< PreviousANNUAL REPORT 2022 – 2023 Preserving and advancing the highest international standards for the profession of architecture ANNUAL REPORT 2022 – 2023 78 The Audit and Risk Committee is pleased to present our report for the Financial Year ended 31 March 2023. 1. AUDIT AND RISK COMMITTEE ATTENDANCE 2022/2023 The ARC meets at least four times per annum in line with its approved charter. Five meetings were held during the financial year. The table below discloses relevant information on the Audit and Risk Committee members. Name of the MemberDate appointedNumber of meetings attended Ms Nocwaka Oliphant - Independent ChairpersonMay 20195 Mr Tshepiso Poho -Independent MemberMay 20195 Ms Zelda Tshabalala -Independent MemberAugust 20194 Mr Lufuno Nematswerani - Council RepresentativeMay 20195 Mr Rowan Graham Nicholls- Council RepresentativeMay 20195 2. AUDIT AND RISK COMMITTEE RESPONSIBILITIES The ARC reports that it has adopted appropriate formal terms of reference as its charter. The Charter was approved by Council. The ARC has managed and regulated its affairs in compliance with this charter. The ARC’s role and responsibilities include statutory duties, and further responsibilities assigned to it by the Council. 3. THE EFFECTIVENESS OF INTERNAL CONTROLS The ARC obtains assurances from management, internal audit and the external auditors on the effectiveness of governance, risk management and internal controls in the areas of financial management, performance management, compliance management and information communication and technology (ICT). Management has made positive progress in addressing the internal control deficiencies that have been reported by internal audit and the external audit over the year. Some weaknesses in the systems of internal controls remained for the period, and were raised with management for attention and correction. 4. RISK MANAGEMENT The ARC is responsible for oversight of the risk management function. The Council has adopted a risk management framework, strategy and, relevant policies for SACAP. The ARC established a risk management sub-committee, chaired by one of the independent ARC members to ensure that risk management oversight is afforded adequate attention by the ARC. This sub-committee reports quarterly to the ARC and the ARC reports quarterly to the Council on the risk management processes. The risk management processes are reviewed by Internal Audit. There has been an improvement in the risk management processes of the SACAP over the year. The ARC is satisfied with the overall risk management function and has made recommendations to management to enhance risk management where necessary. 5. INTERNAL AUDIT SACAP’s Internal Audit function is outsourced and was operational for the entire year under review. The independence of the Internal Audit was monitored throughout the period. Internal Audit follows a risked based approach, which incorporates the Council’s risk assessment. The Internal Audit plans and reports issued for the year under review were reviewed and approved by the ARC. The following internal audits were completed during the year under review: • Human Capital Management; • Financial Discipline (Internal Financial Controls); • Follow Up on Findings raised by External and Internal Audit; and • Performance Information (Performance against Objectives) – Quarter 3. Internal audit’s overall opinion is: Based on the samples tested for the period under review and the results of the audit work performed for the year under review, the existing control environment “Needs Improvement” in order to provide reasonable assurance that the organization’s goals and objectives are being achieved. There were areas where the internal control systems were identified as requiring immediate corrective action. Management focus should be on Performance Information, Human Capital Management and Financial Discipline (Internal Financial Controls). Internal audit also performed follow-up audits on all processes covered.South African Council for the Architectural Profession PART C GOVERNANCE 79 6. THE FOLLOWING ISSUES IDENTIFIED BY INTERNAL AUDIT AND EXTERNAL AUDIT COULD HAVE SOME MATERIAL IMPACT ON THE CONTROL ENVIRONMENT AND MANAGEMENT ATTENTION IS REQUIRED TO ADDRESS THEM Internal control deficiencies • Reconciliation between YM system and accounting system not performed for other income • Asset numbers for disposals not evident and cannot be traced to fixed asset register • Assessment of useful lives of asset for nil value assets still in use not performed • Assets selected from the Fixed Asset Register could not be physically verified Performance (Pre-determined objectives) – Performance management • Inconsistencies noted between Annual Performance Plan and Quarter three (3) Report • Inconsistencies noted between reported achievements on the quarterly report and the proof of evidence provided Compliance with laws and regulations • Policies and Procedures not regularly reviewed • Vacant position existing for more than six (6) months • No evidence of monitoring of changes to Employee details on the VIP system 7. EVALUATION OF THE FINANCE FUNCTION The finance function is adequately capacitated and led by a suitably qualified and competent Senior Manager Finance. The ARC is overall satisfied with the performance of the finance function for the period under review. 8. EVALUATION OF ANNUAL FINANCIAL STATEMENTS The Audit and Risk Committee has reviewed the annual financial statements and the review focused on the following: • Significant financial reporting judgements and estimates contained in the annual financial statements. • Clarity and completeness of disclosures and whether disclosures made have been set properly in context • Compliance with accounting standards and legal requirements. • Significant adjustments and/or unadjusted differences resulting from the audit. • Reflection of unusual circumstances or events and management’s explanation for the accounting treatment adopted. • Reasons for major year-on-year fluctuations, including variances of actual versus budget. • Asset valuations and revaluations. • Levels of general and specific provisions. • Write-offs. • The basis for the going concern assumption, including any financial sustainability risks and issues. 9. EXTERNAL AUDITOR’S REPORT The Audit and Risk Committee concurs and accepts the conclusions of the external auditor on the annual financial statements and is of the opinion that the audited financial statements be accepted and read together with the external Auditor’s Report. 10. EXTERNAL AUDITOR’S REPORT The Audit and Risk Committee expresses its sincere appreciation to the Council, Registrar, Management team, Internal Audit and External auditor for their co-operation towards us achieving the requirements of our Charter as mandated. Ms Nocwaka Oliphant Chairperson of the Audit and Risk Committee SACAPANNUAL REPORT 2022 – 2023 Preserving and advancing the highest international standards for the profession of architecture ANNUAL REPORT 2022 – 2023 PART D Human Resources ANNUAL REPORT 2022 – 2023 80South African Council for the Architectural Profession PART D HUMAN RESOURCE MANAGMENT 81 INTRODUCTION HR OVERVIEW DELIVARABLES UNDER THE REVIEW PERIOD Human Resource has made significant inroads in the past financial year. The main focus areas were High-performance drive; on boarding of new staff; Talent retention and Training/Development. The succession plan programme has been given more attention than ever, and Personal Development Plan(DPD) for the 2023-24 FY is part of the focus area. All employees will have PDP in place when contracting for the new FY (2023-2024). All these has created an environment where employee are comfortable to interact freely with their colleagues/managers with regard to the matters related to their work life. SACAP application for Mandatory Grants as submitted by in 2022, has been assessed and found to meet the criteria as outlined by the Construction Education & Training Authority (CETA) in line with the CETA Grant Criteria for approval. The Mandatory Grants amount, subject to the CETA Grant Regulations shall be paid out to qualifying levy paying employers at 20% of the total levies paid by the employer and received by CETA in terms of section 3(1) read with section 6 of the Skills Development Levies Act during each financial year. SACAP has prioritized the understanding of Annual Performance Plan by embedding it to the entire workforce through various platforms such as imbizo sessions held. Employees had clear defined performance deliverables / objectives for 2022/2023 Financial Year. Understanding the translated SACAP Strategy/Vision/Mission into an easy, clear performance contracting yielded good results. An intentional high performance culture drive has brought about great results as various units showed improvement. This has been achieved through various interventions, such as training and development drive at SACAP, regular employee engagement sessions with leadership team. Wellness Programme has made a huge difference in looking after our employee wellness (Mental issue Challenges) issues. SACAP’s work force is utilising the wellness programme offered by KAELO GROUP. The usage of the programme has gone up by 20% from the previous year’s utilization. ANNUAL REPORT 2022 – 2023 Preserving and advancing the highest international standards for the profession of architecture ANNUAL REPORT 2022 – 2023 82 HUMAN RESOURCE OVERSIGHT STATISTICS EMPLOYMENT AND VACANCIES Programme/ activity/objective 2019/2020 Approved Posts 2020/2021 No. of Employees 2020/2021 Vacancies 2021/2022 No. of Employees 2021/2022 No. of Vacancies 2022/2023 No. of Vacancies Total of Vacancies Top Management1101110 Senior Management4132000 Professional qualified 2319418000 Skilled2623324222 Semi-skilled2111112 Unskilled0000000 TOTAL564511461144 There are currently 4 positions that need to be filled within SACAP as per the approved organogram. The process to fill all the vacant roles is currently underway. Positions have been advertised and some interviews are already scheduled. EMPLOYMENT CHANGES Salary Band Employment at beginning of periodAppointmentsTerminations Employment at end of the period Top Management1001 Senior Management1103 Professional qualified172017 Skilled224124 Semi-skilled101 Unskilled0000 Total428146 THE FOLLOWING APPOINTMENT WERE MADE IN THE FINANCIAL YEAR: • Zola Peter – Human Resource Manager • Nothemba Lugaju- Senior Legal and Compliance Manager • Mzwakhe Hlatshwayo- Education & Accreditation Manager • Vuyo Nyoka – Investigation Officer • Orabetswe Morake - Reconciliation Administrator • Masello Namo - Front Office Assistant • Mzamo Zama - Registrations Administrator • Gloria Rampedi – CPD Administrator REASONS FOR STAFF LEAVING ReasonNumber% Attrition Rate Death10 Resignation00 Dismissal10 Retirement00 Ill health10 Expiry of contract0 Other (Retrenchment)00 Total36.5 %South African Council for the Architectural Profession PART D HUMAN RESOURCE MANAGMENT 83 THE FOLLOWING EMPLOYEES LEFT SACAP DURING THE FINANCIAL YEAR: • Joey Modiselle – Finance Administrator • Mamokete Sehoole – Committee Co-ordinator • Vicky Johnson – Registration Administrator LABOUR RELATIONS: MISCONDUCT AND DISCIPLINARY ACTION Nature of disciplinary ActionNumber Verbal Warning5 Written Warning5 Final Written warning3 Dismissal1 EQUITY TARGET AND EMPLOYMENT EQUITY STATUS Levels MALE AfricanColouredIndianWhite Current TargetCurrent TargetCurrentTargetCurrent Target Top Management11000000 Senior Management22000011 Professional qualified44000011 Skilled3522111102 Semi-skilled00110000 Unskilled11000000 TOTAL4343221102 Levels FEMALE AfricanColouredIndianWhite Current TargetCurrent TargetCurrentTargetCurrent Target Top Management00000000 Senior Management22010111 Professional qualified11010011 Skilled2424110100 Semi-skilled00000000 Unskilled11000000 TOTAL2828130222 Levels DISABLED STAFF MaleFemale Current TargetCurrent Target Top Management0000 Senior Management0001 Professional qualified1100 Skilled0001 Semi-skilled0000 Unskilled0000 TOTAL1102ANNUAL REPORT 2022 – 2023 Preserving and advancing the highest international standards for the profession of architecture ANNUAL REPORT 2022 – 2023 PART E Financial Information ANNUAL REPORT 2022 – 2023 84South African Council for the Architectural Profession PART E FINANCIAL INFORMATION 85 ANNUAL FINANCIAL STATEMENTS OF SOUTH AFRICAN COUNCIL FOR THE ARCHITECTURAL PROFESSION (Established under the Architectural Profession Act no 44 of 2000) Annual Financial Statements for the year ended 31 March 2023 The reports and statements set out below comprise the annual financial statements presented to the Council: INDEX General Information 86 Independent Auditor’s Report 87 - 88 Council Member’s Responsibilities and Approval 89 Registrar’s Report 90 - 91 Statement of Financial Position 92 Statement of Comprehensive Income 93 Statement of Changes in Equity 93 Statement of Cash Flows 94 Accounting Policies 95 - 100 Notes to the Annual Financial Statements 101 - 113 The supplementary information presented does not form part of the annual financial statements and is unaudited: Detailed Income Statement 114 - 115ANNUAL REPORT 2022 – 2023 Preserving and advancing the highest international standards for the profession of architecture ANNUAL REPORT 2022 – 2023 86 GENERAL INFORMATION Country of Incorporation and Domicile Nature of Business and Principal Activities Registered Office Business Address Council Bankers Auditor Level of Assurance Preparer Published South Africa Statutory body that regulates the Architectural Profession in South Africa 51 Wessel Road Right Wing Rivonia 2128 51 Wessel Road Right Wing Rivonia 2128 During the year end up to the date of this report the Council was constituted as follows: Mr NC Nduku - President Ms LR Shongwe née Lerotholi - VicePresident Ms N Daki Dr S Dlamini Mr V Phailane Mr K Bingham Mr MA Mohidien Mr RG Nicholls Mr L Nematswerani First National Bank Nedbank Investec Bank ABSA Nexia SAB&T Registered Auditors These Annual Financial Statements have been audited in compliance with the applicable requirements of Architectural Profession Act,no 44 of 2000 The annual financial statement were compiled by Maphuti Mothapo CA(SA): Finance Manager 17 August 2023South African Council for the Architectural Profession PART E FINANCIAL INFORMATION 87 INDEPENDENT AUDITOR’S REPORT To the Council Members of South African Council for the Architectural Profession. OPINION We have audited the financial statements of South African Council for the Architectural Profession set out on pages 92 to 113, which comprise the statement of financial position as at 31 March 2023, and the statement of comprehensive income, statement of changes in equity and statement of cash flow for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the financial statements present fairly, in all material respects, the financial position of South African Council for the Architectural Profession as at 31 March 2023, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the Architectural Professional Act no 44 of 2000. BASIS FOR OPINION We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the council in accordance with the Independent Regulatory Board for Auditors’ Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the corresponding sections of the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. OTHER INFORMATION The Council Members are responsible for the other information. The other information comprises the information included in the document titled “Annual Financial Statements of South African Council for the Architectural Profession”, which includes the Registrar’s Report. The other information does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. RESPONSIBILITIES OF THE COUNCIL MEMBERS FOR THE FINANCIAL STATEMENTS The Council Members are responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards and the requirements of the Architectural Profession Act no 44 of 2000, and for such internal control as the Council Members determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Council Members are responsible for assessing the council’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Council Members either intend to liquidate the council or to cease operations, or have no realistic alternative but to do so. AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:Next >