OUTA requests urgent meeting with Minister Manamela over chaotic SETAs

Bid files left on the floor. Tenders cancelled because specifications were changed. Tenders awarded to businesses that didn’t bid. Multiple investigations and a report kept secret. Staff suspended and removed for resisting corrupt or improper transactions. Staff too afraid to speak up. A whistleblower charged, cleared and charged again.

This is what OUTA found at the Construction Education and Training Authority (CETA). But it’s not an isolated case.

South Africa’s sector education and training authorities (SETAs) will cost taxpayers R21 billion from Skills Development Levies (SDL) this year. These entities are meant to equip young South Africans with critical skills, but many suffer from gross maladministration, are gripped by chaos, poor leadership and a blatant failure to serve the young people who rely on them. Serious questions arise from the taxpayers who fund these SETAs about the value obtained from their skills development levy contributions, and the unemployed youth who are supposed to benefit.

“It would appear that South Africa’s SETA model is failing and its institutions are bleeding taxpayer money, while the youth they are supposed to serve are left stranded. We’re dealing with recycled leadership, dodgy tenders, and investigations that are hidden or ignored. That’s not oversight, that’s a cover-up,” says Wayne Duvenage, OUTA’s CEO.

OUTA investigations over recent years into the CETA, the Insurance SETA (INSETA), the Services SETA and the National Student Financial Aid Scheme (NSFAS) and other entities within higher education and training sector have found similar patterns: manipulated procurement; over-priced contracts; failed delivery of services; the movement between entities of key individuals linked to dubious procurement; investigations that go nowhere; and a frightening lack of accountability. All of these entities fall under the Ministry of Higher Education and Training, which has now had three different ministers in the past 14 months.

Having recently met with the previous minister – Nobuhle Nkabane – to express its concerns, OUTA has now requested a meeting with the newly appointed Minister of Higher Education and Training, Buti Manamela, to once again raise these and new concerns over the state of these crucial institutions. OUTA is particularly concerned over the lack of action following expensive forensic investigations previously carried out, and wants to emphasise the need for strong, independent boards and executive managers for these entities.

Whistleblowers at risk

OUTA’s investigations in the SETA environment have been supported by courageous whistleblowers who risked their livelihoods to expose wrongdoing. OUTA acknowledges their bravery and urges others with knowledge of misconduct to come forward. Our whistleblower portal is secure and allows for anonymous submissions: https://www.outa.co.za/whistleblowing

The Construction SETA (CETA): What we found

OUTA analysed supply chain management (SCM) irregularities at the CETA from 2019. The picture is of a system in chaos: reports buried or ignored, and clear attempts to intimidate whistleblowers.

OUTA’s investigation considered several key documents:

• The Gobodo Forensic and Investigative Accounting report commissioned by the Department of Higher Education and Training and finalised in May 2019. Gobodo found various supply chain management (SCM) irregularities – including inadequate advertising of tenders, mismatches between the numbers of bids submitted and numbers evaluated, inconsistent bid scoring, altered bid scoresheets and concerns over employee victimisation. Recommendations were made and, to OUTA’s knowledge, were implemented.
• A second report – by Duja Consulting – was commissioned in October 2020 and the final report was handed to the Minister of Higher Education, then Blade Nzimande, in November 2021 at what appears to be an excessive cost of R18.9 million. The report has never been made available to the public or Parliament’s Portfolio Committee on Higher Education and Training, but OUTA obtained a copy of the draft report. Duja assessed 24 bids, found irregularities in all and recommended disciplinary action. “When R18.9 million is spent on a forensic investigation, and the report ends up buried – that’s not negligence, it’s contempt for the public,” says OUTA Senior Project Manager – Rudie Heyneke. “What’s happening at the CETA raises concerns about similar activities at other SETAs.”
• In addition to these reports, OUTA reviewed two legal opinions commissioned by CETA on the Duja report: one from Toka Machabaphala Inc and another by Adv Johann Engelbrecht SC. The cost for these two legal opinions are unknown and should be added on top of the costs for the Duja report.
• Tumiso Mphuthi formally disclosed procurement improprieties at CETA in August 2019 and again in June 2024. Mphuthi, a CETA employee, did not have voting or signing power on procurement, only advisory powers. The CETA has accused Mphuthi of making the disclosures to avoid accountability, although at least one disclosure was made on the advice of the Gobodo investigators. Mphuthi was suspended in connection with allegations in the Gobodo report and, a year later, cleared of all allegations and reinstated. The CETA subsequently laid disciplinary charges against her, in a matter which the Commission for Conciliation, Mediation and Arbitration (CCMA) ruled in May 2025 may go ahead, and which is currently pending. OUTA is concerned that the CETA is targeting Mphuthi in retaliation for her disclosures.

INSETA, Services SETA and MICT SETA: More red flags

In July 2024 and again in April 2025, OUTA submitted detailed information to the Auditor-General of South Africa (AGSA) to assist with audits of SETAs. This information included:

• INSETA’s office rental tender, which raised questions about whether the evaluation process was fair and whether there had been substantially better-priced office space available, especially at the time shortly after the COVID-19 pandemic had commenced, when market-related costs of office rental space in the area had reduced significantly.
• INSETA’s office relocation contract was another concern. Valued at R14 million, it was awarded to Omphi Construction. OUTA could not find any indication that Omphi had the required experience for the job, and found it had previously been contracted by another entity for cleaning services.
• OUTA also noted the December 2023 cancellation of Graduate Institute of Financial Sciences (GIFS) accreditation which, despite a court order, was not reinstated. We believe the apparent deliberate or negligence applied in the GIFS de-accreditation will lead to a damages claim of over R200 million against InSETA.
• One of OUTA’s key concerns involved INSETA’s appointment of HV Holdings in a contract valued at R18 million to clean up data and close historical learner records. HV Holdings was an accredited skills development provider, raising concerns over a potential conflict of interest. OUTA’s investigation found that one of the company’s directors had business ties to the former INSETA board chair, while another director was employed at a tertiary education institution. Just five months after the contract was awarded, HV Holdings withdrew from providing its services, six months after winning the tender, citing “unforeseen financial constraints and other operational challenges”. OUTA has asked the AGSA to establish how much was paid to HV Holdings and what work was done.
• At Services SETA OUTA raised concerns over R1 billion spent on skills development centres, many of which are reportedly not operational and/or vandalised. OUTA has asked the AGSA to establish whether any needs analysis was done, who owns the centres, how much was spent, and which centres are operational.
• CETA has similarly awarded tenders for the construction of skills development centres, at excessively high costs.
• OUTA has also flagged high value contracts awarded by the Services SETA to Five Star Communication and Star Sign and Print, for branded items, printing and production of the annual report. OUTA has previously exposed these contracts – and found that CETA also used Five Star Communication, in what appears to be another irregular appointment.
• On the Media, Information and Communication Technologies SETA (MICT SETA), OUTA received allegations that a board member had established a business that benefited from MICT SETA funded learnerships.

OUTA action

OUTA will submit its full CETA investigation report, including annexures like the Gobodo report and the draft Duja report, to the Portfolio Committee on Higher Education, to assist the committee with oversight. OUTA has also written to Minister Manamela, requesting a meeting to discuss the widespread governance failures in the SETAs, the lack of action on forensic reports like the Duja report, and the growing risk that public money continues to be spent without accountability.

“We’re calling for a frank conversation with Minister Manamela,” says Duvenage. “It’s time for a reset. The sector desperately needs transparent leadership, independent boards, and the political will to act on evidence that’s already been paid for.”

“OUTA is concerned that the findings and recommendations of a costly forensic report (and two legal opinions) have not been implemented almost four years after it was finalised,” says OUTA’s report on the CETA. “It is further an absolute disgrace that an entity uses taxpayers’ money to appoint forensic investigators and legal specialists without acting on the findings of the investigations.”

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