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PRESENTATION TO THE PORTFOLIO COMMITTEE ON PUBLIC WORKS CBE ANNUAL REPORT 2012/13 22 October 2013. CBE Delegation. Ms. Portia Tau-Sekati – CBE Chairperson Mr Phil Mashabane – Deputy Chairperson Ms Gugu Mazibuko – Chief Executive Officer Ms. Maphefo Sedite – Chief Financial Officer
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PRESENTATION TO THE PORTFOLIO COMMITTEE ON PUBLIC WORKSCBE ANNUAL REPORT 2012/13 22 October 2013
CBE Delegation • Ms. Portia Tau-Sekati – CBE Chairperson • Mr Phil Mashabane – Deputy Chairperson • Ms Gugu Mazibuko – Chief Executive Officer • Ms. Maphefo Sedite – Chief Financial Officer • Representatives of the Professional Councils
Purpose of the Presentation • To provide an account of the CBE Performance during the 2012/13 financial year as per the commitments made in the CBE 2012-16 CBE Strategic Plan and 2012/13 Annual Performance Plan
Presentation Structure • Contextual Overview • Background and Policy Context • Strategic Goals of the CBE • Description of Programmes • Performance Review/Report • Governance Review • Financial and Audit report • Report on Activities of Professional Councils • Current interventions on transformation and new high impact areas • Chairperson’s concluding remarks
Background and Policy Context • The CBE 2012 -16 Strategic Planis a product of the Strategic Review Session held by the CBE Council in December 2012. • The CBE Strategic Plan was informed by the following key policy documents: • CBE’s mandate derived from the CBE Act of 2000, key national and sectoral priorities including inputs from key stakeholders such as Professional Councils • Updated Government’s medium term strategic framework document • 2012 State of the Nation Address, • Outline of the Minister’s key priorities • The 2012 National Budget and appropriation for 2012/13 • This review resulted in realignment of CBE activities to make the organisation and the built environment (BE) industry more responsive to developmental priorities such as skills development and job creation.
Strategic goals of the CBE • The Council formulated 8 key strategic goals which guide and inform the work of the CBE over the next MTEF period. • The following are the 8 key strategic goals adopted by the Council: • Drive, support and advise on transformation within the Built Environment • Facilitate integrated development • Perform a leading role in building stakeholder relations • Develop CBE into a thought leader in the Built Environment • Reposition the CBE in the market • Strengthen and maintain effective and efficient public protection regime • Inform and influence government infrastructure spend and professional practice so that they are responsive to national priorities • Strengthen the administration function of the CBE • To realise these important goals the organisation has arranged its work into four key programmes which represent a consolidation of key strategic priorities for the organisation going forward.
CBE Performance Highlights • Achievement of 71% of the total APP deliverables in 2012/13 compared to 59% achievement in 2011/12. • Achievement of an unqualified audit opinion for 2012/13. • Corporate Governance framework and Risk Management strategy and plan, developed and implemented • 12 CBE Bursary students graduated in the disciplines: Engineering (6), Quantity Surveying (3), Construction Management (2) & Architecture (1). • A CBE Post Graduate Studies Project was initiated with various universities, to support post-graduate students with research topics in the built environment. • A co-operation partnership with MISA (Municipal Infrastructure Agency), for technical skills development initiatives in municipalities gained momentum and a research project on the status analysis on current technical skills at municipalities municipalities: Tshwane, Johannesburg, Bojanala (Rusternburg), Mudiri (Mafikeng), Capricon (Limpopo), Thabo Mafutsanyana (Free State), City of Cape Town and Winelands, King Dalentjebo (Eastern Cape), Ethekwini (Durban), Zululand (Ulundi), Francis Baard (NorthCape), Pixley Kaseme (De Aar)
CBE Performance Highlights • Partnership forged with Dept of Higher Education and Training to identify scarce skills & formulation of the skills plan for the government’s infrastructure roll out programme for Presidential Infrastructure Projects. • Collaboration established with the Dept of Labour to take forward the implementation of the Health and Safety in Construction, Accord. • Structured candidacy framework formulated to provide broad principles on practical training and mentoring of candidates across the 6 built environment professions established for workplace training and guides how employers can ensure that graduates achieve requisite skills and competencies for professional practice. • Formulation of the workplace training model by the CBE with the aim of identifying suitable host workplaces as training sites. • Good progress made in improving relations and partnerships with other African Countries – MOAs signed with Namibia & Zambia concluded & successful hosting of Built Environment Indaba conference. • Progress recorded in the Engineering Identification of Work; with all 8 engineering disciplines finalised &only mining engineering, outstanding.
PROGRAMME 1 - Administration • Purpose: To provide strategic management and administrative support to the CBE • Targets achieved: • Implementation report on previous year’s stakeholder survey, internal policy reviews, quarterly reports on compliance with legislation produced as well as quarterly expenditure reports and proper financial control mechanisms. • Relevant Council and Committee meetings held. • An unqualified audit report, achieved. • Targets not achieved: • Stakeholder survey not conducted for 2012/13 – Focus was on building and strengthening stakeholder relations and addressing previous year’s identified weaknesses. • One of three planned IDoW Committee meetings was replaced by electronic correspondence between Commitee members • Review of the Risk Management Strategy was not finalised as scheduled.
PROGRAMME 2 – Skills Academy • Purpose: To drive and facilitate skills and human resource development in the BE with the ultimate goal of transforming the BE • Targets Achieved: • Three of the existing students from previously disadvantaged backgrounds receiving CBE financial assistance – 33 students receiving bursaries • Feasibility report on structured candidacy programme for BE finalised and approved • Feasibility report on business model for the BE Skills Academy finalised – Recommendation was that it not feasible to establish a BE Skills Academy • Targets not achieved: • Implementation of SGB Policy framework – Policy framework was only developed and submitted to DPW for approval, the during 2012/13 year; so its implementation will only take place in 2014/15. .
PROGRAMME 3-Centre for Innovation and Integrated Planning Purpose: To work together with member professions to orientate their expertise to the most immediate challenges of the BE and the developmental State Targets Achieved: • Full roll-out of the data repository with the Research and Policy Depts. • 80% increase in internal access to databases – additional database of Who owns Whom and Bureau of Economic Research being accessible to Research and Policy Department • MoU concluded with Zambia counterparts and DPW signed MoU with Namibian counterparts (CBE is one of the participants) • 2013 Built Environment Indaba hosted successfully.
PROGRAMME 3- Centre for Innovation and Integrated Planning Targets not Achieved: • 60% increase in external access to database not achieved due to limiting licensing conditions • Three instead of six databases are accessible within the Research and Policy Department • One instead of two advisory reports, was submitted to Minister on the State of the Built Environment – Second report to be submitted in the 2013/14 financial year • Implementation of the policy framework on Recognition of New Professions could not be undertaken – Policy framework only developed during the financial year under review and will only be implemented once approved by the DPW
PROGRAMME 4 – Public Interest • Purpose: To promote and protect the interests of the public in the built environment Targets Achieved: • Eight Identification of Work Scope of Work for ECSA completed. • Feasibility report on shared legal services finalised – Report recommended not feasible to implement legal services • Targets not achieved: • Implementation reports on Registration and Appeals Regulations not developed – Both Regulations to be submitted to the DPW in 2013/14 financial year • Appeal cases not resolved within the set 60 days legal timeframes – Panel of chairpersons appointed to expedite hearing of appeal cases.
Governance Review • The CBE Council is the Accounting Authority as per section 49 of the PFMA • The CBE Council reports to the Minister of Public Works (who is the Executive Authority) • The Accounting Authority assumes responsibilities as mandated by the CBE Act. • The Accounting Authority also discharges this responsibility in line with provisions of section 51 of the Public Finance Management Act, (no. 1 0f 1999) • In line with good governance (as per the then King II Report) and in ensuring the Accounting Authority fulfills its roles as mandated, the following statutory and governance committees were established:
Governance Overview • Executive Committee A Council working Committee constituted in terms of section 12 of the CBE Act with a responsibility of ensuring that all Council resolutions are carried out • Management Committee (Human Resources Committee) Responsible for the human resources issues and accordingly plays the role of Human Resource Committee • Audit Committee The audit committee was constituted in line with requirements of the PFMA and Treasury Regulations, with 3 of the 5 members being external members. The key focus areas of the committee were internal control and Risk Management. Performs the function of the audit committee as set out in the PFMA and the Treasury Regulations.
Governance Overview • Finance Committee Ensures that adequate financial management processes and procedures are appropriate and upheld accordingly. • Appeals committee This Committee is constituted in terms of section 21 of the CBE Act with a responsibility of hearing appeals from any person or body aggrieved by the decision of a professional council. • Identification of Work (IDoW) Committee is tasked with concluding the Identification of Work for all the six professions and overseeing its implementation. • Education and Research Committee (EduRes) Committee is responsible for overseeing education and research matters relating to built environment. • Transformation Committee Committee was established to provide strategic advice on transformation.
Governance Review cont... * During the financial year under review the following members resigned from CBE Council & its committees: • C Campbell former Council member resigned on 13 September 2012 • T Majozi former Deputy Chairperson of Council resigned on 29 October 2012 • T Sihlaba former external Audit Committee member resigned on 06 April 2012 ** The following replacements of the resigned Council and its sub-committee members were made: • C Gamede – Council member was appointed on 11 November 2012 • A Peters – Council member was appointed on 11 November 2012 • M Mothipe – external member of the Audit Committee was appointed on 08 February 2013 • P Mashabane was appointed as Deputy Chairperson on 11 November 2012
Income statement review • Above analysis presents a reconciliation of the budget CBE against actual performance for the year 2013 Revenue • Grant income: The variance is mainly due to seconded employee’s reimbursement which was set-off against matching expenditure • Levies: The CBE recovered more levies than originally estimated which resulted in over recovery • Other receipts: Constitute unplanned revenue resulting from insurance claims. • Interest: The CBE over recovered on the interest earned due to stable interest rates Expenditure • Employee Cost: The variance is mainly due to seconded employee’s reimbursement which was set-off against employee cost. • Good and services: The variance is due to some projectdeferred to current year as highlighted above on Programme 2, 3, 4 • Depreciation and amortisation: The CBE uses a cash based budgeting method which excludes non cash items • Fixed assets additions: The fixed assets variance is mainly due price variations on planned assets
ISSUES AS HIGHLIGHTED BY THE AUDITORS, UNQUALIFIED OPINION Movement from previous year 2012/13
Audit Report – 2012/13 CBE has again maintained an Unqualified report with emphasis on the following matter: • Report on Performance Information: Pre-determined objectives • Of 38 targets , 11 targets were not achieved, representing 29% of total planned targets; • Report on Compliance with laws and regulation • Annual financial statements not in accordance with GRAP ; • Approval for accumulated surplus not obtained; and • Internal control weaknesses and leadership noted on performance information (as reported above).
Items reported in previous report (Audit report cont….) • Unqualified report with emphasis however on the following matters: • Performance information • Targets not consistent Action to date Review of APP was undertaken • 41% not achieved in 2011/12 reduced to 29% in 2012/13 Action to date CEO appointment made to drive performance • strategic planning timelines not adhered to Action to date submission in line with prescripts • Expenditure related • Contractors who did not declare employment by State • Contractors who did not disclose prior supply chain practices Action to date all procurement made in line with prescripts • Fruitless Expenditure R215 000 incurred • Action to date No fruitless expenditureincurred, condonement sought from Executive Authority • Financial statements not prepared in accordance with GRAP Action to date Quarterly Annual Financial Statement reviewed by audit committee
CBE Human Resource • Total approved staff composition 32 of which only 27 is funded. 55%: 45% operations vs admin staff • Top & Senior Management consists of the following gender split: 2 Female & 1 Male • Middle Management consists of the following gender split: 3 Female & 3 Male Table: CBE equity statistics by population groups and gender, March 2013.
Regulatory mandate of CBE • The CBE locates itself within the Developmental State paradigm and seeks to ensure that Built Environment Professionals through Professional Councils support the growth and development objectives of government as captured in its various planning documents, e.g. Medium Term Strategic Framework and National Development Plan. • The regulatory approach of the CBE is to steer and guide the activities and performance of the Professional Councils to ensure that they contribute meaningfully to Government’s policy priorities such as job creation, economic growth, skills development and reduction in green house gas emissions. • The Conduct of the Professional Councils and Built Environment Professions should therefore be ultimately assessed against whether or not they contribute in meeting these policy priorities. • In addition Built Environment Professional Councils must be assessed on their ability to effectively discharge the mandate that has been delegated to them by the State through the Acts of Parliament
Governance of Professional Councils • Recognition of Voluntary Associations (VA’s): In the year under review no new Voluntary Associations were recognised but recognition of one VA was withdrawn by SACQSP. VA’s are important knowledge and skills custodians and their growth should be nurtured through formal recognition. • Code of Conduct: A Code of Conduct policy framework was developed by the CBE in 2009 and has been operational since then. All BE Councils have developed Codes of Conduct which govern ethical conduct within the Professions. Failure to adhere to ethical codes of conduct results in disciplinary action • Disciplinary Cases: Latest statistics show a decreasing trend in the number of disciplinary cases by 50% between 2008 and 2012 from 257 to 120. CBE however remains worried because firstly the numbers are still high, secondly a significant number of cases relate to professional incompetence.
Governance of Professional Councils Number and trend of disciplinary cases per Council
Public Protection • Appeal body and procedures: The CBE is an Appeal Body within the industry as per section 4(m) of the CBE Act. As reported earlier there are challenges within this function both at CBE level and at Professional Councils level. CBE developed a best practice model for Appeals to be implemented in 2013/2014 financial year, Panel of Chairpersons finalised and the chairperson are currently addressing the case backlog. • IDoW:The CBE has completed and submitted to the Competition Commission applications for exemption from the prescripts of the Competition Act the IDoW policies of the following 5 professions; SACAP, SACLAP, SACPCPM, SACQSP and SACPVP. The ECSA IDoW policy is taking longer to complete because of the diversity of the engineering, however, sufficient progress has been made towards its completion which will be finalised in the 2013/14 financial year. The completion of the IDoW process will herald a new era for South African built environment. However, the granting of exemption by the Competition Commission is the first milestone; the enforcement of the policy and resulting PC specific regulations is one of the greatest challenges that will face the BEPs system of regulation.
3. Sustainable and Integrated Development • Guideline on Professional Fees:Professional Councils continue to publish their guideline fees as stipulated by their Acts. However, it should be noted that the Competition Commission raised concerns regarding the publication of the guideline of fees and standardization of fees. The Competition Commission advised that the practice of publishing professional fees has a potential of encouraging horizontal price collusion in terms of Section 4 of the Competition Act and therefore can be deemed as anti-competitive. • The CBE together with the Professional Councils is working with the Competition Commission to apply for exemption of its rules in terms of Schedule 1 of the Competition Act as it has possibility of being anti-competitive. The applications will be submitted to Competition Commission in 2013/2014 financial year (submitted in September 2013 and Competition will engage with relevant stakeholders). • Recognition of new Professions: CBE completed a policy position paper that was approved by Council and submitted to the Minister of Public Works for consideration. The CBE is currently developing a policy framework that will guide the recognition and incorporation of built environment professions that fall outside the ambit of the CBE Act (such as Town Planners and Land Surveyors because they operate within the built environment)
4. Human Resource Development • The CBE is given a mandate to promote ongoing human resource development within the built environment (with a specific focus on issues of skills development and education related matters). To this end various policy interventions were made in the year under review. • Key policy developments during the 2012/13 financial year included: • Development of draft registration regulations to regulate the registration function. • A policy position paper on continuous professional development and how this function could be used as a lever for the industry to contribute to development objectives of the State such as skills development • Accreditation: There were 23 unaccredited programmes in 2009, 10 in 2009 and there are 6 remaining unaccredited, in 2012. • The CBE developed an accreditation time-table which is used as a basis for monitoring accreditation of programmes within the built environment
Professional Registrations • Registration: There was a total of 10218 (22%) growth in new registrations of both candidates and professionals between 2008 and 2012. • Registration: Candidate registration grew by 16% between 2009 & 2012. • Registration: Racial composition of candidates is slightly encouraging. Statistics show that 56,5% of registered candidates are black and only 46,5% are white – challenge is slow progress to convert to registered professionals • However: these statistics hide a concerning picture in professions such as Architecture, Landscape Architecture and Property Valuers which still fell below 50% mark in black candidates registration. • Consolidated Gender Statistics show: 13,67% Female and 86,33% Male. • Picture of Registered Professionals is cause for concern : Quarter 4 of 2012/13 shows: 81,5% White, 10,8% African; 5% Indian/Asian; 3% Coloured. • Racial profile of registered professionals remains the most critical area of major concern.
Key Areas of Concern & Interventions to Address Challenges • Responsiveness to government’s development priorities • No clear linkages and responsiveness between the business plans of professional councils and the development priorities of Government • Slow pace of transformation in the BE professions re: race and gender • Interventions • Alignment of strategic plans and business plans of the 6 Councils to that of the CBE and fostering joint projects, going forward. • Formulation of a transformation implementation model and agreeing on transformation targets with all 6 Councils and involvement of the industry as a partner in driving transformation.
Key Areas of Concern & Interventions to Address Challenges Skills challenges: • Poor maths and science levels (from high school level) • Poor throughput rates from tertiary education levels • Registration bottlenecks within BE professions • BE technical skills challenges in municipalities and the public sector Interventions: • Learner support programmes for Maths & Science for Grade 10-12 learners • Career exhibitions targeting rural & township schools & technical schools • Partnerships to encourage young female learners to pursue careers in built environment – Girl Engineering initiative • Public sector technical/built environment skills initiatives including partnership with MISA (Municipal Infrastructure Support Agency) on technical skills development initiatives for municipalities & public sector • Quality assured Structured Candidacy Programme & workplace training
Key Areas of Concern & Interventions to Address Challenges BE Research and Knowledge • Absence of a central repository for information and research on BE issues • Intervention • Establishment of an information and research hub on built environment issues, within CBE Public Interest Issues • Challenges on compliance with legislative time frames for processing Legal Appeals within 60days • Lack of information for the general public on built environment issues Intervention • Appointment of the Panel of Chairpersons for Appeal Cases • Best practice model for processing appeals within the six BE Professions • Establishment of public education mechanism on built environment issues
