Cape Town - Under-spending remained a stumbling block for the National Skills Fund (NSF) since its establishment in 1998, Higher Education Minister Blade Nzimande said in parliament on Wednesday.
"The department took over the responsibility of the National Skills Fund on the 1st of November 2009. We inherited a fund that had huge amounts of unspent money.
"We have had to do a lot of work to review and clean it up... It had projects all over the place," Nzimande told a Portfolio Committee on Higher Education and Training.
Chief director of the NSF Mvuyisi Macikama said under-spending had "characterised" the fund for the past 13 years.
This had resulted from a changeover from one phase of the National Skills Development Strategy (NSDS) to the next.
The transfer of skills development responsibilities from the department of labour to the department of higher education also brought about "unforeseen transitional challenges", Macikama said.
General capacity constraints also contributed to the NSF not being able to spend its funds adequately.
These included the neglect of public training institutions like further education and training colleges and state-owned enterprises.
He added that undue focus was placed on short courses, mainly by private institutions, most of which had not led to a full qualification or decent job opportunities.
He said that for the current financial year, the NSF had a budget deficit of just under R1bn due to availability of surplus funds in NSF coffers from previous years.
"In recognising the reality of under-spending in the current year, the NSF has revised its 2010/11 budget to fall in line with expected spending."
Macikama said that the NSF was currently involved in the "wrapping-up processes" of the second phase of the NSDS. These included the closure of current projects that had run their full period, the production of closure reports, the transfer of unutilised funds back to the NSF and the development of a six-year funding report for the NSDS-II.
The NSF was also busy preparing for the implementation of the third phase of the NSDS.
Nzimande said another area of concern for NSF was that the fund was being treated like an "ATM".
"The NSF did not have the capacity to monitor the spending of its funds.
"We were concerned that it was functioning like an ATM, if not a father Christmas."
Nzimande said some Sector Education and Training Authorities (Setas) were, in the past, "double dipping". He said they would apply for funds from the NSF even though they had not used up existing funds.
He said Setas should now apply to the NSF for funds if they had programmes in place and could show how the funds would be used.
He said the issue of funding and getting the NSF back on track was a "huge challenge".
"We are not going to resolve it in a year, but we are quite certain that we are going to be using this money to make a huge impact."
Macikama said R150m had been made available to the National Student Financial Aid Scheme to fund full cost of study in critical skills and for rural students in all institutions of higher learning in the country.
The money was also intended to cover 820 first-year enrolments, and to fund the education of 335 financially deserving rural students as well as 300 students with disabilities.
A further R100m had been allocated to Career Wise to fund full cost of study of first-year and continuing students in critical skills required by the country.
About R94m was earmarked for the allocation to the National Research Foundation to fund students in postgraduate, masters', doctoral and high-level research programmes.
The NSF also set aside R200m to the extended public works programme for the training of 40 000 people under the programme.
Macikama said that the NSF currently supported 268 community-based skill development organisations.
Six service providers had been contracted to implement skills development projects in the Eastern Cape, KwaZulu-Natal and Mpumalanga at a cost of R10m.
There was also a focus on emerging entrepreneurs in rural areas.
Nzimande said the focus was mostly "rural" because black Africans and coloureds represented the most "disadvantaged and vulnerable" groups.
"The fact is that the most disadvantaged, vulnerable 18- to 20-year-olds are black Africans and coloureds. That's our priority as this government.
"We aren't saying there aren't problems with Indians or whites, but really to compare the two is like chalk and cheese. So our priority is the most vulnerable groups."
Macikama said a full report on the exact numbers of people trained through the various programmes was being compiled and would be available in June.