Parliamentary Scrutiny Ignites Over ETDP SETA's R637 Million Mystery
In a development that has sent shockwaves through South Africa's higher education landscape, the Portfolio Committee on Higher Education and Training convened a critical meeting on April 23, 2026, to interrogate the Education, Training and Development Practices Sector Education and Training Authority (ETDP SETA) about its inability to account for R637 million in grant expenditure. This sum, part of discretionary grants intended for bursaries, internships, and skills programmes targeting students at universities and Technical and Vocational Education and Training (TVET) colleges, highlights deep concerns over financial accountability in skills development funding.
The meeting, chaired by Mr Tebogo Letsie, brought together lawmakers, Auditor-General South Africa (AGSA) representatives, and ETDP SETA leadership to unpack the audit findings from the 2024/25 financial year. Funds like these are lifelines for aspiring educators and trainers, supporting enrolment in education-related qualifications at public universities such as the University of Pretoria, University of Johannesburg, and numerous TVET institutions across provinces like Gauteng and KwaZulu-Natal.
Understanding the Role of ETDP SETA in South African Higher Education
The ETDP SETA, established under the Skills Development Act of 1998, plays a pivotal role in bridging skills gaps within the education, training, and development sector. It collects a 1% skills development levy from qualifying employers' payrolls—primarily schools, colleges, universities, and training providers—and redistributes these as mandatory and discretionary grants. In the 2023/24 financial year alone, the SETA reported total revenue of over R1.28 billion, with discretionary grants amounting to R672 million used for programmes like bursaries for unemployed learners pursuing NQF levels 5-8 at higher education institutions (HEIs).
These grants fund critical initiatives: bursaries covering tuition, accommodation, and stipends for students in teaching diplomas, higher certificates in education, and degrees in human resource development; learnerships placing TVET graduates in practical training; and internships for newly qualified educators at universities like the University of the Western Cape or North-West University. For context, in 2023/24, ETDP SETA awarded 861 new bursaries and 344 renewals, alongside placing over 1,300 TVET students in work-integrated learning—essential for completing National Accredited Technical Education Diploma (NATED) programmes.
Without robust oversight, such funding directly impacts access to higher education for underprivileged youth aiming for careers in teaching or training, exacerbating South Africa's teacher shortage, estimated at 24,000 posts by the Department of Basic Education.
Unpacking the Auditor-General's Damning Findings
The AGSA's audit report for 2024/25 flagged a 'limitation of scope' on R637.6 million in discretionary grant expenditure, meaning auditors could not verify how the funds were spent due to absent supporting documentation—for 100% of the amount. This included 179 transactions totaling around R116 million where records were entirely missing, preventing confirmation that money reached intended beneficiaries like university students or TVET interns.
Discretionary grants, unlike mandatory ones (20% levy refunds for workplace skills plans), are project-based and competitive, prioritising scarce skills in education. They typically support full-cost bursaries (up to R150,000 per student annually) at partnered HEIs such as Stellenbosch University or Cape Peninsula University of Technology, focusing on fields like early childhood development and adult education.
Committee members expressed fury over the lapse, with the AGSA confirming no documents had been submitted despite requests. This echoes prior irregularities: ETDP SETA's 2023/24 report disclosed R5.878 million in irregular expenditure, though lower than the current probe.
The Wasteful Lease Adding Fuel to the Fire
Compounding the grant issues, ETDP SETA faces accusations of squandering R15 million on a Centurion office lease for uninhabitable space. The building, costing R690,000 monthly, forced remote work for staff, yet payments continued during a 13-month transition. Former CEO Nombulelo Nxesi defended it as necessary amid safety concerns, totaling R8.97 million paid.
MPs lambasted the lack of due diligence—no expert inspections or professional advice before signing. This diverted resources from core mandates like funding TVET college infrastructure or university partnerships for educator training.
Parliament's post-meeting statement underscored these failures, noting employees' displacement harmed operations.
ETDP SETA's Defence: Human Error or Systemic Flaw?
During the April 23 engagement, Acting CEO Nokukhanya Mafahla and team refuted 'missing funds' claims, attributing the AGSA flag to misclassification. They insisted documents exist but were logged under accruals, with R42 million in student stipends reversed due to a recording error from May 2024. The full R637 million reportedly remains in the grants account, not disbursed improperly.
Chairperson Letsie acknowledged better communication could have averted media alarm but stressed record-keeping gaps undermine public trust. Minister Buti Manamela called allegations 'serious,' highlighting employee impacts.
Photo by Finde Zukunft on Unsplash
Political Backlash and Criminal Charges
The Democratic Alliance (DA) swiftly laid criminal charges against leadership, citing violations of the Public Finance Management Act (PFMA) Sections 86(1)-(2), Prevention and Combating of Corrupt Activities Act Section 34, and fraud. DA MP Karabo Khakhau demanded investigations, fund recovery, and prosecutions, arguing governance breakdowns risked youth skills development.
- Failure to prevent irregular expenditure
- No disciplinary action on officials
- Inadequate financial records
The DA's charge sheet references SAPS case opening, signalling potential prosecutions.
Unions like COSATU decried malfeasance, demanding probes to protect workers and wasteful spending prevention.
Ripple Effects on Universities and TVET Colleges
The probe threatens future funding certainty. In 2023/24, ETDP SETA's bursaries supported hundreds at HEIs; delays could spike student debt, dropouts, and teacher shortages. TVET colleges, reliant on SETA for work-integrated learning (1,300 placements last year), face stalled NATED completions.
Institutions like University of Fort Hare or False Bay TVET College, common partners, worry about grant pipelines. Broader SETA model—levies funding 80% discretionary/mandatory—under strain from scandals erodes employer confidence.
| Year | Bursaries Awarded | TVET WIL Placements | Discretionary Spend (R million) |
|---|---|---|---|
| 2023/24 | 1,205 (new+renewal) | 1,300+ | 672 |
A Pattern of SETA Mismanagement?
This isn't isolated: Services SETA's R163 million biometric scandal (2025), PetroSA's attempted R1.2 billion NSFAS diversion. Cumulative SETA irregular expenditure hits billions, per AGSA. Higher ed feels it via disrupted bursary flows to education quals.
Reforms post-National Skills Fund (NSF) scandals include independent chairperson panels, but implementation lags.
Pathways to Reform and Recovery
Committee resolutions urge swift document submission to AGSA, disciplinary probes, and forensic audits. Minister Manamela pushes digital tracking for grants. Experts advocate:
- Blockchain for grant tracing
- Third-party verification for bursaries
- Performance-based levy refunds
ETDP SETA's 2025/26 plan targets 190,000 post-school opportunities system-wide; restoring trust is key.
Pre-meeting alert signals ongoing oversight.
Outlook for Skills Funding in Higher Education
Resolution could bolster SETA credibility, ensuring R1+ billion annually reaches 10,000+ students. Universities/TVETs urge transparency to sustain partnerships. Positive: ETDP SETA's 2023/24 unqualified audit shows progress; full compliance could unlock more NSF integration.
Stakeholders eye DHET's NSF overhaul for hybrid funding, blending levies with state budgets for resilient higher ed access.
Photo by Osmany M Leyva Aldana on Unsplash
As investigations unfold, South Africa's higher education sector watches closely. Robust accountability will safeguard bursaries powering the next generation of educators, vital for national development.