BANKSETA AR 31 AUGUST

BANKSETA spending is guided by legislation which specifies that the entity surrenders 20 per cent of its levies to the National Skills Fund. The remaining 80 per cent is spent as follows: • 20 per cent on mandatory grants for levy paying employers in the sector • 10.5 per cent on administration expenses of the SETA • 49.5 per cent on discretionary grants to support various goals of the National Skills Development Plan. In line with the above spending guidelines, the BANKSETA had an overall improvement in its spending compared to the previous year. Over 98 per cent of mandatory grant levy income received was paid back to qualifying employers as a mandatory grant. Administration expenses were maintained within the permissible 10.5 per cent. Discretionary expenditure improved by 62 per cent to R523 million from R323 million the previous year. Cash and cash equivalents at year end were R1213 million (R1062 in 2020/21) representing a 14 per cent increase from the previous year. Our net surplus at R95 million was 3 per cent lower compared to the 2020/21 year (R98 million). Accumulated reserves increased to R1 062 million from R968 million in the previous year. As alluded to in the opening paragraph, 98 per cent of these reserves are currently committed to a pipeline of skills development projects that will increase our expenditure in the 2022/23 financial year. Capacity Constraints and Challenges While the BANKSETA successfully ramped up its assessment of qualifying discretionary grant applications leading to 98 per cent of its surplus funds being committed to a pipeline of skills development projects, spending, however, lagged behind. This was partly due to stakeholders taking time to commence projects due to a need to finalise preliminary activities such as recruitment, induction and securing workplaces for the practical training component. With the increased volume of skills development projects, the BANKSETA also faced constraints related to the on-site monitoring of its projects

Mr Eubert Mashabane Chief Executive Officer

General Financial Review The past year has been marked by an improvement in the delivery of BANKSETA programmes following the devastation of the Covid-19 pandemic. As is the case for South Africa as a whole, the BANKSETA is steadfast in mitigating some of the operational challenges and obstacles that resulted from the negative impact of the pandemic on the economy and, to this end, has produced a stellar performance that we are pleased to report. Performance for the current year improved to 72 per cent (52 per cent for 2020/21) of our performance indicators being reached, commitment on surplus funds improved to R1 042 million (98%) up from R399 million (41 per cent) in the 2020/21 financial year while project expenditure improved to R523 million from R323 million in 2020/21. The mandatory grant payout ratio to levies received stands at 98 per cent. Spending Trends With the easing of lockdown restrictions during the current year, BANKSETA enjoyed an uninterrupted period of operation leading to overall improvement in income and spending patterns. Total revenue increased 39 per cent to R896 million (R644 million in 2020/21). It should, however, be stressed that the 2020/21 year was marked a four-month levy holiday where employers were exempted from paying skills levies.

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PART A: GENERAL INFORMATION | BANKSETA ANNUAL REPORT 2021/22