Comprehensive National Asset Register Reconstruction: Roadmap for Compliance by March 2013

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

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

3. Proposed roadmap Substantially compliant IAR for 2013 Compliant IAR for 2014 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Feb13 Mar 13 April 13 May 13 Aug 13 Sep 13 Mar 14 May 14 SSP adjudicate end Aug Data cleanse, reconciliation, resolve position with provinces SSP on-board, roadmap, train Fieldwork 1 6 regions Wave 2 of SSP for 6 regions Apply FV model Fieldwork 2 5 regions Apply FV model AG review Key projects & activities required Pack IAR Pack IAR AG fixes IAR adjust/ quality checks #1 Acquire tool Design & test tool Finalise capitalisation framework IAR adjust/ quality checks #2 Hand-over Recruit PM in regions PMs trained & onboard High level operating model Detail design of new op model Implement new operating model Operate new operating model or interim structure Approve FV model Design new vesting process Detail design revised vesting process Implementation of revised vesting process Proposed timeline/ sequence IAR v2 IAR Final IAR v1 Fieldwork 1 has to finish by end Jan/ mid Feb in order to pack IAR for 31 March 13 Final IAR Final IAR & snag list • 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 Key: On track Not started Concerned with progress Serious risk

4. Key results of analysis conducted thus far • 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

5. Current view of 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

6. 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

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

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

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

10. AppendicesRevised vesting processVesting stats

11. Discrepancies investigated -Missing item 28(1) certificates -Differences in the vesting stats Unsurveyed land in former RSA 1 Land parcels not yet vested 2 Registered properties PaperTrail & physical verification (Docs &land use) input Unregistered properties Reconcile Reconcile DPW land parcels S28(1) certificates Start DRDLR vesting stats Region vesting stats Surveying process of underlying land Reconcile Bulk vestingat H/O Prepare PSLDVC Application 3 DRDLR PROCESSES QC at HO & (Regions) 4 Tracking & Monitoring 5 Registration process – National Republic of South Africa Obtain PSLDVC resolution (May require more frequent meetings) Submit PSLDVC application (for recommen-dation) Submission by DRDLR HO DG Signs certificate Issue S28(1) certificate Applicant instructs State Attoney to lodge & Registrar of Deeds Endorses Completed PSLDVC application Capture PSLDVC application on LAW system (PSLDVC Secretariat in DRDLR region) Update DPW IAR (need for centralised, iEWorks dB used by all) 6 • Reconciliation between various sources. • PaperTrail and physical verification inputs. • Bulk vesting process at Head Office • QC at HO and Regions before preparing/submitting application. • Tracking, Monitoring and status updates –access to the LAW system • Central dB to track movement of vesting status for DPW to track Proposed interventions

12. National DPW vesting statisticsCumulative from April 94 to Jun 12 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.

13. Cumulative vesting statistics April 1994 to 30 June 2012

14. AppendicesResults of deeds and other reconciliations

15. 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

16. DPW IAR (PMIS) analysis - Own • Above will form basis for fieldwork and workpackages going forward

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