspent conditional grants and receipts 22 - 198
4 629 17 782
Total Liabilities 4 629 17 782
Net Assets 14 518 21 907
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
72
2014R ’000
STATEMENT OF FINANcIAL PERFORMANcE
NOTE(s) 2015
R ’0002014
R ’000
Revenue
Revenue from exchange transactions
Other income - Insurance claim 18 -
Interest received - investment 1 375 1 314
Total revenue from exchange transactions 1 393 1 314
Revenue from non-exchange transactions
Government grants & subsidies 14 51 668 37 175
Transfer from other government entities 500 82
Total revenue from non-exchange transactions 52 168 37 257
Total revenue 17 53 561 38 571
Expenses
Personnel 19 (30 840) (17 440)
Administrative 18 (27 037) (18 215)
Transfer payments (500) (82)
Depreciation and amortisation expenses (2 573) (951)
Total expenses (60 950) (36 688)
(Deficit) surplus for the period 23 (7 389) 1 883
PART E: FIN
AN
cIAl sTATEm
ENTs
73
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
STATEMENT OF cHANGES IN NET ASSETS
AccUMULATED SURPLUSR ’000
TOTAL NET ASSETSR ’000
Balance at 31 March 2013 20 024 20 024
Surplus for the period 1 883 1 883
Total changes 1 883 1 883
Balance at 31 March 2014 21 907 21 907
Surplus for the period (7 389) (7 389)
Total changes (7 389) (7 389)
Balance at 31 March 2015 14 518 14 518
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
74
cASH FLOW STATEMENT
2014R ’000NOTE(s)
2015R ’000
2014R ’000
cash flows from operating activities
Receipts
Grants 51 668 37 158
Interest received 1 375 1 314
Other receipts - Insurance claim 18 -
53 061 38 472
Payments
Employee costs (28 628) (16 929)
Suppliers (42 672) (6 595)
(71 300) (23 524)
Net cash flows from operating activities 10 (18 239) 14 948
cash flows from investing activities
Purchase of plant and equipment 6 (1 273) (9 491)
Purchase of intangible assets 7 (40) (104)
Net cash flows from investing activities (1 313) (9 595)
Net increase/(decrease) in cash and cash equivalents
(19 552) 5 353
Cash and cash equivalents at the beginning of the period 30 015 24 662
cash and cash equivalents at the end of the period 5 10 463 30 015
PART E: FIN
AN
cIAl sTATEm
ENTs
75
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
Budg
et o
n ca
sh B
asis
APP
ROV
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ET
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VED
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AL
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NcE
Stat
emen
t of F
inan
cial
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ance
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nue
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ansa
ctio
ns
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er in
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e - I
nsur
ance
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im-
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rest
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ived
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vest
men
t-
--
1 37
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1 37
51
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l rev
enue
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hang
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ctio
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sfer
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ent g
rant
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51 6
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51 6
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rant
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ties
51 6
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061
6 74
6
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onne
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(30
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2 21
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8 62
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73
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inis
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ive
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(10
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(26
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(30
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(12
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(16
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4
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l exp
ense
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STAT
EMEN
T O
F cO
MPA
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N O
F B
UD
GET
AN
D A
cTU
AL
AM
OU
NTS
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
76
STAT
EMEN
T O
F cO
MPA
RISO
N O
F B
UD
GET
AN
D A
cTU
AL
AM
OU
NTS
(cO
NTI
NU
ED)
1)
The
maj
ority
of i
nter
est w
as e
arne
d fr
om In
vest
men
t with
SA
RB. I
nitia
lly Q
CTO
did
not
ant
icip
ate
the
exce
ss fu
nds
durin
g th
e ye
ar.
2)
The
diffe
renc
e is
due
to a
ppro
ved
rollo
vers
of a
ccum
ulat
ed s
urpl
us th
at fo
rmed
par
t of t
he 2
014
appr
oved
bud
get.
3)
The
pers
onel
exp
endi
ture
bud
get w
as u
nder
spe
nt d
ue to
resi
gnat
ions
dur
ing
the
year
whi
ch w
ill b
e fil
led
in th
e ne
w fi
nanc
ial y
ear.
4)
The
bulk
of t
he g
ener
al e
xpen
ses
wer
e pa
id im
med
iate
ly a
fter
yea
r end
, the
y w
ere
how
ever
acc
ount
ed fo
r cor
rect
ly u
nder
acc
rual
bas
is in
the
prio
r yea
r.
5)
The
capi
tal e
xpen
ditu
re b
udge
t was
und
er-s
pent
bec
ause
the
maj
ority
of t
he a
sset
s w
here
pur
chas
ed in
the
prio
r yea
r whe
n Q
CTO
mov
ed to
it’s
new
pre
mis
es.
Budg
et o
n ca
sh B
asis
APP
ROV
EDBU
DG
ET
R’00
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STM
ENTS
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AL
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ET
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NA
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VED
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AL
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Stat
emen
t of F
inan
cial
Pos
itio
n
Ass
ets
Non
-cur
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Ass
ets
Infr
astr
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re, p
lant
and
equ
ipm
ent
(3 1
73)
1 14
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)-
(1 2
73)
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5
Inta
ngib
le a
sset
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00)
-(1
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-(4
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--
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702
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0 85
0)(1
9 55
2)(8
846
)
PART E: FIN
AN
cIAl sTATEm
ENTs
77
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
AccOUNTING POLIcIES
1. PRESENTATION OF ANNUAL FINANcIAL STATEMENTS
The Annual Financial Statements have been prepared in accordance with the Standards of Generally Recognised Accounting Practice (GRAP), issued by the Accounting Standards Board in accordance with Section 91(1) of the Public Finance Management Act (Act 1 of 1999).
These Annual Financial Statements have been prepared on an accrual basis of accounting and are in accordance with historical cost convention as the basis of measurement, unless specified otherwise. They are presented in South African Rand.
A summary of the significant accounting policies, which have been consistently applied in the preparation of these Annual Financial Statements, are disclosed below.
1.1 Presentation currency
These financial statements are presented in South African rand which is the functional currency of the entity. Figures have been rounded off to the nearest thousand Rand (R’000).
1.2 Going concern assumption
These financial statements have been prepared on the going concern basis. In assessing whether the QCTO is a going concern, the Accounting Authority has considered the fact that the QCTO receives State Contributions (Voted Funds) which is sufficient to classify the QCTO as a going concern for at least the next twelve months and has also conducted a comprehensive going concern assessment.
1.3 Offsetting
Assets, liabilities, revenues and expenses have not been offset except when offsetting is required or permitted by a standard of GRAP.
1.4 Significant judgements and sources of estimation uncertainty
In the application of the QCTO accounting policies, management is required to make judgements, estimations 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 past experience and other factors 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 estimates 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.
Impairment testing
Due to the nature of the QCTO, management considers property, plant and equipment and intangible assets to be non-cash generating assets and therefore impairment of cash-generating assets are not applicable.
Provisions
Provisions were raised and management determined an estimate based on the information available. Additional disclosure of these estimates of provisions are included in note 9 - Provisions.
Property, plant and equipment
The useful lives of assets are based on management’s estimation. Management considers the following factors to determine the optimum useful life expectation for each of the individual items of property, plant and equipment.
l Expected usage of the asset. Usage is assessed by reference to the assets expected capacity or physical output,
l Expected physical wear and tear, which depends on operational factors such as the number of shifts for which the asset is to be used, the repair and maintenance programme, and the care and maintenance of the asset while idle;
l Technical or commercial obsolescence arising from changes or improvement in production or from a change in the market demand for the product or service output of the asset; and
l Exit policy of the entity.
1.5 Infrastructure, plant and equipment
Infrastructure, plant and equipment are tangible non-current assets (including infrastructure assets) that are held for use in the
production or supply of goods or services, rental to others, or for administrative purposes, and are expected to be used during more than one reporting period.
The cost of an item of infrastructure, plant and equipment is recognised as an asset when:
l it is probable that future economic benefits or service potential associated with the item will flow to the entity; and
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
78
l the cost or fair value of the item can be measured reliably.
Infrastructure, plant and equipment is initially measured at cost.
The cost of an item of infrastructure, plant and equipment is the purchase price and other costs attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Trade discounts and rebates are deducted in arriving at the cost.
Where an asset is acquired through a non-exchange transaction, its cost is its fair value as at the date of acquisition.
Where an item of infrastructure, plant and equipment is acquired in exchange for a non-monetary asset or assets, or a combination of assets and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired item’s fair value was not determinable, it’s deemed cost is the carrying amount of the asset(s) given up.
Recognition of costs in the carrying amount of an item of infrastructure, plant and equipment ceases when the item is in the location and condition necessary for it to be capable of operating in the manner intended by management.
Major spare parts and stand by equipment which are expected to be used for more than one period are included in infrastructure, plant and equipment. In addition, spare parts and stand by equipment which can only be used in connection with an item of infrastructure, plant and equipment are accounted for as infrastructure, plant and equipment.
Major inspection costs which are a condition of continuing use of an item of infrastructure, plant and equipment and which meet the recognition criteria above are included as a replacement in the cost of the item of infrastructure, plant and equipment. Any remaining inspection costs from the previous inspection are derecognised.
Infrastructure, plant and equipment is carried at cost less accumulated depreciation and any impairment losses.
Infrastructure, plant and equipment are depreciated on the straight line basis over their expected useful lives.
The useful lives of items of infrastructure, plant and equipment have been assessed as follows:
Item Average useful life Leasehold improvements 5 years Furniture and fittings 5 - 10 years Motor vehicles 5 years Office equipment 3 years Computer equipment 3 years
The QCTO does not review the useful life, depreciation method or residual value if the expectations of previous years did not change.
Each part of an item of infrastructure, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.
The depreciation charge for each period is recognised in surplus or deficit unless it is included in the carrying amount of another asset.
Items of infrastructure, plant and equipment are derecognised when the asset is disposed of or when there are no further economic benefits or service potential expected from the use or disposal of the asset.
The gain or loss arising from the derecognition of an item of infrastructure, plant and equipment is included in surplus or deficit when the item is derecognised. The gain or loss arising from the derecognition of an item of infrastructure, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.
1.6 Intangible assets
An Intangible asset is identifiable if it either:
l is separable, i.e. is capable of being separated or divided from an entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, identifiable assets or liability, regardless of whether the entity intends to do so; or
l arises from binding arrangements (including rights from contracts), regardless of whether those rights are transferable or separable from the entity or from other rights and obligations.
A binding arrangement describes an arrangement that confers similar rights and obligations on the parties to it as if it were in the form of a contract.
An intangible asset is recognised when:
l it is probable that the expected future economic benefits or service potential that are attributable to the asset will flow to the entity; and
l the cost or fair value of the asset can be measured reliably.
The entity assesses the probability of expected future economic benefits or service potential using reasonable and supportable assumptions that represent management’s best estimate of the set of economic conditions that will exist over the useful life of the asset.
Where an intangible asset is acquired through a non-
AccOUNTING POLIcIES (cONTINUED)
PART E: FIN
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ENTs
79
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
exchange transaction, its initial cost at the date of acquisition is measured at its fair value as at that date.
Intangible assets are carried at cost less any accumulated amortisation and any impairment losses.
An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows or service potential. Amortisation is not provided for these intangible assets, but they are tested for impairment annually and whenever there is an indication that the asset may be impaired. For all other intangible assets amortisation is provided on a straight line basis over their useful life.
The amortisation period and the amortisation method for intangible assets are reviewed at each reporting date.
Reassessing the useful life of an intangible asset with a finite useful life after it was classified as indefinite is an indicator that the asset may be impaired. As a result the asset is tested for impairment and the remaining carrying amount is amortised over its useful life.
Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised as intangible assets.
Internally generated goodwill is not recognised as an intangible asset.
Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:
Item Useful life Computer software 2 years
Intangible assets are derecognised:
l on disposal; or
l when no future economic benefits or service potential are expected from its use or disposal.
The gain or loss is the difference between the net disposal proceeds, if any, and the carrying amount. It is recognised in surplus or deficit when the asset is derecognised.
1.7 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or a residual interest of another entity.
The amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition minus principal
repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, and minus any reduction (directly or through the use of an allowance account) for impairment or uncollectibility.
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
Derecognition is the removal of a previously recognised financial asset or financial liability from an entity’s statement of financial position.
A derivative is a financial instrument or other contract with all three of the following characteristics:
l Its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract (sometimes called the ‘underlying’).
l It requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors.
l It is settled at a future date.
The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability (or group of financial assets or financial liabilities) and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, an entity shall estimate cash flows considering all contractual terms of the financial instrument (for example, prepayment, call and similar options) but shall not consider future credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate (see the Standard of GRAP on Revenue from Exchange Transactions), transaction costs, and all other premiums or discounts. There is a presumption that the cash flows and the expected life of a group of similar financial instruments can be estimated reliably. However, in those rare cases when it is not possible to reliably estimate the cash flows or the expected life of a
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financial instrument (or group of financial instruments), the entity shall use the contractual cash flows over the full contractual term of the financial instrument (or group of financial instruments).
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arm’s length transaction.
A financial asset is:
l cash;
l a residual interest of another entity; or
l a contractual right to:
- receive cash or another financial asset from another entity; or
- exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to the entity.
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.
A financial liability is any liability that is a contractual obligation to:
l deliver cash or another financial asset to another entity; or
l exchange financial assets or financial liabilities under conditions that are potentially unfavourable to the entity.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
Liquidity risk is the risk encountered by an entity in the event of difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk.
Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market.
A financial asset is past due when a counterparty has failed to make a payment when contractually due.
A residual interest is any contract that manifests an interest in the assets of an entity after deducting all of its liabilities. A residual interest includes contributions from owners, which may be shown as:
l equity instruments or similar forms of unitised capital;
l a formal designation of a transfer of resources (or a class of such transfers) by the parties to the transaction as forming part of an entity’s net assets, either before the contribution occurs or at the time of the contribution; or
l a formal agreement, in relation to the contribution, establishing or increasing an existing financial interest in the net assets of an entity.
Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or financial liability. An incremental cost is one that would not have been incurred if the entity had not acquired, issued or disposed of the financial instrument.
Initial recognition
The entity recognises a financial asset or a financial liability in its statement of financial position when the entity becomes a party to the contractual provisions of the instrument.
The entity recognises financial assets using trade date accounting.
Initial measurement of financial assets and financial liabilities
The entity measures a financial asset and financial liability initially at its fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.
The entity first assesses whether the substance of a concessionary loan is in fact a loan. On initial recognition, the entity analyses a concessionary loan into its component parts and accounts for each component separately. The entity accounts for that part of a concessionary loan that is:
l a social benefit in accordance with the Framework for the Preparation and Presentation of Financial Statements, where it is the issuer of the loan; or
l non-exchange revenue, in accordance with the Standard of GRAP on Revenue from Non-exchange Transactions (Taxes and Transfers), where it is the recipient of the loan.
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Subsequent measurement of financial assets and financial liabilities
The entity measures all financial assets and financial liabilities after initial recognition using the following categories:
l Financial instruments at fair value.
l Financial instruments at amortised cost.
l Financial instruments at cost.
All financial assets measured at amortised cost, or cost, are subject to an impairment review.
Derecognition
Financial assets
The entity derecognises financial assets using trade date accounting.
The entity derecognises a financial asset only when:
l the contractual rights to the cash flows from the financial asset expire, are settled or waived;
l the entity transfers to another party substantially all of the risks and rewards of ownership of the financial asset; or
l the entity, despite having retained some significant risks and rewards of ownership of the financial asset, has transferred control of the asset to another party and the other party has the practical ability to sell the asset in its entirety to an unrelated third party, and is able to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer. In this case, the entity :
- derecognise the asset; and
- recognise separately any rights and obligations created or retained in the transfer.
The carrying amounts of the transferred asset are allocated between the rights or obligations retained and those transferred on the basis of their relative fair values at the transfer date. Newly created rights and obligations are measured at their fair values at that date. Any difference between the consideration received and the amounts recognised and derecognised is recognised in surplus or deficit in the period of the transfer.
If the entity transfers a financial asset in a transfer that qualifies for derecognition in its entirety and retains the right to service the financial asset for a fee, it recognise either a servicing asset or a servicing liability for that servicing contract. If the fee to be received is not expected to compensate the entity adequately for performing the
servicing, a servicing liability for the servicing obligation is recognised at its fair value. If the fee to be received is expected to be more than adequate compensation for the servicing, a servicing asset is recognised for the servicing right at an amount determined on the basis of an allocation of the carrying amount of the larger financial asset.
If, as a result of a transfer, a financial asset is derecognised in its entirety but the transfer results in the entity obtaining a new financial asset or assuming a new financial liability, or a servicing liability, the entity recognise the new financial asset, financial liability or servicing liability at fair value.
On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received is recognised in surplus or deficit.
If the transferred asset is part of a larger financial asset and the part transferred qualifies for derecognition in its entirety, the previous carrying amount of the larger financial asset is allocated between the part that continues to be recognised and the part that is derecognised, based on the relative fair values of those parts, on the date of the transfer. For this purpose, a retained servicing asset is treated as a part that continues to be recognised. The difference between the carrying amount allocated to the part derecognised and the sum of the consideration received for the part derecognised is recognised in surplus or deficit.
If a transfer does not result in derecognition because the entity has retained substantially all the risks and rewards of ownership of the transferred asset, the entity continue to recognise the transferred asset in its entirety and recognise a financial liability for the consideration received. In subsequent periods, the entity recognises any revenue on the transferred asset and any expense incurred on the financial liability. Neither the asset, and the associated liability nor the revenue, and the associated expenses are offset.
Financial liabilities
The entity removes a financial liability (or a part of a financial liability) from its statement of financial position when it is extinguished — i.e. when the obligation specified in the contract is discharged, cancelled, expires or waived.
The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in surplus or deficit. Any liabilities that are waived, forgiven or assumed by another entity by way of a non-exchange transaction are accounted for in accordance with the Standard of GRAP on Revenue from Non-exchange Transactions (Taxes and Transfers).
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1.8 Leases
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.
When a lease includes both land and buildings elements, the entity assesses the classification of each element separately.
Operating leases - lessee
Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability.
1.9 Impairment of non-cash-generating assets
Cash-generating assets are those assets held by the entity with the primary objective of generating a commercial return. When an asset is deployed in a manner consistent with that adopted by a profit-orientated entity, it generates a commercial return.
Non-cash-generating assets are assets other than cash-generating assets.
Impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognition of the loss of the asset’s future economic benefits or service potential through depreciation (amortisation).
Carrying amount is the amount at which an asset is recognised in the statement of financial position after deducting any accumulated depreciation and accumulated impairment losses thereon.
Costs of disposal are incremental costs directly attributable to the disposal of an asset, excluding finance costs and income tax expense.
Depreciation (Amortisation) is the systematic allocation of the depreciable amount of an asset over its useful life.
Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s length transaction between
knowledgeable, willing parties, less the costs of disposal. Recoverable service amount is the higher of a non-cash-generating asset’s fair value less costs to sell and its value in use.
Useful life is either:
(a the period of time over which an asset is expected to be used by the entity; or
(b) the number of production or similar units expected to be obtained from the asset by the entity.
Recognition and measurement
If the recoverable service amount of a non-cash-generating asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable service amount. This reduction is an impairment loss.
An impairment loss is recognised immediately in surplus or deficit.
Any impairment loss of a revalued non-cash-generating asset is treated as a revaluation decrease.
When the amount estimated for an impairment loss is greater than the carrying amount of the non-cash-generating asset to which it relates, the entity recognises a liability only to the extent that is a requirement in the Standard of GRAP.
After the recognition of an impairment loss, the depreciation (amortisation) charge for the non-cash-generating asset is adjusted in future periods to allocate the non-cash-generating asset’s revised carrying amount, less its residual value (if any),on a systematic basis over its remaining useful life.
1.10 Employee benefits
Employee benefits are all forms of consideration given by QCTO in exchange for service rendered by employees.
Short-term employee benefits
Short-term employee benefits are employee benefits (other than termination benefits) that are due to be settled within twelve months after the end of the period in which the employees render the related service.
Short-term employee benefits include items such as:
l wages, salaries and social security contributions;
l short-term compensated absences (such as paid annual leave and paid sick leave) where the compensation for the absences is due to be settled within twelve months after the end of the reporting period in which the employees render the related employee service;
l bonus, incentive and performance related payments payable within twelve months after the end of the reporting period in which the employees render the related service; and
l non-monetary benefits (for example, medical care, and free or subsidised goods or services such as housing, cars and cellphones) for current employees.
When an employee has rendered service to the entity during a reporting period, the entity recognises the undiscounted amount
of short-term employee benefits expected to be paid in exchange for that service:
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l as a liability (accrued expense), after deducting any amount already paid. If the amount already paid exceeds the undiscounted amount of the benefits, the entity recognise that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund; and
l as an expense, unless another Standard requires or permits the inclusion of the benefits in the cost of an asset.
The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs. The entity measure the expected cost of accumulating compensated absences as the additional amount that the entity expects to pay as a result of the unused
entitlement that has accumulated at the reporting date.
The entity recognises the expected cost of bonus, incentive and performance related payments when the entity has a present legal or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made. A present obligation exists when the entity has no realistic alternative but to make the payments.
1.11 Provisions and contingencies
Provisions are recognised when:
l the entity has a present obligation as a result of a past event;
l it is probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation; and
l a reliable estimate can be made of the obligation.
The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date.
Where the effect of time value of money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligation.
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement is treated as a separate asset. The amount recognised for the reimbursement does not exceed the amount of the provision.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Provisions are reversed
if it is no longer probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation.
Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase is recognised as an interest expense.
A provision is used only for expenditures for which the provision was originally recognised.
Provisions are not recognised for future operating deficits.
If the entity has a contract that is onerous, the present obligation (net of recoveries) under the contract is recognised and measured as a provision.
A constructive obligation to restructure arises only when an entity:
l has a detailed formal plan for the restructuring, identifying at least:
- the activity/operating unit or part of a activity/ operating unit concerned;
- the principal locations affected;
- the location, function, and approximate number of employees who will be compensated for services being terminated;
- the expenditures that will be undertaken; and
- when the plan will be implemented; and
l has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement that plan or announcing its main features to those affected by it.
Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 13.
1.12 Revenue from exchange transactions
Revenue is the gross inflow of economic benefits or service potential during the reporting period when those inflows result in an increase in net assets, other than increases relating to contributions from owners.
An exchange transaction is one in which the entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of goods, services or use of assets) to the other party in exchange.
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.
Measurement
Revenue is measured at the fair value of the consideration received or receivable.
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Interest
Revenue arising from the use by others of entity assets yielding interest, royalties and dividends or similar distributions is recognised when:
l It is probable that the economic benefits or service potential associated with the transaction will flow to the entity, and
l The amount of the revenue can be measured reliably.
Interest is recognised, in surplus or deficit, using the effective interest rate method.
1.13 Revenue from non-exchange transactions
Revenue comprises gross inflows of economic benefits or service potential received and receivable by an entity, which represents an increase in net assets, other than increases relating to contributions from owners.
Conditions on transferred assets are stipulations that specify that the future economic benefits or service potential embodied in the asset is required to be consumed by the recipient as specified or future economic benefits or service potential must be returned to the transferor.
Control of an asset arise when the entity can use or otherwise benefit from the asset in pursuit of its objectives and can exclude or otherwise regulate the access of others to that benefit.
Exchange transactions are transactions in which one entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of cash, goods, services, or use of assets) to another entity in exchange.
Non-exchange transactions are transactions that are not exchange transactions. In a non-exchange transaction, an entity either receives value from another entity without directly giving approximately equal value in exchange, or gives value to another entity without directly receiving approximately equal value in exchange.
Restrictions on transferred assets are stipulations that limit or direct the purposes for which a transferred asset may be used, but do not specify that future economic benefits or service potential is required to be returned to the transferor if not deployed as specified.
Stipulations on transferred assets are terms in laws or regulation, or a binding arrangement, imposed upon the use of a transferred asset by entities external to the reporting entity.
Transfers are inflows of future economic benefits or service potential from non-exchange transactions, other than taxes.
Recognition
An inflow of resources from a non-exchange transaction recognised as an asset is recognised as revenue, except to the extent that a liability is also recognised in respect of the same inflow.
As the entity satisfies a present obligation recognised as a liability in respect of an inflow of resources from a non-exchange transaction recognised as an asset, it reduces the carrying amount of the liability recognised and recognises an amount of revenue equal to that reduction.
Transfers
Apart from services in kind, which are not recognised, the entity recognises an asset in respect of transfers when the transferred resources meet the definition of an asset and satisfy the criteria for recognition as an asset.
The entity recognises an asset in respect of transfers when the transferred resources meet the definition of an asset and satisfy the criteria for recognition as an asset.
Transferred assets are measured at their fair value as at the date of acquisition.
Gifts and donations, including goods in-kind
Gifts and donations, including goods in kind, are recognised as assets and revenue when it is probable that the future economic benefits or service potential will flow to the entity and the fair value of the assets can be measured reliably.
1.14 comparative figures
Budget information in accordance with GRAP 24 has been provided in the Statement of Comparison of Budget Against Actual Amounts for the current financial year only, and forms part of the audited annual financial statements.
When the presentation or classification of items in the annual financial statements is amended, prior period comparative amounts are restated. The nature and reason for the reclassification is disclosed. Where accounting errors have been identified in the current year, the correction is made retrospectively as far as is practicable, and the prior year comparatives are restated accordingly. Where there has been a change in accounting policy in the current year, the adjustment is made retrospectively as far as is practicable, and the prior year comparatives are restated accordingly.
1.15 Irregular expenditure
Irregular expenditure as defined in section 1 of the PFMA is expenditure other than unauthorised expenditure, incurred in contravention of or that is not in accordance with a requirement of any applicable legislation, including -
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(a) this Act; or
(b the State Tender Board Act, 1968 (Act No. 86 of 1968), or any regulations made in terms of the Act; or
(c) any provincial legislation providing for procurement procedures in that provincial government.
National Treasury practice note no. 4 of 2008/2009 which was issued in terms of sections 76(1) to 76(4) of the PFMA requires the following (effective from 1 April 2008):
Irregular expenditure that was incurred and identified during the current financial year and which was condoned before year end and/or before finalisation of the financial statements must also be recorded appropriately in the irregular expenditure register. In such an instance, no further action is also required with the exception of updating the note to the financial statements.
Irregular expenditure that was incurred and identified during the current financial year and for which condonement is being awaited at year end must be recorded in the irregular expenditure register. No further action is required with the exception of updating the note to the financial statements.
Where irregular expenditure was incurred in the previous financial year and is only condoned in the following financial year, the register and the disclosure note to the financial statements must be updated with the amount condoned.
Irregular expenditure that was incurred and identified during the current financial year and which was not condoned by the National Treasury or the relevant authority must be recorded appropriately in the irregular expenditure register. If liability for the irregular expenditure can be attributed to a person, a debt account must be created if such a person is liable in law. Immediate steps must thereafter be taken to recover the amount from the person concerned. If recovery is not possible, the accounting officer or accounting authority may write off the amount as debt impairment and disclose such in the relevant note to the financial statements. The irregular expenditure register must also be updated accordingly. If the irregular expenditure has not been condoned and no person is liable in law, the expenditure related thereto must remain against the relevant programme/expenditure item, be disclosed as such in the note to the financial statements and updated accordingly in the irregular expenditure register.
1.16 Budget information
The approved budget is prepared on a cash basis and presented by economic classification linked to performance outcome objectives.
The approved budget covers the fiscal period from 2014/04/01 to 2015/03/31.
The Annual Financial Statements and the budget are not
on the same basis of accounting therefore a reconciliation between the statement of financial performance and the budget have been included in the Annual Financial Statements. Refer to Statement of comparison of budget and actual amounts.
1.17 Related parties
The entity operates in an economic sector currently dominated by entities directly or indirectly owned by the South African Government. As a consequence of the constitutional independence of the three spheres of government in South Africa, only entities within the national sphere of government are considered to be related parties.
Management are those persons responsible for planning, directing and controlling the activities of the entity, including those charged with the governance of the entity in accordance with legislation, in instances where they are required to perform such functions.
Close members of the family of a person are considered to be those family members who may be expected to influence, or be influenced by, that management in their dealings with the entity.
Only transactions with related parties not at arm’s length or not in the ordinary course of business are disclosed.
1.18 Investment income
Investment income is recognised on a time-proportion basis using the effective interest method.
1.19 commitments
Commitments are disclosed where the QCTO has, in the normal course of its operations, entered into a contractual agreement with entities related to project and other expenses which are not yet due for payment.
1.20 Unauthorised expenditure
Unauthorised expenditure means:
l overspending of a vote or a main division within a vote; and
l expenditure not in accordance with the purpose of a vote or, in the case of a main division, not in accordance with the purpose of the main division.
All expenditure relating to unauthorised expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.
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1.21 Fruitless and wasteful expenditure
Fruitless expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised.
All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.
1.22 Events after reporting date
Events after the reporting date are those events, both favourable and unfavourable, that occur between the reporting date and the date when the financial statements are authorised for issue. Events after reporting date that are classified as adjusting events have been accounted for in the annual financial statements. Events after reporting date that have been classified as non-adjusting events have been disclosed in the disclosure notes to the annual financial statements.
1.23 changes in accounting policies, estimates and errors
The accounting policies applied are consistent with those used to present the previous year’s financial statements, unless explicitly stated otherwise.
The entity changes an accounting policy only if the change:
l Is required by a standard of GRAP; or
l Results in the Annual Financial Statements providing reliable and more relevant information about the effects of transactions, other events or conditions, on the performance or cash flow.
Changes in accounting policies that are affected by management have been applied retrospectively in accordance with GRAP 3 requirements, except to the extent that it is impracticable to determine the period-specific effects or the cumulative effect of the change in policy. In such cases the entity shall restate the opening balances of assets, liabilities and net assets for the earliest period for which retrospective restatement is practicable.
Changes in accounting estimates are applied prospectively in accordance with GRAP 3 requirements. Details of changes in estimates are disclosed in the notes to the Annual Financial Statements where applicable.
Correction of errors is applied retrospectively in the period in which the error has occurred in accordance with GRAP 3 requirements, except to the extent that it is impracticable to determine the period-specific effects or the cumulative effect of the error. In such cases the entity shall restate the opening balances of assets, liabilities and net assets for the earliest period for which retrospective restatement is practicable.
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2. NEW STANDARDS AND INTERPRETATIONS
2.1 Standards and interpretations issued, but not yet effective
The entity has not applied the following standards and interpretations, which have been published and are mandatory for the entity’s accounting periods beginning on or after 01 April 2015 or later periods:
STANDARD/ INTERPRETATION
EFFEcTIVE DATE YEARS BEGINNING
ON OR AFTER EXPEcTED IMPAcT
l GRAP 18: Segment Reporting 01 April 2015 No impact
l GRAP 105: Transfers of functions between entities under common control 01 April 2015 No impact
lGRAP 106: Transfers of functions between entities not under common control 01 April 2015 No impact
l GRAP 107: Mergers 01 April 2015 No impact
lGRAP 20: Related parties 01 April 2016 Not material
lIGRAP 11: Consolidation – Special purpose entities 01 April 2015 No impact
lIGRAP 12: Jointly controlled entities – Non-monetary contributions by ventures 01 April 2015 No impact
lGRAP 6 (as revised 2010): Consolidated and Separate Financial Statements 01 April 2015 No impact
lGRAP 7 (as revised 2010): Investments in Associates 01 April 2015 No impact
lGRAP 8 (as revised 2010): Interests in Joint Ventures 01 April 2015 No impact
lGRAP 32: Service Concession Arrangements: Grantor 01 April 2016 No impact
lGRAP 108: Statutory Receivables 01 April 2016 No impact
lIGRAP 17: Service Concession Arrangements where a Grantor Controls a Significant Residual Interest in an Asset 01 April 2016 No impact
lDIRECTIVE 11: Changes in measurement bases following the initial adoption of Standards of GRAP 01 April 2016 No impact
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3. REcEIVABLES FROM EXcHANGE TRANSAcTIONS Deposits 50 50
Prepaid expenses 91 -
141 50
The deposit was paid as a requirement of a fuel account with the service provider for refuelling of QCTO rented vehicles. The prepaid expenses is a result of the insurance premium cover for the period from 01 December 2014 to 30 November 2015.
4. REcEIVABLES FROM NON-EXcHANGE TRANSAcTIONS
Government grants and subsidies 302 99
Government grants and subsidies receivable is a result of outstanding claims from National Skills Fund (NSF) for the total expenses incurred on behalf of NSF project. It must be further noted that initially NSF used to deposit the funds for the project in advance, however that arrangement was amended and it was agreed upon that QCTO will incur the expenses, and recover the expenses from NSF.
Receivables from non-exchange transactions past due but not impaired
Other receivables from non-exchange transactions which are less than 3 months past due are not considered to be impaired. At 31 March 2015, R 302 000 were past due but not impaired.
The ageing of amounts past due but not impaired is as follows:
1 month past due 302 99
5. cASH AND cASH EQUIVALENTSCash and cash equivalents consist of:
Bank balances 351 9 989
Short-term deposits 10 112 20 026
10 463 30 015
As required in Treasury Regulation 31.2, National Treasury approved the banks where the QCTO bank accounts are held. The weighted average interest rate on short term bank deposits was approximately 5.8% for the financial year (2014 : 5.12%).
Cash includes cash with ABSA bank. Cash equivalents are short term, highly liquid investments that are held with the Corporation for Public Deposits (CPD) - SARB with maturities of three months or less and that are subject to an insignificant risk of change in value.
For purposes of the Cash Flow Statement, cash and cash equivalents comprises of cash on hand, deposits held at call with CPD, net of bank overdrafts.
2015R ’000
2014R ’000
NOTES TO THE ANNUAL FINANcIAL STATEMENTS
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ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
OPENINGBALANcE
R’000ADDITIONS
R’000DISPOSALS
R’000DEPREcIATION
R’000TOTAL R’000
Furniture and fittings 3 346 484 (5) (439) 3 386
Motor vehicles - 400 - (67) 333
Office equipment 386 183 - (198) 371
Computer equipment 3 007 206 (19) (1 231) 1 963
Leasehold improvements 2 692 - - (573) 2 119
Total 9 431 1 273 (24) (2 508) 8 172
20142015
cOST /VALUATION
R’000
AccUMULATEDDEPREcIATION
AND AccUMULATED
IMPAIRMENT R’000
cARRYING VALUE
R’000
cOST /VALUATION
R’000
AccUMULATEDDEPREcIATION
AND AccUMULATED
IMPAIRMENT R’000
cARRYING VALUE
R’000
Furniture and fittings 4 030 (644) 3 386 3 552 (206) 3 346
Motor vehicles 400 (67) 333 - - -
Office equipment 665 (294) 371 482 (96) 386
Computer equipment 3 720 (1 757) 1 963 3 582 (575) 3 007
Leasehold improvements
2 890 (771) 2 119 2 890 (198) 2 692
Total 11 705 (3 533) 8 172 10 506 (1 075) 9 431
Openingbalance
R’000Additions
R’000Depreciation
R’000Total
R’000
Furniture and fittings 513 3 019 (186) 3 346
Office equipment 64 400 (78) 386
Computer equipment 303 3 182 (478) 3 007
Leasehold improvements - 2 890 (198) 2 692
880 9 491 (940) 9 431
Reconciliation of infrastructure, plant and equipment - 2015
Reconciliation of infrastructure, plant and equipment - 2014
6. INFRASTRUcTURE, PLANT AND EQUIPMENT
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
90
2015 R’000
2014 R’000
Trade payables 1 001 15 084
Other payables 2 -
Other accrued expenses 696 1 094
1 699 16 178
OpeningBalance
R,000Additions
R,000
Utilised during
the year R,000
Underprovision
during the year R’000
Total R’000
Leave pay provision 298 486 - - 784
Bonus provision 884 1 253 (1 334) 450 1 253
1 182 1 739 (1 334) 450 2 037
OPENING BALANcE
R’000ADDITIONS
R’000AMORTISATION
R’000 TOTAL
R’000
Computer software 94 40 (65) 69
7. INTANGIBLE ASSETS
8. PAYABLE FROM EXcHANGE TRANSAcTIONS
9. PROVISIONS
cOST /VALUATION
R’000
AccUMULATEDAMORTISATION
AND AccUMULATED
IMPAIRMENT R’000
cARRYING VALUE R’000
cOST /VALUATION
R’000
AccUMULATEDAMORTISATION
ANDAccUMULATED
IMPAIRMENT R’000
cARRYING VALUE R’000
Computer software 145 (76) 69 104 (10) 94
2015 2014
Reconciliation of intangible assets - 2015
Reconciliation of intangible assets - 2014
Reconciliation of provisions - 2015
OPENING BALANcE
R’000ADDITIONS
R’000AMORTISATION
R’000
TOTAL R’000
Computer software - 104 (10) 94
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ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
2015 R’000
2014 R’000
Reconciliation of provision - 2014
OpeningBalance
R’000Additions
R’000
Utilised during
the year R’000
Reversedduring the
year R’000
Total R’000
Leave pay provision 362 - - (64) 298
Bonus provision 309 884 (309) - 884
671 884 (309) (64) 1 182
Leave is calculated based on leave days outstanding at year end and quantified in terms of total cost of employment per employee. The service bonus and the perfomance bonus accruals relates to 13th cheque as well as approved perfomance bonus commitments owed to QCTO employees at financial year end.
10. cASH (USED IN) GENERATED FROM OPERATIONS
Surplus/ (Deficit) (7 390) 1 883
Non-cash movements:
Depreciation 2 508 941
Amortisation 65 10
Loss on sale of plant and equipment 24 -
Movements in operating lease assets and accruals 668 224
Movements in provisions 855 511
Other non-cash items 3 2
changes in working capital:
Receivables from exchange transactions (91)
Other receivables from non-exchange transactions (203)
Prepaid expenses - 129
Payables from exchange transactions (14 480) 11 199
Unspent conditional grants and receipts (198) 198
(18 239) 14 948
(99)
(50)
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
92
2015 R’000
2014 R’000
AT FAIR VALUE R’000
AT A MORTISED cOST
R’000TOTAL R’000
Receivable from exchange transactions 141 - 141
Receivables from non-exchange transactions
302 - 302
Cash and cash equivalents 10 463 - 10 463
10 906 - 10 906
Approved and contracted - Operating expenses 10 309 1 771
Capital Expenditure Commitments 181 -
10 490 1 771
The approved and contracted commitments relates to contracts and orders made by the Council for goods and services thatare yet to be received.
Operating leases - as lessee (expense)
Minimum lease payments due
- within one year 6 381 4 630
- in second to fifth year inclusive 19 738 19 948
26 119 24 578
The QCTO leases 5 photocopy machines from Konica Minolta for a period of 36 months, effective from 1 December 2013 and 1 February 2015 respectively. The monthly lease payments are R7,713 and R12,166 respectively with no annual escalation. The lease agreement is extendable after 36 months for a further 24 months.
The QCTO entered into 5 years lease agreement for office premises with Liberty Properties effective from 1 December 2013. The monthly lease payment is R360,711 with an escalation of 8% per annum. The QCTO also entered into 3 years and 5 months lease agreement for additional office space with Liberty Properties effective from 01 June 2015. The monthly lease payments is R107,252 with an ascalation of 8% per annum.
12. FINANcIAL INSTRUMENTS DIScLOSUREcategories of financial instruments
Except as detailed in the following table, QCTO management considers that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial statements approximate their fair values:
2015
Financial assets
11. cOMMITMENTS
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ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
AT FAIR VALUE R’000
AT A MORTISED cOST
R’000TOTAL R’000
Payable from exchange transactions 1 699 - 1 699
AT FAIR VALUE R’000
AT A MORTISED cOST
R’000TOTAL R’000
Receivable from exchange transactions 50 - 50
Receivables from non-exchange transactions 99 - 99
Cash and cash equivalents 30 015 - 30 015
30 164 - 30 164
AT FAIR VALUE R’000
AT A MORTISED cOST
R’000TOTAL R’000
Payables from exchange transactions 16 178 - 16 178
16 178 - 16 178
2015
Financial liabilities
2014
Financial assets
2014
Financial liabilities
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
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12. FINANcIAL INSTRUMENTS DIScLOSURE (cONTINUED)
Fair values
As indicated above QCTO’s financial instruments consist mainly of cash and cash equivalents and payables from exchange transactions. No financial instruments were carried at an amount in excess of its fair value and fair values could be reliably measured for all financial instruments.
Financial assets and financial liabilities are recognised on the entitie’s Statement of Financial Position when the entity becomes party to the contractual provisions of the instrument. The following methods and assumptions are used to determine the fair value of each class of financial instruments:
cash and cash equivalents
Cash and cash equivalents comprise cash on hand and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value. The carrying amount of cash and cash equivalents approximates fair value due to the relatively short-term maturity of these financial assets.
Accounts payable
Payables from exchange transactions are stated at amortised cost, which approximates their fair value due to the relatively short-term maturity of these financial liabilities.
Financial instrument risk
In the course of the QCTO operations it is exposed to market, interest rate, credit, and liquidity risk. As a Schedule 3A Public Entity, QCTO’s Council approved the Risk Managment Policy in May 2013. The agreed Risk Managment Framework and Strategy was available in the QCTO but due to limited staff could not be fully implemented, however progress has been made.
Market risk
Foreign exchange risk
The QCTO does not initiate any transactions with international parties and is therefore not exposed to any exchange risk due to currency fluctuations. All transactions are denominated in South African Rand with local vendors.
Price risk
The QCTO is not exposed to price or commodity price risk as they do not carry any investments. Cash includes cash with commercial banks. These cash equivalents are subject to an insignificant risk of change in value.
cash flow and fair value interest rate risk
The QCTO does not carry any significant interest bearing assets, therefore the revenue and operating cash flows are not substantially depended on changes in market interest rates. As the QCTO does not have significant interest bearing liabilities, the expense and cash flows are not substantially dependend on changes in market interest rates. The QCTO exposure to interest rate risk and effective interest rates on financial instruments at reporting date are as follows:
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ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
RATED NON-RATED TOTAL2015Cash and cash equivalents 10 463 - 10 463Receivable from exchange transactions 141 - 141
10 604 - 10 6042014Cash and cash equivalents 30 016 - 30 016Receivable from exchange transactions 50 - 50
30 066 - 30 066
EFFEcTIVEINTEREST RATE
R ‘000
SUBJEcT TOINTEREST RATE
MOVEMENT:FLOATING
R ‘000
NON-INTERESTBEARING
R ‘000TOTALR ‘000
31 March 2015
current financial assets
Cash and cash equivalents 5.80% 10 463 - 10 463
Receivable from exchange transactions N/A - 141 141
5.80 % 10 463 141 10 604
current financial liabilities
Payables from exchange transactions N/A - 1 699 1 699
- - 1 699 1 699
31 March 2014
current financial assets
Cash and cash equivalents 5.12% 30 016 - 30 016
Receivable from exchange transactions N/A - 50 50
5.12 % 30 016 50 30 066
current financial liabilities
Payables from exchange transactions N/A - 16 178 16 178
- - 16 178 16 178
credit risk
Financial assets, which potentially subject the QCTO to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. Credit risk arises from the risk that a counterparty may default or not meet its obligations timeously.
The QCTO management limits its treasury counter-party exposure by only dealing with well-established financial institutions approved by National Treasury. The QCTO does not have any material exposure to any individual or counter-party. The QCTO’s concentration of credit risk is limited to the industry in which the QCTO operates. No events occurred in the industry during the financial year that may have an impact on the recovery of receivable from exchange transactions.
The funds maximum exposure to credit risk is equal to the total value of the following assets:
12. FINANcIAL INSTRUMENTS DIScLOSURE (cONTINUED)
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
96
Retention of accumulated surplus - 1 883
12. FINANcIAL INSTRUMENTS DIScLOSURE (cONTINUED)
Liquidity risk
The QCTO manages liquidity risk through proper management of working capital, capital expenditure and actual versus forecasted cash flows. Adequate reserves and liquid resources are also maintained.
Forecast liquidity reserve as of 31 March 2015 is as follows:
2016R’000
2017R’000
2018R’000
Opening balance for the period 10 463 10 463 10 463
Operating proceeds 61 848 93 390 122 342
Operating outflow (61 848) (93 390) (122 342)
closing balance for the period 10 463 10 463 10 463
LESS THAN 1 YEAR
R’000TOTAL R’000
31 March 2015 Payables from exchange transactions 1 699 1 699
31 March 2014 Payables from exchange transactions 16 178 16 178
The table below analyses the financial liabilities that will be settled on a net basis into the relevant maturity groupings based on the remaining period at balance sheet date to the contractual maturity date:
13. cONTINGENcIES
The following contingent liabilities exist:
The QCTO applied for the retention of the net surplus for the 2014 financial year in terms of section 53 (3) of the PFMA from National Treasury during the first quarter of the 2014/15 financial year. This approval was granted by National Treasury on the 4th August 2014.
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ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
14. RELATED PARTIES
All related party transactions that occurred during the financial year were in the normal course of business, in accordance with the mandate of the QCTO.
Department of Higher Education and Training (DHET)
National Skills Fund (NSF)
Agriculture Sector Education and Training Authority (AGRISETA)
Banking Sector Education and Training Authority (BANKSETA)
Culture, Arts, Tourism, Hospitality and Sports
Educational and Training Authority (CATHSSETA)
Chemical Industries Education and Training Authority (CHIETA)
Construction Education and Training Authority (CETA)
Education, Training and Development Practices
Sector Education and Training Authority (ETDPSETA)
Energy Sector Education and Training Authority (EWSETA)
Financial and Accounting Services Sector Education and Training Authority (FASSET)
Food and Beverages Manufacturing Industry Sector
Education and Training Authority (FOODBEV)
Fibre Processing Manufacturing Sector Education and Training Authority (FP&M SETA)
Health and Welfare Sector Education and Training Authority (HWSETA)
Insurance Sector Education and Training Authority (INSETA)
Local Government Sector Education and Training Authority (LGSETA)
Media, Advertising, Information and Communication
Technologies Sector Education and Training Authority (MICT)
Mining Qualifications Authority (MQA)
Manufacturing, Engineering and Related Services
Sector Education and Training Authority (MERSETA)
Public Service Sector Education and Training Authority (PSETA)
Safety and Security Sector Education and Training Authority (SASSETA)
Services Sector Education and Training Authority (SERVICE-SETA)
Transport Education and Training Authority (TETA)
Wholesale and Retail Sector Education and Training Authority (W&RSETA)
Relationships
Department
Entities under the department
Key management information
Refer to pages 5 to 7
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
98
14. RELATED PARTIES (cONTINUED)
Related party balances
Amounts included in Receivable from non-exchange transactions (Payables from exchange transactions) regarding related parties
2015 R’000
2014 R’000
CATHSETA - 99
DHET - (12 257)
NSF 302 -
Grants received from SETAs
AGRISETA 702 393
MERSETA 3 236 1 779
ETDP SETA 936 508
EWSETA 656 295
FASSET 1 109 610
W&RSETA 2 228 1 235
FP&MSETA 844 509
TETA 1 577 853
FOODBEV SETA 709 395
Services SETA 3 299 1 894
MICT SETA 1 712 941
CATHSETA 693 397
HWSETA 897 457
MQA 2 505 1 299
CETA 1 404 781
INSETA 958 503
SASSETA 614 372
CHIETA 1 220 640
LGSETA 1 173 709
BankSETA 2 029 858
28 501 15 428
Transfer from Department of Higher Education and TrainingDHET 23 167 21 747
Total Government grants and subsidies received 51 668 37 175
Related party transactions
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ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
Current year 26 -
Prior Year - -
26 -
2015 R’000
2014 R’000
Contributions for the year included in employee cost 2 315 1 308
2015 R’000
2014 R’000
Reconciliation of irregular expenditure
Opening balance 328 -
Add: Irregular Expenditure - current year 26 328
Less: Amounts condoned (328) -
Less: Amounts recoverable (not condoned) - -
Less: Amounts not recoverable (not condoned) - -
26 328
15. DEFINED cONTRIBUTION PLAN
The QCTO provides for retirement benefits for all of its permanent employees through a defined contribution scheme to the Government Employees Pension Fund (GEPF) that is subjected to the Pension Funds Act, 1956 as amended. In terms of the Pension Funds Act, the fund is not required to be actuarially valued. The QCTO’s liability is limited to its contributions made. There are 59 employees who are members of the GEPF in which the QCTO’s contribution is 13% of pensionable emoluments.
16. IRREGULAR EXPENDITURE
Analysis of expenditure awaiting condonation per age classification
Details of irregular expenditure – current year
Irregular Expenditure incurred:
Current year irregular expenditure of R26,000 consists of expenditure incurred in contravention of the supply chain procurement processes and procedures.
Condonement of irregular expenditure:
The Accounting Authority is yet to grant condonement of R26,000.
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
100
17. REVENUE
2015 R’000
2014 R’000
Other income - Insurance claim # 18 -
Interest received - investment 1 375 1 314
Government grants & subsidies 51 668 37 175
Conditional Grant (NSF) 500 82
53 561 38 571
Other income - Insurance claim 18 -
Interest received - investment 1 375 1 314
1 393 1 314
Transfers from other government entities
Government grants & subsidies 51 668 37 175
Conditional grant (NSF) 500 82
52 168 37 257
# This relates to income received from an insurance claim as a result of a loss on disposal of assets that was alreadyrecognised in the prior years.
The amount included in revenue arising from exchanges transactions are as follows:
The amount included in revenue arising from non-exchange transactions is as follows:
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ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
2015 R’000
2014 R’000
Accounting fees - 19
Advertising 502 497
Assessment rates & municipal charges - 11
Auditors remuneration 1 796 1 735
Bank charges 16 12
Cleaning 264 67
Consulting and professional fees 4 095 5 716
Consumables 16 10
Office Plants 74 -
Gifts 38 -
Insurance 46 58
Conferences and workshops 1 402 678
IT expenses 1 795 819
Marketing - 29
Lease rentals on operating lease 5 505 1 821
Motor vehicle expenses 7 -
Loss on scrapping of assets 25 27
Legal fees 536 204
Postage and courier 44 70
Printing and stationery 2 367 1 524
Secretarial fees 146 -
Security Expenses 44 -
Software expenses 45 -
Staff welfare and refreshments 33 22
Subscriptions and membership fees 65 -
Telephone, internet and fax 720 509
Training 198 113
Travel, subsistance and accomodation Local 5 148 2 529
Assets expensed - 3
Electricity 1 147 379
Council & Committees Remuneration 448 63
Repairs and maintenance 113 139
Recruitment costs and temporary staff 401 1 054
Other expenses 3 107
27 038 18 215
18. ADMINISTRATIVE
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
102
19. PERSONNEL
2015 R’000
2014 R’000
Salaries and wages 28 628 16 929
Basic 21 180 12 007
UIF 67 -
SDL 151 -
Defined contribution plans 2 315 1 308
Overtime payments 22 30
Housing benefits and allowances 220 139
Bargaining council 2 3
Medical aid - company contributions 190 133
Other 4 481 3 309
Non-cash items: 2 212 511
Bonus 1 703 575
Leave pay provision charge 509 (64)
30 840 17 440
2015 R’000
2014 R’000
Operating lease accrual893 224
20. BUDGET DIFFERENcES
Differences between budget and actual amounts basis of preparation and presentation The budget and the accounting bases differ. The Annual Financial Statements for the whole-of-government are prepared on the accrual basis using a classification based on the nature of expenses in the statement of financial performance. The Annual Financial Statements are consolidated statements that include all controlled entities, including government business enterprises for the fiscal period from 2014/04/01 to 2015/03/31. The Annual Financial Statements differ from the budget, which is approved on the cash basis and which deals only with the general government sector that excludes government business enterprises and certain other non-market government entities and activities. The amounts in the Annual Financial Statements were recast from the accrual basis to the cash basis and reclassified by functional classification to be on the same basis as the final approved budget. In addition, adjustments to amounts in the Annual Financial Statements for timing differences associated with the continuing appropriation and differences in the entities covered (government business enterprises) were made to express the actual amounts on a comparable basis to the final approved budget. The amounts of these adjustments are identified in the Statement of Comparison of Budget and Actual Amounts.
21. OPERATING LEASE LIABILITY (AccRUAL)
The operating lease accrual was a result of the difference between the payments made up to 31 March 2015 on a straightline basis calculated over the lease period and actual payments made.
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ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
2015 R’000
2014 R’000
Unspent conditional grants and receipts
Unspent grants - 198
2015 R’000
2014 R’000
Balance at the beginning of the year 198 -
Additions during the year - 280
Income recognition during the year (198) (82)
- 198
22. UNSPENT cONDITIONAL GRANTS AND REcEIPTS
The NSF conditional grant was awarded to QCTO to train QDFs so that the cohort group of the QDFs is representative of all the races of the country. Due to insufficient capacity within QCTO the project could not be completed as envisaged. The project implementation timelines were extended to 2014/15 financial year.
Unspent conditional grants and receipts comprises of:
Movement during the year
23. DEFIcIT FOR THE YEAR
The deficit was a result of non-cash items of depreciation and provisions (note 6 & 9) which were not included in the approved cash budget. Furthermore the final budget included a roll-over of accumulated surplus of R5,353 million which practically in accounting terms cannot be realised as revenue and can only be spent by reduction of accumulated surplus, hence the deficit.
NOTES
NOTES
NOTES
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2015
QCTO Annual Report 2014/2015
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Quality Council for Trades and Occupations256 Glyn Street, Hatfield, Pretoria, 0083, South Africa
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