OUTA: R21 BILLION IN SKILLS FUNDING MISUSED WHILE YOUTH ARE ‘LEFT STRANDED’
- BEE NEWS
- Aug 6
- 3 min read
Lerato Mpembe | 4 August 2025
The Organisation Undoing Tax Abuse (Outa) has raised alarm over what it calls widespread mismanagement and corruption in South Africa’s Sector Education and Training Authorities (SETAs), claiming that billions in public funds meant for youth skills development are being wasted while unemployed young people remain neglected.
In a detailed report released as a formal appeal to newly appointed Minister of Higher Education and Training, Buti Manamela, Outa pointed to “serious governance failures” within the SETA structure, with the Construction Education and Training Authority (CETA) identified as a key concern. The watchdog warned that unless immediate action is taken to clean up the R21 billion-a-year sector, the credibility of the country’s entire skills development framework may collapse.
“The SETA model is failing. These institutions are bleeding public funds while the youth they should serve are left stranded,” said Outa CEO Wayne Duvenage.“We’re dealing with recycled leadership, dodgy tenders, and investigations that are hidden or ignored. That’s not oversight; that’s a cover-up.”
Billions Mismanaged While Centres Decay
The SETAs are funded through the Skills Development Levy, a compulsory payroll tax meant to drive training and upskilling across multiple industries. But Outa’s findings suggest that instead of empowering young South Africans with real skills, many SETAs are engaged in questionable procurement practices, wasteful expenditure, and retaliation against whistleblowers.
Among the key examples cited is the Services SETA, where Outa questioned how over R1 billion was spent on skills development centres—many of which have reportedly been vandalised, stand incomplete, or are non-operational. Photographic evidence and site inspections revealed dilapidated buildings in several provinces, raising concerns about infrastructure planning, delivery, and oversight.
In the case of INSETA (Insurance Sector Education and Training Authority), Outa criticised an R18 million contract awarded to clean up historical learner records. The contract was flagged because of alleged links between the awarded company and former board members, suggesting possible conflicts of interest.
CETA at the Centre of Forensic Reports and Retaliation
Outa’s strongest focus was on CETA, where two forensic reports uncovered damning evidence:• A 2019 report by Gobodo Forensic and Investigative Accounting, commissioned by the Department of Higher Education and Training (DHET), highlighted irregular tender procedures and victimisation of staff who raised concerns.• A second report by Duja Consulting, commissioned in 2020 for R18.9 million, found procurement irregularities in all 24 contracts it assessed. The report recommended disciplinary steps against officials and raised serious red flags—but the findings were never made public.
Despite being handed to then-Minister Blade Nzimande in 2021, the Duja report remains buried. Outa reviewed two legal opinions related to this report and criticised the lack of transparency, calling it an “insult to accountability.”
“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,” said Rudie Heyneke, Outa’s Senior Project Manager.
Outa also revealed that one whistleblower who initially exposed procurement issues within CETA was cleared and reinstated—only to face renewed disciplinary action, which the organisation believes is retaliatory.
Outa Requests Urgent Action and Oversight
Outa has written to Minister Buti Manamela requesting a formal meeting and immediate intervention. The Department of Higher Education and Training, through its spokesperson Mandla Tshabalala, confirmed receipt of the request, saying:
“It has only been a few days since the appointment of Minister Buti Manamela, so we do not have all the information at the moment. We are still to gather reports from the SETAs.”
Outa intends to table its full dossier—including the Duja draft report, audit summaries, and internal correspondence—to Parliament’s Portfolio Committee on Higher Education and Training, calling for a comprehensive investigation and urgent reform.
A System in Crisis: Call for Reform
The SETA system, once envisioned as a bridge between education and employment, is under increasing scrutiny. Beyond CETA, Outa also found irregularities at the MICT SETA (Media, Information and Communication Technologies), including over-priced tenders, abandoned training centres, and service providers allegedly linked to board members or executives.
“We’re calling for a frank conversation with Minister Manamela,” said 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 Raised:
• R21 billion in SETA funds being distributed yearly without proper oversight.• Forensic reports ignored or kept confidential despite damning findings.• Whistleblower victimisation continuing despite legal protections.• Abandoned or non-functional training centres, despite high budgets.• Tender processes lacking transparency, with alleged political or personal ties.
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