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PRESENTATION TO THE PORTFOLIO COMMITTEE ON PUBLIC WORKS 19 JANUARY 2011

PRESENTATION TO THE PORTFOLIO COMMITTEE ON PUBLIC WORKS 19 JANUARY 2011. 1. MAIN CONTENTS. Immovable Asset Register Progress on the implementation of GIAMA. 2. I . IMMOVABLE ASSET REGISTER. 3. Sub-Contents. Audit Qualifications Rationale and Progress

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PRESENTATION TO THE PORTFOLIO COMMITTEE ON PUBLIC WORKS 19 JANUARY 2011

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  1. PRESENTATION TO THE PORTFOLIO COMMITTEEON PUBLIC WORKS 19 JANUARY 2011 1

  2. MAIN CONTENTS • Immovable Asset Register • Progress on the implementation of GIAMA 2

  3. I. IMMOVABLE ASSET REGISTER 3

  4. Sub-Contents • Audit Qualifications • Rationale and Progress • Intensifying the Enhancement and completeness of the Asset Register • Conclusion 4

  5. Audit qualifications on immovable assets: 2009/10 1) Not all assets owned by the DPW were accounted for in the asset register that supports the financial statements; Title deeds and stand numbers for some of the assets were not indicated on the asset register and therefore the DPW’s rights and obligation to these properties could not be verified, and DPW, in conjunction with the Department of Rural Development and Land Reform and all provincial departments’ custodians, was tasked with leading a government-wide initiative to complete the vesting of ownership of state-owned land. This initiative is still in progress. 5

  6. Rationale and ProgressNot all assets owned by the DPW were accounted for in the asset register that supports the financial statements Rationale • Project expenditure captured on Works Control System (WCS) not reflected on Asset Register. Progress • WCS and PMIS modules have been integrated on iE- Works. • Projects and expenditures are currently linked to immovable assets in the Asset Register through asset numbers. 6

  7. Rationale and ProgressTitle deeds and stand numbers for some of the assets were not indicated on the asset register and therefore the DPW’s rights and obligation to these properties could not be verified Rationale • Incomplete surveying of State Land results in certain properties not having title deed numbers and stand numbers. • Also, inadequacies relevant to update of Asset Register leads to incompleteness. Progress • Significant improvement noted by Auditor-General on completeness. • Reviewed Asset Register guideline on essential information. 7

  8. Rationale and ProgressDPW, in conjunction with the Department of Rural Development and Land Reform and all provincial departments’ custodians, was tasked with leading a government-wide initiative to complete the vesting of ownership of state-owned land. This initiative is still in progress. Rationale • Vesting is a joint custodial responsibility. • Key essential of vesting is that a property must exist as an entity and its title endorsed in the Deeds Office. • Surveying for vesting is a pre-requisite. Progress • Implementation of the Vesting Master Plan is in progress and a tracking mechanism has been put in place for vesting applications to the level of the competent authority at DRDLR. • Performance relative to targets is monitored jointly on quarterly basis. • 12 000 land parcels out of 35 746 land parcels in DPW Asset Register have been vested. 8

  9. Intensifying the Enhancement and completeness of the Asset Register Phase 1 2011/12 – 2012/13 • Appointment of at least 200 contract workers to physically verify completeness, accuracy and update Asset Register essential information across all Regions. • Operationalize the Amnesty initiative to identify unaccounted States assets. Phase 2 2011/12 – 2013/14 • Appointment and renewal of contract workers to fast track vesting programme. • Appointment of surveyors and alignment to DRDLR surveying programme. Phase 3 2011/12 – 2012/13 • Further development on the Integrated Asset Register Management System. • Prioritize Condition Assessments. • Enhanced Stakeholder engagements with Provinces and Municipalities. 9

  10. Conclusion The enhancement of the Asset Register is an ongoing exercise towards completeness and maintenance to meet the requirements of full life-cycle asset management envisaged as per the Government Immovable Asset Management Act, (Act 19 of 2007 ). 10

  11. II. PROGRESS REPORT ON THE IMPLEMENTATION OF GIAMA 11

  12. CONTENT • Background • Legal Framework of GIAMA • Status report on: • Implementation of the Act • Asset Register • Achievements since implementation of the Act • Challenges faced by the Departments • Plans towards full implementation • Conclusion 12

  13. 1. BACKGROUND • The State’s immovable assets are owned and controlled by a multitude of entities on National, Provincial and Local Government level, as well as by the large number of Public Entities. • This proliferation of custodians of immovable assets, invariably causes duplication of effort, inconsistencies and inefficiencies in the manner that such assets are managed in Government. • Poor immovable asset management decisions will have a detrimental impact on Government’s ability to render efficient and effective services to the public. 13

  14. BACKGROUND (Cont…) • This culture of replacement rather than maintenance eventually costs government significantly more than what ongoing preventative maintenance would cost. • It is therefore imperative that Government’s immovable assets be managed in a uniform, efficient, effective and accountable manner. 14

  15. 2. LEGAL FRAMEWORK OF GIAMA • The Constitution mandates the National Government to pass legislation for all spheres of government with the purpose of establishing uniformity and setting minimum norms and standards with regard to service delivery. • In 2003, Cabinet mandated the Minister of Public Works to develop a policy framework to govern the management of immovable assets throughout Government and to implement that policy by means of legislation. • In 2005, Cabinet approved the Government-wide Immovable Asset Management Policy and in 2007, the Government Immovable Asset Management Act (GIAMA) was promulgated, applicable to National and Provincial Government only. 15

  16. 3. PROGRESS MADE TOWARDS IMPLEMENTATION Provincial pre-implementation plan • DPW developed a workbook outlining important aspects to be considered by provinces; • Each province was required to prioritize activities in accordance with a self-assessment questionnaire; • Each province was required to establish sub-forums for users and custodians; • DPW has trained all provincial DPW property management staff on compilation of user asset management plans; • DPW participated (where required) in workshops and forum held at provincial level to clarify processes. 16

  17. PROGRESS MADE TOWARDS IMPLEMENTATION (Cont…) In April 2009, the President signed a proclamation to bring GIAMA into operation with effect from 01 April 2010 for provincial spheres of government. National and Provincial stakeholders finalized key policies and guidelines to be put in place for the strategic management of immovable assets. These policies and guidelines are the – • compilation of a user asset management plan (U-AMP) as well as the custodian asset management plan (C-AMP); • compilation and maintenance of immovable asset registers; 17

  18. PROGRESS MADE TOWARDS IMPLEMENTATION (Cont…) c) the updating of the vesting guidelines to be applicable to both national and provincial departments; • the alignment of asset & property management policies such as the state official residential accommodation policy; Compilation of Asset Management Plans a) all provinces have started developing the 2012-13 financial year user asset management plans for submission to relevant treasury for funding purposes in terms of section 6 of the Act. 18

  19. PROGRESS MADE TOWARDS IMPLEMENTATION (Cont…) Compilation of Immovable Asset Registers • The guideline for the compilation of immovable asset registers has been completed with inputs from stakeholders; • The “ideal end state” information fields have been incorporated into the GIAMA Asset Register (GAR) module of the iE-Works system; 19

  20. PROGRESS MADE TOWARDS IMPLEMENTATION (Cont…) Confirmation of ownership “vesting” of state-owned properties • National Vesting Master Plan incorporating national and provincial land has been developed and requires custodians to finalise the vesting of state land by latest 2014; • Although the bulk of applications are still with the Provincial State Land Disposal Committees (PSLDC) for finalisation, a significant progress has been made; • It is important to note that the delay in the finalisation of the vesting programme does not preclude departments from populating their asset registers and preparing U-AMPs and C-AMPs; 20

  21. PROGRESS MADE TOWARDS IMPLEMENTATION (Cont…) Confirmation of ownership “vesting” of state-owned properties d) As an interim measure, national and provincial custodians have reached agreement on the principle of “deemed vested”; e) The issuing of item 28(1) certificate and the subsequent endorsement of the title deeds will confirm that assets are either vested nationally or provincially thus leading to updated and accurate asset registers. 21

  22. PROGRESS MADE TOWARDS IMPLEMENTATION (Cont…) Condition Assessment and Maintenance Programmes • The development of a uniform guidelines for condition assessments for the various asset type has been prioritised and provincial departments are participating in this process; • As GIAMA only came into operation for provinces on 01 April 2010, the budget requirements to address maintenance priorities were only be submitted to the Provincial Treasuries during 2010-11 financial year; • In the meantime, provincial custodians have compiled a list of properties that received a C1 (very poor) and C2 (poor) condition rating by users from the U-AMPs submitted during 2010-11 financial year. 22

  23. 4. ACHIEVEMENTS SINCE IMPLEMENTATION OF THE ACT Both National and Provincial departments have managed to: • Provide a uniform immovable asset management framework to promote accountability & transparency; • Ensure effective immovable asset management within departments; • Ensure alignment of the use of immovable assets with the service delivery objectives of departments; • Minimize the cost of immovable assets allocated to departments; • Enable the submission of better quality information regarding immovable asset related needs into the budgeting process. 23

  24. 5. CHALLENGES FACED BY DEPARTMENTS • GIAMA is underpinned by the principle that immovable asset management is a specialised domain and it therefore necessitates skilled asset managers (custodians) to ensure the efficient management of immovable assets; • Capacity and funding to carry out immovable asset management functions; • The allocation of maintenance budget to user departments creates multiple functions within the departments; • Continuous change in the departmental management causes delays in implementing certain decision; • Delays in delegation of custodial responsibilities by Premiers. 24

  25. 6. PLANS TOWARDS FULL IMPLEMENTATION The process of extending GIAMA to local government has started, however the following need to be taken into account: • There are key differences in the legal framework and structure of local government, compared to national / provincial government; • It would be particularly difficult to draft a single piece of legislation to apply immovable asset management principles to all spheres of government; • A different approach has therefore been identified to apply the principles of immovable asset management to local government without undue delay; 25

  26. PLANS TOWARDS FULL IMPLEMENTATION (Cont…) • Alternative 1: Additions and/or amendments to the Local Government: Municipal Planning and Performance Management Regulations could be developed and issued by the Minister of Cooperative Governance & Traditional Affairs in terms of the Local Government: Municipal Systems Act, 2000 to remedy the shortcomings; • The Department of Cooperative Governance & Traditional Affairs concurs that the applicable regulations governing municipal planning should be harmonized with the principles embodied in GIAMA; • In the meantime, the process of aligning IDIP and GIAMA has been concluded and will be applied in 2011-12 FY; 26

  27. PLANS TOWARDS FULL IMPLEMENTATION (Cont…) • Alternative 2: Specific legislation could be developed, based on the requirements, organisational structure and existing legal framework of local government; • The lengthy process in developing and enacting new legislation makes Alternative 2 unattractive, especially in view of the expedient opportunity that Alternative 1 offers; • Given the varying levels of autonomy of Public Entities, extensive consultation is required before legislation applicable to such organs of State can be finalised 27

  28. 7. CONCLUSION The implementation of GIAMA has reached a critical stage and the continued commitment of Senior Management in custodian departments remains essential. GIAMA affords government the opportunity to improve service delivery through: • A facilitated process to improve asset management • Structured immovable asset management plans to improve: • implementation of new maintenance and operational programmes 28

  29. THANK YOU! 29

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