Discretionary grant projects

Index

• Glossary
• Section One - Background
• Introduction
• Guiding Principles
• The Purpose of this Guideline
• Who can Apply
• How to Apply
• When to Apply
• Section Two - Discretionary Grant Criteria and Formulae
  • Criteria for Discretionary Grants
  • Note on Funding Formulae for Different Discretionary Grant Categories
  • Items that will not be considered for Discretionary Grant Funding
• Section Three - The Discretionary Grant Procedure
• Table of Procedure Steps
• Checklist for Making Discretionary Grant Applications
• Key Considerations for Reporting on the Utilisation of the Grant

ONE

BACKGROUND

The Skills Development Act No 97 of 1998 aims, amongst other things, to develop and improve the skills levels of South Africans. Increased investment in education and training was needed for this purpose and a skills development levy was therefore introduced. Further to this, the Act also makes provision for the quality assurance of education and training related to workplace skills development.

The Seta’s were established as the institutional vehicles to implement the Skills Development and related Acts. An important function of the SETAs is the management of funds received as a result of the levy income from their respective economic sectors. The Skills Development Levies Act No 9 of 1999 is the legislation that specifically guides this process.

Of the total levy contributions by employers in terms of section 3(1) of the Skills Development Levies Act, the following provides a breakdown of how the levy contributions are allocated for the period April to March of each Discretionary Grant Year Cycle:

• 20% is allocated to the National Skills Fund/SARS
• 10% is allocated to SETA’s for administrative purposes 
• 60% is allocated for mandatory grants
• 10% is allocated for discretionary grants

 The purpose of Discretionary Grants is to encourage employers and stakeholders to contribute towards the achievement of the objectives of the Human Resources Development Strategy (HRDS), the National Skills Development Strategy (NSDS) and the CHIETA’s Sector Skills Plan (SSP). Discretionary grants are available to applicants who engage in skills development practices that will lead to the achievement of these objectives and targets.

In addition to the 10% of the Levy contributions that are allocated to the Discretionary Grant, any unclaimed or surplus funds remaining after mandatory grants have been disbursed for the applicable year and any monies earned by a SETA as interest, are transferred to the Discretionary Grant Fund. The amount available for Discretionary Grants varies from year to year and is determined at the beginning of each Discretionary Grant cycle.

Since there are limited funds available, this guideline has been developed to manage the disbursement of these discretionary funds. It provides detailed criteria for the purpose of making application and award decisions. In addition, given the nature of grant cycles, the Discretionary Grant will only apply for the forthcoming year’s activities. No retrospective funding will be considered.  

A. The evaluation process will take two months. The applicants will be informed of the outcome of their application at the end of August and the first tranche payment will be made after a contract has been signed.
B. As the CHIETA provides grants utilizing funds from the previous funding cycle (April 2004 to March 2005) the projects to be funded should not have commenced before the current financial year (April 2005 to March 2006)
C. As a rule of thumb, Discretionary Grants should benefit the chemical industries sector.

This guideline advises Applicants on the Discretionary Grant process, how to apply for Discretionary Grants, and report on utilization of the grant.

Section 2.1. details criteria for application.

Applicants are to submit their Discretionary Grant application on the prescribed CHIETA Discretionary Grant application form (see Appendix “B”). 

One application form is to be submitted per organisation. However where more than one DG category is being applied for, separate project plans should be prepared to motivate for funds to implement different projects, e.g. if applying to implement the Chemical Operations NQF L2 Learnership, and ABET, two applications are needed.

Applications for Discretionary Grants must be made and approved by the CHIETA for any prioritized training or other activity taking place in the current financial year (April 2005 to March 2006). 

For projects that will not be completed by March 2006, e.g. an eighteen-month Learnership, the application should indicate budget allocations and activities for different financial years. While in-principle approval may be given to a multi-year project, the applicant will need to submit a report and budget motivation by April 2006 in order to access funds to complete the project in the next financial year.

Deadlines for different grant categories are indicated in section 2.1. Please note that the deadline for the majority of applications to reach the CHIETA Projects Division is 30th June 2005.

 TWO
DISCRETIONARY GRANT CRITERIA AND FORMULAE

Criteria for Discretionary Grant Allocations and Applications are reviewed on an annual basis, linked to the CHIETA’s Business Plan targets and the objectives of the National Skills Development Strategy (NSDS).

A further critical consideration is to ensure that any CHIETA strategic projects (either planned or in implementation) complement, and do not overlap with the criteria for Discretionary Grant funding, so that resources are aligned to best achieve the skills development targets and objectives for the chemical industries sector. (See Appendix D for list of approved CHIETA Projects).

Although the new National Skills Development Strategy (NSDS II) comes into effect this year, the funding cycle for leveraging Discretionary Grant support for NSDS II only applies from 2006-2007. NSDS II marks a significant shift and the criteria for the current year (2005-2006) represents a movement towards the new landscape that will be effected fully only in the next funding cycle.

Applications will be evaluated on the basis of:

• Soundness of the proposed intervention,
• Compliance with the Discretionary Grant Guidelines, and
• Prior Discretionary Grant implementation history.

Kindly note that the NSDS beneficiary targets apply:

• 84% black
• 54% women
• 4% people with disabilities

Additional criteria that will be applied to DG applications relate to their “fit” to the CHIETA’s 2005-2006 Business plan targets, as well as principles such as geographic spread and skills transfer.

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Discretionary Grant Training Schedule

These unit costs and funding formulae are provided merely as a guide, and indicate the maximum amount available for different grant categories. Applicants are thus encouraged to work on a duration and level basis, e.g. an eighteen month Learnership will cost more than a Learnership that lasts six months, and in most cases, a Learnership at NQF L6 is likely to be more expensive than a Learnership at NQF L1.

Therefore applicants must provide a budget based on anticipated actual costs, since different initiatives and levels of programmes carry varying costs.

No retrospective increases in grant awards will be made as this has budgetary and management implications for the CHIETA.

Applicants are requested not to apply for funding of the following: 

• Set up costs e.g. start up costs
• Capital expenditure e.g. building costs, computers etc
• Transport and accommodation
• Existing operating expenses e.g. salaries of current employees who will undergo training
• Development costs of learning programmes
• Policy development
• Any similar projects that are funded by the CHIETA, a government department, another SETA or any other establishment
• Learners placed in workplaces outside the chemicals sector
• Employment and Skills Development Agencies outside the chemicals sector

All Discretionary Grant applications will be processed according to the following procedure, which seeks to ensure that Discretionary Grant awards are fair, consistent, valid and reliable.

•  Does the application meet the Discretionary Grant criteria?
• Does my application consist ONLY of Appendix “B” of the guideline and supporting documentation?
• Have I completed a separate project description (section B of the application form) for each grant category applied for?
• Will it reach the CHIETA in time to meet the submission deadline?
• Is the application a product of consultation with stakeholder parties? - If so, have the parties signed section F of the application form (Appendix “B”)?

• Was an original copy delivered by hand / post to the CHIETA offices?
• Are the banking details correct and verified?
• Are there any unspent funds from the previous financial year, and have these been refunded to the CHIETA, or reflected as committed funds, or deducted from the current project budget?
• Are the proposed education and training providers accredited to provide the service they have been earmarked for?

It is a condition of the contract that applicants forward quarterly project progress reports. A standard template will be provided for reporting on project progress.

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Appendix A - Discretionary Grant Activity Schedule