NATIONAL SKILLS FUND 2024/25 ANNUAL REPORT IN PARLIAMENT, CAPE TOWN

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NATIONAL SKILLS FUND 2024/25 ANNUAL REPORT IN PARLIAMENT, CAPE TOWN

Providing funding to catalyse skills development in support of the Post-School Education and Training system remains a crucial mandate for the National Skills Fund. 

The 2024/25 financial year reflected steady progress in programme delivery, alongside targeted efforts to address audit findings and operational bottlenecks. While the NSF recorded notable achievements in skills funding, infrastructure investment, and research support, the entity also worked to close persistent gaps in performance verification, contracting timelines, financial controls and consequence management. 

The 2024/25 Annual Report therefore aims to reflect and provide a broader state of affairs in the National Skills Fund, herein summarised. Context of the NSF for the Year under review

The transition from the 6th Administration into the 7th Administration required shifts in the work of the NSF to align its interventions and hasten implementation of the Ministerial Task Team recommendations. The NSF underwent changes in leadership and management while noting vacancies throughout the organisation.

“The year under review was not business as usual for the National Skills Fund. It was a year of expansion, digitisation and acceleration of operations. This intensive work has yielded measurable results and demonstrable access to skills development for many young people. I am pleased about what the fund has delivered and look forward to another year of tighter financial controls that result in meaningful progress in the quest to skill our nation", said the Minister of Higher Educatin and Training, Mr Buti Manamela. Investigations into The Affairs of The National Skills Fund In March this year, President Cyril Ramaphosa signed the Proclamation authorising the Special Investigating Unit’s (SIU) to investigate allegations of serious maladministration, improper or unlawful conduct by officials or employees of the NSF and the department and skills development providers, and the possible mismanagement of funds allocated to the NSF spanning from 1 January 2013. 

The investigation by the SIU is underway. Separate from the SIU investigation, the Hawks have also been doing their own investigation, following cases opened by the NSF and other stakeholders relating to the mismanagement of the NSF funding intended to benefit learners, as well as working through the State Attorney to recoup funds mismanaged by Skills Development Providers. 

The National Skills Fund has and continues to comply and fully participate with the investigations. In support of these investigations, the NSF made available all necessary information which was needed to assist the investigation process. The NSF’s participation in these investigations and their outcomes will set it on a new trajectory as it repositions itself as a catalytic change agent in our communities and the country at large. Our message is simple and clear; those who are found to have committed any wrong doing, following these investigations, must face the full might of the law. 

Further, the NSF has fully cooperated with matters related to the Public Protector matters that have arisen from projects from prior years that required NSF interventions to ensure that learners will be able to complete the training that could not be completed by Skills Development Providers. Lastly, the NSF has also been subjected to an Assessment by the Information regulator.  

These investigations, cases and assessments all ran concurrently to the audit by the Auditor-General of South Africa. Despite capacity constraints, the NSF officials have worked tirelessly to comply with all these organs of state; preparing records manually, and putting in place corrective and preventative measures and controls to improve accountability of the fund and those approved funding. 

This was no small feat.  Further interventions are underway to strengthen the institutional capability to build an entity that can hold all stakeholders accountable for the funds and to deliver on the skills required to contribute to catalysing economic growth and social cohesion.  

Skills development grant disbursement 

The NSF disbursed a total amount of R4.588 billion for the 2024/25 financial year towards skills development funding. The amount of R4.389 billion was disbursed towards education and training of learners, while R198 million towards strengthening the PSET system. 

This is a significant improvement from prior year disbursement.  Overall Reflection of NSF Performance Compared to the previous year where only 19% of the National skills fund’s targets were met, the 2024/25 period has seen a 14% performance improvement with the NSF achieving 33%, representing 10 of the 30 output indicators as outlined in the NSF 2024/25 Annual Performance Plan.  

The performance reported is concerning and an indication that NSF and funded NSF Skills Development Providers must up its interventions and controls. Skills Development Providers must and are required to report timeously and accurately with supporting evidence, and where there is non compliance, consequence management will be implemented to guard the resources of the state to ensure that the funds reach the beneficiaries and interventions.  

Skills Development Funding In the 2024/25 financial year, the National Skills Fund funded at least 56 277 learners for education and training. Of these learners, more than 35 000 come from rural areas, and almost 21 000 are from urban areas, across the country. 

The gender breakdown reveals that more female learners, almost 38 000, were funded, compared to almost 19 000 male learners, for various learning interventions such as internships, learnerships, and skills programmes. 

Of the more than 56 000 learners the NSF funded, 52 811 are Africans, followed by coloureds with 3 202, 188 white and 123 Indians. Out of the reported 56 277 learners funded, 5 848 completed their education and training during the 2024/25 financial year. 

The National Skills Fund also funded during the 2024/25 period, a total of 4 874 bursary students through the National Students Financial Aid Scheme, National Research Foundation, African Institute for Mathematical Science, Agri-bursaries, South African International Maritime Institute and International Scholarships. A total amount of R1.742 billion was directed towards bursaries and scholarships, including R1 billion for the missing middle students. 

Out of a total of 4 874 bursary students, 910 learners completed their qualifications in this period. Also funded is a total of 2 410 learners for education and training through worker education, significantly exceeding the target of 710 by 1 700. 

The NSF Bursary Scheme will develop a new bursary strategy that clearly positions the NSF bursary as seed funding to leverage the private sector and local government or municipalities. 

This restructuring is necessary to avoid duplication with NSFAS and to focus on post-graduate funding for scarce skills. In November 2024, the National Skills Fund launched the Persons With Disability Programme, earmarked to provide Persons With Disability with an opportunity to become economically self-reliant and enable them to improve their livelihoods. 

The programmes are tailored to cater for all classification of disabilities, including Psychosocial Disability, Neuro-developmental Disabilities, etc. “With the R650 million Persons with Disability Programme, we are making it unmistakably clear: access to skills and economic opportunity must extend to every South African, regardless of their circumstances. This investment, positively impacting the lives of over 10 000 beneficiaries, signals our unwavering commitment to building a PSET system where inclusivity is the norm and no one is left behind”, said Minister Buti Manamela. In September 2025, Minister Manamela approved the expansion of the Artisan Massification Programme, with an additional amount of R1 065 billion. 

This will see additional 4 725 beneficiaries onboarded on to the progamme in addition to the current an approved budget of R1,325,392,448.75 to support 5,885 artisans. In total, artisan development portfolio represents a committed budget of R2,390,879,467.20, to fund 10,610 artisans. This expansion will help the country strengthen its technical pipeline for strategic infrastructure, manufacturing, construction, automotive and energy sectors. 

The approval to expand the Artisan Massification programme comes with strict conditions that must be met to safeguard the project, its funding, but importantly, the learners. The conditions include the introduction of a pay for performance contracting and payment model for projects. In addition, the information of Approved for funding SDPs will be provided on the NSF website to ensure that beneficiaries seeking access to opportunities will have access to the information of providers and also establish transparency and visibility of SDPs funded. 

Post-School Education and Training system Improvement Funding The National Skills Fund, in partnership with the Department of Higher Education and Training, committed a total of R2 880 000 000. 00 (Two billion, Eight Hundred and Eighty Million Rand) in the Post-School Education and Training (PSET) infrstrucutre development, nationally. This partnership started in 2013 and is still ongoing until all targeted PSET TVET institutions are completed. These are therefore multi-year projects, hence the number of years it has taken for construction. 

The NSF contributed to the Department of Higher Education and Training’s Outcome 3, which aims to improve the quality of the PSET provisioning, by funding 10 infrastrucutre projects in the 2024/25 financial year. During the 2024/25 financial year, two campuses were completed i.e. Balfour Campus and Ngqunqushe Campus, and a total of R230 812 732 00 was committed to support the expansion of the existing campus at Mnambithi TVET College. 

In Auguts this year, the National Skills Fund launched the Aliwal North Engineering Campus of Ikhala TVET College. The budget allocation for Aliwal North Campus was a total of R122 019 591.85. The National Skills Fund successfully funded more than 30 research interventions, including development of innovative tools such as the TVET College Barometer and labour market intelligence research including the production of the National List for Occupations in high demand. The research provides the basis to steer and approve funding to occupations in demand by the labour market. 

These interventions included, but were not limited to, indepth studies revealing misalignments between college programmes and labour market needs, and the identification of strong student demand despite systemic challenges such as outadted curricula and indadequate industry collaboration.  

Oversight and Findings of the Auditor-General The NSF received a qualified audit outcome with matters on the annual performance report and compliance with legislation for the 2024/25 financial year. The NSF received forty-three (43) audit findings, of which thirteen (13), or 30%, are material and require close monitoring to prevent recurrence. 

These material findings relate primarily to non-exchange transactions, such as Skills development Expenditure, Deferred Expenditure, Payables, Accruals and related party transactions. All the misstatements identified were not addressed during the audit and this led to material and noncompliance findings in the audit report.  Signficant focus and interventions has also been directed to clear out Irregular Expenditure and Fruitless and Wasteful expenditure incurred in the 2021/22 period and subsequently consequence managemement has been recorded in majority of cases. Work is currently underway with the State Attorney in regards to the Material Irregularity recorded, as the NSF seeks to recoup funds from a Skills Development provider. 

Accountability and Way Forward The 2024/25 Annual Report and the qualified audit by the Auditor-General have been tabled. The reports are no doubt a signal that further work is still needed to improve the NSF’s performance results in the next financial year. Stabilisation and Reforms will include reforming the NSF’s operating model, funding approaches as well the implementation of pay for performance model that will ensure the NSF disburses funds at the point of proof of work undertaken. 

Further, speed and agility to implement the recommendations of the Ministerial Task Team that conducted a Strategic Review of the NSF.  It thus should be noted that the entity’s manual operations or lack of automated systems and capacity constraints in terms of human resources, in critical positions, have been major contributors that led to it not meeting its performance targets and obtaining a qualified audit. 

The NSF has now established a fully functioning Human Resource Mangement unit that manages the full spectrum of HR functions, including recruitment and selection, management and selection, management of staff conditions, and more recently, Labour relations and organisational design. Through this unit, the NSF has reviewed its organisational structure to better align with the strategic objectives of the entity. As a result, the year 2024/25 saw major leadership and administrative changes in the NSF, which influenced the strategic direction and operational priorities of the entity. A total of 139 permanent funded vacancies and 89 of the 99 approved contract posts were filled during this period and 63 staff were trained in line with the work skills plan. This is despite challenges such as high vacancy rates in senior management, a moratorium on recrutitment, and reliance on manual systems.

The NSF was still able to strengthen its human resource capacity,through its Human Resource Development Unit. Finalisation of the organisational structure review and the filling of all vacancies will also alleviate pressure currently experienced by almost all business units in the entity. The NSF aims to have filled all positions by Quarter 4 2025/26. In February of this year (2025), the NSF made a commitment to launch the Enterprise Resource Planning (ERP) system in 10months. On 31 October of 2025, exactly 10 months following the commitment, the NSF went live with the first phase of the four phases that will culminate into a fully-fledged digitized National Skills Fund, once implemented. 

For years, the NSF depended on a manual system for its operations, a method that slowed performance and output, and continuously proved problematic. The implementation of the ERP system is a turning point for the NSF’s transformation journey, to move away from manual processes, and completely digitize and change how the NSF conducts its business. 

Through this system, the NSF will work smarter, track performance in real time, and ensure every rand is spent with purpose and integrity. 

The system will allow the NSF to lay ground for clean audits, strong compliance, and public confidence in its mission. It will fully automate the organisation and improve project management by eliminating errors that continued to hamper the entity’s performance. 

This system will benefit not only the NSF, but all South Africans, to whom we have a mandate to serve. It will improve how we interact with our clients and ublock many of the challenges we continued to experience in the past. Legislation and Governance The Amendment of the Skills Development Act is crucial to the NSF fully operating as a legal entity and for the formal establishment of the NSF Board, as per the Ministerial Task Team recommendations. NSF has submitted sustantive sections to the Skills Development Amendment Act to address governance and strategic operations of the NSF. 

While this process is underway, the NSF will action the establishment of an Advisory Committee to enhance efficiency and decision-making regarding project recommendations and other strategic matters for the entity including the delegation of authority. This is important, because the Committee shall focus on providing advice and guidance on how best to achieve the outcomes of the NSF, to provide guidance and direction to catalytic project leads, and expedite decision-making processes in the NSF. 

Through its Executive Committee, the NSF will soon submit reccomendations to the Minister on the Advisory Committee including its terms of reference, its composition, its recruitment, selection and appointment, and how it will relate to the other existing internal structures, without undermining them.  

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