Training authority tackles claim challenges
The NTA has taken key steps taken to improve the employer training grant claim process and make it more employer-friendly in the interim.
Jo-Mare Duddy – More than 2 800 employers have registered with the Namibia Training Authority (NTA) and more than N1 billion has been collected in vocational education training levies since the registration of VET levy payers started early in January 2014.
Challenges remain with the administration of the VET levy, but the training authority “continues to make solid progress in this regard”, the NTA’s manager for corporate communications, marketing and advocacy, Mornay Louw, told Business7.
According to the authority’s latest annual report, tabled in Parliament recently, a cumulative total of N$910 million, including interest of N$61.2 million, was collected in levies in 2016/17, while N$111.6 million was paid out in employer training grant (ETG) claims.
At the end of the 2017/18 financial year, a total of N$1 332 801 930.96 had been collected in levies, inclusive of total interest of about N$122.45 million.
Louw said claim payouts are ongoing under all reporting cycles. “Although it has stabilised for 2014/15 and 2015/16, the NTA anticipates a good number of claims to be paid out under the 2016/17 cycle over the next few months,” he said.
According to the annual report, ETG claims worth N$69 million were received in 2014/15, of which N$47.1 million or 68% was paid out. In 2015/16, only N$39.2 million or 32% of the claims to the tune of N$122 million were settled. In 2016/17 the figure was about 15% - N$25.3 million of N$164 million.
The administration of VET levies was one of the areas in which the NTA underperformed in 2016/17, according to the annual report. In the financial year under review, the authority only achieved half of its target of 50%.
According to Louw, this is “largely the result of teething problems towards ensuring compliance amongst VET levy employers and towards ensuring the timeous processing and disbursement of ETG claims to employers”.
“The effective and efficient administration of the VET levy is of significant strategic importance for the NTA, and indeed represents a standalone pillar on the organisation’s rolling five-year strategic plan.” An improvement in terms of strategic execution to 69% has been recorded for the 2017/18 cycle, he said.
Louw said the processing of individual claims is often delayed or halted because of incompleteness and a lack of valid evidence documentation. “Furthermore, and in line with the regulations, the NTA can also not honour a claim payment when there exists outstanding interest on such an account. The NTA can also only honour payments up to 50% of what employers paid as levies. Claims submitted by employers often exceed this 50% ceiling,” he said.
Challenges
Volumes of evidence were highlighted in the annual report as one of the challenges. For each application submitted, employers are required to submit evidence of training implementation, including the course outline and attendance registers, as well as evidence of total cost, which includes tax invoices and proof of payment.
“Given the documentation volumes submitted, the process for evaluation of applications takes long,” the report states.
Insufficient evidence is another stumbling block.
According to the annual report, 108 out of 356 employers – or 30% - in the 2014/15 financial year were issued with rejection letters because of insufficient evidence. In 2015/16, it was nearly 26% or 93 out of 361 employers.
The open-ended re-submission of evidence too delays the claims settlement process. Employers are allowed to re-submit evidence for any rejected application. “This means that evidence for applications from 2014 is still being re-submitted. This result in a back-and-forth process and ongoing evaluations,” the report says.
The definition of training is also problematic. “Despite the all-inclusive definition as provided for under the VET Act, some employers have raised concerns that a number of their training interventions are not eligible for the grant, as the seemingly do not meet the definition,” the annual report states.
Mitigation
According to the annual report: “In mitigating these challenges, the NTA has embarked on reviewing the policy statements pertaining to the disbursement of the ETG. In addition, the VET levy regulations are also going to be reviewed.”
Louw told Business7 that the process to review the policy statements is underway and yet to be completed.
Key steps taken in the interim to improve the claim process and make it more employer-friendly include the adoption by the board of directors of amendments to the evidence requirements to accompany ETG claims, he said.
“These alternatives now include inter alia certificates of attendance, course registration forms and training service provider receipts for training conducted internally; and assessment result statements, letters with names of training course attendees and payroll reports for training conducted externally.”
Louw said “these changes have already resulted in a more streamlined and efficient claims process on the part of employers, as witnessed under the most recent (2016/17) ETG claim submission round”.
Regarding the review of the VET levy regulations, he said: “The NTA appreciates that the review of the gazetted VET levy regulations requires thorough and deep consultation with those stakeholders key to this programme’s implementation and ongoing success.”
He said the consultation process has kicked off “in earnest” and have taken place with the board of directors and the ministry of higher education, training and innovation (MHETI). As a next step, the NTA intends to engage the broader industry sector, which includes all VET levy-registered employers, Louw added.
Compliance inspectors
The VET Act requires that the education minister appoints compliance inspectors in line with the laws governing the public service.
“Although the NTA anticipated that the appointment of compliance inspectors to be finalised before the end of 2017/18 financial year, as stated in the 2017/2018 Annual Report, the process is yet to be finalised,” Louw said.
The NTA has commenced the process of recruitment of the compliance inspectors with the assistance of the Public Service Commission secretariat and the MHETI. Recommendations have been forwarded to MHETI for consideration and approval, he said.
These inspectors will also help the NTA in overcoming the challenge to determine the exact total of employers who qualify to pay levies, as there is no database that could support the authority in enforcing compliance in this regard, Louw said. Site verification visits could be performed to verify the accuracy of the basis used by registered employers to calculate their levy payments.
“As a measure to ensure all eligible employers are identified and registered, the NTA engaged the ministry of finance and other institutions to solicit their databases of employers to ascertain their eligibility for the VET levy. Advocacy campaigns have also been carried out to sensitise employers of their obligations to register and pay the VET levy,” he said.
Challenges remain with the administration of the VET levy, but the training authority “continues to make solid progress in this regard”, the NTA’s manager for corporate communications, marketing and advocacy, Mornay Louw, told Business7.
According to the authority’s latest annual report, tabled in Parliament recently, a cumulative total of N$910 million, including interest of N$61.2 million, was collected in levies in 2016/17, while N$111.6 million was paid out in employer training grant (ETG) claims.
At the end of the 2017/18 financial year, a total of N$1 332 801 930.96 had been collected in levies, inclusive of total interest of about N$122.45 million.
Louw said claim payouts are ongoing under all reporting cycles. “Although it has stabilised for 2014/15 and 2015/16, the NTA anticipates a good number of claims to be paid out under the 2016/17 cycle over the next few months,” he said.
According to the annual report, ETG claims worth N$69 million were received in 2014/15, of which N$47.1 million or 68% was paid out. In 2015/16, only N$39.2 million or 32% of the claims to the tune of N$122 million were settled. In 2016/17 the figure was about 15% - N$25.3 million of N$164 million.
The administration of VET levies was one of the areas in which the NTA underperformed in 2016/17, according to the annual report. In the financial year under review, the authority only achieved half of its target of 50%.
According to Louw, this is “largely the result of teething problems towards ensuring compliance amongst VET levy employers and towards ensuring the timeous processing and disbursement of ETG claims to employers”.
“The effective and efficient administration of the VET levy is of significant strategic importance for the NTA, and indeed represents a standalone pillar on the organisation’s rolling five-year strategic plan.” An improvement in terms of strategic execution to 69% has been recorded for the 2017/18 cycle, he said.
Louw said the processing of individual claims is often delayed or halted because of incompleteness and a lack of valid evidence documentation. “Furthermore, and in line with the regulations, the NTA can also not honour a claim payment when there exists outstanding interest on such an account. The NTA can also only honour payments up to 50% of what employers paid as levies. Claims submitted by employers often exceed this 50% ceiling,” he said.
Challenges
Volumes of evidence were highlighted in the annual report as one of the challenges. For each application submitted, employers are required to submit evidence of training implementation, including the course outline and attendance registers, as well as evidence of total cost, which includes tax invoices and proof of payment.
“Given the documentation volumes submitted, the process for evaluation of applications takes long,” the report states.
Insufficient evidence is another stumbling block.
According to the annual report, 108 out of 356 employers – or 30% - in the 2014/15 financial year were issued with rejection letters because of insufficient evidence. In 2015/16, it was nearly 26% or 93 out of 361 employers.
The open-ended re-submission of evidence too delays the claims settlement process. Employers are allowed to re-submit evidence for any rejected application. “This means that evidence for applications from 2014 is still being re-submitted. This result in a back-and-forth process and ongoing evaluations,” the report says.
The definition of training is also problematic. “Despite the all-inclusive definition as provided for under the VET Act, some employers have raised concerns that a number of their training interventions are not eligible for the grant, as the seemingly do not meet the definition,” the annual report states.
Mitigation
According to the annual report: “In mitigating these challenges, the NTA has embarked on reviewing the policy statements pertaining to the disbursement of the ETG. In addition, the VET levy regulations are also going to be reviewed.”
Louw told Business7 that the process to review the policy statements is underway and yet to be completed.
Key steps taken in the interim to improve the claim process and make it more employer-friendly include the adoption by the board of directors of amendments to the evidence requirements to accompany ETG claims, he said.
“These alternatives now include inter alia certificates of attendance, course registration forms and training service provider receipts for training conducted internally; and assessment result statements, letters with names of training course attendees and payroll reports for training conducted externally.”
Louw said “these changes have already resulted in a more streamlined and efficient claims process on the part of employers, as witnessed under the most recent (2016/17) ETG claim submission round”.
Regarding the review of the VET levy regulations, he said: “The NTA appreciates that the review of the gazetted VET levy regulations requires thorough and deep consultation with those stakeholders key to this programme’s implementation and ongoing success.”
He said the consultation process has kicked off “in earnest” and have taken place with the board of directors and the ministry of higher education, training and innovation (MHETI). As a next step, the NTA intends to engage the broader industry sector, which includes all VET levy-registered employers, Louw added.
Compliance inspectors
The VET Act requires that the education minister appoints compliance inspectors in line with the laws governing the public service.
“Although the NTA anticipated that the appointment of compliance inspectors to be finalised before the end of 2017/18 financial year, as stated in the 2017/2018 Annual Report, the process is yet to be finalised,” Louw said.
The NTA has commenced the process of recruitment of the compliance inspectors with the assistance of the Public Service Commission secretariat and the MHETI. Recommendations have been forwarded to MHETI for consideration and approval, he said.
These inspectors will also help the NTA in overcoming the challenge to determine the exact total of employers who qualify to pay levies, as there is no database that could support the authority in enforcing compliance in this regard, Louw said. Site verification visits could be performed to verify the accuracy of the basis used by registered employers to calculate their levy payments.
“As a measure to ensure all eligible employers are identified and registered, the NTA engaged the ministry of finance and other institutions to solicit their databases of employers to ascertain their eligibility for the VET levy. Advocacy campaigns have also been carried out to sensitise employers of their obligations to register and pay the VET levy,” he said.
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