Competence Must Trump Cronyism

OUTA has filed legal action aimed at overturning the re-appointment of Gugu Mkhize as the CEO of the Insurance Sector Education and Training Authority (Inseta) for another five years.

The action was lodged in the Pretoria High Court in December 2025, and has since been served on the respondents, Minister of Higher Education and Training Buti Manamela, the Inseta and its board, the Department of Higher Education and Training, and Mkhize.

Mkhize was the Inseta CEO for the five years from 1 April 2020 to 31 March 2025. Her reappointment was reported on 2 October 2025.

OUTA’s application asks the court to review and set aside the appointment, declare that the appointment is invalid and unconstitutional, and order the Inseta board to run a new transparent process for the appointment. The Inseta board (the accounting authority) is responsible for finding and nominating a CEO, and it is the Minister’s responsibility to appoint the CEO based on the board’s recommendation.

“This court case is not just about one appointment. It is about whether the rules that govern public institutions still matter. The implications go far beyond one individual. At its core, this case asks a fundamental question: were the rules followed or were they bypassed?” says Advocate Stefanie Fick, OUTA’s Executive Director for Accountability.

“The legal framework is clear. Even when reappointing a serving CEO, the process must be transparent, competitive and properly overseen. Performance must be assessed and recommendations must come from a lawfully constituted board.

“OUTA believes this did not happen. Instead, the re-appointment of Ms Mkhize appears to have been pushed through while the accounting authority – the board – was incomplete, without an appointed chairperson, and under urgent directives that compressed or bypassed mandatory processes.”

The Inseta’s previous board held office from April 2020 to 31 March 2025. A new board was appointed by the Minister from 30 September 2025.

Mkhize had been the CEO whose contract expired on 31 March 2025, and was extended to 30 September 2025.

On 30 September 2025, the new board members were appointed and, the same day, the Minister directed them to implement one of three options:

• Identify three suitable CEO candidates from the executive management team, and submit a recommendation to the Minister for the new CEO; or
• Start recruiting and selecting a new CEO; or
• Submit a recommendation for the reappointment of the incumbent CEO (Mkhize) for another five years. If this option was chosen, it was to include performance reports.

OUTA’s founding affidavit in this matter is by Fick. “OUTA is concerned that the reappointment appears to be based on political cronyism and expediency, rather than recommending and appointing the best-qualified person to the position,” says Fick in the affidavit, noting that the appointment process appeared to be “rife with procedural irregularities”.

The Inseta board didn’t have a chairperson at the time of the recommendation to the Minister, raising questions about the legality of the process. In addition, there were concerns that not all the board members had been appointed.

On 15 October 2025, OUTA wrote to the Minister expressing concern over the appointment. The Minister’s response failed to address the concerns.

Gugu Mkhize: Unfit to be CEO

Fick’s affidavit says that Mkhize’s performance over the previous five years left her unfit for the job. Under Mkhize, the Inseta received four qualified audits for 2022, 2023, 2024 and 2025. The Auditor-General’s annual audit reports pointed to significant internal control and record-keeping deficiencies, failure to implement corrections, and failure to ensure legally required financial and performance reports.

“The Auditor General’s reports deal with systemic and perpetual failures of material financial misstatements, failure to observe the provisions of the PFMA [Public Finance Management Act], failure to manage expenses leading to irregular expenditure (caused by non-compliance with supply chain regulations), and failure to implement, enforce, and maintain sufficient internal financial controls. These are all the CEO’s responsibilities,” says Fick in the affidavit.

“Based on the continuous financial and management failures identified by the Auditor General, the Minister could never have concluded that Ms Mkhize’s past performance as CEO met the threshold of competence, diligence and commitment to justify her appointment.

“The Minister preferred Ms Mkhize over other candidates, which shows a clear bias.”

Do the SETAs provide value for money?

The 21 SETAs are funded through Skills Development Levies charged to employers. In 2025/26, the SETAs are expected to receive about R20.805 billion from these levies.

OUTA has repeatedly raised concern over some of the SETAs, after OUTA investigations pointed to corruption, waste and governance failures.

In August 2025, a review of the SETA system, published by the Bureau for Economic Research, Economic Research Southern Africa and Impumelelo Growth Lab, found that despite R164 billion in levy revenue collected over 13 years for the combined SETAs, performance across the SETA system has deteriorated, with certifications down 23% while revenue rose 46%. The report noted that the cost per SETA certification (R181 000) was more than double that of a university enrolment (R76 000).