Asset Management: Strategic Issues

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Asset ManagementStrategic Issues
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Table of contents

• Background
• Government Wide Immovable Asser Management
  (Policy)
• User Asset Management Plans (UAMP) and Custodian
  Asset Management Plans (CAMP)
• Asset Register Enhancement
• Asset Register Lost/Abused Assets
• Un/Under- Utilized Assets (DOD)
• Prioritization of Budgets
• Memorandum of Understanding (MOU)
• Service Level Agreements (SLAs)
• Disposals
• Research
• Pan African Parliament (PAP)
• Ports of Entry

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Background

• The Asset Management units specific purpose is
  to ensure that the state- owned immovable assets
  are optimally utilized, functional, cost
  effective and support service delivery objectives
  of states national clients department.
• Although the unit has been existent in the
  department it has just gone through a major
  transformation which prompted creation of new
  structure. The structure comprise of Portfolio
  Performance Unit, Investment Analysis and Key
  Accounts Management.
• The unit has embarked on a number of initiatives
  since its inception. Some of the initiatives in
  progress are
• Asset Register Enhancement Project,
• Short term prioritization of maintenance budget,
• Long term criteria of prioritising maintenance
  budget
• User and Custodian Asset Management Plans in
  line with GIAMA
• MOUs between DPW and its clients departments,
• Service Level Agreements (SLA) with client
  departments,
• Options analysis on disposals (both local and
  foreign) programmes
• It is units intention to have facilitated and
  developed policies and strategies for the life
  cycle management of states immovable assets by
  2007.

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Government-wide Immovable Asset Management
(Policy)

• In August 2005, Cabinet approved the
  Government-wide Immovable Asset Management Policy
  and the draft Government Immovable Asset
  Management (GIAMF) Bill for submission to
  Parliament.
• The policy calls for more efficient and effective
  use of immovable assets by three spheres of
  government and places an obligation on accounting
  officers to prepare Immovable Asset Management
  Plans to ensure that prudent management of such
  assets takes place.
• The policy and draft bill distinguish between
  users and custodians of immovable assets.

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User Asset Management Plans (UAMPs) and Custodian
Asset Management Plan (CAMP)

• Asset Management has compiled draft guidelines
  for the completion of user immovable asset
  management plans (UAMPs) to facilitate and assist
  with the required asset management plans by
  national governments. These guidelines will also
  be used for provinces.
• Assistance is being provided to user departments
  to complete their UAMPs in accordance with the
  client strategic plans.
• It is envisaged that the necessary basic
  immovable asset management plans in compliance
  with GIAMF would be completed for national
  departments in the current MTEF period.
• Parallel, Custodian immovable asset management
  plan (CAMP) guideline is being finalised.

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User Asset Management Plans (UAMPs)

• Users of immovable assets utilise the space or
  accommodation to give best effect to their
  functions and therefore must produce a User
  Immovable Asset Management Plan (UAMP) to ensure
• accountable, fair and transparent management of
  immovable assets
• effective, efficient and economic use of
  immovable assets
• reduced overall cost of service delivery and
• reduced demand for new immovable assets.
• A.M. will assist with the completion of a final
  pilot UAMP for the Department of Home Affairs to
  be implemented by the beginning of the financial
  year 2006/07 by 30 March 2006.
• AM also plans to complete all the UAMPs of its
  remaining client departments in March 2007. This
  will allow capacity build-up and consultation.

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Custodian Asset Management Plan (CAMP)

• DPW as the custodian is responsible for all
  activities associated with common law ownership
  and therefore must produce a Custodian Immovable
  Asset Management Plan (CAMP) to ensure that
  immovable assets
• are efficiently and effectively managed
  throughout their life-cycle
• provide a transparent and cost effective (best
  value) manner to meet service delivery
  requirements of users
• are maintained in a state to provide the most
  effective service
• are assessed in relation to its performance,
  suitability, condition and the effect of the
  condition service delivery ability and
• are disposed of in line with assessment
  recommendations.
• To this end, DPW will produce this plan during
  the 2006/07 fiscal year

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Asset Register Enhancement

• For the first time, a comprehensive inventory of
  State-owned immovable assets is available in an
  electronic format. Through the data gathering
  exercise, the number of entries in the National
  and Provincial Governments immovable asset
  registers increased from 112 000 to 375 000
  (consisting of information on land parcels and
  all buildings and structures).
• Agreement has recently been reached with the
  Office of the Accountant-General in National
  Treasury on the various fields of information
  that an immovable asset register should contain
  including both basic (essential) and additional
  (supplementary).
• In addition, it has recently been agreed with
  the Auditor-General that the basic (essential)
  fields will serve as the basis for the auditing
  of Governments immovable asset registers in
  future.

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Asset Register Enhancement

• AM commenced the asset register enhancement
  project in 2005/06 to improve data integrity of
  the departments asset register, service delivery
  and to facilitate property management in the
  eleven regions.
• The project will be completed over three years
  with an estimated total budget of R30m, effective
  from March 2005.
• A total of fifty four (54) contract workers have
  been employed in its regional offices to assist
  with the enhancement of asset register, service
  providers will also amply this process.
• Asset register enhancement project is running
  concurrently with the property vesting of the
  Department of Land Affairs.

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Asset Register Lost/Abused Assets

• Situational Analysis requires DPWs capability to
  acquire basic source information from the public
  through existing structures.
• A dedicated toll-free call centre number is being
  established.
• The approach of this process covers the entire
  extent of the Republic and should not only be
  former TBVC focused.
• DPW engages the Intelligence Structures to sort
  reclassification of the former National
  Intelligence Services (NIS), Military
  Intelligence (MI) Immovable Asset Registers and
  establishes all SARS records for transfers and
  donation to the State .
• Recommendations to this effect have just been
  forwarded to the Minister.

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Asset Register Lost/Abused Assets

• The lack of comprehensive information and
  collection of data necessitates the need for the
  institutional framework to assist in the assets
  identification strategy, given the recurrent of
  this problem.
• Parliamentary Constituency Offices
• South African Local Government Association
  (SALGA)
• Media Advertisements
• Capacity Enhancement
• DPW is exploring a FICA modelled verification
  process for all the identified grey immovable
  assets within and outside RSA

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Un/Under-utilised Assets Department of Defence
(DoD)

• Confirmed status of DoDs under -utilised
  facilities
• Western Cape 5 facilities have been identified,
  DoD to consolidate its operations in attempt to
  free some properties for disposal.
• Eastern Cape awarded to Cacuba community for
  land claim.
• Gauteng being investigated for possible disposal
  subject to confirmation by DoD.
• Limpopo 2 properties released to Justice and
  SAPS.
• Mpumalanga 1 property under evaluation for
  possible release to other departments/disposal.
• North West 3 properties identified for disposal
  and 1 still under investigation for possible
  disposal.
• For the rest of the un/under-utilised assets, DPW
  is awaiting confirmation from DoD.

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Prioritisation of Budgets

• Prioritising of the departments Maintenance and
  Capital Budgets
• During the 2005/06 financial year, the branch
  embarked on a prioritisation of the maintenance
  and capital budgets programme for the 2006/07
  year.
• The implementation programme was completed after
  collaboration with various stakeholders after
  giving due consideration to budget constraints.
• A draft long-term prioritisation of budgets is
  being prepared to co-incide with the MTEF cycles,
  going forward.

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Prioritisation of Budgets

• In December 2005 the Department developed a
  short-term criteria of prioritising maintenance
  projects for 2006/07.
• Criteria- ranked in order of importance
• 1.Statutory compliance e.g. OHSA, PFMA, PPPFA
  other Land, Environmental Safety Legislation
• 2. Security measures e.g. prevention of escapes
  and safe keeping of firearms
• 3. Functional vs. Residential accommodation e.g.
  provision of essential services
• 4. Special projects e.g. not captured on WCS but
  are a priority, and
• 5. Degree of readiness e.g projects that are at a
  tender stage

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Memoranda of Understanding (MOUs)

• The memorandum of understanding (MOU) is aimed at
  clarifying the relationship between the
  Department of Public Works (DPW) and the User
  Department with regard to the provision of
  services related to the management of immovable
  accommodation.
• Asset Management is tasked with the management of
  roles and responsibilities of DPW and the user
  departments and to ensure that a cooperative
  working relationship exists between departments.
• Asset Management is tasked with the management of
  roles and responsibilities of DPW and the user
  department and to ensure that a cooperative
  working relationship exists between departments.
• A total of 8 MOUs have already been signed and it
  is anticipated that the rest will be completed
  by 31 March 2006.

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Service Level Agreements (SLAs)

• The Department has embarked on an exercise of
  developing Service Level Agreements for all
  clients in April 2006.
• This is intended to define and monitor the level
  of services (service standards) offered to DPW
  clients in compliance with GIAMF.
• The SLAs will be governed by best practice
  principles and aligned with Government and
  Departmental strategic objectives over the MTEF
  period.
• These SLAs will be premised on the CVPs (Asset
  Management approach), that will be adopted for
  our respective clients.

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Asset Management Research

• One of the key objectives of AM is to provide
  past, current and future property industry
  researched information / data to enable the
  department to make informed decisions.
• AM must provide tools and capacity
• To research and analyse financial, economic and
  social market trends for broader economy,
• To determine economic and social market trends
  for property and construction sectors at both
  micro and macro level,
• To develop and implement analytical tools and
  models as well as appropriate systems, and
• To provide data and information to enable
  financial analysis, risk and return,
  socio-economic, planning, and policy for
  influencing acquisition, construction,
  maintenance and disposals.
• It is on the basis of the research outputs that
  tangible results and improvements will evident in
  2006/07.

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Disposals

• GIAMF provide that immovable assets are only of
  value to the user if they support service
  delivery objectives (effectively and
  efficiently).
• The branch has identified about 2000 unutilised
  properties from the asset register for possible
  disposal and has developed a disposal programme
  for their disposal over a period of 5 years. The
  final disposal decisions will depend on further
  investigation and analysis in respect of the 2000
  unutilised properties.
• Disposals are now managed in a more integrated
  and co-ordinated manner for efficiency and
  effectiveness.
• Disposal Phases 1 and 2 of the disposal programme
  have already been approved by the Minister and it
  is planned that the surplus properties will be
  disposed in the MTEF period 2006/08. In addition
  to the phases 1 and 2 properties, further
  investigation into the 2000 unutilised properties
  together with other additional unutilised
  properties will be continued and included in
  disposal phase 3.

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Disposals

• The effective rollout of the disposal programme
  will minimise holdings of surplus and
  under-performing assets and maximise value to
  Government.
• Apart from Phases 1, 2 and 3, special disposals ,
  particularly, illegally occupied and dilapidated
  properties must be sold immediately. For example,
  through auctions.
• An identification and investigation of Foreign
  properties for disposals has already commenced.
• Asset Management has already identified
  properties in Malawi, Namibia, France, Germany,
  Madeira and Switzerland for disposal.
• Foreign property disposal is subjected to the
  laws and regulations of the country where
  property is domiciled.

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Pan African Parliament (PAP)

• Residential Properties has been secured for the
  President of PAP whose occupation is earmarked
  for 1 April 2006.
• Options Analysis Phase
• Needs analysis
• This encompasses the identification of site
  location site analysis location due diligence
  evaluation and recommendation.
• Design
• Appointment of competitions advisor Alignment
  with accreditation institution of choice
  compilation of competition document announcement
  of competition and appointment of the preferred
  bidder to work on drawings and tender
  documentation.
• Construction
• Setting out of the works site clearance
  sub-structure super- structure roof
  construction external works first delivery 12
  months defects period including specialized work
  and final handover.
• Project completion expected in the first half of
  2010.

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BCOCC

• The BORDER CONTROL OPERATIONAL CO-ORDINATION
  COMMITTEE (BCOCC) structure was presented and
  approved by the Cabinet Lekgotla in July 2005.
• DPW has been mandated to chair the BCOCC
  Development Committee.
• National Treasury allocated budget of R 910
  million for the BCOCC until the end of 2008/2009
  financial year.
• The funds are utilised for Capital Works,
  Acquisitions, and RAMP projects and for the
  expansion and renewal of the ICT systems at Ports
  of Entry (Air, Land, Sea and Rail which includes
  54 Land Ports of Entry, 10 Harbours and 10
  International Airports).

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• Siyabonga