Outa and whistle-blower accuse government’s skills training bodies of ‘repurposing’ funds

Unusual transactions as some of the country’s Sector Education and Training Authority bodies (Setas) have led to allegations of financial irregularities.

CEO of the Organisation of Undoing Tax Abuse (Outa), Wayne Duvenage, said it has been seeing a pattern in the country’s Sector Education and Training Authority bodies (Setas) where funds are often being “repurposed” to hide mismanagement.

Duvenage said this during an annual future education breakfast held at the Maslow on Wednesday.

The country currently has 21 Setas.

A Seta has the function of monitoring the quality of education and training in their sectors. It has to report to the Director-General of the Department of Labour on the implementation of its sector skills plans and its income and expenditure.

These Setas receive public funding through a levy-grant system, through taxes paid by SA’s employers.

Whistle-blower

Recently, the former Senior Manager for Skills Planning and Head of Research for the Insurance Seta (Inseta) has stepped forward to blow the whistle on what she felt were “questionable transactions”.

Speaking at the future education breakfast, the former employee, Adeline Singh, claimed that a few years ago she was approached by another department within the organisation that asked her to scrutinise an award letter that was registered.

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Singh said that she found it was an award letter for R1 million towards an IT company. But, she said, she noticed that the letter was reportedly lodged without all the relevant documentation and as such she could not understand how it was approved and awarded.

Singh claimed that she then flagged it with the relevant authority and called the whistle-blower’s line where she registered a case.

“I was told that it was noted and that all was in order,” she said.

Singh said she was satisfied that the case would be handled and that justice would take its course. However, the IT company shut its doors and absconded with the portion of the R1 million that was paid to it.

“The Inseta staff had thereafter to pick up the tasks the IT company was supposed to fulfil,” she said.

Funding redirected

Singh also said that she noticed instances where funding that was meant for training institutions was often being “repurposed”.

She gave the example of funds being redirected to chieftaincies – but she did not scrutinise them as closely as she did the award letter at the time.  

The senior manager said that she expected to see the report of the whistle-blowing incident in the yearly report that was to be submitted by Inseta to Parliament to learn how it was finally resolved. But, she said, it was not there.

“I didn’t see that report. I followed up on this and was again assured that all was okay,” she said.

Singh said after this, she felt she was being victimised. She said that she was removed from her senior post, and was eventually put on performance review before she was suspended.

Not the only one

Singh was not the only one to be sidelined after blowing the whistle.

In June 2023, when the Chief Executive Officer of the Graduate Institute of Financial Sciences (GIFS), Kershen Pillay, claimed that he was made aware by individuals within the insurance educational sector that Inseta was encouraging clients not to use the services of GIFS and instead use a particular provider, he immediately approached them about this.

“GIFS immediately wrote to Inseta on numerous occasions to address these accusations made against them. But we never got a response,” Pillay said at the future education breakfast.

He said that the institution reportedly enjoyed a good relationship with Inseta but the relationship started to strain when they questioned Inseta on their lack of service delivery. He claimed that there was more than 3 000 learner records dating as far back as 2015 that were not being certified by the Inseta, as well as the occurrence of avoidable operational issues.

Public protector

“We then reported the matter to Quality Council For Trades & Occupations (QCTO) to investigate in June 2023. In October 2023, we later shared our evidence with the public protector and we requested that the public protector investigate where learners were writing open book exams with the particular institution the Inseta was referring them to.

“We also requested the investigation into ghost learners that were in the Inseta system that we were made aware of,” he said.

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Pillay stated that after this, Inseta immediately de-accredited GIFS on 14 December 2023 at 5:38pm. “They did it when our offices and most businesses were closed for the year and included new charges, which we don’t have sight of. 

“Inseta did attempt to de-accredit us twice before, in 2022 and later retracted it stating it was a system error and then once again on 26 September 2022 based on an investigation report, which they were not willing to share with GIFS or allow GIFS to participate in,” Pillay said.

The institution then hauled Inseta to court over this. The court ordered that the institution’s accreditation be immediately reinstated.

Duvenage believes that the claims made by both GIFS and Singh should be taken seriously.

“We have seen in such state institutions, there is enough in the relationships that exist among individuals in positions of authority to see these occurrences taking place,” he said.

He referred to the instances of corruption Outa claimed to have uncovered in Service Seta in 2018 and in more recent times, at the National Student Funding Aid Scheme (Nfsas).

Inseta response

Responding to the issue of the de-accrediting of GIFS, Inseta’s Executive Manager of Operations, Leslie Kwapeng, stated: “GIFS has been de-accredited effective as of 14 December 2023, following an appeal ruling made by the Quality Council for Trades Occupation (QCTO).

“As regards to the specific questions raised, which most of them are directly or indirectly related to pending legal proceedings, kindly note that Inseta is currently prejudiced to make comments on incomplete legal proceedings and matters that are subjudice.

“As a public institution, Inseta remains committed to the promotion of the Skills Development Act aimed at inclusive and participatory skills development. Inseta endeavours to fulfil this mandate in partnership with the QCTO, stakeholders and learners.”

With regard to the allegations around the irregularities of the awarding of the R1million to the IT company, The Citizen is still awaiting a response from Inseta on this.

Inseta opens criminal case against GIFS

Meanwhile, Inseta on Monday morning told the SABC that it has opened a criminal case against the GIFS for allegedly spreading false information and causing malicious damage to its image. It also accused GIFS of ignoring a cease and desist reprimand.

CEO for Inseta, Gugu Mkhize, said GIFS was not de-accredited for “blowing the whistle” on Inseta. “We de-accredited GIFS before they went to the public protector. The de-accreditation happened in 2022 and their report was submitted in 2023,” she said. 

She said the reason GIFS was de-accredited was because an investigation was undertaken in 2021 that revealed some irregularities. “We then issued them with a notice to de-accredit them. They then submitted an appeal to the QCTO. We waited for a decision. That decision came in December and we issued them with a de-accreditation accordingly.

“The de-accreditation was based on an investigation and we found some foul play and noncompliance to our own internal processes and policies.”

She said GIFS was invited to participate in the investigation but claimed they withheld information.

With regard to the accusation of ghost learners, she said their records showed no such thing.

Regarding the number of certificates outstanding, she said there was no backlog of more than 700 learners. She said only 13 certificates are outstanding.

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