PRESENTATION TO THE PORTFOLIO COMMITTEE ON PUBLIC WORKS. COUNCIL FOR THE BUILT ENVIRONMENT 2016/17 ANNUAL REPORT PRESENTATION Acting CEO: Priscilla Mdlalose 03 October 2017

PRESENTATION OUTLINE Purpose Mandate of CBE Built Environment Structure Five Year Strategic Goals and Priority Areas CBE Performance Information Financial Report Professional Councils

The Mandate of CBE CBE is established in terms of Act, No. 4 of 2014 as a juristic person. It is an Entity of the DPW, with the mandate to: a) Promote and protect the interest of the public in the built environment; b) Promote and maintain a sustainable built environment and natural environment; c) Promote ongoing human resources development in the built environment; d) Facilitate participation by the built environment professions in integrated development in the context of national goals; e) Promote appropriate standards of health, safety and environmental protection within the built environment;

The Mandate of CBE f) Promote sound governance of the built environment professions; g) Promote liaison in the field of training in the Republic and elsewhere and to promote the standards of such training in the Republic; h) Serve as a forum where the built environment professions may discuss the relevant i) required qualifications ii) standards of education iii) training and competence iv) promotion of professional status v) legislation impacting on the built environment; and i) Ensure uniform application of norms and guidelines are set by the councils for the professions throughout the built environment.

Built Environment Organogram Structure DPW Minister ECSA Engineering Council of South Africa SACLAP South African Council for the Landscape Architectural Profession SACAP South African Council for the Architectural Profession SACQSP South African Council for the Quantity Surveying Profession SACPCMP South African Council for Project and Construction Management Professions SACPVP South African Council for the Property Valuers CBE

Purpose To provide an account of the CBE Performance during the 2016/17 financial year, as per the commitments made in the 2014 -2019 CBE Strategic Plan and 2016/17 Annual Performance Plan.

Five-Year Strategic Goals & key priorities for 2016/17 The CBE embraces the National Development Plan, The Medium Term Strategic Framework 2014–2019 and the Industrial Policy Action Plan – as reflected in the following Key Outcomes: Outcome 4: Decent employment through inclusive growth Outcome 5: A skilled and capable workforce to support an inclusive growth path Outcome 12: An efficient, effective and development-oriented public service

Five-Year Strategic Goals & key priorities for 2016/17 Programmes NDP Alignment A built environment that is responsive to the developmental and economic priorities of Government. Programme 1:Government Policies and Priorities Outcome 4 – decent employment through inclusive growth (Chapter 3 of the National Development Plan [NDP]) Outcome 6 – an efficient, competitive and responsive economic infrastructure network (Chapter 4 of the NDP) and Outcome 12 – an efficient, effective and development orientated public service (Chapter 13 of the NDP). A transformed built environment with appropriate, adequate skills and competencies, responsive to the country’s infrastructure delivery needs. Programme 2 - Skills for Infrastructure Delivery An optimally functioning built environment with a responsive and relevant policy and legislative framework based, on informed and researched positions Programme 3 –Built Environment Research, Information and Advisory Built Environment Professionals (BEPs) that operate within a regulated policy and legislative framework Programme 4 - Regulation and Oversight of six CBEP

PART A: CBE PERFORMNANCE INFORMATION

CBE Performance Highlights The CBE achieved 73% of its targets, while 27% were not achieved. Internal controls functioned optimally and no new instances of irregular expenditure was incurred during this financial year. The root cause of all identified irregular expenditure has been addressed. There was an unqualified audit for 2015/16.

CBE Performance Highlights The Project Plan for the production and development of high demand Built Environment Professional (BEP) skills categories (Land and Engineering Surveyors and Geographic Information Systems [GIS] professionals) was completed. CBE’s partnerships with Universities of Technology (UoTs) and host employers worked very well, which made it possible to place a total of 200 interns. A Transformation Strategy was developed for Councils for Built Environment Professions (CBEP). 450 learners were enrolled in the Maths and Science support programme. 50 candidates were placed for Workplace training.

CBE Performance Highlights An advisory report on the implementation of the Occupation Specific Dispensation (OSD) by DPW (National and Provincial departments) was developed and presented at the DPW Skills Forum. The final report on the implementation plans of the three partnerships to improve technical capacity within municipal, Provincial and National departments was developed. The partnerships were with the following entities: The Defence Formation Unit of the National Department of Defence (DoD) 2. Municipal Infrastructural Support Agency (MISA), representing municipalities 3. A Memorandum of Agreement (MoA) with the Eastern Cape Department of Public Works

CBE Performance Highlights The final report on the implementation of the Standards for Infrastructure Procurement and Delivery Management (SIPDM) MoA to support infrastructure delivery was developed. All appeals lodged were finalised within the statutory time limit as required. The final report on Corporate Governance was submitted to DPW. The final report on Compliance with the PFMA by the six councils for the professions was developed. The oversight report on the implementation of the Monitoring and Evaluation Framework by the six councils for the professions was developed.

Key Challenges and Remedial Actions Some of the targets, which were not achieved, were due to a heavy dependence on external stakeholders for their success. The CBE has signed a number of MoUs to deal with the dependency. The CBE also experienced IT challenges. Some of the identified challenges were caused by ageing servers and old switches, connectivity and access control. The CBE is currently reviewing and updating its systems and IT governance frameworks. The management of CBE’s occupational lease remained a challenge in the financial year under review. 5 Vacancies at Council level still remain.

Key Challenges and Remedial Actions The CBE relocated from Brooklyn to Menlyn in the last quarter of the financial year. The Chief Executive Officer (CEO), suspended in April 2015, was dismissed on 29 August 2016. A recruitment process for this position is currently underway. The Manager: Legal and Regulations Services acted in the CEO’s position from April 2015 to October 2015. The Chief Operations Officer (COO) has been acting in the position of the CEO from November 2015 to date.

Programme 1 - Adminisration Programme 1 had five annual targets. Four were not achieved. Refer to page 32 to page 36 of the annual report. The targets were not achieved due to: Lack of capacity in the IT department, Further consultation regarding the draft documents

Programme 1 - Administration Strategic Objective Programme Performance To ensure that the CBE has necessary capacity and capability to support Government’s development priorities within the built environment Unqualified Audit Opinion

Programme 2 - Skills for Infrastructure Delivery Programme 2 had six annual targets, all of which were achieved. Refer to page 38 to 44 of the annual report.

Programme 2 - Skills for Infrastructure Delivery Strategic Objective Programme Performance To drive and facilitate Skills Development and Transformation within the BE. Three BEPs categories developed the Implementation Project Plan to support the production of two high demand BEPs skills categories (Land and Engineering Surveyors, and Geographic Information Systems [GIS] professionals) for the SIPs 450 learners enrolled for Maths and Science support programme 50 candidates/BE graduate placed in workplace training 200 interns placed for work-integrated learning Report on accredited programmes and institutions Developed transformation strategy for the BEPs

Programme 3 –Built Environment Research, Information and Advisory Programme 3 had four annual targets in the 2016/17 APP. One target was not achieved. The reason for non-achievement was due to external dependency. The MoA was not signed by EPWP/ ILO. Refer to page 46 to 49 of the annual report.

Programme 3 –Built Environment Research, Information and Advisory Strategic Objective Programme Performance To provide informed and researched advice to Government on BE priority matters identified in the MTSF. Three partnerships to support BE technical capacity within municipal, Provincial and National departments, implemented(MISA, Department of Defence and DPW provincial in Eastern Cape One partnership with the Office of Chief Procurement Officer (OCPO) on the SIPDM programmes to support infrastructure delivery in the public sector Advisory report on the implementation of OSD by DPW National and Provincial departments to attract and retain BEPs, developed

Programme 4 - Regulation and Oversight of six BEPCs Programme 4 had seven annual targets. The Programme achieved six targets, out of seven. Refer to page 51 to 56 of the annual report. The non-submission of Strategic Plans and APPs on time by the CBEP was the reason for the non-achievement of the one target.

Programme 4 - Regulation and Oversight of six BEPCs Strategic Objective Annual Targets CBE to act as an appeal body on matters referred to it, in terms of the law regulating the BEPs, and to promote sound governance of BEPs. 100% finalisation of appeals within the statutory 60 days Report on the facilitation of engagement between the Competition Commission with BE professional bodies, by 31 March 2017 Final report on the progress made by the six CBEP on the implementation of the Corporate Governance Framework Three workshops to facilitate the alignment of the Ministerial approved BE policy frameworks by the six CBEP. Submission of the six CBEP PFMA compliance report to DPW Oversight report on the implementation of the CBE Monitoring and Evaluation Framework by the CBEP, submitted to Council and DPW

AUDITORS REPORTS 2016/17 Year Audit Opinion Performance 2012/13 Unqualified 91% 2013/14 86% 2014/15 96% 2015/16 73% 2016/17

PART B: CBE FINANCIAL REPORT

Financial Performance For the year under review, the CBE received a grant allocation of R43.413 million from DPW. Together with additional revenue from the CBEP levies and interest income, the CBE had a total revenue budget of R45.661 million for the year. The total budgeted expenditure for the year is R45.661 million, which resulted in a zero deficit budget for the year. The actual financial performance of the CBE resulted in a deficit of R1.814 million for the year. Refer to page 103 for a detailed break down of the financials.

Financial Performance The detailed financial performance is outlined in the annual financial statements for the 2016/17 financial year. The total actual revenue earned for the year amounted R46.438 million against the budgeted revenue of R45.661 million. The favourable variance of R0.777 million on revenue.

Report of the Auditor-General to Parliament on the Council for the Built Environment Report on the audit of the financial statements Opinion 1. I have audited the financial statements of the Council for the Built Environment set out on pages 103 to 144, which comprise the statement of financial position as at 31 March 2017, and the statement of financial performance, statement of changes in net assets, cash flow statement and the statement of comparison of budget information with actual information for the year then ended, as well as the notes to the financial statements, including a summary of significant accounting policies.

Report of the Auditor-General to Parliament on the Council for the Built Environment Report on the audit of the financial statements 2. In my opinion, the financial statements present fairly, in all material respects, the financial position of the Council for the Built Environment as at 31 March 2017, and its financial performance and cash flows for the year then ended in accordance with Generally Recognised Accounting Practice (SA Standards of GRAP) and the requirements of the Public Financial Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA).

Summary of detailed Audit findings

SECTION 9: Summary of detailed audit findings 22 Page no. Finding Classification Rating Number of times reported in previous three years Status of implementation of previous year(s) recommendation Misstatements in financial statements Misstatements in annual performance report Non-compliance with regulation Internal control deficiency Service delivery Matters affecting the auditor’s report Other important matters Administrative matters 22 AoPO: Insufficient evidence submitted    Not addressed 28 AoPO: Targets not specific In progress 26 AoPO: Inconsistency between APP and APR Commitments 23 Disclosure: Commitment disclosure incomplete Employee costs 29 Employee cost: Control deficiency in acting positions General IT controls 31 IT: No approved disaster recovery plan 33 IT: Governance Framework not approved 34 IT: Strategic Plan not in place 35 IT: Approved patch management processes not in place 36 IT: User Access Management - No formal documented processes in place 38 IT: Program Change Management - No approved processes in place 40 IT: Service Continuity - No approved backup and retention strategy in place AFS Page no. Finding Classification Rating Number of times reported in previous three years Status of implementation of previous year(s) recommendation Misstatements in financial statements Misstatements in annual performance report Non-compliance with regulation Internal control deficiency Service delivery Matters affecting the auditor’s report Other important matters Administrative matters

AFS: Review of annual financial statements  In progress Heading 3 25 Page no. Finding Classification Rating Number of times reported in previous three years Status of implementation of previous year(s) recommendation Misstatements in financial statements Misstatements in annual performance report Non-compliance with regulation Internal control deficiency Service delivery Matters affecting the auditor’s report Other important matters Administrative matters 49 AFS: Review of annual financial statements    In progress Heading 3 25 Statement of Comparison of Budget and Actual Amounts not prepared on approved budgets Movable assets 41 PPE: Asset not verified Operating expenditure 42 Expenditure: Suppliers that are not VAT vendors, charged VAT Not addressed Payable 51 Salary structures not signed by employees Predetermined objectives 43 AoPO: Inconsistency between APP and Strategic plan Procurement and Contract Management (to confirm for removal) 45 SCM: No declaration of interest 46 SCM: Catering paid for non-attendees 53 SCM: Publishing date could not be determined 48 SCM: PPPFA not properly applied

Management of Audit Issues All previous year audit findings have been resolved. The IT governance audit findings were the only repeat findings from prior years but has now been resolved with the appointment of an IT manager and the use of consultants to update the IT governance documents.

Management of Audit Issues An Audit Matrix of all external and internal audit findings is used to track the progress of resolving the audit findings. The progress of each audit finding is updated every quarter by the responsible Manager, reviewed by Executive Management and submitted to the Audit and Risk Committee. Target = Clean audit 2017/2018.

Part C:Report on Activities of Professional Councils

Percentage number of registered candidates by race and gender The table below indicates an increase in the number of Previously Disadvantaged Individuals (PDIs) at candidacy level. PDIs make up 69% of registered candidates. Visible progress in racial transformation in the candidate phase is encouraging. Refer to page 146 to 173 of the annual report.

Percentage number of registered candidates by race and gender Professional Council Candidate African White Indian Coloured ECSA 19994 11852 5648 1981 513 SACAP 1991 574 1106 181 130 SACLAP 76 13 58 2 3 SACPVP 602 258 275 40 29 SACPCMP 3798 2332 1056 165 245 SACQSP 1993 1029 677 193 94 Total 28454 16058 8820 2562 1014   100% 56% 31% 9% 4%

Percentage number of registered professionals by race and gender The table below indicates an increase in the number of Previously Disadvantaged Individuals (PDIs) at professional level. PDIs make up 29% of registered professionals.

Percentage number of registered professionals by race and gender Professional Council Professionals African White Indian Coloured ECSA 29340 6102 20609 1968 661 SACAP 7997 1078 5833 576 510 SACLAP 206 7 194 1 4 SACPCMP 2605 496 1871 145 93 SACPVP 1324 198 1005 66 55 SACQSP 2105 414 1472 177 42 Total 43577 8295 30984 2933 1365   100% 19% 71% 7% 3%

RPL Applications received Applications registered CBEP RPL Applications received Applications registered Applications rejected   Applications pending ECSA 15 14 1 SACPCMP 56 SACLAP SACQSP 13 11 2 SACAP SACPVP

International Agreements CBEP Partnerships and Agreements SACPVP International Valuation Standards Council Member of African Real Estate Society ECSA Washington Accord Sydney Accord Dublin Accord Engineers Mobility Forum Engineering Technologists Mobility Forum Mutual Exemption Agreement with the Institution of Civil Engineers (ICE) (UK) Mutual Exemption Agreement with Engineers Ireland African Engineering Organisations (FAEO) SACPCMP MoU with the National Home Builders Council (NHBRC) SACLAP Opened negotiations with International Federation for Landscape Architects (IFLA) SACQSP RICS/SACQSP Mutual Recognition of Competence Agreement SACAP Commonwealth Association of Architects  

Complaints Received CBEP Complaints Received Complaints Completed In progress Withdrawn SACPVP 45 7 22 16 ECSA 63 18 SACPCMP 2 1 SACLAP SACQSP 31 6 24 SACAP 116 Total 257 59 65 17

Number of Voluntary Associations CBEP Number of recognised VAs ECSA 49 SACAP 12 SACLAP 1 SACPCMP 11 SACPVP 3 SACQSP

Transformation Initiatives Maths and Science The CBE undertook the Maths and Science support programme during the 2016/17 financial year. The programme is aimed at enabling and initially assisting learners (in Grade12) from disadvantaged communities in Limpopo, North West, Free State and Gauteng to obtain better grades in both Maths and Science subjects in order to attract them into built environment professions. The overall percentage pass rate of learners who were enrolled in the programme was 60,71% for Maths and 59,75% for Science.

Transformation Initiatives Structured Candidates Programme The CBE is implementing the Structured Candidacy Programme with the aim of offering young, black people an opportunity to undergo a structured mentorship programme leading to a professional registration with a relevant statutory council. The Structured Candidacy Programme training fields are: Engineering (Civil, Electrical and Mechanical), Quantity Surveying, Architectural Services, Landscape Architectural, Construction Project Management, Property Valuations and Town Planning.

Transformation Initiatives Interns and candidate placement The Workplace Training Programme was initiated to oversee quality workplace training of built environment candidates and interns, using the CBE developed quality assured structured candidacy framework. A total of 50 candidates are participating in the Workplace Training programme, and all are currently placed with host workplace training employers. A total of 200 interns are currently placed with host workplace training employers. Other initiatives by the six CBEP are detailed on page 61 of the annual report.

Thank You