ci d b presentation of annual report 2008/09 parliamentary portfolio committee

cidb

Presentation of Annual Report 2008/09

Parliamentary Portfolio CommitteeTuesday, 20 October 2009

development through partnershipcidb

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


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

Highlights for 2008/09Challenges

– 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


Highlights for 2008/09Focus 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


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


Performance SummaryCRS/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


Performance SummaryProcurement 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


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


Performance Summary

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


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

Impact Detail Planned Date of Completion

Qualification 1Prior 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 1Irregular 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

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 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.

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.

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

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

……………………….Thank you


Conclusion

ci d b presentation of annual report 2008/09 parliamentary portfolio committee

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