ci d b Presentation of Annual Report 2011/12 October 2012

1. development through partnership cidb Presentation of Annual Report 2011/12 October 2012

2. Presentation Layout Mandate Legislative framework & Mandate Priorities and challenges in 2011/12 Annual Performance Summary Financial Performance/A-G Report Financial Performance Report of the A-G Corrective Action Plan development through partnership

3. cidb Mandate The mandate of the cidb is to: Provide strategic leadership to construction industry stakeholders; Promote sustainable growth of the construction industry and the participation of the emerging sector in the industry; Promote improved performance and best practice of public and private sector clients, contractors and other participants in the construction delivery process; Promote uniform application of policy throughout all spheres of government and promote uniform and ethical standards, construction procurement reform, and improved procurement and delivery management – including a code of conduct; Monitoring and regulating the performance of the industry and its stakeholders, including the registration of projects and contractors. Transformation Growth Common Focus Delivery Capability Performance

4. Highlights for 2011/12 Contractor Development and Training/ support Quality services at Contact Construction Centres Monitoring Industry Performance Industry Skills delivery Development of Best Practice standards Implementation of Infrastructure Delivery Management Toolkit Compliance and regulations enforcement Efficient registration services development through partnership

5. Challenges for 2011/12 Delay in submitting frameworks (including Standards) for the Best Practice i.e Project  Assessment Scheme and the Best Practice Project Contractor Recognition Scheme to the Board for approval due to delays in stakeholder consultation Delay in finalising regulations amendments Delay in new CRM system and EDMS implementation Delay in finalising the Framework for Municipal Toolkit development through partnership

6. Annual Performance Summary and impact 2011/12

7. Growth and Contractor Development Enterprise Development National Contractor Development Programme-NCDP ( Framework) updated, communicated and published. Client Capacitation completed at all provinces. Provincial contractor training in all 9 provinces completed including 7 catalytic projects development through partnership

8. Growth and Contractor Development Quality services at cidb provincial Offices (Construction Contact Centres – CCC’s) Annual average of 93.8% on compliance was achieved on the accuracy of data captured (90% target). Annual average of 96,6% on compliance with over the counter 48 hour registration turnaround time was achieved (95% target). Annual average of 92.3% registration compliant documents produced (90% target). development through partnership

9. Construction Industry Performance Monitoring industry performance Construction Industry Indicators (CIIs) published communicated and applied (low rate and depth of transformation, economic conditions and slow rate of public sector spend…) Quarterly Monitor published, communicated and applied (State of industry development) SME survey published communicated and applied Quarterly provincial outreach communication sessions held in 4 provinces Infrastructure skill delivery cidbPost Graduate Conference held. development through partnership

10. Procurement and Delivery Management Support on procurement reform Public sector clients training sessions conducted in all provinces. Compliance and regulations enforcement Case law reports published quarterly. Anti-corruption strategydeveloped. Hearings on non-compliance conducted(Audit blitz conducted) development through partnership

11. Procurement and Delivery Management Infrastructure Delivery Improvement Evaluation of the impact of the cidb Toolkit achieved. IDMT training completed in all provinces. Evaluation of the impact of pilot programme on cidb Gateway process completed development through partnership

12. Construction Registers Service Efficient registration service The 21 working day turnaround time was achieved for compliant Grade 2-9 applications, including the processing of annual updates. Queries administered within the stipulated turnaround time of 48 hours. development through partnership

13. Financial Performance/AG Report 2011/12 OVERVIEW Financial Performance Actual vs. Budget Annual Financial Statements Report of the Auditor-General Opinion Emphasis of matter: Irregular expenditure Corrective Action Plan Fruitless and wasteful expenditure

14. development through partnership Financial Performance (Actual vs. Budget) Thank You Thank You

15. Financial Performance (Annual Financial Statements) Revenue Revenue from government increased by 3,6% from R63,665m in the previous year to R65,959m. Revenue from registers increased by 5,9% from R45,073m in the previous year to R47,737m. Total expenditure Total expenditure increased by less than 2% compared to the previous year.

16. Finance income Interest income increased by 11% from R4,132m in the previous year to R4,600m. The Deficit Surplus for the year is R6,068m inclusive of R4,589m non cash items. Financial Performance (Annual Financial Statements) cont.

17. Cash & Cash Equivalents Cash & cash equivalents remained average when compared between previous year and current year with a minimal decrease of less than 1%. Accounts Payable & Income Received in advance Total Payables decreased by R1,249m from R19,086m. Income Received in advance decreased by R1,239m to R27,576m from R26,337m. Financial Performance (Annual Financial Statements) cont.

18. development through partnership Report of the Auditor-General • Opinion • The cidb received an unqualified audit report in the 2011/12 financial year with the following matters: • Emphasis of Matter: • Restatement of corresponding figures: relating to provision of debt impairment amounting to R456k • Irregular expenditure: relating to determining of the full extent of irregularities amounting to R11,781m (thus indicating an increase of R2,515m when compared with that of the previous year) Thank You

19. development through partnership Report of the Auditor-General Item 1: Restatement of corresponding figures The corresponding figures for 31 March 2011 were restated as a result of an erroneous disclosure of the provision for debt impairment amounting to R456k discovered during the 31 March 2012 audit in the financial statements. Thank You

20. development through partnership Report of the Auditor-General cont. Item 2: Irregular expenditure (R11,781m) Section A: details of irregular expenditure – not recoverable (tot.: R3,929m): i) Five year lease not initially approved by the National Treasury (since condoned): R478k ii) Transactions where notice was not given to Treasury and AG (warning issued, no losses): R1,454m iii) Extension of contracts (relates to old tenders): R1,997m Thank You Thank You

21. development through partnership Report of the Auditor-General cont. • Item 2: Irregular expenditure (R11,781m) • Section B: details of irregular expenditure – under investigation (tot.: R7,852m): • i) Transactions procured without following open tender/procurement processes: R1,58m • ii) Transactions procured without obtaining original and valid tax clearance certificate: R3,75m • Bids awarded with clerical errors: R2,522m Thank You Thank You

22. AG Management Letter Report & Corrective Action Plan • The AG has raised a number of issues in the management letter report for the 2011/12 financial year. In response to these matters the cidb has designed a Corrective Action Plan (CAP) monitoring tool. The CAP sets down: • Timelines within which the issues will be resolved • Who the responsible official is, to resolve the issue • The specific action to be taken to resolve the issue • Monitoring is performed by the CEO, Audit Committee and the Board. Thank You development through partnership

23. A-G Management Letter Report & Corrective Action Plan Over and above the Correction Action Plan, the AG has developed a dashboard document which lists the key control matters that the cidb must take care of during the course of the new financial year (2012/13) in order to avoid a qualification. Regular meetings between the AG, CEO and CFO where progress is assessed, have been arranged for this financial year. The cidb Internal Audit unit has also started with the follow up audit on the matters raised by the AG in the management letter report. List available of all the detailed matters raised by the AG in the management letter report and corrective actions undertaken Thank You development through partnership

24. ..….Thank you…… Discussion / responses to questions development through partnership

25. AG Management Letter Report & Corrective Action Plan Listed below are the detailed matters raised by the AG in the management letter report: Thank You development through partnership

26. AG Management Letter Report & Corrective Action Plan development through partnership

27. AG Management Letter Report & Corrective Action Plan development through partnership

28. AG Management Letter Report & Corrective Action Plan development through partnership

29. AG Management Letter Report & Corrective Action Plan development through partnership

30. AG Management Letter Report & Corrective Action Plan development through partnership

31. AG Management Letter Report & Corrective Action Plan development through partnership

32. development through partnership Fruitless and Wasteful Expenditure (R63K) • An amount of R29k was paid for cellphone airtime on a stolen phone that was not timeously reported. • An amount of R33k was incurred i.r.o. interest penalty charged for early withdrawal of funds. • . Thank You