R29 million gone, R956 million irregular: Manamela demands answers from two SETAs on life support

Higher Education and Training Minister Buti Manamela has called for urgent corrective action at the Construction Education and Training Authority (CETA) and the Services Sector Education and Training Authority (Services SETA), after both received qualified audit opinions for the 2025/26 financial year.

Briefing Parliament’s Portfolio Committee on Higher Education and Training, Manamela said the two institutions need to fix persistent governance and financial control weaknesses and show that public money is producing skills, jobs and better livelihoods. Both were placed under administration in August 2025 after governance and operational difficulties, and both stay there until 31 January 2027.

“Administration is an intervention. It is not an outcome. Its success lies in whether the institution emerges with stronger governance, credible financial controls, capable leadership, improved service delivery and renewed public confidence,” Manamela said.

A qualified audit opinion means material issues remain unresolved, and the department has told both administrators to draw up audit action plans with clear responsibilities and timeframes.

At CETA, Manamela said 58 of 68 annual performance targets were met, roughly 85%. The money tells a harder story. Revenue of about R914 million against expenditure of R1.25 billion left a deficit of approximately R336 million, and the cash balance fell from about R1 billion to R607 million while significant discretionary grant commitments remain outstanding. He said the institution cannot keep drawing down reserves without addressing the structural causes of the imbalance.

Accumulated irregular expenditure stands at approximately R956 million, with fruitless and wasteful expenditure of R44 million, which he described as serious historical control failures.

Two irregularities drew particular attention. About R15.75 million was paid on an artisan development project without the intended benefits being delivered, and about R13.26 million went on a learner biometric attendance and stipend payment system that was never fully operationalised. Together that is roughly R29 million in reported losses.

“When public money is spent on training, we must be able to identify what was delivered. Where losses occurred, we must determine responsibility and pursue recovery and consequence management,” Manamela said.

He asked for a complete account of investigations, legal steps, responsibility assessments and possible recovery measures, and raised the reported prescription of a contractual claim against the supplier in the artisan development project. “I will not pre-empt any proceedings, but the passage of time must not become an excuse for institutional inaction,” he said.

Services SETA recorded revenue of approximately R2.5 billion, expenditure of R1.9 billion and a surplus of approximately R562 million, which Manamela said was partly attributable to delays in programme implementation. He warned that unspent money is no achievement when eligible learners have not been trained, bursaries have not been paid or employers cannot get support.

Delayed bursary payments affecting students at universities and Technical and Vocational Education and Training (TVET) colleges were his sharpest concern. “Behind a delayed bursary may be a student unable to register or pay for accommodation. The Administrator must give this Committee a clear account of outstanding bursary obligations, reasons for the delays, and the timetable for resolution.”

With the administration period ending in January 2027, Manamela said the remaining months must be used to stabilise executive structures, appoint Accounting Authorities, strengthen financial controls, resolve audit findings and prepare comprehensive handover reports. He flagged delays in governance appointments, including difficulty finding suitable nominations for chairpersons and completing organised labour representation.

The department will require a verified exit assessment covering governance readiness, financial sustainability, audit improvements, unresolved legal matters and outstanding commitments before the institutions return to ordinary governance. Manamela warned against a cycle of failure, administration, a new Accounting Authority and another intervention. “The real test of administration is whether the improvements survive the Administrator’s departure,” he said.

Beyond the two SETAs, he set out wider priorities for the post-school education and training sector, including stabilising the National Student Financial Aid Scheme (NSFAS) and building a credible, sustainable student funding model. He urged prospective students to apply for NSFAS funding for the 2027 academic year before the deadline on 31 October 2026.

He also said the department and the National Skills Fund must address concerns from learners in the Denel Training Programme about delayed stipends, accommodation, transport, tools, safety and completion of their training, and that broader reforms to the SETA landscape are under consideration subject to consultation, legal compliance and fiscal assessment.

Manamela called for time-bound plans to clear outstanding audit findings, transparent reporting on expenditure, appropriate consequence management, better delivery of bursaries and workplace learning, and a managed transition to stable governance.

This report is based on the SAnews (South African Government News Agency) account of the Minister’s briefing, which is a summary of the proceedings rather than the full record of the committee meeting. The source is available at https://www.sanews.gov.za/south-africa/manamela-seeks-accountability-setas-under-administration.