Government Immovable Asset Management Bill [GIAMA]

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Government Immovable Asset Management
BillGIAMA

• National Council of Provinces
• Select Committee on Public Services
• Parliament, 09 May 2007

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Content

• Introduction
• The need for GIAMA
• Legal framework of GIAMA
• Consultation
• Scope of application of GIAMA
• Objectives of GIAMA
• Principles of Immovable Asset Management
• Guidelines Requirements
• Responsibilities of Users
• Responsibilities of Custodians
• Immovable Asset Management Plans
• Norms and Standards
• Current position

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1. Introduction

• This presentation aims at highlighting the
  objectives, principles and roles
  responsibilities pertaining to the draft
  legislation to govern the life-cycle management
  of immovable assets in the National Provincial
  spheres of Government, as embodied in the
  Government Immovable Asset Management Bill.

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2. Need for Government Immovable Asset
Management Act (GIAMA)

• Government is confronted with service delivery
  needs which must be matched with the efficient
  and effective use of all resources, including
  immovable assets.
• Governments extensive and diversified immovable
  assets have a significant impact on the overall
  macro-economic, socio-political physical
  landscape.
• Decisions on immovable assets have long-term
  implications and should be based on the full
  impact of costs over the expected lifespan of
  such assets.
• It is therefore imperative that Governments
  immovable assets be managed in a uniform,
  efficient, effective and accountable manner.

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3. Legal framework of GIAMA

• The Constitution mandates the National Government
  to pass legislation for all spheres of government
  if the purpose is to establish uniformity and to
  set 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
  immovable asset management throughout Government
  and to implement that policy by means of
  legislation.
• In 2005, Cabinet approved the Government-wide
  Immovable Asset Management Policy and the
  introduction of legislation.
• The Government Immovable Asset Management Bill
  B1-2006 was tabled in Parliament in Feb 2006.
• In March 2007, the Bill was adopted by the
  National Assembly.

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4. Consultation

• DPW has consulted with all National and
  Provincial Departments on the GIAMA policy and
  their comments have been incorporated in the
  Bill.
• In particular, DPW continually consults with
  National Treasury to ensure consistency with
  the Public Finance Management Act (PFMA) and its
  regulations, as well as National Treasurys
  Asset Management Guideline.
• DPW has consulted extensively with the dplg
  regarding the extension of the principles and
  objectives of GIAMA to local governments, through
  the development of a regulatory framework in
  terms of existing legislation .

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5. Scope of application of GIAMA

• The Government Immovable Asset Management Bill
  B1-2006 is applicable to national and
  provincial departments only.
• It is the intention to extend the objectives of
  GIAMA throughout Government (without disturbing
  existing mandates or the roles and
  responsibilities of government entities).
• In order to achieve the objectives of GIAMA at
  municipal level, DPW is assisting the Department
  of Provincial Local Government (the dplg) to
  develop the regulatory framework to govern
  immovable asset management in local government,
  in terms of existing legislation (Local
  Government Municipal Systems Act, 2000 and
  Municipal Finance Management Act, 2003).
• Given the varying levels of autonomy of Public
  Entities, extensive consultation is required
  before legislation applicable to such organs of
  State can be finalised.

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6. Objectives of GIAMA

• GIAMA will make it incumbent on national
  provincial departments to promote Governments
  service delivery objectives through the sound
  management of immovable assets they use or
  control. The objectives of the legislation are 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, to ensure the efficient utilisation
  of such assets.
• 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, which in turn
  will result in improved budgeting for capital
  works, maintenance and operating costs.

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7. Principles of Immovable Asset Management
The management of immovable assets as defined in
GIAMA must comply with the following principles
of immovable asset management

1. IAM must comply with existing legislation (e.g.
   PFMA, Occupational Health and Safety Act sector
   specific legislation) government policies (e.g.
   Batho Pele access for disabled persons to
   public buildings) and regulations (e.g. National
   Building Regulations)
2. Strategic planning and management of immovable
   assets are key corporate activities and need to
   be considered together with other strategic
   planning (e.g. human resources information
   technology).
3. Immovable assets should exist to support the
   service delivery objectives of the organ of
   state.
4. Immovable assets with strategic importance to
   Government should not be disposed of.

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Principles of Immovable Asset Management
(Continued)

1. Required resources must be allocated to optimise
   utilisation of and expenditure on immovable
   assets.
2. Before deciding to acquire new assets, organs of
   state must consider all relevant factors
   including non-asset solutions, full life-cycle
   costing, risk analysis and the optimal use of
   existing assets.
3. In asset management decisions, organs of state
   should take into account the preservation of
   heritage, cultural environmental values.
4. Immovable asset management decisions should meet
   the needs of the present without compromising the
   needs of future generations.
5. Immovable asset management must be aimed at the
   improvement of health and safety in the working
   environment.
6. Immovable asset management must be aimed at
   reducing the overall cost of service delivery
   through the optimal allocation of resources.

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8. Guidelines Requirements

• The proposed legislation will empower the
  Minister of Public Works to determine
  immovable asset management guidelines and minimum
  requirements that will -
• complement general asset management guidelines
  issued by National Treasury in terms of the PFMA
• provide a framework for the management of
  immovable assets throughout their life-cycle,
  encompassing
• Strategic planning
• Acquisition
• Maintenance management and
• Disposal.

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Guidelines Requirements Continued)

• address the minimum content, format and processes
  required to compile immovable asset management
  plans
• provide a planning framework for custodians to
  implement a portfolio management function
• provide a framework to facilitate benchmarking,
  condition assessment and performance measurement
  of immovable assets and
• prescribe the critical information required to
  manage immovable assets.

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9. Responsibilities of Users

• A user of immovable assets utilises such assets
  to give best effect to its functions in pursuit
  of its service delivery objectives. A user must
  therefore produce a user asset management plan
  (U-AMP) to ensure -
• accountable, fair and transparent utilisation of
  immovable assets
• effective, efficient and economic use of
  immovable assets
• reduced overall cost of service delivery
• reduced demand for new immovable assets.

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10. Responsibilities of Custodians

• Custodians are responsible for the efficient
  effective management of immovable assets
  throughout their life-cycle and therefore must
  produce a custodian asset management plan (C-AMP)
  to ensure that immovable assets are
• provided in a transparent cost effective manner
  to meet the service delivery requirements of
  users
• maintained in the state in which they would
  optimally support service delivery objectives,
  including refurbishment at regular service-life
  intervals
• assessed in relation to performance, suitability,
  condition and the effect that the condition of an
  asset has on service delivery ability and
• dealt with in the manner which the assessments
  indicate relevant to each assets life cycle,
  including renewal at the end of its current
  economic-life or release for socio-economic
  purposes.

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11. Immovable Asset Management Plans

• All national and provincial departments will be
  required to annually compile an Asset Management
  Plan (AMP) that will form part of Governments
  strategic planning budgeting processes.
• A department responsible for custodial functions
  in respect of immovable assets will compile a
  Custodian AMP (C-AMP) that must cover all the
  immovable assets (State-owned and leased) that
  such custodian controls or intends to control.
• A user of immovable assets will compile a User
  AMP (U-AMP) that must cover all the immovable
  assets (State-owned and leased) that such
  department uses or intends to use.
• Custodians and users of immovable assets should
  jointly conduct the annual strategic planning
  process. Custodians must assist users by
  availing information pertaining to the
  performance of immovable assets allocated to such
  users.

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Immovable Asset Management Plans (Continued)

• All AMPs must be submitted to the relevant
  Treasury annually (on a date to be
  determined by that Treasury).
• AMPs will inform the annual budgetary process and
  must be revised once budget allocations are
  finalised by National Treasury.
• Revised AMPs must be included in the annual
  strategic plans of national and provincial
  departments and will therefore be presented to
  Parliament Provincial Legislatures respectively.

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Feb to April Users (assisted by Custodian)
prepare U-AMP for next financial cycle
November Budget allocations approved by Treasury
May Users submit U-AMP to Treasury Custodian
June to August Custodian assesses U-AMPs in
terms of total portfolio submits C-AMP to
Treasury
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12. Norms and Standards

• The legislation will allow the Minister of Public
  Works to issue regulations to ensure uniformity
  in respect of -
• User Asset Management Plans
• Custodian Asset Management Plans
• Functional Assessment of Immovable Assets
• Space cost norms
• Valuation of immovable assets
• Feasibility and Options Analyses
• Immovable Asset Registers

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13. Current position

• In Feb 2007, the Portfolio Committee on Public
  Works conducted extensive public hearings and all
  relevant comments were incorporated into the
  Bill. DPW subsequently engaged with the
  Portfolio Committee and Office of the Chief State
  Law Advisor regarding necessary amendments to the
  Bill.
• The Amended Bill was adopted by the National
  Assembly in March 2007. The Bill was
  subsequently referred to the National Council
  of Provinces (NCOP) for consideration.
• DPW has developed comprehensive guidelines for
  the compilation of User- and Custodian Asset
  Management Plans, providing step-by-step guidance
  to strategic planning processes.
• To launch strategic asset planning in the
  National Government, DPW has initiated a
  process to compile U-AMPs for all national
  departments. To further provide leadership in
  immovable asset management practices in National
  Provincial Government, DPW will host
  seminars, workshops, etc.

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THANK YOU!!!