National Public WorksPortfolio Committee PresentationImmovable Asset Register Programme (IAR)August 2012

Page 2

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

► 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 3

Proposed roadmap

Aug 12 Sep 12 Oct 12 Dec 12

Data cleanse, reconciliation, resolve position with provinces

Detail design of new op model

On track Not started

Pack IAR

Apply FV model

IAR adjust/ quality checks

#1

Key:

Finalise capitalisation

framework

Detail design revised vesting process

Jan 13

Implementation of revised vesting process

Wave 2 of SSPfor 6 regions

Nov 12

IAR v1

Proposed timeline/ sequence

Serious risk

Concerned with progress

Feb13 Mar 13 April 13 May 13

Fieldwork 1 6 regions

IAR v2 IAR Final

Approve FV model

Design new vesting process

Aug 13 May 14

High level operating

model

Acquire tool

Design & test tool

Fieldwork 1 has to finish by end Jan/ mid Feb in

order to pack IAR for 31 March 13

SSP adjudicateend Aug

SSP on-board,

roadmap, train

Recruit PM in

regions

PMs trained & onboard

Operate new operating model or interim structureImplement new

operating model

2013 IAR will comprise:•+-60-70% physical verification with remainder of data cleansed (desktop)•Defence UAMPS incorporated•Provinces properly accounted for•FV1 based on input from inspection•FV2 based on municipal value & desktop

Mar 14

Fieldwork 2 5 regions

Apply FV

model

Sep 13

AG review

AG fixes

Final IAR & snag list

Final IAR

Pack IAR

IAR adjust/ quality checks

#2Hand-over

Substantially compliant

IAR for 2013

Compliant IAR for 2014

Page 4

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 45 150► 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► 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 5

Current view of position with provinces

FY 2012 EC FS GP WC NC NW MP L KZN Total

Identified on Deeds as provincial

7,911 5,14529,01

622,27

9895 2,738

13,257

8,500 22,196111,93

7

Presented for audit by Provinces

9,900 4,93114,29

511,56

22,158 762 6,021 966 5,759 56,354

Received from Provinces (requested by National DPW

9,752 4,931 540 4,778 422 762 5,400 966 2,064 29,615

► 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

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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 7

Key successes

► There is a clear plan outlining what needs to done to produce a baseline compliant IAR► Our time spent on extensive analysis, research and consultation with relevant stakeholders

has confirmed the complexity and extent of work required which has previously not been addressed

► 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 8

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

National Public WorksPortfolio Committee PresentationImmovable Asset Register Programme (IAR)August 2012

Appendices

Appendices

Revised vesting processVesting stats

Page 11

Discrepancies investigated-Missing item 28(1) certificates-Differences in the vesting stats

Discrepancies investigated-Missing item 28(1) certificates-Differences in the vesting stats

StartStart

Reconcile

Reconcile

Rec

onci

le

Registered properties

Unsurveyed land in former RSA

Land parcels not yet vestedLand parcels not yet vested

Unregistered propertiesUnregistered properties

Surveying process of underlying land

Surveying process of underlying land

Registration process – National Republic of South Africa

Registration process – National Republic of South Africa

Completed PSLDVC application

Obtain PSLDVC resolution (May require more frequent meetings)

Obtain PSLDVC resolution (May require more frequent meetings)

Submit PSLDVC application

(for recommen-dation)

Submit PSLDVC application

(for recommen-dation)

Capture PSLDVC application on LAW system

(PSLDVC Secretariat in DRDLR region)

Submission by DRDLR HO

DG Signs certificate

Issue S28(1) certificate

Submission by DRDLR HO

DG Signs certificate

Issue S28(1) certificate

Applicant instructs State Attoney to lodge & Registrar of Deeds Endorses

Applicant instructs State Attoney to lodge & Registrar of Deeds Endorses

PaperTrail & physical

verification (Docs &land use) input

PaperTrail & physical

verification (Docs &land use) input

Bulk vesting at H/O Prepare PSLDVC

Application

Bulk vesting at H/O Prepare PSLDVC

Application

QC at HO & (Regions)

QC at HO & (Regions)

DRDLR PROCESSES

Tracking & MonitoringTracking & Monitoring

1.Reconciliation between various sources.2.PaperTrail and physical verification inputs.3.Bulk vesting process at Head Office

1.Reconciliation between various sources.2.PaperTrail and physical verification inputs.3.Bulk vesting process at Head Office

11

22

33

4455

Proposed interventions 4.QC at HO and Regions before preparing/submitting application.5.Tracking, Monitoring and status updates –access to the LAW system6.Central dB to track movement of vesting status for DPW to track

4.QC at HO and Regions before preparing/submitting application.5.Tracking, Monitoring and status updates –access to the LAW system6.Central dB to track movement of vesting status for DPW to track

Update DPW IAR

(need for centralised, iEWorks dB used by all)

66

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National DPW vesting statisticsCumulative from April 94 to Jun 12

Province31 Dec2011

30 June 2012

Vesting certificates Issued

Dec 11 to Jun 12

EC 1,292 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

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, a lack of information and inadequate project management.

A revised vesting process has been designed in consultation with DRDLR and will be implemented in September

2012.

Page 13

Cumulative vesting statistics April 1994 to 30 June 2012

NATIONAL DRDLR PROVINCES

Province IAR VestedStill to be

vestedIAR 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 2,601Not

ProvidedNot

Provided22,279 3,255

TOTALS 32,928 13,379 19,549 24,502 8,871 111,937 18,500

Appendices

Results of deeds and other reconciliations

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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 are 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

► ,,Total number of records in Deeds File 68,458,007

Total number of Properties in Deeds File 7,395,908

State Land (Category 1) ( Provinces and National) 182,345

Parastatal (Category 2) 10,255

Municipality (Category 3) 977,536

Private (Category 5) 6,225,772

Total State Land 182,345

Less : Provincial Registered parcels -111,937

= All National registered land parcels(DPW, DRDLR, DWA) 70,408

Less: DRDLR ( Need the list of Current DRDLR less what is in Deeds) -25,258

Total Remainder of National Registered properties to be compared to the PMIS Immovable Asset register in order to identify properties on Deeds but not on PMIS - Unique land parcels to be added to PMIS list. 45,150

Deeds Analysis

Objective: State Land as per Deeds AnalysisTo identify properties not accounted for in the Provincial Asset Registers and other National

State Land as per Deeds

These properties include other National Custodians as per the Custodial Framework

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DPW IAR (PMIS) analysis - Own

Cat Descriptor after the Aktex Verification

TOTALLand Parcels Include in IAR

Ringfenced for further follow up

Should be excluded Comment

1 Aktex contains reference to "National" hence included 4,969 4969 Deemed DPW National 2 RSA or derivative thereof 16,471 16471 Deemed DPW National 3 Other:Probable: Department of Public Works Properties 8 8 Various for follow up5 Provincial Properties ( Clearly Provincial Names) 1,209 1,209 Not National DPW7 Private Properties ( Individuals, Companies, Municipalities, Parastatals & Agencies) 3,659 3,659 Not State Land

12 Other State Departments (DRDLR, DWA, DOD) 3,341 3,341 Other Custodians13 Tribal Land 110 110 Verify property usage11 Foreign Properties 101 101 DIRCO has custodial powers

9 Property no longer exist 261 261 Expropriated/ consolidated/ re-numbered6 Permission To Occupy and Build (PTO's and PTOB's) 401 401 Verify property usage8 Unregistered - no title holder 4,366 4,366 Investigating

10 DUMS 976 976 DuplicationsPre September Records - Balance between 31 March 2011 AFS to 30 Sept 2011 23 23 For follow up

35,895 21,448 6,027 8,420 4 Department of Public Works Properties Transferred from the Devolved file 1,336 1,336

15 Properties from Deeds and not PMIS 5,354 5,354 42,585 21,448 12,717 8,420

► Above will form basis for fieldwork and workpackages going forward

Page 17

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

Devolved: DPW 50,364

Cat Descriptor after the Aktex Verification

TOTALLand Parcels Include in IAR

Ringfenced for further follow up

Should be excluded Comment

1 Aktex contains reference to "National" hence should be moved to Masterfile 1,336 1,336 Deemed DPW National 2 RSA or derivative thereof 15,863 15,863 Deemed Devolved Provincial Properties3 Provincial Properties ( Clearly Provincial Names) 10,818 10,818 Deemed Vested properties & Should be dislosed by the provinces4 Private Properties ( Individuals, Companies, Municipalities, Parastatals & Agencies) 8,994 8,994 Not State Land6 Unregistered - no title holder 6,961 6,961 Investigating basis of inclusion on IAR8 Other State Departments 346 346 Other Custodians9 Former Model C Schools 2,047 2,047 Former Model C schools belongs to the provinces & will be vested provincially

10 Permission To Occupy and Build (PTO's and PTOB's) 2,260 2,260 Verify property usage11 Government trusts 307 307 These are Education, Hospital & Road Trustees - belongs to the provinces12 DUMS 372 372 15 Disclosed by DRDLR 950 950 16 DIsclosed by DWA 95 95 17 DAFF 15 15

50,364 15,878 12,293 22,193

AFS Treatment