Parliament slams National Skills Fund over mismanagement and irregularities

The Portfolio Committee on Higher Education has raised the alarm over the deteriorating state of the National Skills Fund (NSF), citing severe internal deficiencies and mismanagement.

During a briefing on Wednesday, the committee expressed scepticism about the NSF’s ability to recover from its challenges, despite presenting an action plan to address issues flagged in the Auditor-General’s 2023/24 report.

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‘Misappropriation of funds’

Chairperson of the committee Tebogo Letsie, on Thursday, condemned the NSF’s underspending of R3.7 billion during the last financial year, emphasising its devastating impact amid South Africa’s high youth unemployment.

“The misappropriation of funds intended to upskill and reskill young people is deeply troubling,” Letsie said.

The committee criticised the absence of the NSF’s accounting authority and the Department of Higher Education’s executive authority at the meeting, describing their failure to attend as “unacceptable”.

It further noted irregularities, including payments made to Medirwe Investments without adhering to established funding procedures.

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Lack of consequences

Letsie highlighted the lack of consequence management for officials involved in these unauthorised transactions.

“Despite having clear guidelines and procedures for funding skills development, the NSF has allowed payments to proceed without following due processes,” he said.

Concerns were raised about the NSF depositing skills development funds into business accounts instead of interest-bearing accounts held by skills development providers (SDPs).

The committee dismissed the NSF’s explanation that rural-based SDPs struggle to open such accounts.

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Committee to ensure transparency

The Department of Higher Education and Training also came under fire for redeploying NSF officials implicated in a forensic investigation to other directorates.

The committee warned that this practice undermines accountability.

To address these challenges, the committee resolved to summon Higher Education Minister Blade Nzimande and the department’s director-general.

It also plans to urge the president to expand the Special Investigating Unit’s (SIU) mandate to include NSF projects.

“The committee reiterated its commitment to ensuring transparency, accountability and effective governance within the NSF to ensure it fulfils its mandate of addressing South Africa’s critical skills shortages”.

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