An investigation of the efficiency of South Africa's sector education and training authorities (SETA's)

The performance of South African Sector Education and Training Authorities (SETA's) has been increasingly questioned. On this premise, the paper investigated the efficiency of the SETAs with respect to their utilization of funds in order to promote a range of education and training outputs was investigated. More specifically, the study investigated the quantity and quality of five training and education outputs, set by the National Skills Development Strategy (NSDS), in relation to the funding received. Furthermore, the study examined the amount of money spend on administrative expenditure by the various SETAs, as well as the SETAs management of financial reserves. In order to guide the study, as well as analyze the data, a conceptual framework to measure efficiency was based on an input-output model developed by Gupta and Verhoeven (2001). Data were obtained from the published accounting and annual reports for the period 2006 – 2009. The results indicated only two of the SETA's were efficient with respect to their utilization of funds and that only five SETA's consistently met their own targets. The study also shows that if the SETA' s funds had been applied to education and training outputs, rather than for investment purposes, training outputs could have been considerably increased. The paper has implications for the use of public funds with respect to the critical skills shortage confronting the economy.