National Public Works Immovable Asset Register Programme (IAR) August 2012
Executive Summary ► DPW embarked on the reconstruction of its IAR in November 11 and has completed an extensive exercise of ► ► ► ► ► analysing the deeds database & other relevant registers/ information sources to assist in determining which properties are National, Provincial or other custodians’ defining a fair value model which will be applied to properties as the carrying value going forward defining a new operating model to better manage the IAR and DPW’s concurrent mandate going forward This reconstruction exercise has identified a significant amount of work that is required to resolve a multitude of unresolved legacy issues which requires extensive interaction with DRDLR, Provinces, NT and other stakeholders The approach adopted by the IAR programme will ensure that a baseline compliant IAR is produced covering all required assertions (completeness, accuracy, ownership etc) The gaps identified indicate that a significant amount of work (including physical inspections) is required in order to comply with NT and audit requirements as current compliance level is in the region of 40 -50%. DPW HO and Regional teams are in the process of completing data analysis and cleansing that arose from Deeds comparisons and are expected to complete this by (1) 30 Sep 12 and (2) 31 Dec 12 The cleansed data will form the basis of physical inspections from Oct 12 to Aug 13 to confirm information required to comply with requirements The position with the Provinces and compliance with NT Sector Specific Guide will be regularised by March 2013 with relevant follow up work by Aug 13 Our target is to have a substantially complete and compliant IAR by March 2013 with required follow up of remaining gaps to be completed by Sep 13 Page 2
Executive Summary - Key successes ► ► ► There is a clear plan outlining what needs to done to produce a baseline compliant IAR incorporating all work previously done (where applicable) Our time spent on extensive analysis, research and consultation with relevant stakeholders has confirmed the complexity and extent of work required which was addressed in prior projects We have engaged extensively with stakeholders such as the AG, OAG, the Provinces to confirm our plan. We are again meeting with the AG during August 12 to confirm deliverables. We have developed a custodian framework which will inform disclosure requirements and provide clarity going forward We have developed a fair value model to value the IAR by Mar 2013 and a compliant capitalisation policy to ensure the IAR remains properly valued going forward Page 3
Executive Summary - Key challenges & risks ► ► We are still experiencing challenges in working with key stakeholders such as Deeds, CSG and other custodians to ensure that the right information and decisions are forthcoming to resolve state land issues and incorporation in correct IARs / financial statements Mobilising sufficient resources in time given that significantly more work is required than originally anticipated due to; ► ► ► unresolved legacy issues (e. g. finalising devolution of provincial properties) and exceptions arising from data analysis and deeds comparison There is still a material risk attached to the data available to inform fieldwork requirements Mobilising (in time) the requirements of DPW’s concurrent mandate Implementing a revised operating model (in time) to continue maintaining the IAR Incorporating work previously performed or performed by other State departments in line with our timelines, e. g. ► ► Defence UAMPS CSG state land audit Page 4
Index to report ► Background to DPW’s asset register Applicable assertions Programme on a page Key results of analysis conducted thus far Position with provinces Vesting process Action plan on IAR concurrent functions 6 7 8 9 10 11 12 ► Appendices 13 - 21 ► ► ► Page 5
Background to DPW’s Asset Register ► ► Prior 1994, there was no comprehensive computer-based register of state-owned immovable assets. Information on assets was captured in a variety of disjointed inventories, most of which were manual paperbased systems. In 1995 the Department of Public Works commenced with the compilation of a comprehensive computerbased inventory of immovable assets under the control of both national and provincial custodians. The project was undertaken with the assistance of private contractors and completed in 1999. The information that was gathered included physical address of properties; cadastral description and extent of land parcels; utilisation and users of properties; zoning and potential use of properties; and photographs and footprint sketches of sites and improvements. In order to address the gaps identified from the above-mentioned project, in 2005 DPW embarked on the Asset Register Enhancement Programme (AREP) and was completed on 31 March 2008, to enhance the asset register. The scope of the project focused only on 33 555 immovable assets and the following information was enhanced: ► ► ► ► Linking of land parcels with improvements; Measuring floor areas of buildings where such information was not previously captured; Establishing use and identity of occupants; Capturing servitude rights over selected state properties; and Capturing photographs, drawings and footprints of improvements for the selected properties. Servcon and Intersite Solutions were further appointed in December 2007 to verify the essential information fields of DPW’s and provincial Public Works’ asset registers and conduct condition assessments on Stateowned properties. In 2009, DPW and the service providers resolved to put the project on hold in order to verify the authenticity of data to determine the amount payable to the service providers. Asset register is a continuous exercise due to the incompleteness and inaccuracy of information Page 6
Applicable assertions Assertion Approach Comment Completeness -Use of deeds download in conjunction with DRDLR & extensive reconciliation of data with other state land custodians for all registered properties. -Deeds / Aktex is used as a basis and substantiated with other documents e. g. Original Title deeds & SG diagrams -IAR fields checked against NT minimum requirements - Compliance with the Sector specific guide, position with provinces confirmed (List A/B) to determine who discloses what. Dependencies: -CSG for provision of surveyed land -Deeds for the registration of unregistered land -Vesting process for National and Provincial properties but we are reconstructing a complete position by virtue of Deeds analysis & recon -Provinces confirming properties supplied to the AG and Provincial Usage properties(List A/B) Accuracy & Reliability - Initial reference is made to the Aktex and substantiated by original title deeds and SG diagrams for accuracy. - Data cleansing performed and fieldwork to be performed Dependencies: Availability of original title deeds/ docs Surveying of land Ownership Rights & Obligations -Ownership is confirmed as per Aktex / Title Deed -Surveying of state land to confirm ownership -Physical verification to prove property use & confirm custodian Dependencies: Surveying process scheduled to be completed by 31 March 2014 Existence - Physical verification to prove existence and have photos, GPS Coordinates & SG diagrams as portfolio of evidence For 2012/13, 60 -70% of properties will have been verified. Valuation -FV model developed and in process of socialising To be applied 2012/13 Presentation & Disclosure -Extensive interaction with provinces, DRDLR and other custodians Aim for 2012/13 is to have first proper consolidated view and to ensure right properties disclosed in right AFS Completeness will be qualified until CSG completes survey process , but IAR Programme aims to provide a reconciled position of State land by 2012/13 Page 7
Focus for 2013 is on completeness based on Deeds & accuracy improved given data cleanse & fieldwork Programme on a page State land audit information to be incorporated Key projects & activities required Aug 12 SSP adjudicate end Aug Sep 12 Oct 12 SSP onboard, roadmap, train Nov 12 Dec 12 Fieldwork 1 6 regions 2 GP, KZN, WC, FS, NC Jan 13 Feb 13 Wave 2 of SSP for 6 regions Acquire tool Recruit PM in regions Design & approve FV model Design & test tool PMs trained & onboard Design new vesting process May 13 Deeds refresh process Detail design of new operating model Aug 13 Sep 13 Mar 14 May 14 Apply FV AG review final product Conduct AG fixes Pack IAR adjust/ quality checks #1 Implement new operating model Detail design revised vesting process Remaining assertions addressed & ongoing update process Fieldwork 2 Remaining 5 regions Pack IAR Finalise capitalisation framework High level operating model Mar 13 April 13 Apply FV model Data cleanse, reconciliation, resolve position with provinces Position with provinces sorted IAR adjust/ quality checks #2 Hand-over Operate new operating model or interim structure Implementation of revised vesting process Proposed timeline/ sequence Fieldwork 1 has to finish by end Jan/ mid Feb Page 8 IAR preparation & presentation IAR will comprise: • +-60% physical verification, remainder comprises desktop cleansed data • Defence UAMPS processed • Provinces accounted for + snag list • Devolution done + snag list • NT sector specific requirement incorporated in IAR (Provinces) • FV 1 based on input from inspection • FV 2 based on municipal value & desktop Final IAR & snag list Final IAR
Key results of analysis conducted thus far Analysis of Deeds # properties Total state land 182 345 Identified as provincial (111 937) Identified as DRDLR (25 258) Deemed National DPW ► ► As a result of quantifying the above position, extensive engagement and confirmation with other custodians & stakeholders is required before finality can be reached We are still in the process of analysing and confirming above statistics ► ► This is a complex process & there are still significant challenges in identifying ownership given a multitude of naming conventions and given that the vesting process is still underway National DPW has previously disclosed +- 35 000 properties in its annual reports ► ► ► 45 150 We have so far confirmed +- 27 000 properties by reference to Aktex as being National DPW’s The remainder is currently being analysed and categorised and will be subject to relevant field work if required Of the +- 50 000 properties identified on our current IAR as potentially being provincial properties, we have confirmed that +- 16 000 are indeed provincial properties that we are still required to disclose as they have not been vested by the provinces (NT sector specific guide requires DPW to disclose such) ► The remainder is currently being analysed and forms part of the current engagement with the provinces to confirm disclosure requirements by National and Provincial DPWs Page 9
Position with provinces It is clear from above that a significant amount of work is still required to clarify the position with provinces and to ensure accuracy and consistency of disclosure required in terms of current applicable frameworks ► ► National DPW has allocated a specific team to resolve this by March 2013 in order to provide a consistent and reconciled national view of all state land National DPW is engaging at MINMEC, HOD and GIAMA forums to address the above Page 10
Vesting process ► ► Our focus to date has been on laying the foundations to address all assertions required to produce a baseline compliant IAR We are aware that progress* on vesting is significantly behind target at all levels of government (DPW 40%, DRDLR 33%, Provinces 16%) in order to achieve the target date set at 2014 in terms of vesting master plan (agreement between DRDLR, DPW, Provinces) We have completed the design of required interventions to address the vesting backlog in consultation with DRLDR and will implement revised process by Sep 12 Progress statistics and proposed intervention provided in Appendix *stats sourced from DRDLR Page 11
Action Plan on IAR Concurrent Functions (National and Provincial Public Works) Page 12
National Public Works Immovable Asset Register Programme (IAR) August 2012 Appendices
Appendices Enhanced vesting process Vesting stats 15 16 -17
Discrepancies investigated -Missing item 28(1) certificates -Differences in the vesting stats Start Reconcile Bulk vesting at H/O Prepare PSLDVC Application 4 2 Unregistered properties Surveying process of underlying land 3 Obtain PSLDVC resolution Submit PSLDVC application (May require more frequent meetings) (for recommendation) Proposed interventions 1. 2. 3. Paper. Trail & physical verification (Docs &land use) input Registered properties QC at HO & (Regions) Completed PSLDVC application Unsurveyed land in former RSA Land parcels not yet vested Reconcile 1 Reconciliation between various sources. Paper. Trail and physical verification inputs. Bulk vesting process at Head Office DRDLR PROCESSES Tracking & Monitoring Capture PSLDVC application on LAW system Submission by DRDLR HO DG Signs certificate (PSLDVC Secretariat in DRDLR region) 4. 5. 6. 5 Issue S 28(1) certificate Registration process – National Republic of South Africa Applicant instructs State Attoney to lodge & Registrar of Deeds Endorses Update DPW IAR (need for centralised, i. EWorks d. B used by all) QC at HO and Regions before preparing/submitting application. Tracking, Monitoring and status updates –access to the LAW system Central d. B to track movement of vesting status for DPW to track Page 15 6
National DPW vesting statistics Cumulative from April 94 to Jun 12 Province 31 Dec 2011 30 June 2012 Vesting certificates Issued Dec 11 to Jun 12 EC 1, 292 0 FS 2, 194 2, 223 29 GP 2, 091 2, 158 67 KZN 1, 835 1, 858 23 L 499 525 26 MP 962 1, 008 46 NW 353 383 30 NC 1, 470 1, 570 100 WC 2, 356 2, 362 6 Total 13, 052 13, 379 327 Page 16 DPW’s current vesting process is not properly structured and not managed appropriately. There is a lack of information given the current state of the IAR and inadequate project management. An enhanced vesting process has been designed in consultation with DRDLR and will be implemented in September 2012.
Cumulative vesting statistics April 1994 to 30 June 2012 NATIONAL Province IAR Vested DRDLR Still to be vested IAR PROVINCES Vested Deeds Vested EC 2, 336 1, 292 1, 044 7, 149 1, 920 7, 911 2, 423 FS 3, 179 2, 223 956 616 648 5, 145 1, 118 GP 8, 791 2, 158 6, 633 851 153 29, 016 2, 485 KZN 4, 589 1, 858 2, 731 7, 271 633 22, 196 5, 937 L 2, 333 525 1, 808 2, 475 3, 181 8, 500 653 MP 2, 375 1, 008 1, 367 3, 604 1, 341 13, 257 1, 127 NW 2, 035 383 1, 652 2, 083 609 2, 738 772 NC 2, 327 1, 570 757 453 326 895 730 WC 4, 963 2, 362 2, 601 Not Provided 22, 279 3, 255 32, 928 13, 379 19, 549 24, 502 8, 871 111, 937 18, 500 TOTALS Page 17
Appendices Results of deeds and other reconciliations 19 -21
Deeds Reconciliation , , ► ► Assumptions and limitations: Based the analysis on DRDLR’s LAW predetermined ownership categories as follows: ► 1. State Land Properties ( Provinces and National) ► 2. Parastastals Properties ► 3. Municipality Properties ► 4. Unknown Properties - Usually cleared & and is blank ► 5. Private Properties and ► No registered Owner ► Shares – properties with multiple registered owners on the deeds web are being analysed separately ► There also duplicates within the data received from the deeds office ► All National properties where DRDLR does not have supporting documentation are deemed to be National DPW properties unless accounted for by another custodian ► Page 19
DPW IAR (PMIS) analysis - Own ► Above will form basis for fieldwork and workpackages going forward Page 20
DPW IAR (PMIS) analysis - provincial properties included in PMIS ► Based on the 2011 PMIS system 50, 364 properties were classified as provincial and formed basis of analysis Page 21
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