The Department of Labour ends its financial year for 2008-09 at the end of next month looking forward to a challenging 2009-10. Following qualified audit reports for the 2007-08 financial year for both the Department and its two funds, the National Skills Fund and Compensation Fund, the Department spent time improving its systems to ensure better accountability for public funds.
The Department will be implementing a new financial system (SAP) for the National Skills Fund (NSF) starting from April 2009. The system will allow the NSF to prepare its financial statements on an accrual basis, in line with the South African Statements of Generally Accepted Accounting Practice, a departure from the current cash or modified cash basis of preparation, which has earned the Fund audit qualifications in the last two financial years.
The Department has also made substantial progress in resolving the accounting framework for the NSF, an issue that also led to a qualification. The Department took a decision to list the NSF as a public entity and is currently finalizing a business case to formalize the listing process. The accounting framework has also been addressed through the Skills Development Amendment Act.
At operational level the NSF has also resolved issues around procurement of service providers in one of its key training programmes, the Social Development Funding Window. Over the last two financial years the Auditor General has raised a qualification on this programme on the grounds that procurement of training providers was not in line with government supply chain policy. A new database of training providers has been finalized ensuring that future procurement will be in line with supply chain policy of government. Regrettably, as a result of this requirement, the Department has had to scale down on training for 2008-09 resulting in a lesser number of the unemployed people participating in skills development initiatives.
Related to this was the advances paid to unemployed people for their meals and the R30 daily transport allowances while attending training. Due to limitations on current systems (mainly BAS), the Department was qualified for not being able to reconcile allocated advances in time for the thousands of trainees. This problem was also resolved paving a way for thousands unemployed people to continue benefiting from this grant whilst participating in various skills development initiatives.
Commenting on the NSF’s prospect of acquiring a new system, Labour Spokesperson Page Boikanyo said today: “The system brings with it the long desired peace of mind where the Fund’s primary responsibility of providing skills development to unemployed would be discharged without any further hindrance. We also look forward to a clean Bill of health when the 2008/09 audits are conducted”.
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