Department of Public Works Immovable Asset Register Enhancement Programme briefing

NCOP Public Services

11 November 2013
Chairperson: Mr MP Sibande (ANC, Mpumalanga)
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Meeting Summary

The Department of Public Works (DPW) gave an update to the Committee on the progress made towards the finalisation of the Immovable Asset Register (IAR) Enhancement Programme. Since meetings held in 2012, the IAR had been treated as a priority by DPW.  The delegation presented details on the various aspects of the IAR programme that were being implemented, and the progress made on them. It was noted that DPW was moving forward, and aimed to complete the IAR programme by 2016.  The registry of land parcels proved to be a major factor in the IAR and a good deal of progress had been made in the previous two years. Future progress in that area depended on successful deeds analysis. DPW was making positive progress in terms of surveyed unregistered land parcels and the continued success would rely on increased physical verification. A slide noting the state land reconciliation as at October 2013 included registered, unregistered, and Section 42 land parcels.  There were still many unregistered and unsurveyed properties across the country.  Overall, the state owned 184 011 pieces of land across the country, but DPW claimed that there were another 3 127 pieces of land that fell in their jurisdiction, that remained unregistered.  There was still a great deal of work to be done in terms of the physical verification of state owned properties. Provinces had been asked to assist with identification. It appeared that Western Cape province owned the largest amount of state land, with KwaZulu Natal following. The total of all provincially-owned land was 26 434 parcels. Some properties belonging to the national DPW had been devolved to the provinces. 

The DPW then noted the specific aims and objectives for 2013/14, which included ensuring progress on surveying of land, which was one of the benchmarks against which progress was measured. Un-surveyed land was to be disclosed to DPW by the Department of Rural Development and Land Reform. Once a piece of registered land was vested and the custodian confirmed, it would then be the custodian’s responsibility to include it in their IAR. At the moment, the Government Immovable Asset Management Act (GIAMA) did not apply to local government, although it did set out the principles against which national and provincial departments must manage the immovable assets that the controlled or used. After considering the options, it was suggested either that a separate set of regulations could be issued for local governments, or that the Local Government: Municipal Planning and Performance Management, 2001 Act could be amended to specify what local government must do. Finally, the results of the Auditor-General’s investigation of the IARs was presented. The national DPW had achieved no qualifications in most areas but had been qualified in the category of valuation of assets. The provincial department in Free State was issued with a qualified opinion, Limpopo, Eastern Cape and North West had disclaimers, and other provinces received unqualified opinions.

Members were not entirely happy with the presentation and some were very critical about what they perceived as lack of progress altogether, and commented that none of this information was new. They  were concerned that the initial timelines had been abandoned and the completion dates had been pushed forward to 2016, which not only affected the ability of this Committee to finalise the issue, but Members also questioned if those dates were realistic. They were also concerned about the rising costs of the project, and wondered if the term “service providers” was in fact referring to consultants, a factor the Committee had been critical about in the past. They wondered how and whether the national and provincial departments could work together, whether there was a committee being used to coordinate the work. They asked for more clarity on Operation Bring Back and asked what the DPW would do if properties were being illegally occupied or used. They wondered why some provinces achieved poorer audits than others, how the national DPW would assist them, and demanded a full copy of the IAR before the next meeting, to clarify what properties were covered.
 

Meeting report

Department of Public Works Immovable Asset Register Enhancement Programme briefing
Mr Mziwonke Dlabantu, Director General, Department of Public Works, began by thanking the Committee for their time and introduced the delegation. He then asked a member of his delegation to continue with the presentation.

Mr Peter Chiapasco, Deputy Director General, Department of Public Works, said that he would speak t the Immovable Asset Register (IAR) Enhancement Programme. Since the previous meeting in 2012 the asset register had been a key function of DPW. He noted (see attached presentation for full details) the progress made by the Department of Public Works (DPW or the Department) from inception of the IAR programme until March 2013, including the deeds downloads, the reconciliation of provincial DPW lists and those from the Department of Human Settlements, and the linking of structures to land parcels, which had been significantly completed. 

Mr Chiapasco then provided an overview of the DPW plan spanning from April 2013 to March 2014 which included the on-going deeds refresher for registered land parcels, building an IAR for surveyed and unregistered land, conducting physical verification of all DPW properties, and preparing the 2013/14 Annual Financial Statement notes and narrative. He then provided a flow chart which demonstrated what DPW had done and the progress made towards its final goals. The flow chart provided a demonstration of the three year plan being implemented by DPW, with the goal of completing the IAR programme by 2016.

Mr Chiapasco then provided a breakdown of some key areas, including the registration of land parcels, which had made good progress in the previous two years and had been on pace to perform well in 2013/14. Future progress in registered land parcels was reliant on successful deeds analysis.  DPW was making positive progress in terms of surveyed unregistered land parcels and the continued success would rely on increased physical verification.  He noted that Lists B and E fell under provincial jurisdiction, and thus their 2013/14 numbers were not available.

In 2011/12 the IAR had resulted in the DPW getting an audit disclaimer and in 2012/13 it had received a qualified audit opinion.

Mr Chiapasco then presented a slide noting the state land reconciliation as of October 2013, which included registered, unregistered, and Section 42 land parcels.  He noted that there were still many unregistered and unsurveyed properties across the country.  Overall, the state owned 184 011 pieces of land across the country.  The DPW further claimed that there were 3 127 pieces of land that fell in their jurisdiction that remained unregistered.

He then broke down provincial ownership by province, and it was noted that the most provincially-owned land was in the Western Cape, with over double that of KwaZulu-Natal, the next province in line. The Eastern Cape was home to the least amount of provincially-owned land, followed by Gauteng and Limpopo. The total for all provincial owned land was 26 434 parcels.  It was noted that some properties belonging to the national DPW had been devolved to the provinces. 

Mr Chiapasco stated that there was still a great deal of work to be done in terms of the physical verification of state owned properties and that the next five months would prove to be very busy.  DPW had many meetings with service providers scheduled for the near future.

Mr Chiapasco then moved onto the national vesting report of September 2013.  There had been 15 032 land parcels vested since 1994, with a further 24 780 still to be done.  In terms of provinces, the largest amount of vested parcels lay in Gauteng, Western Cape and Free State, with the fewest in Limpopo, North West and Eastern Cape. The goal of vesting was to determine which of the many  government departments involved was the custodian for a given asset.

He moved on to the sector specific guide and the requirements for 2013/14. These included the DPW having to ensure that progress was made towards surveying land, as surveying was the benchmark against which its targets were set. Un-surveyed land was to be disclosed to DPW by the Department of Rural Development and Land Reform. Once a piece of registered land was vested, and the custodian confirmed, it would be that custodian’s responsibility to include it in the IAR.

A forum of Chief Financial Officers had determined that the Deputy Director General of Asset Information Management was responsible for confirming the readiness and functionality of iE-Works for provinces.   DPW Information Systems unit had been engaging with provinces on iE-Works matters.  The provinces had indicated that they wished to continue working with DPW, and with the implementation of iE-Works initiatives they would be able to read and collect information in a cohesive manner and present one coherent report.  There would be a go-live pilot launched in the New Year.

Mr Chiapasco continued with the presentation of the IAR action plan and noted that there was constant work being done on the tracking and movement of assets. The surveying and vesting of state land was to be completed by March 2015 and the capitalisation of State Immovable Assets was to be completed by March 2014.  He briefly spoke about Operation Bring-Back which was aimed at recapturing some state-owned land that had fallen by the wayside over time.

The presentation then touched on the extension of the Government Immovable Asset Management Act (GIAMA) to local governments.  GIAMA provided a framework of basic principles against which national and provincial departments must manage the immovable assets that they utilised or controlled, when executing their mandates.  GIAMA was structured around role-players involved in the acquisition, operation and disposal of the State’s immovable assets and the management processes within the government.

Due to key differences in the legal framework and organisational structure of local government, compared to that at the national and provincial levels, it was problematic to incorporate local government into existing GIAMA legislation, and therefore a different approach needed to be taken. It was suggested that a separate set of regulations could be issued for local governments, or the Local Government: Municipal Planning and Performance Management, 2001 Act could be amended. 

Mr Chiapasco then presented the Auditor-General’s opinion on the DPW IAR for 2012/13. DPW had obtained an IAR unqualified audit in most sub categories, including Accuracy and Reliability, Existence, Ownership Rights and Obligations, Completeness, and Presentation and Disclosure.  The only category where a qualified opinion was given was in the sub-category of valuation.  He then broke down the audit opinions of each province in this regard. The provincial department in Free State had received a qualified opinion and Limpopo, Eastern Cape and North West had received an opinion of disclaimer.  The other provinces had received unqualified opinions.

Discussion
Mr H Groenewald (DA, North West) noted that the reconciliation of assets was a large project and there was much work left to be done. There had been cut-off dates previously set, but they were not reached, and he used the targets for completion of vesting as an example. He wanted to know, firstly, why the completion date had been shifted. Secondly, he enquired how much land and human settlements belonged to the State at that point, and where the title deeds were for these properties. He asked who, in the Department, was responsible person for keeping the Asset Register updated, and what was the relationship between teams working at a national level and teams working at a provincial level, as well as the size of those teams. He enquired as to the size of the budget for the entire programme, from 2007 to the end? Pointing out that some provincial departments of public works were “in chaos”, and that obtaining a consistent report from them could be problematic, he asked how DPW nationally would try to ensure that it received monthly reports from the provincial departments.

Mr M Jacobs (ANC, Free State) was also concerned about the intended dates of completion. He noted that some people on the Committee might not still be around in 2016, and it was disappointing that the date was pushed back to 2016, from the initial completion date of September 2013.  He asked who had the final authority on the ownership of land.

Ms M Themba (ANC, Mpumalanga) felt that the presentation did not give the Committee too much new information and said that much of the subject matter was discussed when DPW first met with the Select Committee. She felt as though DPW was putting the issues brought up by the Committee on the back burner.  She was not satisfied with the presentation and said the Committee wanted to see better results.

Ms Themba asked if, in the provincial DPWs, there were any specific committees with whom the national Department was working, and how often meetings were held with the provinces. She also wanted to know how the DPW would deal with a situation in which someone was illegally occupying a property. She also wanted to know how many state-owned houses were vandalised per province.

Mr Z Mlenzana (COPE, Eastern Cape) thought that provincial representatives should have been asked to the meeting. This presentation set out some heavy responsibilities for the provinces. He wondered if the term “service provider” was a veiled reference to the use of consultants as DPW had long been accused of using too many consultants. He also commented that the timelines presented seemed to be inconsistent.

The Chairperson agreed with the sentiments expressed by his colleagues and noted that the DPW was running out of time to complete the goals, as the incarnation of this Select Committee would not be around for much longer.  He noted that slide 13 called for increased capacity, but asked what this meant, and whether it was needed at a national or provincial level. Clarification was also requested in regard to Operation Bring-Back, with more specifics on this and who was responsible for implementation. He questioned if the DPW felt that its goals as stated here were attainable.

Mr Dlabantu began the responses by stating that, despite some setbacks, he believed that progress had been made in the previous two years.  The timeframes presented were based on assessments done as to what had been achieved, and what still remained to be done. He apologised for the fact that indeed the DPW would not be able to achieve the goals of a complete IAR before the 2014 General Election. The dates presented were, however, based on what were believed to be reasonable targets for completion. Mr Dlabantu stated that he was confident in saying that if something was government-owned, DPW would be able to identify it, and it would be accounted for.  He suggested that the next time DPW came before the Committee if should bring the full asset register, so that questions about specific locations could be answered, and specific buildings could be identified.

Mr Cox Mokgoro, Chief Financial Officer, DPW, stated that the budget for the IAR programme was R55 million. Spending on physical verification had proven to be a costly aspect and a great deal of spending occurred in the category of compensation of employees.  R30 million was paid to service providers to enable physical verification, and two consortiums had been hired to help in this regard.  They had been hired due to the sheer numbers of buildings and land that required verification.  Due to DPW being in turnaround mode, it was necessary for it to hire external service providers on a short term basis.  The service providers would, however, transfer skills to DPW employees, which would help the Department in the future.

Mr Dlabantu added that once the service providers fulfilled their functions DPW would be able to significantly reduce their reliance on outsiders.

Mr Chiapasco then spoke about the vesting process and noted the provincial and national departments were in the process of researching how many people would be needed for this process, as it required a plethora of onsite investigations. He stated that most title deeds lay in the regional offices of the DPW but that this office did not have all of them, as there were many cases that were issues of legacy.

He noted that the DPW was developing a model to determine who was directly responsible for the IAR and reiterated that the Departmental officials would bring the actual asset register with them when they next made a presentation to the Committee. The DPW was working towards obtaining full physical verification of who was living in any state-owned assets, and any irregularities would be addressed. DPW had defined who the custodians were at provincial and national levels.  Operation Bring-Back was aimed at taking back any assets that may have gone astray over the years, and future presentations would demonstrate the progress made.

Ms Florence Rabada, Chief Director: Asset Register, DPW, stated that significant progress had been made in the linking of structures to land parcels.  She stated that the South African Government had changed fast and this fact caused land to be improperly registered.

Mr Mokgoro added that the process of linking land to structures was very close to being completed.  Within the IAR as a whole there were sub-programmes, and significant progress had been made since 2009, and that, thanks in part to the aggressive oversight by the Committee, the DPW had also seen better audit results and was continuing to make progress.

Mr Mlenzana stated that the Committee heard about numerous plans from DPW, but what seemed always to be lacking was full implementation.  The Committee wanted to know if DPW actually knew where state land was, and was not so much concerned with the intricacies of the systems.  He stated that some state land had been stolen, and wondered if DPW could account for that. He asked if the delegation when flying from Pretoria to Cape Town, was actually able to account for the land they were flying over?  He stated that he was not interested in the theory of political evolution offered by Ms Rabada and instead was interested in knowing whether DPW had taken the necessary steps to ensure that state land was accounted for.  He expressed frustration with the constantly changing timeframes and noted that DPW was putting millions of rands into these types of projects and not implementing anything.

Mr Groenewald asked why Eastern Cape, North West and Limpopo had received disclaimers in their audit opinion.

Mr Jacobs requested that the Committee be given a copy of the IAR before the next meeting, so that Members could properly scrutinise it in order to know exactly what was going on.  He asked why costs had escalated so greatly and if DPW could provide the final spending figure to be spent by 2016.

Ms Themba stated that despite the DPW’s assurance that achievements had been made, she needed proof, and reiterated that this Department had not performed at the levels that the Committee expected. She noted that in recent meetings with citizens during “Bringing Parliament to the People”, many concerns about this issue were brought up. 

The Chairperson sought further clarity in regard to Operation Bring-Back and noted that the presentation stated that vesting targets for 2011/12 were only 70% completed. He wondered if the shortfall on this had been made up during the following year.

Mr Dlabantu stated that the asset register was a very large report and that DPW would provide it to the Committee electronically. In terms of cost escalation, he responded that DPW was in the final stages of completing the programme and implementing everything, but it could not control what happened in the past. He also noted, in answer to the criticisms, that although the DPW may not have not achieved everything that it intended to, the progress made was not insignificant.

During the next meeting, after the Committee had had a chance to review the asset register, Members and the DPW would be able to identify the exact assets causing the greatest concerns and see whether they were accounted for. Once it was fully implemented, the IAR would allow people to track all state assets. He asked Committee Members to appreciate that significant work had been done, and said that future results would attest to the progress made by DPW.  This had not been an easy exercise and DPW would continue to provide the Committee with frequent updates and explanations.

Mr Mokgoro stated that DPW was working with the provinces who received disclaimer audits, and that a Chief Financial Officer (CFO) Forum had been held, where the National CFO met with provincial CFOs, in order to look at all the issues raised by the Auditor-General.  The asset register was an essential programme for provinces.  He underlined the fact that the full implementation of the IAR was a multi-year programme and that DPW was in the midst of a crucial period of implementation.

Mr Mokgoro further explained Operation Bring-Back, which was intended to take back stolen state property.  He encouraged those who were illegally occupying state property to come forward and declare so. The DPW would be specifically targeting those illegally occupying state property.

Ms Rabada referenced the 70% vesting completion rate raised by the Chairperson, and stated that the vesting process had proven to be quite difficult. Custodians could not provide the proper information needed in the time given, and this failure led to the need for a  review of the DPW’s processes.

The Chairperson stated that the Committee was worried about the financial implications of the issues highlighted during the meetings.  He felt that the use service providers needed to be limited as well.  He reiterated that the Committee wanted to see the IAR before its next meeting with the DPW.

The meeting was adjourned. 
 

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