Services SETA Corruption

Since 2018, OUTA has been investigating corruption and mismanagement in the Sector Education and Training Authorities (SETAs), particularly in the Services SETA.

There are 21 SETAs, funding through levies paid by employers, and they are intended to fund and oversee learnerships, internships, apprenticeships and skills training programmes. The SETAs cover different sectors of the economy.

In November 2018, OUTA exposed the Services SETA’s R163 million contract with Grayson Reed, a company which used a false name and charged the SETA exorbitant amounts for dubious services. In September 2019, the Services SETA finally ended that contract six months early, but failed to reclaim any of the money spent on it.

In June 2023, OUTA exposed the Services SETA's overpriced R36 million contract with Five Star Communications and Projects for branding material, and laid a criminal complaint with the SAPS.

The SETAs are entrusted with enabling the youth to become skilled and gain a foothold in the economy.

The SETAs’ failure to manage their funds responsibly fails the unemployed youth and our country as a whole.

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2023: The Five Star contracts

In June 2023, OUTA laid criminal complaints Andile Nongogo, former CEO of the Services Sector Education and Training Authority (SSETA) and now the NSFAS CEO, and three others, in connection with a tender awarded by the SSETA in August 2016. 

OUTA asked for a police investigation into the conduct of Nongogo, Duduzile Mwelase, a senior manager at SSETA at the time, and Anania Baloyi and Ngwenya Baloyi, both from Five Star Communications and Projects CC, which was awarded the tender. OUTA wants all four individuals to be investigated for alleged fraud and corruption, with Nongogo and Mwelase, who is the senior manager for brand management at SSETA, also to be investigated for contravening the Public Finance Management Act (PFMA).

Five Star was paid R36.962 million for providing branded items to SSETA, including charging R302 000 for a branded tender box, which OUTA estimated was over-inflated by 8 000% or at least R292 000.

Mwelase took delivery of the tender box and Five Star’s invoice was approved by Nongogo. The SSETA paid 29 invoices submitted by Five Star.

OUTA wants companies who charged these exorbitant prices and public officials who approved such inflated payments to be held to account for the abuse of public funds. OUTA also wants such suppliers to be listed on National Treasury’s restricted suppliers’ database to block them from further business with all organs of state.

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"A culture of transparency demands open governance and the disclosure of information except in exceptional circumstances."

– The South African Human Rights Commission, on the pervasive failure by public bodies to honour PAIA requests for information from the public, in its annual PAIA report for 2019/20.

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