Immovable Asset Register (IAR)Programme

Presentation to Portfolio Committee on Public Works

19 February 2013

Page 2

Contents

Topic Page

Background 3-4

IAR roadmap & key milestones 5

Key milestones 6-7

Key challenges 8

Progress Against Provincial Targets 9

Critical Assertion Requirements and Risks identified

10

Key Results 11-13

Vesting progress – State Land 14

Conclusion & critical success factors 15

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Background

• A project office has been set up, a clear roadmap with detailed work plans prepared and resource requirements have been defined to produce a baseline compliant register by 31 March 2014 and a “future-proof” register by 2019 in line with the current turnaround program’s timelines;

• The focus to date has been on the completeness of the number of registered land parcels that National DPW, Provincial DPWs and DRDLR are meant to disclose in their asset registers given the analysis of Deeds records;

• Extensive consultations have taken place with the Provinces through MinMec structures and the position with the provincial DPW’s and provincial housing departments will be confirmed by 31 March 2013.

• Existing data has been cleansed by reference to Aktex records and structures in PMIS have largely been linked to land parcels in preparation for the physical inspection thereof. This will improve the accuracy and reliability of information required and provide enriched data for DPW’s asset management requirements.

• A custodian framework has been prepared and is in the process of being refined to incorporate discoveries made as the project progresses.

• The project has considered the re-use of data from prior projects and is using other current sources of information available to supplement the process (e.g. Defence UAMPs, results of the state land audit undertaken by CSG etc).

• The target date to confirm the quantum of land parcels is 31 March 2013 where after a physical inspection process will commence in May 2013 to complete the asset register.

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Background Cont.

• The project includes working with the various custodians of state land and user departments, e.g. use of the recently completed Defence UAMP to provide additional required information, working with CSG, the Provinces and DRDLR to confirm SDF’s on tribal land and land registered / vested in DRDLR and the Provinces;

• As part of the IAR project National DPW will be able to provide a consolidated view of all state land (National, provincial and DRDLR at this stage) which will be mapped on an RSA map using a GIS system to assist with identifying such un-surveyed land required to be accounted for by National. This process will also assist the portfolio/ property management functions of NDPW. This will

• NDPW will eventually be linked to CSG’s e-cadastre project which will permit online updating of state land records;

• As part of the Deeds data analysis and cleansing process the programme has identified certain transactions that will be further investigated as part of the revised Operation Bring Back (OBB) process, which will commence 1 April 2014. It is envisaged that certain field-work results will similarly be subjected to further investigations as part of the OBB process.

15. Audit of rates payable for periods < 2008

27. PMIS migration process

3. Ongoing refinement of IAR data to include tracking of surveyed but not registered land,

SDFs, PTO’s, resolving tribal land issues.

32. Operate & enhance final IAR system to serve as common reporting platform for National & Provincial DPW’s (and potentially other custodians)

11. Property data updates via system linkages (e-cadastre ) & reciprocal information sharing state land

custodians and CSG to ensure extent of un-surveyed land is reduced/ controlled.

7. Operation “Bringback” projects & related (forensic) investigations

IAR roadmap & key milestones to 2019

Mar 13

2. Apply FV model

29. Stabilise iEWorks & operate as interim IAR system (national & provinces) with certain “bolt-ons”.

Mar 15

13. Implementation of revised vesting process

National, DRDLR, Provinces

Mar 14 Mar 16 Mar 17

1. Determine & maintain quantum of registered & surveyed not registered properties for DPW family

(DPW, DRDLR, Provinces)

Mar 19

25 +26. Implement interim & final ARM operating model for baseline IAR requirements.

Upgrade operating model for future-proof requirements

5. Fieldwork by SSP to improve

accuracy & supplement IAR

Mar 18

9. Deeds refresh process

28. Assess current iEWorks tech-refresh

14. Implement capitalisation process

& relevant systems linkages

6. Continuous update by means of annual cycle count/ UAMPS linkage in line with revised operating model & tools to gather UAMPs electronically

30. Define wider business requirements to future-

proof Eworks & IAR

35. Define framework/ requirements for

incorporating municipality props

36. Define & mobilise projects for

incorporation of municipality props

34. Upgrade IAR for modified accrual requirements which includes

componentisation, depreciation, estimated useful life & impairment

Oct 13

Emphasis of matter still

likely

31. Implement final IAR system in conjunction with

NT

12. Prepare revised vesting plan for all

state land custodians

33. Define upgrade requirements for IAR

given modified accrual basis

9.Deeds refresh process

9.Deeds refresh process

23+24 . Detailed design of operating model requirements for DPW & a

framework for IAR management in wider “state land family”

16. Link IAR & rates file

18. Link IAR &

“rental” stock

19. Link IAR & recovery from client depts. -

PMTE

5. GIAMA considerations & linkages pertaining to IAR & related processes

22. Link IAR & maintenance

tracking (day-to-day)

4. Determine & implement process & mechanism to track

unsurveyed land

10. Global state land

recon

10. Global state land

recon

10. Global state land

recon

8. Generate DPW state land portfolio overview (reports/ GIS) for input into asset investment

management decisions

17.Global rates recon

20+21. Link IAR & UAMP publishing / tracking &

capital budgeting process

Stabilisation

Completeness of registered properties

addressed in DPW family IARs

IAR to pass 2014 audit given

certain ongoing parallel

processes

IAR 70% integrated with DPW business processes

Vesting process completed

Efficiency management

“Future-proofed” IAR

GRAP or modified accrual

IAR complete + snag list

IAR operating on iEWorks for DPW

family

Compliant IAR on new platform, fully integrated

with DPW business processes

Jan 13

Clean audit for

IAR

Projects required to achieve 2017 vision

Projects critical for 2014 clean audit

Incorporate outcomes from

lease audit

Emphasis of matter still likely

Operational

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Key milestones: Completeness of registered properties (National & Provincial custodians)

Key projects Target Achievement Variance Interventions

Determine and maintain quantum of registered & surveyed not registered properties for DPW

31 March 2013 • Quantum determined for National and Provincial registered State land

• Quantum determined for National unregistered State land

• Quantum for Surveyed and not registered Provincial State land

• Confirmation of unregistered state land with provincial custodians is in progress

Determine and Implement process & mechanism to track un-surveyed land

31 March 2014 • Alignment of DPW IAR with CSG data and (64%)

• GIS mapping of state land (10%)

• Not applicable

• Not applicable

Deeds Refresh (Re-run of reconciliations to ensure updated data

31 March 2013 • To resume in March 2013 • To resume in March 2013

Process of downloading data in progress

Prepare revised Vesting plan for national & provincial state land

31 March 2013 • National Vesting Task Team established (including all national and provincial custodians)

• Revised vesting process developed and incorporated into vesting plan

• Vesting progress is slow

• Revised vesting process and plan

• Delegations for signing of Item 28 (1) certificates

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Key milestones: Completeness of registered properties (National & Provincial custodians)

Key milestones

Target Achievement Variance Interventions

Detailed design of Operating Model requirements for DPW

31 March 2014 • The initial design is completed and currently being aligned with the Turnaround Organisational plan

• Business case outstanding

• Task team established to fast track the development of the Operating Model

PMIS migration process

31 March 2013 • A duplicate copy of iE-Works has been developed to capture cleansed data after physical inspection

• Not applicable

Page 8

Key challenges

• The National Treasury Sector Specific Guide places onerous requirements on National DPW

• E.g. National required to disclose what is not vested by Provinces• Such information is not readily available and has had to be reconstructed / confirmed with the

provinces in conjunction with the deeds reconciliation that was performed by National• We are making good progress and the relevant required linkages and relationships with the

provinces have been rebuilt through MinMec and at official levels• The IAR requires continuous adjustments given the ongoing surveying of SDFs

in the provinces and the vesting process• It is a very time consuming process to analyse registered state land and to agree with the

relevant custodian what is meant to be reflected in each of their registers. This is exacerbated by the fact that multiple / inconsistent custodian naming conventions still exist on Deeds

• Delays in rolling out a transversal government property management system has hampered accurate information sharing

• In line with the turnaround plan, iE-Works will be rolled out in March 2014 as the interim system for the asset register including such functionalities such as rates payment, lease and rental stock management etc, once the required additional controls have been implemented and tested

• The system will be made available to the provinces• There are a host of legacy issues/ transactions that need to be attended to as

part of the asset register cleansing / finalisation process• Departmental administration and procurement processes have contributed to

delays in obtaining required resources, tools and service providers required

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Progress Against Provincial Targets

Status of Provincial IARs IAR System

Audit Qualification

2011/2012

Status(Readiness

for 31 March 2013)

EC Complies with NT minimum requirementsEnrichment required to obtain national design requirements

Logica YHousing assets

FS Phase 1 of IAR project completedIn process of appointing service provider to complete baseline IARConcern with timing of intervention/ legacy issues

Excel Y

GP* Considering appointing consultant to assist with resolving IAR issues/ merging various IARsConcern with timing of intervention/ legacy issues

Excel Y

KZN* In process of reconciling number of land parcels and upgrading IARConsidering new IAR system

Premis N

LP* Audit action plan also addresses IAR in conjunction with service providerChanges in demarcation to be processedConcern with timing of intervention/ legacy issues

Excel Y Disclaimer

MP* Physical inspection of “devolved” propertiesChanges in demarcation to be processed

Excel N

NC Service provider on board to assist with IARAudit action plan to address IAR issues.

Excel Y

NW Have applied to National for assistanceConcern with timing of intervention/ legacy issues

Excel YDisclaimer

WC Service provider was appointed to address IAR. Excel N

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Critical Assertion Requirements and Risks Identified

The following critical assertions have to be addressed to achieve a clean bill of health for the IAR by March 2014:

Assertion Component Key risks

Completeness Registered land

Vested properties

Land surveyed not registered

Un-surveyed land

Rental stock/ portfolio

Final reconciliation of state land parcels, provincial housing land & anomalies such as certain properties no longer in state’s hands or never transferred

Reconciliation between DRDLR’s records and provinces’ records

Identifying completeness of SDFs given external information required & resolving disputes

Reliably determining the extent of un-surveyed land and clearly defining National DPW’s land parcelsCompleteness & revenue leakage

Accuracy Confirming user departments/ occupants for rental stock

Determining usage of property as at 27.4.1994 for vesting process

Correct rates being paid by correct custodian, amounts due to municipalities

Physical verification process may not be able to confirm

Information may not be available – alternative processes required

Under & over payments/ budgeting process inaccurate, exposure in respect of arrears

Valuation Applying municipal values Acceptance by OAG & AG given historical cost cannot be reconstructedConsistency & reliability of allocation of municipal value to land/ structure allocationTimely application of alternative valuation methods where municipal values are not available

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Key results: Deeds Analysis

Analysis of registered land parcels by custodian Deeds@ Nov

2011

Provincialuse

Not Stateland

Re-categorise

Adjust TOTAL

Total state Land 182,345 -4,301 1,529 179,573

Provincial Properties 111,937 10,743 -1,290 -166 1,000 122,224

DRDLR 25,258 185 25,443

Deemed DPW land parcels 45,150 -10,743 -3,011 -19 529 31,906

Additional State Land (Not identified in the deeds but on PMIS)

354

To be disclosed by National DPW:

Total registered land parcels deemed National DPW 32,260

Permission To Occupy and Build on Municipalities, Parastatals & Private land

392

Land not registered in State’s name (SDF’s) 4,249

Total land parcels 36 901

Provincial properties not yet vested 31,153

NB: Work in progress. Situation as at 8 February 2013

Comparison of current register received to current statistics Total

Land parcels previously disclosed 35,895

Land parcels removed given that these are no longer state land (private, municipalities, parastatal etc) -9,432

RSA land parcels added given the deeds download information (being verified ) 10,438

Revised number of land parcels as above 36,901

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Key results

Conditional Grant devolved to provinces in 2008 (Land parcel analysis)

•Insufficient information available at this stage for the provinces to confirm whether such land parcels are indeed provincial properties

•Items marked red will be further analysed and investigated as such assets were in essence not devolved by National to the Provinces or they were subsequently disposed/ transferred to other custodians by the provinces

Land parcels EC FS GP KZN LP MP NC NW WC Total

Total initially devolved by National 5,076 3,500 10,020 11,929 3,035 3,004 1,363 6,469 5,968 50,364

Analysed as follows:

Confirmed Provincial 1,481 2,947 7,227 3,483 709 1,917 788 1,259 1,544 21,355

Should remain with National 182 385 126 78 119 69 3 423 127 1,512

Deemed DRDLR 7 132 306 1,197 33 106 3 98 - 1,882

Municipalities - - - 230 64 - - 1,147 80 1,521

Human Settlements - - - 39 - - 3 - 44 86

Parastatal & Private 858 36 - 3,260 988 395 76 1,575 775 7,963

Confirmed Provincial as vested 1,843 - 1,886 2,086 634 471 474 1,106 3,052 11,552

Further investigations required* 1,556 - 475 1,556 488 46 16 861 346 4.493

NB: Work in progress. Situation as at 8 February 2013

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Key results

Registered land parcels EC FS GP KZN LP MP NC NW WC Total

Deeds analysis (provincial names) as at November 2011

9,362 5,145 28,746 22,174 7,586 14,285 1,448 2,703 20,488 111,937

Add: Provincial usage properties (as RSA on deeds)

858 575 3,313 3,433 198 1,144 107 793 322 10,743

Other adjustments 254 -960 -18 -50 630 -19 -5 -9 -279 -456

Transfers between custodians (demarcations)

-12 0 1 10 2280 -2284 10 5 -10 0

Deemed Provincial 10,462 4,760 32,042 25,567 10,694 13,126 1,560 3,492 20,521 122,224

Made up as follows:

Provincial DPW 6,697 4,760 18,122 5,313 3,891 2,465 1,443 2,694 7,909 53,294

Provincial Housing (incl .R293, RDP – source provincial DPW)

2,907 o/s 13,715 16,811 6,629 9,517 o/s o/s 12,288 61,867

Investigations in progress 858 - 205 3,443 174 1,144 117 798 324 7,063

Total 10,462 4,760 32,042 25,567 10,694 13,126 1,560 3,492 20,521 122,224

Analysis of Provincial DPW land

o/s=information outstanding/ cannot discern between housing and other provincial state land as yet

NB: Work in progress. Situation as at 8 February 2013

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Vesting progress – state land

NATIONAL DRDLR 9 provinces in total:

Land parcels VestedStill to be

vestedLand

parcelsVested

Still to be vested

Land parcels

VestedStill to be

vested

+- 36 901Registered

Subject to finalisation of data cleanse

process

13,633 23,268 24,502 8,959 15 543 +-53,294

Subject to finalisation

of data cleanse process

22,141 31 153

According to statistics as at the end of 2012 approximately 71 171 registered land parcels still need to be vested

National DPW is in the process of overhauling its current vesting process to achieve the following vesting progress (25% by 2014, 90% 2015, 100% by 2016)

The provinces have been requested to submit their revised vesting plans as agreed at the January 2013 MinMec meeting.

National DPW and DRDLR are co-operating to simplify and fast track the vesting process. Revised processes to be effective 1 April 2013. Whilst their have been some issues with the reliability and consistency of vesting stats, the revised vesting process to be implemented between DRDLR and DPWs includes a full reconciliation and rectification of DRDLR records

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Conclusion & critical success factors

• This is a large & complex programme which requires extensive consultation and co-operation amongst state departments to enable NDPW to produce the required compliant IAR

• A lot of effort (to date) has gone into collecting, analysing and cleansing data in preparation for the physical inspection process commencing May 2013

• A lot of progress has been made to re-establish the required linkages & co-operation amongst state departments and to obtain the required data

• An extensive amount of work is still required between now and March 2014 (clean audit) and March 2019 (final state IAR) with the following critical success factors;• Adequate dedicated resources to deliver the project• Ongoing co-operation and improved capacity in the state land custodians,

departments• Implementation of iE-Works by March 2014• Establishment of interim structures & processes in National and Provincial DPW’s to

maintain such enhanced IARs (until final structures are approved)