Cidb

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Cidb Presentation of Annual Report 2006/07
Parliamentary Portfolio Committee Wednesday, 07
November 2007
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Presentation Layout

• Introduction
• Legislative framework Mandate
• Highlights for the FY 2006/07
• Stats to date-context
• Performance Summary-Table
• 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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Introduction

• Legislative Framework Mandate
• CIDB Act 38 of 2000mandates the CIDB to
  establish the National Register of Contractors
• Facilitates public sector procurement, delivery
  and risk management
• Supports contractor development
• Promotes better performance - improved quality,
  safety, health and environment.
• to categorise contractors in accordance with
  their capability

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Legislative framework and mandate

• Benefits of the RoC
• Support risk management in the tendering process
• Reduce the administrative burden
• To facilitate sustainable growth and
  transformation of contractors, enable effective
  access by the emerging sector
• Reduce tendering costs to clients and contractors
• Promote minimum standards and contractor best
  practice
• Enable access by the private sector
• Provide information on the size, distribution,
  nature and development of contractors
• To improve the performance of contractors

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Highlights for 2006/07

• Challenges
• Boom in the Construction industry
• Exponential Growth of the Register of Contractors
• Backlog in contractor registration- resolved in
  March
• Internal Growth expansion programme in response
  to the growth of the RoC
• Challenge on resources and systems

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Highlights for 2006/07

• Focus areas/Projects
• Rollout of the Std for Uniformity
• Municipalities (main focus)
• Continued with National and Provincial Depts
• Continued with Parastatals
• Continued with support to Contractors
• Construction Contact Centers
• National Contractor Development Programme
• National Infrastructure Maintenance Strategy
• Support to 2010 Infrastructure Team (stadia)
• Independent Review of cidb

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Stats to date-Class of Works by grading
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Stats- Exponential Growth

• Increase in registrations
• Dec 2004 1500
• Dec 2005 7500
• Dec 2006 27500
• July 2007 42000
• Dec 2007 55 000 projected, currently 51 000

Total registrations (active suspended)
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Performance Summary

• Growth
• Economic Research Monitoring of Public Sector
  Spending
• Publish quarterly construction economy monitor
  and improve quality of monitor based on
  information from the registers.
• Investigation into Skills for infrastructure
  delivery - the challenge of restoring the skills
  pipeline completed report published
• Framework for ongoing Quarterly Monitors
  established

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Performance Summary

• Growth
• Communication
• Promote outcomes of the Charter process.
• Monitor progress and promote sustainable
  empowerment initiatives and performance against
  targets.
• Construction Charter was launched. The next phase
  i.e. 3rd party review had not been finalised due
  to delayed DTI scorecard/BEE codes.

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Performance Summary

• Growth
• Communication
• Procurement Forum (for procurement reform) and
  Focus Group (for register of professional service
  providers) engaged National Treasury engaged to
  deal with Competitive bidding. Various public
  sector client capacitation workshops
• New website-work in progress
• Various communication tools

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Performance Summary

• Performance
• CRS
• Phase I of registers-municipalities, etc
• Implementation of regulations
• Phase II-components investigated
• RoPSP
• Framework for Register of Professional Service
  Providers and consulted stakeholders

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Performance Summary

• Performance
• CIIs
• Last ones published in 2005/06 AR
• New-contract awarded to UFS
• Strong link to Registers
• Link to Charter - after 3rd Party Review

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Performance Summary

• Procurement and Delivery
• Procurement Reform
• 2000 officials and consultants capacitated by
  the end of the financial year.
• Provided support and advice to the 2010
  Infrastructure Procurement team in the
  procurement of contractors to build the 2010
  stadia.
• Provided support in the development of
  procurement documents for the EC Department of
  Public Works, in conjunction with the Coega
  Development Corporation.
• Started focus on Compliance

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Performance Summary

• Procurement and Delivery
• Public Sector Delivery
• Increased cidb participation and commitment to
  IDIP by increasing cidb capacity (internal
  staff).
• Hosted an international expert on Polarity
  Management as part of training for IDIP PMU
  (partners).
• Participated fully in the appointment and
  training of Technical Assistants for DPW and
  Department of Education, later in the appointment
  and training of Technical Assistants for
  Department of Health.

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Performance Summary

• Procurement and Delivery
• Public Sector Delivery
• -- i-Tender Register of Projects
• Continued to promote the use of the i-Tender
  Register of Projects (RoP) to enable electronic
  registration of projects.
• Special project-Upscaled the registration of
  clients as employers to ensure they use the
  i-tender RoP.

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Performance Summary

• Emerging Contractor Development
• Developed, in conjunction with National DPW, the
  framework for National Contractor Development
  Programme framework, to be rolled out to
  provinces-started where the first Outreach
  Centres/CCC would be established.
• Engaged the Banking Council and some regional
  bank offices to facilitate their involvement.
  Some banks eg in KZN (Ithala, ABSA) have
  responded with packages to support contractors.
• Kick-started establishment of Construction
  Contact Centres

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Performance Summary

• Knowledge Centre and Research
• Agenda
• Cidb 4th Post Graduate Student Conference, hosted
  by the Institute of Transport Technology at the
  University of Stellenbosch, held from 8 to 10
  October 2006 attracting some 100 academics from
  around the world
• Continuous engagement with academic institutions
  and individuals regarding the research agenda

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Performance Summary

• CIDB Impact - 5-year Evaluation
• Successful evaluation of cidb by independent
  Panel in Jan 29-Feb 02, 2007.
• Review report submitted to the Board, to be
  submitted to the Minister.
• Report is positive about the performance of cidb
  in the first 5 years, with recommendations to
  enhance further delivery on mandate.

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Financial Performance

• Revenue
• Revenue from government increased by 19 to
  R40,012m from R33,510m in the previous year. This
  increase was in line with the business plan and
  budget expectations.
• Revenue from registers increased by 142 to
  R16,930m from R6,988m in the previous year
• Total expenditure
• Total expenditure increased by 33 compared to
  the previous year. The bulk of the this increase
  relates to Staff costs which increased by
  R8,339m(78) from previous year.

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Financial Performance

• Finance income
• Interest income increased by 186 to R1,943m from
  R0,679m in the previous year.
• The surplus
• Surplus for the year is R5,525m to be utilized in
  the next years budget for the set up of CCCs as
  part of our expansion program.
• Cash Cash Equivalents
• Cash cash equivalents increased by R8,073m from
  R18,261m. The bulk of this increase relates to
  Investments which grew by R6,962m(38) from
  R18,110m.

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Financial Performance

• Accounts Payable
• Accounts payable increased by R4,375m from
  R14,408m. The bulk of this increase relate to two
  areas
• Contractors not assessed grew by R2,836m(41)
  from R6,910m
• Unallocated deposits grew byR3,621m(84) from
  R4,293m

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Auditor General Findings 2006/07

• OVERVIEW
• One(1) Qualification
• Two(2) Other matters
• No Emphasis of matter

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Auditor General Findings 2006/07

• Qualification
• Finding
• contractor accounts were incorrectly debited
  and/or credited which might have
• resulted in material misstatement of
• the accounts payable and accounts
• receivable balances disclosed in the
• statement of financial position.

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Auditor General Findings 2006/07

• Qualification (continued)
• Managements Action
• A reconciliation process has been started to
  reconcile each contractor account since
  inception. The reconciliation process is planned
  to be completed on 30 November 2007.
• We have requested Treasurys approval to open up
  a new bank account which will be used for
  contractor deposits. All future deposits will be
  made to this new bank account. The existing bank
  account, which is a savings account, will be
  discontinued and all amounts in that account will
  be ring-fenced in order to simplify the
  reconciliation process.

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Auditor General Findings 2006/07

• Other Matters
• Finding
• Tenders were not always advertised for
• 30 days before closure as required
• in terms of Treasury Regulation 16A.6.3
• Managements Action
• All tenders are currently advertised for
• 30 days before closure in terms of
• Treasury Regulation 16A.6.3.

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Auditor General Findings 2006/07

• Other Matters (continued)
• Finding
• The schedule of outcome of disciplinary hearings
  and/or criminal charges, names and ranks of
  employees involved and sanctions and any further
  actions taken against employees during the year
  under review were not submitted to the executive
  authority, National Treasury and the Auditor
  General as required in terms of Treasury
  Regulation 33.3.1

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Auditor General Findings 2006/07

• Other Matters (continued)

Managements Action - Treasury Regulation
33.3.1 is currently being complied with.
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Conclusions

• Our systems are being beefed up
• HR Resource allocation being increased
• New structure to deal with risk management
• Internal audit AGs recommendations being
  implemented
• New proactive approaches to managing the
  organisation
• Registration process being simplified

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Conclusion

• .Thank you