BANKSETA ANNUAL REPORT 2023

ANNUAL FINANCIAL STATEMENTS ACCOUNTING POLICIES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2023 6. EXPENDITURE (continued) 6.1.1 Retrospective adjustments by SARS The SETA refunds amounts to employers in the form of mandatory grants, based on information from SARS. Where SARS retrospectively amends the information on levies collected, it may result in mandatory grants that have been paid to certain employers that are in excess of the amount the SETA is permitted to have granted to employers. A receivable relating to the overpayment to the employer in earlier periods is raised as the amount of such mandatory grant over payment, net of bad debts and provision for irrecoverable amounts. 6.2 Discretionary grants A SETA may allocate discretionary grants to employers who have submitted an application for a discretionary grant in the prescribed form within the agreed upon cut-off period. 6.2.1 Discretionary project expenditure A SETA may, out of surplus mandatory, administration or discretionary levies and in accordance with criteria as defined in the SETA Grant Regulations, allocate funds to employers and other associations or organisations. The criteria for allocating funds are approved by the SETA’s Board. Where necessary it can be required of interested employers, associations or organisations to complete and submit a funding application for consideration and approval by the SETA. A SETA allocates discretionary grants to employers who have submitted an application for a discretionary grant in the prescribed form within the agreed upon cut-off period. Discretionary grant expenditure is recognised as expenses in the period in which they are incurred and in which the conditions are met.

Discretionary project expenditure comprises:

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costs that relate directly to the specific contract;

- costs that are attributable to contract activity in general and can be allocated to the project; and - such other costs as are specifically chargeable to the SETA under the terms of the contract. Such costs are allocated using methods that are systematic and rational and are applied consistently to all costs having similar characteristics.

Project costs are recognised as expenses in the period in which they are incurred.

6.3 Administration expenditure The Skills Development Levies Act, 1999 (Act No. 9 of 1999) as amended stipulates that a maximum of 10% of the levy income for the sector may be used for the SETA’s operational administration expenses. An additional maximum of 0.5% of the sector levy income is contributed by the SETA to the Quality Council for Trade and Occupations (QCTO) to fund the QCTO’s activities. The Minister determines the annual QCTO contribution. In exceptional circumstances and on application by the SETA, the Minister may approve that the SETA exceed the 10.5% administration expense limit. In cases where the SETA has exceeded this administration expense limit without prior approval, the SETA may apply to the Minister for condonation.

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BANKSETA ANNUAL REPORT 2022/23