Presentation of Annual Report 2008/09 cidb Presentation of Annual Report 2008/09 Parliamentary Portfolio Committee Tuesday, 20 October 2009 development through partnership

Presentation Layout Introduction Legislative framework & Mandate Highlights for the FY 2008/09 Performance Summary Presentation of Financials Audit Process Audit findings Management’s corrective action Conclusions development through partnership

Introduction Legislative Framework & Mandate CIDB Act 38 of 2000…mandates the cidb to provide strategic leadership to industry stakeholders to stimulate sustainable growth, reform and development Regulate the construction industry development through partnership

Highlights for 2008/09 Challenges Boom in the construction industry, followed by the credit crunch that affected sectors of the economy Good performance by industry due to commitment by government Continued exponential growth of the Register of Contractors Internal Growth –expansion programme in response to the growth of the RoC Strain on resources and systems Budget shortfall development through partnership

Highlights for 2008/09 Focus areas/Projects Regulation amendments Rollout of the Std for Uniformity Construction Contact Centers, 3 launched National Contractor Development Programme-NCDP National Infrastructure Maintenance Strategy-NIMS Support to 2010 Infrastructure Team (stadia) Infrastructure Development Improvement Programme-IDIP development through partnership

Performance Summary Phase 1 and Phase 2 – rollouts Growth and Contractor Development-GCD National Contractor Development Programme-NCDP Phase 1 and Phase 2 – rollouts Signed MoUs with ABSA and STD Bank Construction Contact Centres-CCCs. 3 CCCs launched Mpumalanga, Northern Cape and Free State development through partnership

Performance Summary CRS/Registers High quality registration service and further enhancement of CRS-Business Process management (BPM), staff training Regulation amendments-effective Jan 2009 Phasing out of outsourced help Desks development through partnership

Performance Summary Procurement and Delivery management-PDM Improving Public Sector Procurement Reform-amendment to regulations-SfU, Practice Notes and Briefing Notes Improving Public Sector Infrastructure Delivery-IDIP Brochure Development of construction Procurement as a profession-discussion paper Leadership, Stakeholder Relations and Communications-Procurement Focus Group development through partnership

Performance Summary Construction Industry Performance-CIP Institutional support Status Reports & CII Practice guides Phase II-Best Practice Schemes, met and some ready for pilot Research and Development development through partnership

Performance Summary Office of the CEO Stakeholder Forum – Sept 2008 Publications Fraud and corruption development through partnership

Financial Performance Revenue Revenue from government decreased by 16% to R41,891m from R49,891m in the previous year. Revenue from registers increased by 21.11% to R35,325m from R29,168m in the previous year Total expenditure Total expenditure increased by 4,4% compared to the previous year. The bulk of this increase relates to Staff costs which increased by R6,085m(19%) from previous year.

Financial Performance Finance income Interest income decreased by 6,54% to R2,948m from R3,154m in the previous year. The Deficit Deficit for the year is (R1,351m) after depreciation of R4,238m(R1,225m – 2008). Cash & Cash Equivalents Cash & cash equivalents increased by R5,511m from R30,287m. The bulk of this increase relates to Investments which grew by R8,754m(38%) from R22,774m.

Financial Performance Accounts Payable & Income Received in advance Total Accounts payable increased by R2,305m from R14,408m. The bulk of this increase relate to ‘Trade and other payables’ which grew by R3,518m(61%) from R5,733m Income Received in advance increased by R10,526 to from R13,748m

Auditor General Findings 2008/09 OVERVIEW One(1) Qualification Two(2) Emphasis of matter One(1) Other matters Other Legal & Regulatory Requirements

Auditor General Findings 2008/09 Planned Date of Completion Impact   Detail Planned Date of Completion Qualification 1 Prior year errors on PPE not being properly disclosed in the AFS 30-Nov-10 Planning will be improved with regards to the co-ordination of the audit by utilising the Audit Steering Committee more effectively. New accounting standards training has been arranged and is scheduled for November 2009. Emphasis of matter Irregular Expenditure on finance lease entered into without prior approval by National Treasury 31-Mar-10 Application to National Treasury for condonation will be made. 2 Restatement of Corresponding Figures Other Matters Strategic plan did not include the materiality and significance framework as per National Treasury Regulations 30-Sep-09 Completed

Auditor General Findings 2008/09 continued… Planned Date of Completion Impact   Detail Planned Date of Completion Governance framework 1 Internal control defficiencies - Prior period error 30-Nov-09 Training is currently taking place on the effective use of the Accounting system, especially the use of the Reporting Module. New accounting standards training has been arranged and is scheduled for November 2009. Key Governance Requirements Implementation No significant difficulties were experienced during the audit concerning delays or the availability of requested information. 28-Feb-10 Planning will be improved with regards to the co-ordination of the audit by utilising the Audit Steering committee more effectively. A dry run of the year end will be performed in January/February 2010 2 The financial statements were not subject to any material amendments resulting from the audit. Training is currently taking place on the effective use of the Accounting system, especially the use of the Reporting Module. New accounting standards training has been arranged and is scheduled for November 2009. A dry run of the audit will be performed in January/February 2010. 3 The annual report was submitted for consideration prior to the tabling of the auditor’s report. 31-May-10 Planning will be improved on the co-ordination of the entire audit process including the compilation of the annual report. 4 The information systems were appropriate to facilitate the preparation of the financial statements. 5 The prior year audit findings have been substantially addressed. Monitoring and follow up on audit querries has been implemented. Risk Manager has been appointed and his role will include monitoring progress on all audit report issues and to report to ceo/audit committee and Board. 6 The information systems were appropriate to facilitate the preparation of a performance report that is accurate and complete. 31-Jan-10 Training is taking place on the effective use of the system especially on the Reporting Module. New accounting standarsd training has been arranged and is scheduled for November 2009. 7 Adequate control processes and procedures are designed and implemented to ensure the accuracy and completeness of reported performance information. The entire process around the Performance management system and Internal Controls Regarding Performance Management is being reviewed to comply strictly with the guidelines as set out in the Framework for Managing Programme Performance Information as issued by National Treasury.

Auditor General Findings 2008/09 continued… Planned Date of Completion Impact   Detail Planned Date of Completion Report on other Legal and Regularity Requirements 1 Submission of strategic plan 30-Sep-09 The 2010/11 startegic plan was submitted timeously to the NDPW 2 Lack of effective, efficient and transparent systems and internal controls regarding performance management 31-Jan-10 The entire process around the Performance management system and Internal Controls Regarding Performance Management is being reviewed to comply with strictly with the guidelines as set out in the Framework for Managing Programme Performance Information as issued by National Treasury. 3 Inconsistently reported performance information 4 Reported performance information not relevant 5 Lack of source documentation

Conclusions Our systems are being beefed up-EDMS, CRS software improvement-major vs incremental Review of registration criteria-resolutions, stakeholder consultations HR Resource allocation being increased New structure to deal with risk and governance management implemented New approach on Internal audit & AG’s recommendations being implemented Registration process simplified

Conclusion ……………………….Thank you development through partnership