News24 | Seven audit failures, CEO misconduct findings put three SETAs under administration

Minister of Higher Education and Training, Buti Manamela, briefed the media on Tuesday.

• The construction, services, and local government SETAs were put under administration in August 2025.
• Minister of Higher Education and Training Buti Manamela outlined the progress made by the administrators of the three SETAs.
• Criminal cases and disciplinary actions have been initiated against implicated officials, with ongoing investigations involving the Hawks and the Public Protector.
  

Seven consecutive qualified audit opinions, an undisclosed relationship between a CEO and an “awarded bidder”, and an irregular CEO appointment finding were among the reasons why the higher education minister put three Sector Education and Training Authorities (SETAs) under administration last year.

Minister of Higher Education and Training Buti Manamela said at a media briefing in Pretoria on Tuesday that placing the Construction Education and Training Authority (CETA), the Services Sector Education and Training Authority (Services SETA), and the Local Government Sector Education and Training Authority (LGSETA) under administration in August was “a necessary and decisive step to stabilise governance, restore institutional integrity, enforce consequence management, and protect the credibility of South Africa’s skills development system”.

“The evidence is clear: The decision was not only justified, but essential.”

He pointed out that governance failures at each institution were systemic, documented, and serious.

According to the minister, the CETA had accumulated four consecutive qualified audit opinions, internal controls had collapsed, “litigation exposure was rising, and labour relations were strained”.

READ | EFF asks court to nullify Manamela’s 8 SETA CEO appointments

He said the Services SETA had received seven consecutive qualified audit opinions and that there was “a full seven-year period without consequence management”.

“Its Audit Committee Task Team had documented systemic supply chain failures, a former CEO who failed to disclose his relationship with an awarded bidder, and a pattern of pre-payment for services before contracts commenced.

“Despite three major investigations, not a single official had been held accountable.”

Manamela said the LGSETA had faced findings from a National Treasury forensic report confirming the irregular appointment of its CEO and “the unlawful dissolution of its Audit and Risk Committee”.

He said a criminal case was registered with the police on 10 October 2025.

“A protracted dispute with the Auditor-General, compounded by a cyber attack that corrupted financial records and created a material discrepancy of over R1.5 billion, had paralysed the institution’s governance and audit readiness.”

The minister said that in each of the three cases, administration was the appropriate and proportionate remedy under the Skills Development Act.

The administrators’ mandate was to restore controls, strengthen financial and operational management, rebuild stakeholder trust, and “re-anchor these institutions in their statutory responsibilities”.

Outlining the achievements of the CETA administrator, Oupa Nkoane, Manamela said 23 of the 35 defined activities across 11 key performance areas had been fully achieved, and 12 were in progress.

A new CFO started work on Monday, ending nearly two years of “acting financial leadership”.

More than 20 internal audit findings in ICT (Information and Communication Technology) have been resolved, and salary negotiations have been concluded, “restoring workforce stability”.

He said the administrator of the Services SETA, Lehlogonolo Masoga, inherited an institution which had legacy commitments at R3.4 billion as of 31 March 2025, with some stretching back over eight years.

“By January 2026, this had been reduced to R2. 8 billion.”

An acting CFO was appointed in February 2026, and no new irregular or wasteful expenditure has been identified since the start of the administration.

Manamela added:

He also said the Services SETA has entered a three-year strategic partnership with Takealot to create 20 000 training and job opportunities for unemployed youth.

“The SETA has settled outstanding bursary payments previously owed to universities and colleges, a failure that had directly harmed students.”

He said that the administrator of the LGSETA, Zukile Mvalo, had prioritised the implementation of the National Treasury forensic report, “which was the central mandate of his service level agreement with the department”.

“Disciplinary action has been pursued against the implicated CEO. A criminal case is before the police, and the Public Protector has opened a sector-wide investigation.

“The protracted legal dispute with the Auditor-General, which had itself become a governance liability, has been resolved.”

Manamela said that the former CEO had challenged both the administration decision and the termination of his contract in the Labour Court, but that the court had ruled in favour of the ministry and the LGSETA.

Meanwhile, Mvalo said the big item was implementing the National Treasury’s forensic report and that “part of the actions were to discipline the former CEO”.

“With regard to participation in board meetings, we took a decision to dissolve the audit and risk committee, and that was actioned accordingly.

“The other recommendations arising from the report were to open criminal cases against the former board members who participated in the irregular appointment of the CEO. We have opened a case, which is with the Hawks now.”

He said that the Public Protector was also involved in an investigation involving the irregular appointment of the former CEO.