Formulation of a Government-wide Fixed

Asset Management Framework

Presentation to the Portfolio Committee of Public

Works13 November 2002

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Why Immovable Asset Management Framework &

Act?Currently no comprehensive consolidated guideline for the State’s immovable assetsThis is a good governance initiative - Like PMFA and Public Service Act, Asset Management Framework – later Act, will guide whole of government to enable:

>Better allocation of limited resources >Better alignment of immovable assets with

service delivery & community expectations >Reduced demand for new immovable assets >More effective use of existing immovable assets

>Will apply to any sphere of government that has a role in immovable assets including infrastructure without taking away respective mandates or roles.

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Why Specific Focus on Immovable Assets?

Impact on macro-economic and physical landscape of the country– positively or negativelyHave land ownership implications & often emotiveAre a finite resource Are difficult to change location & useHave lengthy acquisition periodsCostly to manage and maintainHave a very long life cycle

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Principles: Immovable Asset Management Framework

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

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Immovable Asset Management in a govt-wide

context

Resource Strategies and Plans

Service Delivery Strategy

Departmental Strategic Plan

Government-wide Policy/Legal Framework

Community Needs and Expectations

Human Resource Plan

IT and SupportSystems Plan

Im/movable AssetManagement Plan

Financial Plan

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Immovable Asset in Context of Service

Delivery

Service DeliveryStrategy

CurrentAssetsFunctionality

Condition

Utilisation

Performance

GOVERNMENT OBJECTIVES AND POLICIES

Fixed Asset Requirements

Additional Utilise Redundant

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Useful Life of Immovable Asset

PlanningPlanning

DisposalDisposal

Utilise and Utilise and MaintainMaintain

AcquisitionAcquisition

8

Immovable Asset Life Cycle Cost

TimeTime

Co

stC

ost

Pla

nn

ing

Pla

nn

ing

Ac

qu

isit

ion

Ac

qu

isit

ion

Dis

po

sa

lD

isp

os

al

Utilise andUtilise andMaintainMaintain

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Portfolio

Treasury

DPW/Cust

DPSA

FINANCIAL POLICY AND BUDGET

IMMOVABLE ASSET MANAGEMENT POLICY AND CUSTODIAN

Dept A Dept B/Prov/Mun

Strategic Plan Strategic Plan

Service Delivery Strategy Service Delivery Strategy

Advice

Immovable Asset Management Plan

Additional Utilise Redundant

Immovable Asset Management Plan

Additional Utilise Redundant

Proposed Institutional Environment & Processes for the Government wide Immovable Asset

Management Framework

HUMAN RESOURCE POLICY

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ConclusionPresentation outlines the backbone of initial proposal regarding a Government-wide Immovable Asset Management FrameworkFramework will be developed into an Act, mid next year. (GIAMA)Currently framework consultations–DG to DGIncorporation into Jan 2003 Lekgotla, anticipated.Draft Bill to be ready – Feb 2003 for public consultations & promulgation target – July03In future, govt depts and other organs of govt will prepare yearly asset management plans, similarly to yearly budget plans.Anticipated other organs of State will begin doing the same, share information, intergrate planning and effort and follow uniform good governance guidelines and approaches, re: immovable assets.