1. MEETING OF THE MINISTER AND DEPUTY MINISTER OF HUMAN SETTLEMENTS WITH THE COMMUNITY SCHEMES OMBUD SERVICES BOARD OF DIRECTORS 2 JULY 2014 AT 14H00 CSOS PRESENTATION

2. 1. INTRODUCTION: The Community Schemes Ombud Services Act (Act No 9 OF 2011) [CSOS ACT] was promulgated on the 11 June 2011 and provides for the establishment of the Community Schemes Ombud Services (CSOS) as a Public Entity. The CSOS has been classified as a Schedule 3A Public Entity in terms of the Public Finance Management Act (Act No 1 of 1999) [PFMA]. 2

3. The mandate and main functions of the CSOS include: (i) To develop and provide a dispute resolution service in terms of the Act. (ii) Provide training for Conciliators, Adjudicators and other Employees of the Service. (iii) Regulate, Monitor and control the quality of all Sectional Title Schemes governance documentation and such other scheme governance documentation as may be determined by the Minister (iv) Take custody of, preserve and provide access electronically or by other means to Sectional Title Schemes governance documentation and such other Scheme governance documents as may be determined by the Minister. (v) Manage the Sectional Titles Management Act as provided by the relevant Act. 3

4. 2. THE BOARD OF DIRECTORS: 2.1 The Board of Directors was appointed for a period of 3 years from 1 January 2013 until 31 December 2015. 2.2The Board Comprise the following seven (7) Members: Rev Dr Vukile Mehana (Chairperson) Adv. Milicent Malebye (Deputy Chairperson) (Resigned) Adv. Derick Block Adv. Nomazotsho Memani Mr. Trevor Bailey Mr. Mfanozelwe Shozi Ms. Tinyiko Mhlari 4

5. 2. THE BOARD OF DIRECTORS: cont. 2.3 BOARD SUB-COMMITTEES: The following Board Sub-Committees have been appointed: Audit and Risk Committee: Ms. T. Mhlari – Chairperson Human Resource and Remco:Mr. M. Shozi – Chairperson Adjudication and Governance: Chairperson Compliance, Levies & Regulations:Adv N. Memani – Chairperson 2.4 Board meetings held in the 2013 Financial Year were 3 plus 1 Strategic session that dealt with the 2013/2014 APP and Budget. 2.5Board members have been kept updated on the unfolding relevant development. 5

6. 2.6Latest update was on 14 April 2014 2.7 INDUCTION AND MEETINGS: The Board was inducted on the 22 nd March 2013. During this induction, the Board was presented with a number of proposed documents that include the following: o 5 Year Strategic Plan. o An Annual Performance Plan. o A number of proposed operational Policies. NB: The above stated Plans have been revised. 6 2. THE BOARD OF DIRECTORS: cont.

7. o The 2013/14 APP was approved by the previous Minister on 31 January 2014 and it has since expired. A new 2014/15 APP is ready to be approved by the Minister o Also a new 5 Year Strategic Plan needs to be approved by the Minister 2.8 RE-CLASSIFICATION OF THE NEW CSOS ENTITY: One of the resolutions of the CSOS Board was to approach the National Treasury for the re-classification of the CSOS within the context of the National Tresuary Regulations. Such an exercise, was to revisit the status of the CSOS and improve the scale of Board Remuneration. The National Treasury responded in December 2013 with the Scale of Board Fees, which are still very low compared to the level of competency and experience of the Board Members. The Minister is hereby requested to approach the Minister of Finance for a review of the Board Fees. 7 2. THE BOARD OF DIRECTORS: cont.

8. 8 3. FINANCIAL POSITION OF CSOS: 3.1It should be noted that there was no CSOS budget for 2013/14, however, an amount of R20 million was approved for CSOS in August 2013. 3.2 While the proposed Annual Performance Plan given to the Board by the Department referred to an amount of R64 million for the 2013/2014 Financial Year, the Board was informed by the Department that for some reason, the work of the CSOS was not budgeted for the 2013/2014 Financial year. 3.3A subsequent meeting was held wherein a resolution was taken that: On 29 July 2013 an amount of R3 million was to be immediately made available to be used for some immediate set-up and administration costs of the CSOS and for putting in motion the recruitment of the CEO / Chief Ombud Officer and the Chief Financial.

9. 9 3.4 Through a competitive bidding process, CSOS has now established its own primary Bank Account, which was opened in August 2013, with First National Bank and activated on the 31 st March 2014 the day when some moeny was transferred by the Department to CSOS. 3.5This amount of R17 million was deposited into the account on 31 March 2014 which was allocated for the 2013/14 Financial Year with R3 million retained by the DHS. Condonation is being sought through the DHS to utilise the R17 million for operational purposes in the 2014/15 Financial Year. 3.6 For 2014/15 Financial Year, CSOS is informed by the DHS that an amount of R40 million has been budgeted for CSOS operations. This being the case, an amount of R57 million is provided for in the 2014/15 APP. 3.7Mention is also made that the Unaudited Annual Financial Statement 2013/14 has been submitted timeously to the Office of the Auditor- General, National Treasury and Department of Human Settlements. 3. FINANCIAL POSITION OF CSOS: cont.

10. 10 4. OFFICE ACCOMMODATION: 4.1 For operational purposes, and noting that such operations will evolve incrementally, the Board has signed a 1 year renewable lease agreement with the Estate Agency Affairs Board. Currently a partitioning of this 561sqm office space is to be completed by end July 2014. 4.2With funds permitting, in the new Financial Year it is intended that this matter will be re-visited for purposes of having a permanent Office Accommodation for both the National and Gauteng Provincial Offices.

11. 11 5. STAFF MATTERS: 5.1The CFO has already been appointed from 1 April 2014. 5.2The appointment of CEO/Chief Ombud is at the final stage. 5.3Soon thereafter, the other two Executives namely: o Corporate Services Executive o Adjudicator General will be appointed speedily. 5.4Other 22 administrative staff will be appointed during the 2014/15 Financial Year.

12. 12 6. URGENT MATTERS TO BE ATTENDED TO: 6.1The signing of the 2014/15 APP and 5 Year Strategic Plan by the Minister. 6.2The finalization of the Regulations to effect the CSOS Act. 6.3The Presidential Proclamation of the CSOS 6.4The Public Launch of the CSOS 6.5The Minister to engage with the Minister of the Department of Rural Development and Land Affairs for the transfer of the Title Deeds. 6.6On recommendation by the Board, the Minister to determine the annual levies to be paid by Community Schemes.

13. 13 7. BOARD AND OTHER MEETINGS: DateName of a MeetingAttendees 22 March 2013 Induction meeting Adv Memani, Ms Mhlari, Rev Dr Mehana, Adv Block, Mr Shozi 03 April 2013 Board Meeting Adv Memani, Ms Mhlari, Rev Dr Mehana, Adv Block, Adv Malebye, Mr Trevor Bailey, Mr Shozi 24 May 2013 Board Meeting Adv Memani, Ms Mhlari, Rev Dr Mehana, Adv Block, Mr Trevor Bailey, Mr Shozi 05 July 2013 Tender meeting with the BanksAdv Memani, Adv Block, Ms Mhlari 23 July 2013 Workshop with the recommended bankMs Mhlari 26 August 2013 Workshop on Annual Performance Plan (APP) and Strategic Plan 2013/2014 Adv Memani, Ms Mhlari, Rev Dr Mehana, Adv Block, Mr Trevor Bailey, Mr Shozi 13 September 2013 Workshop on Operational Policies Adv Memani, Ms Mhlari, Rev Dr Mehana, Adv Block, Mr Trevor Bailey, Mr Shozi 19-20 September 2013 Attending NAMA ConferenceAdv Memani 09 October 2013 Meeting to discuss leviesAdv Memani and Rev Dr Mehana 14 November 2013 Portfolio Committee MeetingAdv Memani and Ms Mhlari 05 February 2014 Board meeting Adv Memani, Ms Mhlari, Rev Dr Mehana, Adv Block, Mr Trevor Bailey, Mr Shozi 11 February 2014 CSOS Public Launch Meeting Ms Mhlari 18 February 2014 CSOS Public Launch and Compliance & Enforcement Symposium meeting Adv Memani 25 February 2014 CSOS Public Launch Meeting Ms Mhlari 25 February 2014 Compliance & Enforcement Symposium meetingAdvocate Memani 03 March 2014 Interviews for CFORev Dr Mehana, Ms Mhlari, Mr Shozi and Adv Memani 24 April 2014 Interviews for Chief OmbudRev Dr Mehana, Ms Mhlari, Mr Shozi and Adv Memani 05 May 2014 Finalisation of Chief Ombud InterviewsRev Dr Mehana, Ms Mhlari, Mr Shozi and Adv Memani