INTERDEPARTMENTAL MEMORANDUM OF UNDERSTANDING

BETWEEN

THE DEPARTMENTS OF ………………………. (“THE USER DEPARTMENT”)

AND

PUBLIC WORKS

ENTERED INTO BY …………………………….

IN HIS/HER CAPACITY AS

ACCOUNTING OFFICER OF THE DEPARTMENT OF PUBLIC WORKS

AND

……………………………

IN HIS/HER CAPACITY AS

ACCOUNTING OFFICER OF THE DEPARTMENT OF

………………………….

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Definitions

AMP

Asset Management Plan

GIAMA

Government-wide Immovable Asset Management Bill

MTEF

Medium Term Expenditure Framework

OHSA

Occupational Health and Safety Act

PFMA

Public Finance Management Act

  1. INTRODUCTION

1.1This memorandum of understanding (MOU) is aimed at clarifying the relationship between the Department of Public Works (DPW) and the UserDepartment with regard to the provision of services related to themanagement of accommodation-related immovable assets. The MOU is necessary to clearly spell out the roles and responsibilities of the two Departments.

1.3 This MOU is not a legally binding document - it is an agreement between two branches of a single legal entity with the aim of improving service delivery. The MOU therefore does not contain all the clauses that would normally be present in a legally binding document between two legal entities. The MOU has been written with the aim of promoting a co-operative working relationship, as opposed to an adversarial working relationship. The main aim of the MOU is to establish a framework for a cooperative working relationship.

1.4 DPW is the full custodian of all immovable assets that vest in the national government, and that were situated within the Republic of South Africa prior to 27 April 1994, except in cases where national assets are assigned to other departments by virtue of legislation. Full custodianship involves responsibility for planning, acquisition, operation and maintenance, and disposal. As the custodian, DPWhas the common law responsibilities associated with ownership of immovable assets, and is the ‘owner’ in terms of the Occupational Health and Safety Act.

1.5 DPW also has some custodial responsibilities (including maintenance but excluding disposal) for immovable assets situated in the former homelands and occupied by a national department.

1.6 In terms of the Government-wide Immovable Asset Management Bill (GIAMA), DPW may assign or delegate this custodianship to a User Department in writing. This MOU is only applicable in instances where DPW has not delegated or assigned this custodianship to the other party to this agreement. In such instances a separate agreement will be drawn up to clarify roles and responsibilities between the two departments.

2. ROLES AND RESPONSIBILITIES

The general roles and responsibilities for DPW and the User Department are set out below:

2.1 ROLES AND RESPONSIBILITIES OF THE USER DEPARTMENT

2.1.1IMMOVABLE ASSET REQUIREMENTS

  • Carry out strategic planning for its accommodation-related immovable asset requirements (in accordance with the PFMA and GIAMA), in consultation with DPW.
  • Compile user Asset Management Plans as required by the PFMA and GIAMA, assisted by inputs from DPW, with regard to acquisition, operation and management and disposal of immovable assets. The User Department will submit its User Asset Management Plan to National Treasury (in accordance with GIAMA).

2.1.2BUDGET ISSUES[1]

  • Budget annually over the MTEF for new acquisitions (including building, buying and leasing), based on the amounts required per annum as advised by DPW; and reimburse DPW on a cost-recovery or accommodation charge basis during the implementation of these acquisitions.
  • Budget for options analyses for acquisitions, in accordance with the Options Analysis Manual approved by National Treasury, and in accordance with amounts advised by DPW. The User Department must allocate appropriate officials to participate in all options analysesin accordance with the Manual.
  • Budget annually over the MTEF for existing leases, based on amounts as advised by DPW. Reimburse DPW on an accommodation charge basis for payments made against these leases.
  • Budget for tenant installation and reinstatement of lease costs for new and existing leases, in accordance with amounts advised by DPW.
  • Budget annually for accommodation charges to be paid to DPW for state-owned accommodation-related immovable assets (in accordance with rental amounts as advised by DPW and National Treasury). DPW will use this rental income to pay municipal property rates and to carry out prioritised maintenance within budgetary constraints.
  • Budget for municipal services, including water, electricity, sewerage and refuse removal, andpay municipalities directly for these services or alternatively reimburse DPW on a cost recovery basis, including a 5% management fee, for managing these payments.
  • Budget annually for and implement day-to-day maintenance projects of a value less than the limit in the policy governing devolved day-to-day maintenance[2], if the department wishes to carry out minor day-to-day maintenance itself.

2.1.3OBLIGATIONS PLACED ON THE ACCOUNTING OFFICER

  • On a continuous basis inform either the relevant DPW regional office or failing which, the DPW head office Key Accounts Management section, of any maintenance needs. DPW will prioritise such maintenance needs within its available budgets.
  • The Accounting Officer of the User Department or an official delegated by the Accounting Officer must approve the annual Implementation Programme in writing, upon submission of such Implementation Programme by DPW before the end of February every year. DPW will draw up the Implementation Programme on the basis of the budgets approved by Treasury based on consideration of the client and custodian AMPs (as described in GIAMA).
  • The Accounting Officer of the User Department or his/her delegate must approve or reject in writing any suggested changes to the Implementation Programme within 10 working days of submission of such written suggestions by DPW. This includes allocating or re-allocating funds when necessary.
  • Effect all necessary liaison and agreements related to new acquisitions with local communities. DPW must be invited to participate in such liaisons with communities.
  • Send delegated officials to all project-related meetings (including meetings on site) as requested by DPW, and respond to all requests for decisions or approvals for project-related matters within 10 working days.

2.1.4TENANT OBLIGATIONS

  • Comply with all tenant contractual obligations for all leases for properties occupied by the User Department.
  • Inform DPW, in writing, of the intention to vacate State accommodation or termination of lease agreements, at least 18 months in advance.
  • Refrain from negotiating directly with the landlord with regards to matters which could have financial implications for leased properties.
  • Refrain from negotiating directly with any service providerappointed by DPW.
  • The User Department will be held responsible for deliberate or negligent damage to property or the cost of occupying space in a leased property in excess of the space specified in the lease.
  • The User Department will be responsible for cleaning and gardening services in all the properties which it occupies, unless such services are specifically stipulated in the lease agreement to be the responsibility of a lessor.
  • In terms of Section 16 of the OHSA, 1993 the Accounting Officer of the User Department is obliged to ensure inter alia that:

(a)Health and Safety Committees are established per workplace and function as determined by the relevant legislation;

(b)First aid officials are appointed, trained and equipped;

(c)Fire safety officers are appointed and trained;

(d)Emergency evacuation plans are developed and approved by the Department of Labour and subsequently be exercised as may be required for it to be effective;

(e)That the facilities, sites and buildings are only used in accordance with the approved usages and applicable zoning;

(f)Storage of fuel and chemicals as well as laboratory operations only be undertaken in suitably designed, constructed and equipped areas;

(g)Occupational injuries and/or diseases attributable to the facilities not meeting legislated requirements, in addition to being reported to the Department of Labour, also simultaneously be reported to DPW;

(h)Ensure that all officials undertaking responsibilities on behalf of the User Department pertaining to the management, control and operation of buildings, facilities, installed equipment and systems provided by DPW comply with the standards of training, qualifications and experience and that such officials follow the procedure set in the Occupational Health and Safety Act, 1993 and its Regulations and Incorporated Standards, SABS 0400, or any other such acts. Ensure that the relevant requirements of that Act and the relevant regulations as well as Chapter 3 Part 4 of the National Water Act, 1998, the Environmental Conservation Act, NEMA and such other relevant legislation which regulate the activities and operations referred to, are complied with during such management, control and operation of buildings, facilities, installed equipment and systems.

  • Where applicable, the User Department shall indicate in writing which of the specialised facilities, installed equipment and systems provided by DPW (such as sewage effluent, purification works and steam generating boilers, and other such equipment) are to be operated by the User Department’s personnel and which should be operated by contractors appointed by DPW.
  • Respond to requests from DPW to verify properties identified for disposal (i.e. sale, transfer or donation) within 30 days.

2.2 ROLES AND RESPONSIBILITIES OF DPW

2.2.1Assist the User Department with its strategic planning for its accommodation-related immovable asset requirements.

2.2.2Provide the User Department with information required to produce the user asset management plan mentioned under the User Department’s responsibilities above, or alternatively with a draft user asset management plan.

2.2.3Submit the Implementation Programme described above to the User Department by the end of February every year.

2.2.4Execute the approved Implementation Programme and provide the User Department with monthly progress reports covering expenditure versus budgets and a summary of progress per project. On a quarterly basis, these reports will include cash flow forecasts per project for the remainder of the financial year.

2.2.5Institute corrective actions to address under-performance against the implementation programme.

2.2.6Manage acquisitions on behalf of the User Department. This includes undertaking options analyses where required in consultation with the User Department, and undertaking suitability and feasibility studies pertaining to availability of municipal services, structural and topographical suitability and the legal clearance and acquisitions of sites before the commencement of any development. It also includes pre-design, design development, documentation, procurement, execution and defects liability period. DPW must carry out all procurement related to executing the Implementation Programme in terms of prevailing government procurement policies and legislation (the Preferential Procurement Policy Framework Act and the Supply Chain Framework), and use this procurement to develop emerging businesses in terms of the Broad-based Black Economic Empowerment Act and the Constitution.

2.2.7Approve and implement all disposals of state-owned accommodation-related immovable assets, for which DPW has custodianship, in terms of the State Land Disposal Act. Prior to disposal, DPW must request the User Department to verify in writing that the property is no longer required for service delivery.

2.2.8DPW will obtain the written consent of the User Department before awarding any acquisition contracts at a value above the amount budgeted for the acquisition in the Implementation Programme. DPW will also obtain the written consent of the User Department before approving variation orders which increase the value of any acquisition above the amount budgeted for.

2.2.9As determined by Section 16 of the OHSA, 1993 the Accounting Officer of DPW bears the responsibility for the compliance of the buildings, facilities, installed equipment and installations to the requirements set by the OHSA, 1993 and its Regulations and Incorporated Standards, SABS 0400, and any other such acts in providing for the executing of the processes, operations work and occupancy of the facilities to be used by the User Department.

  1. INSTITUTIONAL ARRANGEMENTS

3.1Bilateral meetings shall be held monthly, unless otherwise agreed to between DPW and the User Department, to ensure effective communication. The Accounting Officers of both Departments commit to either attending meetings themselves, or sending delegates who have authority to make decisions to the meetings. The meetings shall entail discussions of inter alia, the Asset Management Plan, Implementation Programme, progress reports, problem areas and recommended solutions.

3.2The Key Accounts Management section of DPW will facilitate these meetings and will represent DPW at these meetings.

4. FINANCIAL MATTERS

4.1DPW is responsible for managing expenditure related to acquisitions, the budgets for which are on the User Department’s budget. DPW will incur such expenditure on the basis of the agreed-to Implementation Programme, and will recoup this expenditure from the User Department on a cost-recovery basis in terms of the communiqué issued by National Treasury. The Accounting Officer of DPW will be held accountable in terms of the PFMA with regard to this expenditure.

4.2DPW must provide the User Department with quarterly invoices for accommodation charges for state-owned accommodation-related immovable assets, in terms of Treasury-approved rates. The User Department must pay these invoices within 30 days.

5. DEFAULTS

5.1DPW and the User Department agree that, should either party be in serious default of this agreement, both Accounting Officers should meet and decide on appropriate corrective actions to address the breaches. If this fails, the breaches should be taken to Ministerial level.

…………………………………………………….

ACCOUNTING OFFICER

DEPARTMENT OF PUBLIC WORKSDATE

…………………………………………………….

ACCOUNTING OFFICER DATE

DEPARTMENT OF

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[1]Based on the attached “Devolution of Budgets and Introduction of Rental Charges for Accommodation-related Immovable Assets”, as approved by National Treasury.

[2]See attached document.