Asset register: Department of Public Works progress report

Meeting report

Asset register at Department of Public Works: Progress Report
The Chairperson noted the Minister’s apology.

Mr Mziwonke Dlabantu, Director General, National Department of Public Works, noted that the Department of Public Works (DPW or the Department) would present a progress report on the Immovable Asset Register (IAR) programme.

 welcomed members and notified the committee about the ministers’ apology. The meeting was slightly delayed and the chairperson did not take kindly to this. She heartily welcomed the Department and gave over to the department to present

The Director General of the National Department of Public Works (DPW) Mr M Dlabantu told the committee the purpose of the meeting was to give a progress report on the Immovable Asset Register Programme (IAR) that the DPW had undertaken.

Mr M Gwazube, Chief Operations Officer, DPW, referred to the executive summary as well as the presentation. He noted that bullet point 3 of the presentation was not yet achieved, but that the DPW had been able to define a new operating model to better manage the IAR, but had not yet resolved some of the issues around the concurrent mandate. It had also not managed t complete everything set out in bullet point 4, relating to compliance with National Treasury (NT) requirements. The DPW was also behind target in completing the cleansing of data, which would result from the physical inspections carried out between October 2012 and August 2013. this activity would commence in May 2013. The inspections would be done to confirm information required to comply with the Auditor-General (AG) and NT requirements.

Mr Gwazube noted that the purpose of repeating the executive summary from the previous year was that DPW had identified ten key areas that the Department was using to measure progress. Six of those areas had received attention, and the aims accompanying them had been achieved, but the other four still needed attention.

Mr L Gaehler (UDM) said that he thought the meeting would be recorded.

The Chairperson told the Committee the recording equipment was out of order.

Ms P Ngwenya-Mabila (ANC) asked when and where the documents were submitted as it seemed that not everyone had copies

The Chairperson replied that the DPW had submitted them the previous Thursday.

Mr Gaehler replied that this was not sufficient; the shortage of documents hindered full participation in the meeting.

The Chairperson replied that the issue was indeed being addressed

Mr Gwazube continued with the presentation. He noted that the IAR programme had started in November 2011. DPW had not, when it presented in 2012, yet commenced with its turnaround programme but when it did so the IAR programme was superimposed. He referred to the media statement speaking to stabilisation and an efficiency phase. He noted that, within the context of the turnaround, the targets for March 2014 remained the same as stated previously, but DPW was now focusing more on audit requirements, seeking to ensure accuracy, completeness, validity and meeting obligations. He repeated that the physical verification would start later than expected, due to bureaucratic and other issues. DPW was dealing with registered land parcels only, but had also started a process with the Chief Surveyor General (CSG) of tracking unregistered land parcels and progress with these.

The DPW started consulting with regional structures to resolve issues relating to vesting, but had not made the required progress as yet. This was important, because the requirements of the Accountant-General were that any land parcels that were not on any other custodians’ asset register would have to be reflected on the DPW asset register. From a legal framework perspective, other custodians, such as a  provincial public works office, could legally claim that their asset register was complete even though there was an unregistered hospital in their region, since they had no legal requirements to put that particular property on their register, but then that property would then become a problem for DPW. Linked to this were problems around property rates and taxing. The Minister of Public Works could engage with the provincial structures to prepare for the devolution of the functions for payment of rates and taxes, because DPW found that provinces would not push the vesting process if they were not legally compelled to do so. DPW reached agreement with NT that this function must devolve in the new financial year and that would remove the onerous burden presently resting on the DPW to declare unregistered assets on the other custodians’ registers, and ensure that vesting processes would be completed by these provincial structures. This was a very important point in moving forward.

The DPW had linked the existing data from the asset records and DPWs’ Property Management Information System (PMIS), in preparation for the physical inspection. It would ensure that DPW had a sound basis and this required reconciliation of information from within the Deeds Office. DPW was doing a second round of reconciliations because the state, private sector and individuals were constantly buying and exchanging property. This reconciliation was done in preparation for the physical verification, so that DPW could then focus on the other requirements.

The custodian framework had been prepared and refined to incorporate discoveries as the project was progressing. There were properties identified as needing investigation. About 5 000 properties that had no documents proving movement from the public to the private sector. DPW had also considered work that had been done by other institutions, and had found, for example, that the Defence Asset Management Plan was reliable. DPW was also working with the Department of Rural Development and Land Reform (DRDLR) to capture property that developed on unregistered land. The DPW assets register, once complete, would be linked to the Chief Surveyor General’s (CSG) cadastral project, so that online updating would be possible when the Land Records Act came into effect.

The DPW had agreed to move information from PMIS to IE-works when verified, to avoid the information becoming polluted again, a major problem identified with the controls in PMIS. IE-works would be a temporary platform, until the DPW could start operating an asset register that could not be polluted.

There were some questions whether the Operation Bring Back (OBB) project was properly conceived and whether it produced useful information. It had moved from the premise that former TBVC states would be the only ones showing problems in asset registration, but this was incorrect. There were properties used by the intelligence community that were situated outside the public service, and international properties that were not accounted for. These aspects would have to be deliberated upon. Particular assets and properties belonged to operations such as Stratcom in the public services sphere, and these would have to be accounted for when DPW deliberated with the intelligence community. It appeared also that many transactions prior t 1994, in the former TBVC stated, concerned properties that were neither surveyed nor were they registered.

Mr Gwazube referred again to the fact that the IAR programme had been superimposed on the turnaround programme. There were key milestones, one relating to the stabilisation and another to efficient management. The target of creating an IAR that would pass scrutiny by the AG had not changed. However, the years from 2014 to 2019 were now described as the efficiency management phase. This would allow DPW to know what it had to do with an approved IAR, how to put into operation an IT platform that would not allow for any corruption of information, how the new operating model would work, how OBB would be brought on board and how links would be established between asset registers and billing clients through proper itemized and properly valued billings. DPW was not shifting dates, but was ensuring that it would meet the 2014 outcomes, of which six were already achieved.

The linking of the IAR and turnaround would also ensure that the lease audit outcomes were incorporated, to inform OBB on the forensic investigation.

Completeness of registered properties (National & Provincial custodians)
Mr Gwazuba said that one of the key milestones for 2013 was to determine and maintain a quantum of national registered and surveyed property, and unregistered land. The quantum of surveyed national and provincial land, as also for national unregistered state land, was known. The target to get figures for unregistered provincial state land had not been achieved, but the CSG and DPW were working together to get the numbers. Confirmation of unregistered state land for the provincial custodians was a work in progress. Tracking of unsurveyed land was to be done by 2014. There had so far been about 64% alignment of data. The DPW was resuming the reconciliation due in March 2013 in regard to Deeds research.

A national vesting team had been established to revise and refine the vesting plan for provinces and DPWs, had developed a plan and was incorporating it. DPW was to develop a detailed design for its operational model requirements, and that was partially completed, as part of the turnaround organisational plan. In its interactions with Heads of Departments (HODs) and MinMEC, DPW had proposed a model to say how the operating unit for all the custodians should look, what kind of processes should be followed, and the level of funding required to operate that kind of asset register. That had been approved by MinMEC. It still had to be fully implemented and approved so that by 2014 the national custodian and provincial departments could operate their asset registers. DPW was also supposed to manage the migration of the PMIS process to IE-works platform.

Discussion
The Chairperson asked Mr Gwazube to say more on the last point, before continuing, and to ask why the DPW was reflecting on provinces.

Mr Gwazube replied that the DPW had struggled with the appointment of the Second Secondary Provider (SSP) that was supposed to do the physical verification. There were problems with the procurement process, and administrative bureaucratic issues within DPW that had to be managed. There had been several “bruising” internal debates about the issue, but these were managed, albeit with the result that the physical verification had been delayed to May 2013 instead of October 2012, with DPW now completing the appointment of the SSP.

The focus on provinces was done so that DPW could now differentiate between what was national, provincial and custodial property. The bulk of the assets that needed to be recorded in asset registers resided within provinces. The presentation set out where DPW was on the processes, and this led to the need for the Minister to engage with provinces. The provinces’ state of readiness, and the requirements around this, were noted. This explained the levels of intervention in each case, as set out in the tables. When it came to audit qualifications, and DPW’s interaction with the AG, it was evident that there were inconsistencies with asset registration platforms. This was the reason for choosing the common platform of IE-works. He reiterated that if other custodians failed to show assets on their register, it became a problem for DPW, which was why there was a need to collaborate and take interventions.

Ms A Dreyer (DA) enquired why an asterisk appeared in the table next to certain provinces.

Mr Gwazube replied that those were provinces that the Minister had visited, where he had interacted with MECs heading departments. Those without asterisks were work still in progress.

Critical Assertion Requirements and Risks identified
Mr Gwazube noted that in order to complete the AR, it was necessary for DPW to deal with the issue of final reconciliation of state, household, and provincial housing land. It must settle anomalies such as properties that were no longer in state hands, or were never transferred. DPW had to reconcile DRDLR records and provincial records, and identify the completeness of the State Domestic Facilities (SDF), including whether this had taken account of external information.

Another risk was whether DPW could resolve disputes.

DPW had to reliably determine the extent of unsurveyed land and clearly define national departments’ land parcels. Completeness of the information, and leverage for revenue must be checked. DPW depended on CSG to reach a reliable determination on the extent of unsurveyed land, and thus depended on him to complete the state land audit. DPW was aware of the Permission To Occupy (PTO) status of certain assets.

The expected risk around accuracy was that the physical verification process would possibly not conform with the desktop research, but DPW was trying to mitigate this by sending out service providers to verify. It had  identified issues about missing information and the actual location of other properties, and would need to verify through other processes. Under and over payments and exposure were other areas identified.

In respect of evaluation, DPW said that there were risks that DPW could not meet the expectations of the Office of the Accountant General (OAG) and the AG, given the historical costs that could not be reconstructed, and the question of consistency and reliability of allocation of municipal values to land, as well as structures for allocations. The risks would inform the future models for valuation. The DPW had to find a way to timeously apply  alternative valuations methods when municipal values were not available, for instance in cases where certain municipalities had not completed their valuation rolls

Foundations of Asset Registers
Ms F Rabata, Chief Director, DPW, said that she would outline the critical foundations for an asset register. Prior exercises had taught DPW that it could not embark on a programme for the IAR before doing a desktop analysis first, rather than sending out consultants or employees, to measure and check who occupied what. The months since October 2012 had been spent in doing an analysis. By the end of this financial year, in March 2013, DPW would know the quantum of what each of the national custodians used, what each province was responsible for, and what DRDLR was responsible for. It was critical to get that basic information right.

The Deeds Office was the authoritative source of information in the country for registered land. DPW had to manage the portfolio and provide accommodation for clients, but it could do so only when it knew what it owned. DPW’s past problems in budgeting were linked to its lack of knowledge as to what it owned or was responsible for. The previous audits said much about DPW’s and provinces’ state of readiness on IAR.

Ms Rabata then took the Committee through the numbers, comparing the previous and current figures (see attached presentation for detail). She pointed to the number of land parcels that were registered under the different custodians.

Ms Dreyer interjected to ask if tribal land fell under DRDLR.

Ms Rabata confirmed that it did.

She continued that previously, DPW had said, in its annual financial statements, that it had an estimated  35 000 land parcels, but after the last ten months’ analysis it had revised that to 31 906.After adjustments, DPW found properties on its PMIS that were not in the Deeds Office system. If DPW used the deeds registry as an authoritative source, this raised the question of how it had properties reflected that were not on the deeds register.

The Chairperson asked for clarification on this point. DPW had said that its data did correlate with the Deeds Office registers.

Ms Rabata said that in 1994 the state had no electronic database. DPW had only started to identify state assets using an electronic asset register in 1995. DPW was now trying to register the databases.

Mr L Gaehler (UDM) asked whether the DPW checked on former TBVC state land assets, who had held their own deeds registers.

Ms Rabata referred the Committee to the previous response given to the Chairperson, that DPW found certain properties reflected in its own asset register that did not appear on the Deeds Office register.  Mr Gaehler was correct that the Deeds Office register had been accepted by the state as an authoritative source after 1994. However, even up to the present, there were land parcels registered to private people, or municipalities or parastatals that appeared still on DPW’s register. The discrepancy was due to the fact that the DPW was working with a constantly moving target.  What the DPW was now presenting as ‘work in progress’ had to do with constantly reconciling data, which prevented DPW from saying that it had complete and correct data. DPW had managed to secure the records that supported the entries, through the Aktex records that were printable. However an asset, even if wrongly included in the DPW records, would have to remain noted there until the IAR programme met the audit requirements. In the meantime, however, DPW would investigate the transfers. It could not simply delete from the AR without doing so.  The process of checking had already started and DPW had a database for archived properties. That was part of OBB. Of the 45 000 land parcels, 36 000 parcels have been confirmed as indeed belonging to the DPW. She reminded Members that if a province failed to disclose its assets, then DPW would have to disclose those assets in its financial statements at the end of the year. In this financial year, DPW would have to disclose 31 153 provincial land parcels where provincial custodians had not already disclosed them.

Prior to April 2008, DPW paid rates for provinces’ properties used by the provinces.  After April 2002, DPW devolved that function to provinces, who must in future pay rates on their own properties. Provinces had asset registers before that time, and should have listed the assets even if DPW had been paying the rates. A reconciliation was done in 2008, to ensure that provincial registers captured the properties on which DPW was no longer paying the rates. Provinces confirmed 21 000 land parcels under their custodianship, and another 11 000 provincial ones were also found. The properties shown in red on the analysis in the document were still under investigation as they were listed as belonging to different custodians. There were 4 493 properties that required further investigation. The provincial analysis of DPW land should be completed by 31 March 2013. These properties would be subjected to physical verification processes, as there were difficulties with finding who the custodians actually were.

After adjustments, as listed on the later table in the attached document, DPW had found that land parcels under provincial custodianship were not 111 937 but were 122 224 in number. DPW had done a breakdown on the numbers. It found that the initial numbers provided to DPW by the provinces, of 29 650 properties, in fact needed to be corrected to 53 294, after the process of verification through the Deeds Office, physical inspection of provincial assets and the use of property. That number included both vested and unvested land. 31 153 were unvested land parcels that DPW had to show in its financial statements. The remainder of about 22 000 properties were yet to be vested by provinces. The analysis process had a cut off date of 31 March 2013. DPW was still working with provinces to identify who the custodians were of the property under investigation.

The vesting process presented previously differed quite substantially from the process shown today. Mr Gwazube had touched on the difficulties of vesting. DPW was measuring progress against land parcels not verified and investigated. After investigation, the numbers that DPW was now presenting were more realistic. Previously, the DPW knew that there were about 50 000 properties needing still to be vested. That number was now assessed at 71 171. Because the incorrect numbers had been used as a basis, it would be impossible to measure exactly how far DPW had gone, and so it also affected the budget and resource planning for meeting the targets. Over the last ten months, however, DPW had managed to refine the numbers and quantify a better plan. About 25% of the 36 000 properties would be vested by 31 March 2013, 90% by 2015, and 100% by 2016.

In conclusion Mr Gwazube referred the Committee to the critical successes that DPW had achieved. He reiterated that the different presentations that the Department was also highlighted areas where it had fallen short. He emphasised the conclusion of the reconciliation process that would lead to the physical verification process from May 2013, and how this would lead into the 2014 targets. The CSG was also cooperating, and the Departments of Defence and Agriculture, both of whom had complete asset registers, were also helping. State entities registering assets on behalf of departments were cooperating, including the Centre for Scientific and Industrial Research (CSIR). DPW was not intending to deviate from its  target of having a fully-compliant asset register by 2014. The critical success factors for this remained the same. However, it was adding a new process that would ensure that the IAR was properly maintained and could operate to support DPW in its turnaround.

Mr Gwazube noted that the plans were already made, but guidelines were needed to ensure that the programme was moving in the right direction. DPW had reached the necessary agreements with the state land custodians and departments but now needed to ensure the necessary funding for identified HR processes. This issue was being raised because the DPW would hope for support from this Committee if it requested budgets for previously-unforeseen needs. In addition, it wanted to ask that when other custodians requested budgets, the Committee would also ensure that their budgets were used in a way that would support the DPW’s IAR process. A common platform had been agreed. DPW and others now needed to move the process forward and get approval on the structures.

Discussion
The Chairperson commented that many Members appeared to have concerns about the presentation, and how this related to the past presentations to the Committee.

Ms Dreyer asked what vesting meant. She asked if international properties, like embassies, fell under the DPW or Department of International Relations and Cooperation (DIRCO) such as embassies. She questioned whether DPW knew of the actual sizes of properties in provinces. She also asked how the unreliability of the DPW asset register impacted on the Land Reform programme, since it was not known what exactly existed that could be transferred to those making land claims.

Ms C Madlopha (ANC) asked the DPW what information it sought from the Deeds Office. There was no consolidation of information on the former TBVC states’ land. She was not clear on whether DPW had recorded how much land was held privately, or by parastatals. She wondered what DPW would do if it found privately-owned land without supporting deeds of transfer. She said it seemed that DPW was now focusing on compliance with the IAR programme, and would later move on to other matters. She asked if the properties outside of the country  would also form part of IAR, for purposes of compliance.

Mr K Sithole (ANC) was concerned with DPWs shifting of dates around meeting targets. He too had concerns about the international property. He also was worried about land parcels that would seem to have been transferred to Department of Human Settlements, asking how many had been transferred. He wondered whether DPW was going to meet its target of confirming the quantum of land parcels by 31 March 2013.

Ms Ngwenya-Mabila agreed that she too had concerns whether DPW would meet its deadline for physical inspections, which had been given to the Committee in August 2012. She wanted to know the reasons behind the delay in vesting, which was the responsibility of DPW. She also wondered about the causes of the  delays in rolling out of the transversal government property management system, and why OBB was now being shifted back to 2014. This would surely delay the IAR programme already started.

Mr M Swathe (DA) commented that although DPW had noted that there was information that had not been captured in the Deeds Office register, it was apparently still intending to use the system, without actually surveying properties. He asked exactly what ‘legacy’ issues were referred to by DPW. He wanted more detail on how DPW was dealing with assets that were initially in its register but were apparently now transferred to individuals and municipalities, in order to make its reconciliation effective.

Ms N Ngcengwane (ANC) said that the fact that the presentation was not received on time was perhaps symptomatic of DPW not showing enough seriousness about the IAR programme. She was also worried about the Deeds Office not having the correct information on transfers of property between individuals and the state. The Government Immovable Assets Management Act (GIAMA) was passed in 2007, and was supposed to have been implemented within three years at local level. To date, this had not happened and she wondered if this did not have an impact on assets. At provincial levels, rates were not being paid because provinces were not aware which properties belonged to them, and that fact was likely to delay the IAR for a long time still. She questioned also if DPW would meet its target for confirming all unregistered state land by 31 March. The former Transkei Deeds Office had burnt down, and she questioned how DPW could account for state property, some of which had been annexed and turned into bed and breakfast accommodation by the custodians in the intervening years. Shifting time frames told her that the clean audits were going to be elusive for the next few years.

Mr Gaehler asked why the DPW was shifting targets, commenting that this would be very onerous for the  incoming staff. He asked if the DPW references to ‘foot soldiers’ meant consultants or DPW officials, and asked what work they would actually be doing. Particularly because there was misuse of state property in the Eastern Cape, Mr Gaehler warned DPW to complete the IAR and OBB programmes properly, for the sake of the country. He noted finally that there was no mention of Free State vesting and asked what was happening in this province.

Mr N Magubane (ANC) commented that the Deeds Offices had been situated in four provinces in the past but the main office was in Pretoria. He saw no reason why there should be a problem with the burning of offices in Mthatha as the Pretoria office surely had records of all land parcels.

Ms N Madlala (ANC) commented that the Committee had difficulty in reading the two documents, which were printed in black and white, without showing the colour coding. She asked for clarification on these points, the Ministerial visits, and the relationship between DPW and the DIRCO concerning assets abroad.

The Chairperson noted that R30 million was allocated for assets registers, and R6 million was spent on a new system to capture those assets. The Committee needed to know where this system was. When DPW appointed Ernst and Young as consultants, she wondered if they had been told about the 230 assets of DIRCO, although she also noted that this figure was disputed between DPW and DIRCO.  She told the Committee that there were about 30 properties in Namibia ,of which five were sold to the highest bidder, without any other criteria being followed – a very worrying assertion - and additionally 14 foreign properties had been identified for disposal, although there was no disposal policy. In 2012, DPW mentioned certain properties that were to be disposed of, for commercial purposes, enquired where these were and asked if Ernst and Young were informed about this.

The Chairperson also insisted that the Committee wanted to know if the consultants had been made aware of the 20 properties for land reform, and 300 hectares of land that was to be disposed for agricultural, educational and municipal purposes.

The Chairperson said that the Committee had been informed that devolution of property rates was only started in 2006. in relation to GIAMA she added another question as to why there were no plans for national and provincial asset registers to use the same operating model.

There was a comment from the floor that DIRCO had an asset register which it had asked DPW to manage for them.

The officials from DPW then responded to the questions, grouping them together.

Replying to the vesting questions, DPW said that after 1994 there  were national competencies, such as defence and police and justice, and provincial and concurrent competencies such as education and health, which meant that all those properties under those custodians needed to be vested correctly. DPW therefore had to start demarcating which piece of a particular portfolio of assets in South Africa belonged to whom, which was the reason why divisions occurred. The custodians as identified in the presentation had each their own areas of mandate. DPW had to take that into account when determining who should be the owner of a particular facility. Vesting meant that there was a need to move that property to the right registered owner. The DPW was responsible for vesting of its own assets, and  other custodians were responsible for the vesting of their own assets, but the difficulty was that the accounting standards used in the audit process said that where a state asset had not yet been vested with the rightful owner, DPW was responsible. That was why DPW had linked the devolution of property rates and taxes to vesting, to try to get other custodians to complete their vesting obligations. When a custodian approached NT to ask for money for property rates and taxes, it would need to produce a complete  asset register of all its properties. The shifting of functions around rates and taxes would therefore compel the custodians to actually complete the vesting exercise properly in order to be given a budget for rates and taxes.

Additionally, it was impossible to vest something that a custodian was not aware of. The Deeds Office analysis had, for the first time, uncovered this point, as seen by the revised numbers. If the DPW did not have information at a national level, it could not track which custodian was supposed to act in respect of what properties.

In relation to the questions around the former TBVC states, the DPW representatives noted that the DRDLR was the custodian of those land parcels. There were very complex land tenure arrangements in those states that differed from those used in the former areas of South Africa.

With regard to foreign properties, DPW said there were two state custodians to whom functions were devolved – namely SAPS and DIRCO. However, that devolution excluded the power to dispose of  public properties, and this power belonged exclusively to DPW, who had the legal mandate to attend to this.

The Chairperson interjected by asking whether the properties sold in Namibia were sold by the Minister of Public Works.

The DPW representatives replied that they did not know of the details. The Minister generally had the power, exclusively, to dispose of  public property.

The issue of foreign properties had been linked to OBB, but because the premise had been incorrect from the start, there was a need to revise it. It was not only the TBVC states where the problem existed, but also in the former South Africa, and there were additional problems in the international sphere, for instance with Stratcom operations.

The Chairperson interjected to say that DPW simply had one call – namely to account for OBB. She wanted to know what happened.

The DPW official responded that OBB had now been conceptualised properly. However, how exactly it would be resourced was not clear. Establishing a call centre would not be enough to run OBB that was to deal with complex property issues. The question remained who would run the investigations, and there was a need to resource it properly, with the right people running the investigations, who had no conflicts.

In relation to the size of properties, this had to be established in order to meet the requirements of having an audit-compliant Asset Register. Physical verification was done partly to capture the actual size of properties where the DPW did not have this information, to establish the square meter coverage, whether there were improvements and how much land was owned by whom.

The question of the impact on the Land Reform programme could only really be answered by DRDLR, but a department was of course only able to dispose of state assets where it was certain that these indeed belonged to the department. DPW was not suggesting that it did not know about its assets, nor was it saying that there was non-compliance, but was emphasising that the register did not meet all the audit requirements for the register to be declared complete. It was not foreseen that DRDLR would dispose of any land that was in dispute, or that had not been vested.

It was agreed that because a Deeds Registry was centralised, the deeds repository would have had archived records. DPW had identified areas that needed investigation and were going to pursue those. On issues pertaining to Mthatha, DPW had started interacting with the regional manager in the previous year and there would be a follow up on areas that were problematic in that region. The DRDLR had put in place a similar programme to the DPW, for all the former TBVC states and older RSA properties. A dedicated team was in place to look at to how and what their asset register should contain, and this would cover eventualities such as the deeds office being destroyed.

On the question of how many private properties had moved to private hands, yet were not substantiated, DPW did not know exactly how many, but was aware of a certain number and would investigate.

DPW still needed to become involved in the compliance focus of the audit on properties outside the country. The mandate of the current Project Management Office PMO was to look inside RSA, and not without. This blind spot had already been noted, and would be covered in the future. The mandate for IAR was not extended outside South Africa. However, this was not a problem as DIRCO still needed to keep a register of its international facilities, as part of the devolution of that particular function and DPW still needed to revisit this internally. DPW still needed to engage with the intelligence community concerning Stratcom operations prior to 1994, so that there was a structured and legal way of dealing with those international properties that may fall under Department of Defence or State Security Agency. This area would still have to be discussed as it was not part of the original terms of reference.

DPW assured Members that in fact it was not shifting dates. There was still a target of 2014 to have an asset register that complied with the Office of the Accountant General’s criteria. The Minister had, however, started and then formalised the  turnaround strategy on 1 June 2012. Between then and February 2013, the DPW ensured that the turnaround was ingrained in all the processes and projects. That was why Mr Gwazube referred to superimposing one project on the other. The deadline of 2014 for IAR should coincide with the stabilisation phase of the turnaround strategy, and IAR would be put into operation during the Turnaround’s efficiency management phase. The new references to new systems were included to ensure that even after complying, DPW would by then have a platform in place that was properly resourced with HR, processes and systems, and that could continue to function without corruption challenges.  There was broad  agreement on that operating model but it still needed funding.

The issues of billing were important because when specialisation was introduced, DPW had to be in a position to run a billing system. All these other elements were not so visible in the compliance phase, but DPW was constantly working on the worth and value of the projects and how they would take DPW forwards.

There were about 60 000 land parcels identified and earmarked for provincial housing, but they had not been transferred yet. DPW had to engage with DHS at national and provincial level. It was possible that there were discrepancies in the legal processes, with land used for low cost housing, and some of the land may have been part of what were formerly buildings in the Housing sector, which fell under the 2002 determinations under the old Housing Act. DPW was planning to work with MinMEC and  DHS to manage their projects as part of the IAR project. DPW would liaise with relevant provincial departments. 

In response to questions around deadlines, DPW had indicated that it had experienced bureaucratic and administrative challenges that led to delays of around six months. This shifted the date for starting back to May 2013. However, there were two tranches to the original plans. Tranche 1 related to five regional offices, and Tranche 2 to the remaining six. DPW had now reorganised that and streamlined into one tranche only. It would be important to ensure that the physical verifications were done before March 2014, as by then DPW had to have a compliant asset register.

Responding to the questions about the value and credibility of the desktop research, DPW noted that it was necessary to refer to the office that had to keep a registry, and that was the Deeds Office. The DPW and Deeds Office asset registers were compared with each other. DPW had to know how many registered properties there were in South Africa, whether the records matched, and whether these were vested or unvested. The desktop analysis was necessary to understand the basis from which the DPW was working, and to identify the backlogs for each province and insist that they met targets. The South African Deeds Office register compared highly with others in the world.

Members had asked for more elaboration on the legacy issues. These included the fact that at 1994 there was no uniform system for keeping an asset register in the country, and there were land tenure systems that were incompatible. The DPW could make a list of such concerns, which did impact on its work.

The question of non-implementation of GIAMA at the local level was one of DPW’s current challenges but it could not deal with all the legislative issues of that programme. The targets for 2014 did not include dealing with legislative problems. That would, however, be addressed in the later phases. Other departments had developed enabling legislation that helped them to define the management of the three spheres of government, but DPW relied on cooperative governance. Unless things were seriously out of kilter, it would have to ask local government to assist in defining and making interventions, whereas the Minister for Human Settlements, for instance, was empowered to make direct interventions by managing accreditation of municipalities. The Minister of Public Works had already promised that after 2014, DPW would look into developing legislation to help DPW address the challenges.

Ms Dreyer asked whether, if DPW still owned a building according to the asset register, the system also told DPW who was responsible for maintaining the property if it had since been devolved to a province.

DPW replied that if an asset had been devolved to a custodian, then that custodian was responsible for it. Even where there had not been a formal devolution, there were certain responsibilities that attached, up to a certain threshhold. When clients had been given the ability to maintain an asset, they should do so, but generally clients would not do so unless an asset had deteriorated, maintaining that this was still DPW’s obligation. The question was how DPW was managing and monitoring their portfolios, and whether they were ensuring that clients did not allow assets to deteriorate.

DPW also said that DPW’s meeting of the 2014 target was highly dependent on the Chief Surveyor General.

Ms Ngwenya-Mabila and the Chairperson thought the target would not be met.

Mr R Mattler, DPW representative, said that he was concerned about the high numbers of unregistered land parcels.

Mr Gwazube eventually, but only partially, conceded. He said that DPW would ensure that the next administration and Portfolio Committee would not be disempowered after 2014.

He continued that properties around Port St. Johns were developed on the basis of Permissions To Occupy. These assets were never really state assets, and this was one of the legacy problems in relation to former TBVC states. Whoever owned the land owned the asset built on it. The allocations for IAR covered the periods 2005 to 2008. However, it was identified that about 33 000 land parcels were verified and linked to improvements. The main purpose of this exercise was to try to discover if there were improvements, which had not been done previously. Verifications were done to comply with the audit requirements.  DPW would still be investigating the properties for which it could not account.

The Chairperson wanted to know who owned rivers, the mountains, the seas and underground assets, and whether certain animals were being recorded. 

The Committee agreed that this was indeed important.

The Chairperson asked if Auditor-General South Africa wanted to comment.

An official from AGSA  responded that the Auditor-General had attended MinMEC and had noted some of the issues. He would pass on the information.

DPW said that infrastructure assets would in future be recorded, as part of the efficiency phase after 2014. The DPW was until then mainly concerned with issues around compliance.

The Chairperson added that the system that was used by Department of Defence to detect underground assets was not an expensive one, and enquired how DPW would be able to detect those assets without using that system.

Ms Madlopha said that DPW had clarified that until 2014 it would focus on compliance and stabilisation. After that, it must be sure about the accuracy of information in the assets register.

Mr Dlabantu said DPW had noted the questions that required a more detailed response, and was hoping to furnish satisfactory ongoing reports. He cautioned that the project was very complex.

The Chairperson asked for presentations to start from events in 2008, when IAR started. That would help the Committee to understand and compare progress. She asked if  DPW had a clause in its contract with the consultants that after they had finished their work on the asset register, every single record would be handed to DPW.

Mr Dlabantu confirmed that this was so, and information was handed over as it was collected.

The meeting was adjourned.