Formulation of a Government-wide Fixed Asset Management Framework

1. Formulation of a Government-wide Fixed Asset Management Framework Presentation to the Portfolio Committee of Public Works 13 November 2002

2. Why Immovable Asset Management Framework & Act? • Currently no comprehensive consolidated guideline for the State’s immovable assets • This is a good governance initiative - Like PMFA and Public Service Act, Asset Management Framework – later Act, will guide whole of government to enable: >Better allocation of limited resources >Better alignment of immovable assets withservice delivery & community expectations >Reduced demand for new immovable assets >More effective use of existing immovable assets • >Will apply to any sphere of government that has a role in immovable assets including infrastructure without taking away respective mandates or roles.

3. Why Specific Focus on Immovable Assets? • Impact on macro-economic and physical landscape of the country– positively or negatively • Have land ownership implications & often emotive • Are a finite resource • Are difficult to change location & use • Have lengthy acquisition periods • Costly to manage and maintain • Have a very long life cycle

4. Principles: Immovable Asset Management Framework • Immovable assets should support service delivery • Immovable asset management policies of any authority should be consistent with the government’s policies/legislation • Framework is premised on basis that ownership of immovable assets is centralised in National, Provincial, Local Government & Parastatals entities, ie. title is not devolved to individual depts. • Full life cycle costing, risk analysis and better use of existing immovable assets should be the driving factors in immovable asset management decisions – (user pays) • Full cost of providing, operating, and maintaining of immovable assets should be reflected in the budgets of the authority responsible for delivering a service • Immovable asset management decisions should be focused on meeting the service delivery needs of the present, without compromising the needs of future generations

5. Community Needs and Expectations Government-wide Policy/Legal Framework Departmental Strategic Plan Service Delivery Strategy Resource Strategies and Plans Human Resource Plan Financial Plan Im/movable Asset Management Plan IT and Support Systems Plan Immovable Asset Management in a govt-wide context

6. Condition Current Assets Functionality Utilisation Performance Fixed Asset Requirements Additional Utilise Redundant Immovable Asset in Context of Service Delivery GOVERNMENT OBJECTIVES AND POLICIES Service Delivery Strategy

7. Useful Life of Immovable Asset Planning Disposal Acquisition Utilise and Maintain

8. Immovable AssetLife Cycle Cost Utilise and Maintain Planning Disposal Acquisition Cost Time

9. Treasury DPSA DPW/Cust Advice Dept A Dept B/Prov/Mun Strategic Plan Strategic Plan Service Delivery Strategy Service Delivery Strategy Portfolio Immovable Asset Management Plan Immovable Asset Management Plan Additional Utilise Redundant Additional Utilise Redundant Proposed Institutional Environment & Processes for the Government wide Immovable Asset Management Framework FINANCIAL POLICY AND BUDGET HUMAN RESOURCE POLICY IMMOVABLE ASSET MANAGEMENT POLICY AND CUSTODIAN

10. Conclusion • Presentation outlines the backbone of initial proposal regarding a Government-wide Immovable Asset Management Framework • Framework will be developed into an Act, mid next year. (GIAMA) • Currently framework consultations–DG to DG • Incorporation into Jan 2003 Lekgotla, anticipated. • Draft Bill to be ready – Feb 2003 for public consultations & promulgation target – July03 • In future, govt depts and other organs of govt will prepare yearly asset management plans, similarly to yearly budget plans. • Anticipated other organs of State will begin doing the same, share information, intergrate planning and effort and follow uniform good governance guidelines and approaches, re: immovable assets.