Council for the Built Environment (CBE) Annual Report 2009/10: briefing

Meeting report

Introduction
Members congratulated Mr G Oliphant (ANC), Chairperson, on his promotion to Deputy Minister of Mineral Resources, and thanked him for his commitment, dedication, and excellent service to the Committee.

Mr Oliphant thanked the Committee for the opportunity it gave him as it had contributed to his professional growth.

Members bid farewell to Mr Sipho Mandonsela who had resigned as Chairperson, Council for the Built Environment, and wished him well for the future.

Council for the Built Environment (CBE) Annual Report 2009/10: briefing
Mr Bheki Zulu, Chief Executive Officer (CEO), Council for the Built Environment (CBE), introduced his  delegation.

The Council had received an unqualified report from the Auditor-General (AGSA) with matters of emphasis. The current year’s Audit Report was seen as a major step in the area of governance and compliance from the prior year’s qualified opinion. The challenges with which the Council had struggled in 2009/10 included eliminating the causes of that previous qualified audit opinion. Mr Zulu acknowledged that CBE’s performance standard was not up to date. He also mentioned that transformation was still a challenge at CBE but was confident that CBE could improve.

Mr Mfezeko Gwazube, Chief Operations Officer (COO), CBE, assured the Committee that CBE was a functional Council. CBE had 13 concurrent mandates for which it had to develop policy guidelines and ensure consistent application across the built environment profession. CBE had commissioned nine policy frameworks during 2009/10. Three were completed and six were in a draft format for completion in 2010/11. The CBE had almost doubled the number of bursaries compared to the previous year from 28 to 45. There had been a significant improvement on the facilitation alignment of the international accords and agreements; it had become possible for South African professionals to practice outside South Africa and for foreign professionals to practice in South Africa.

Mr Zulu explained that the CBE Council was the accounting authority that assumed responsibility as mandated by the Public Finance Management Act 1999 (Act No. 1 of 1999) and the Council for the Built Environment Act 2000 (Act No. 43 of 2000). Five committees had been established to ensure that the accounting authority fulfilled its role and mandate. The committees included those on Identification of Work and Education, and Research. Council Members were reimbursed and given an honorarium according to the position they held in the committees and the number of meetings which they attended (slide 16).

Ms Maphefo Sedite, Chief Financial Officer, CBE, said that the Council had received an unqualified report from the Auditor-General (AGSA) with matters of emphasis, however, on irregular, fruitless and wasteful expenditure.

Irregular expenditure related to services provided by suppliers whose tax clearances had expired during the year, expenditure incurred due to a contract amount being exceeded without authorisation, and expenditure incurred due to a reduction of the number of copies printed of the prior year’s annual report which resulted in cost increases.

A second matter of emphasis was the accumulated surplus of R7.9 million for the year; a contingent liability was disclosed in note 23 of the annual financial statements. R7.1m related to the 2008/2009 financial year for which approval from National Treasury was still pending by year end, but which was subsequently approved. R0.8m related to the 2009/2010 financial year surplus. (Slide 18).

The Auditor-General further had observed on the report on performance information, that, under pre-determined objectives, there had been non-compliance with regulatory and reporting requirements, reported information was not consistent with planned objectives, planned targets were not specific, measurable and time bound, planned and reported indicators were not defined, and planned indicators were not verifiable.

Ms Sedite assured the Committee that the CBE had cleared the issues raised by the Auditor-General. For example, control measures had been put in place to ensure that irregular, fruitless and wasteful expenditure on tax clearances did not happen again. The Council believed that the current year’s Audit Report was a major step in the area of governance and compliance from the prior year’s qualified opinion.  Ms Sedite mentioned that all the funds that were allocated for current assets were utilised and that the accumulative surplus had improved compared to the previous year.

Mr Gwazube reported on the activities of the professional councils (slides 22-27). He said that the assessment of the performance of the professional councils was structured into four themes - Public Protection, Human Resource Development (HRD), Sustainable and Integrated Development and Governance of professionals. On Public Protection there were more matured cases and there were more CBE decisions that were appealed against than in the previous year. Mr Gwazube acknowledged that demographics on transformation were not what were desirable especially on gender and race registration. He also stated that a strategic process of realignment and regularisation of existing agreements with Section 33 of the Constitution were to be finalised soon.

Mr Zulu thanked the Committee for its support and constructive criticism.

Discussion
Mr C Kekana (ANC) asked for an update on the case of black engineers who struggled to be registered and took the matter to court. He also wanted to know the CBE fund capacity concerning bursaries and what CBE did concerning the decline in the registration of architects.

Mr Zulu explained that the Department had submitted to the Minister of Public Works a threefold proposal which would improve the registration process. He also informed the Committee that the case for Black engineers was scheduled for 6 December 2010 in the High Court.

Ms N November (ANC) wanted clarity as to the performances of the provinces in terms of skills development and recruitment strategies as these were not mentioned in the presentation.

Mr Zulu stated that some of the provinces lacked accredited universities for the profession. This was a major challenge as it was difficult to promote the professions.

Mr K Sithole (IFP) suggested that CBE had to promote these professions to schools as most pupils had no idea what professions like landscaping entailed. He also wanted clarity as to why there was irregularity on tax clearances while CBE had monitoring processes in place.

Mr Zulu explained that the cause of the irregularity was the recommendation by the financial committee to authorise extra work; however, when the recommendation was approved, proper administration procedures were not followed.

Mr Kekana wanted clarity as to why there was shortage of professionals in Gauteng while it had more than three universities and whether CBE chose its bursary beneficiaries from rural areas.

Mr Zulu explained that Universities of Technology were the only ones that were accredited for the built environment. He also stated that the CBE bursary focused mostly on students from rural areas.

Mr N Magubane (ANC) suggested that promotion of the Built Environment profession had to be done in lower grades so that pupils would be able to choose subjects that were relevant to the profession, as it was very hard to change subjects in grade 12.

Mr T Magama (ANC) wanted clarity on the rumour that CBE had an unqualified audit opinion. He also wanted CBE to explain how it dealt with the person who was responsible for the irregularity of tax clearances. Mr Magama wanted to know if CBE had budgeted for a big increase in staff and why there was a drastic decrease in the registration of professionals.

Mr Zulu informed the Committee that the person responsible for the irregularity of tax clearances was given a warning. The majority of the staff increase was on the operational side and the increase of 30 new staff was budgeted for; two of that 30 had already resigned. He believed that the decline in registration was because people were not forced to register. The Council had considered implementing a strategy of not allowing persons to practise without first registering.

Mr L Gaehler (UDM) wanted to know how many members of the Council were from different associations. He also proposed that the Committee obtain a copy of the proposal submitted to the Minister. He was not impressed that the proposal was for the period until 2025 and he suggested that CBE produce plans that would deal with the problems it was facing at the present moment. He also wanted clarity as to what was CBE’s policy on young people with certificates from technical schools.

Mr Zulu stated that there were four members from governmental infrastructure in the Council and there were another four who were appointed by the public but the Council consisted of 20 members. He assured the Committee that even though the proposal to the Minister was for the period up to 2025 there was work that was already in progress. He informed the Committee that some of the young people obtained their certificates form colleges that were not accredited

The Acting Chairperson expressed her appreciation that the Committee was to get quarterly reports from CBE as that would assist the Committee in its oversight and facilitate obtaining clarity on difficult issues.  She advised the CBE that it was moving in the wrong direction regarding the demographics of the country as there were still high numbers (80%) of White professionals registered but very few women and members of other races.

Mr W Doman (DA) wanted to know what measures had been taken against four beneficiaries of bursaries who had not performed satisfactorily in the previous year.

Mr Zulu explained that the four beneficiaries were no longer benefiting from the bursary scheme, but it was impossible to get the money back or to make them pay as they came from severely disadvantage and underprivileged homes.

Mr Zulu thanked the Committee for its support and constructive criticism

The Committee urged the CBE to work hard and collaborate with the Committee for the growth of the country. The Committee was also impressed with the CBE’s excellent work on the presentation.

The meeting was adjourned.