Construction Seta battles under weight of unverifiable grants and unauthorised pay cheques

The Construction Education and Training Authority (Ceta), one of South Africa’s Sector Education and Training Authorities (Setas) tasked with developing skills and empowering young people, has once again come under scrutiny after failing to act on repeated recommendations from the Auditor-General of South Africa.

The failures resulted in qualified audits over the past four years and cumulative irregular expenditure amounting to R871.4-million. Among the key concerns raised were overcommitments linked to discretionary grants, where work could not be substantiated or verified.

The mounting financial crisis led Higher Education and Training Minister Buti Manamela to place the entity under administration, with Oupa Nkoane appointed as administrator.

Nkoane told Daily Maverick that the administration process stemmed largely from financial mismanagement. He said all irregular expenditure, including the latest R63,000 flagged, must undergo a formal determination process to establish whether losses occurred, who should be held liable, and whether funds should be recovered or condoned.

“The Ceta administration is largely because of financial mismanagement,” said Nkoane. “Each item must be subjected to a determination process to establish whether the expenditure resulted in loss, whether liability can be attributed to specific officials, and whether the matter should be condoned, recovered, or written off.

“We have prioritised the clearance of the cumulative balance through a structured determination process as outlined in the instruction note. Where warranted, recoveries will be done within the prescripts of the law. The R63,000 is undergoing the same process.”

During a meeting of Parliament’s Portfolio Committee on Higher Education on 13 May, MPs questioned Nkoane about action taken against individuals implicated in wrongdoing at Ceta.

“Eleven people [have faced disciplinary action]. The charges stem from the forensic reports that were conducted by my predecessors and the current ones I am doing,” said Nkoane. However, Ceta’s senior human resources manager, Brian Tyebileyo, later indicated that only seven officials were currently facing disciplinary processes.

The investigations include the Abacus report, which was repeatedly cited in the Attorney-General’s qualified audit opinions over four years. The Gobodo report also implicated senior officials in irregular contract approvals, while the Bowmans report identified R870-million in discretionary grants awarded without adequate oversight as legally actionable irregularities.

Vodacom and MTN contracts questioned

One of the major concerns raised before Parliament involved Ceta’s internet service contracts with Vodacom and MTN.

Ceta’s 2021 Vodacom contract was flagged by the Attorney-General and subsequently investigated. The contract was allegedly extended beyond April 2024 based on unverified credit claims. Sunday World also reported that Ceta’s Vodacom services were disconnected in June 2025 because of an unpaid bill amounting to R2.9-million.

According to the reports, Ceta’s former acting chief financial officer had initially recommended a lawful migration process away from the service provider. However, that recommendation was allegedly reversed, and Vodacom was reappointed through a deviation process that the CFO opposed. The Auditor-General later classified the expenditure as irregular, with R1.5-million still outstanding.

At the same time, Ceta was alleged to be pursuing another contract with MTN for similar services. According to Nkoane, both contracts were active simultaneously. “We are now having a liability to pay the potential liability of MTN on a contract that did not have an SLA [service-level agreement] and even an appointment… There’s a character of mismanagement of procurement in this organisation,” said Nkoane.

Nkoane added that the matter had been flagged to the Department of Higher Education and Training (DHET), which is responsible for oversight. However, the department’s chief director for Seta coordination, Mabuza Ngubane, denied that the issue had ever been brought to his attention.

“I am not aware. It was not flagged to the department. It’s an honest answer,” said Ngubane. MPs challenged Ngubane’s response, arguing that the Attorney-General had already flagged the matter several years earlier.

Billions in overcommitments

Overcommitments linked to discretionary grants have become one of Ceta’s biggest financial risks. In its latest presentation to Parliament, Ceta admitted that overcommitments had contributed directly to its qualified audit outcomes. The entity disclosed a potential discretionary grant overcommitment risk exceeding R1.4-billion, while its current overall overcommitment exposure now stands at R2.7-billion.

Nkoane’s adviser for governance and compliance, Lethabo Mamabolo, told Daily Maverick the issue reflected a broader inability to properly account for spending.

“This means we could not substantiate items in the financial statement, either with sufficient and appropriate evidence, or we could not submit that evidence at all. And then there is now a limitation of scope,” said Mamabolo.

Nkoane said the administration had begun attempting to clean up the system and remove unsupported commitments from the balance sheet. “We are cleaning the system because these sit on our balance sheet and are not getting built. We get invoices for projects that were done three or four years ago … the function of contract management was weak,” said Nkoane.

Fraud and accreditation irregularities have also emerged as major concerns.

According to Nkoane, the number of accredited service providers listed externally did not match Ceta’s internal records. “We have accredited 1,120 service providers out there, but in our database, we have 480 accredited providers. This is an area requiring attention. Colleagues have been selling the accreditation of Ceta. This is a fact,” said Nkoane.

Questions over administrator’s salary

MPs also expressed outrage over Nkoane receiving an annual remuneration package of R3-million without formal approval from either Minister Manamela or the DHET. The amount exceeded the proposed salary package by R500,000.

Ceta manager Molebogeng Taje defended the payments, saying the delays in finalising Nkoane’s contract had forced the entity to act. “I did [authorise the payment] ... on the grounds that we had written to DHET to say we would like to implement this while you are still considering what to pay and that if there are any changes, we will do a reconciliation,” said Taje. “The administrator and I had agreed that it would be okay.”

Nkoane argued that delays by the department placed him under financial pressure. “The delays of the department compromised me and placed me in a difficult position. First, second, and third month without a salary, I had to burn my reserves… When the department was not responding, I considered it as a yes,” said Nkoane.

DA MP Karabo Khakhau sharply criticised the explanation. “Since when is silence a yes? This doesn’t give you the right to determine your salary without authority … it is wrong,” said Khakhau. Portfolio committee chairperson Tebogo Letsie blamed Ceta officials for creating the situation.

“You decided to bring us into this mess. Taje, which is highly irregular, wrote a proposal for a salary to her boss; the boss signs his own salary, and his boss has not agreed to this thing,” said Letsie.

DHET Director-General Nkosinathi Sishi accepted responsibility for delays in processing the agreement, while Nkoane confirmed that repayments had already begun.

Students bear the consequences

While senior officials battle over contracts, audits and salaries, students who depend on Ceta-funded stipends say they are being left behind. A second-year student at the MCD training centre in Vereeniging, who asked to remain anonymous, told Daily Maverick that delayed monthly stipend payments of R2,970 had created severe financial strain for them.

“We get paid a month behind, and our payments are always late since the year started. When we get paid at the end of May, we will be getting the April stipend. I have to pay late rent fees. I cannot move near the workplace because I have a son, so he can be able to go to school. So the stipend is always delayed, I pay late fees for rent, and I still have to hustle for more money in order to travel to work for the whole month,” said the student.

As the administration attempts to stabilise Ceta, Letsie warned that its failures were undermining South Africa’s broader skills development goals. DM