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National Department of Public Works Proposed extension of application of Government Immovable Asset

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On 3 May 2006, during discussion of the Government Immovable Asset Management ... there needs to be new legislation and regulations that govern the maintenance, ... – PowerPoint PPT presentation

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Title: National Department of Public Works Proposed extension of application of Government Immovable Asset


1
National Department of Public WorksProposed
extension of application of Government Immovable
Asset Management Bill B1-2006 to include Local
Government
  • Portfolio Committee on Public Works
  • 24 May 2006

2
Content
  • Background
  • Decisions informing current Bill
  • Summary Review of scope of application of
    current Bill
  • Fundamentals of current Bill National/Provincial
    vs Local Government
  • Legislation guiding strategic planning in Local
    Government
  • Use of GIAM principles in Local Government
    strategic planning
  • Conclusion

1
3
1. Background
  • On 3 May 2006, during discussion of the
    Government Immovable Asset Management Bill, the
    Portfolio Committee on Public Works expressed the
    view that the scope of application of the draft
    legislation (currently limited to
    National Provincial Government) should, as a
    matter of urgency, be broadened to include Local
    Government.
  • The Committee requested the Department to provide
    reasons why it was of the opinion that Local
    Government could not initially be included in the
    scope of application of the draft legislation.

2
4
2. Decisions informing current Bill
  • Cabinet mandated the Min of Public Works to
    develop a policy framework to govern the
    management of immovable assets throughout
    Government and to implement that policy by means
    of legislation, stating
  • there needs to be new legislation and
    regulations that govern the maintenance,
    handling and disposal of immovable assets.
  • Item 1.2.9, Minutes of Cabinet, 02 April 2003
  • In August 2005, Cabinet approved (a) the
    Government-wide Immovable Asset Management
    Policy and (b) the Government Immovable
    Asset Management Bill, applicable to National and
    Provincial Government only.
  • Item 3.2.1, Minutes of Cabinet, 17 Aug 2005

3
5
Decisions informing current Bill (Continued)
  • In June 2005, DPW informed the Portfolio
    Committee that the draft legislation would
    initially only apply to National and Provincial
    Governments, but that the objective remains to
    extend the legislation throughout Government
    (without disturbing the existing mandates
    of government entities).
  • In particular, it was stated that due to (a)
    complexity of legislation governing Local
    Government and (b) varying levels of autonomy of
    Public Entities, DPW would need to embark on a
    more extensive consultation process before
    submitting legislation applicable to these
    spheres of Government.

4
6
3. Summary Review of scope of application
of current Bill
  • There are key differences in the legal framework
    and structure of local government, compared
    to national/provincial government.
  • It would be particularly difficult to draft a
    single piece of legislation to apply immovable
    asset management principles to all
    spheres of government.
  • A different approach has therefore been
    identified to apply the principles of immovable
    asset management to local government without
    undue delay.
  • This objective can be achieved by harmonizing the
    regulations governing municipal planning with the
    principles embodied in the current
    Government Immovable Asset Management Bill.
  • DPLG fully concurs with DPWs proposal.

5
7
4. Fundamentals of current Bill National/Prov
Gov vs Local Gov
  • The Government Immovable Asset Management Bill
    is structured around the following
    building blocks
  • A) Role-players within the asset management
    arena
  • B) Management processes of government.
  • While the management of all spheres of government
    stem from the same fundamental principles, the
    role-players and management processes of local
    government differ substantially from national
    provincial government.

6
8
Fundamentals of current Bill (Continued)
  • A) Role-players Nat/Prov Government
  • Users Departments who use immovable assets to
    perform their functions
  • Required to compile user asset
    management plan
  • Custodians Departments who perform caretaker
    functions in relation to immovable assets
  • Required to compile custodian asset management
    plan
  • A) Role-players
  • Local Government
  • No standard institutional delineation between
    users and custodians of immovable assets
  • No separate accounting officers in various
    departments of a Municipality
  • GIAM legislation for Local Government would
    require different building blocks
  • Would be problematic to apply Bill, as currently
    structured, to Local Government

7
9
Fundamentals of current Bill (Continued)
  • B) Management Processes Nat/Prov
    Government
  • National Provincial Depts (both users and
    custodians) will be obliged to compile an
    immovable asset management plan, as part of the
    annual strategic planning process (prescribed in
    the Public Service Act PFMA).
  • Such immovable asset management plans must be
    submitted to the relevant Treasury and will
    inform the annual budgetary process.
  • B) Management Processes Local
    Government
  • Municipalities are not required to prepare
    specific annual strategic plan, but in terms of
    Municipal Systems Act, are obliged to prepare an
    Integrated Development Plan, which serves as
    their principal strategic management planning
    instrument
  • Different budgetary process in Local Gov. IDPs
    not submitted to Treasury. GIAM
    legislation for Local Gov would require
    different building blocks.

8
10
5. Strategic planning in Local
Government
  • Municipalities are governed by a separate body of
    legislation, of which the Local Government
    Municipal Systems Act, 2000 (MSA) and the
    Municipal Finance Management Act, 2003 (MFMA) are
    most relevant to immovable asset management -
  • The principal strategic planning document of a
    municipality is its Integrated Development Plan
    (IDP).
  • The MSA prescribes a specific process for the
    compilation of IDPs, which must also be aligned
    with provincial development plans and national
    priorities.
  • The MSA also prescribes comprehensive
    consultation requirements in relation to the
    compilation of IDPs.

9
11
6. Use of GIAM principles in Local Gov
strategic planning
  • An IDP is an inclusive strategic plan for the
    development of a municipality. In terms of the
    existing regulatory framework, an IDP may, as
    part of its financial strategy, contain an asset
    management strategy.
  • The only shortcomings in the existing IDP process
    are
  • it does not explicitly specify the immovable
    asset management planning process and
  • it does not make immovable asset management
    mandatory, as is the case in the Government
    Immovable Asset Management Bill.

10
12
Use of GIAM principles in Local Gov strategic
planning (Continued)
  • Such shortcomings can be remedied by additions to
    the Local Government Municipal Planning and
    Performance Management Regulations, issued by the
    Minister of Provincial Local Government (in
    terms of the Local Government Municipal Systems
    Act, 2000).
  • The Department of Provincial Local Government
    fully concurs with DPWs proposal that the
    applicable regulations governing municipal
    planning be harmonized with the principles
    embodied in the Government Immovable Asset
    Management Bill B1-2006.

11
13
7. Conclusion
  • It is therefore proposed that
  • the Portfolio Committee recommends the
    promulgation of the Government Immovable Asset
    Management Bill B1-2006 in its current form
    and
  • DPW engage the Dept of Provincial Local
    Government without delay to harmonize the
    applicable regulations issued in terms of the
    Local Government Municipal Systems Act, 2000
    with the GIAM principles, to make immovable asset
    management planning an integral part of the
    compilation of Integrated Development Plans.
  • -ooOoo-

12
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