cidb

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

• Introduction
• Legislative framework Mandate
• Highlights for the FY 2008/09
• Performance Summary
• Presentation of Financials
• Audit Process
• Audit findings
• Managements corrective action
• Conclusions

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Introduction

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

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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

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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

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Performance Summary

• 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

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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

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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

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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

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Performance Summary

• Office of the CEO
• Stakeholder Forum Sept 2008
• Publications
• Fraud and corruption

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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.

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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.

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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

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Auditor General Findings 2008/09

• OVERVIEW
• One(1) Qualification
• Two(2) Emphasis of matter
• One(1) Other matters
• Other Legal Regulatory Requirements

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Auditor General Findings 2008/09
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 1 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 1 Strategic plan did not include the materiality and significance framework as per National Treasury Regulations 30-Sep-09 Completed
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Auditor General Findings 2008/09 continued
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 1 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. 28-Feb-10 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 auditors 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. 28-Feb-10 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.
  5 The prior year audit findings have been substantially addressed. 30-Nov-09 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. 31-Jan-10 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.
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Auditor General Findings 2008/09 continued
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 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.
  4 Reported performance information not relevant 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.
  5 Lack of source documentation 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.
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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 AGs
  recommendations being implemented
• Registration process simplified

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Conclusion

• .Thank you