1. MAINTENANCE, REPAIR, REHABILATATION, REFRUBISHMENT, UPGRADE AND ADDITION National/Provincial Road shows July/ August 2009 1

2. Classification Circular 3 Classification of own account and outsourced Maintenance and Repairs (M&R), Upgrade and Additions (U&A) and Rehabilitation and Refurbishment (R&R) of all asset types Presented by: SCOA Technical Committee National Treasury

3. 3 Important principles Why record asset related payments? –Infrastructure reporting –Asset management and costing –Recording own account transactions –Correctly present spending on contractors –Monitoring total maintenance cost

4. 4 Definitions Own Account maintenance, upgrade and rehabilitation –Department engages in project in its own capacity Outsourced maintenance, upgrade and rehabilitation –Project is outsourced to an external service provider Only difference is in Item segment

5. 5 Definitions continued Maintenance and repairs –Maintaining the capacity and effectiveness of an asset at its designed level Upgrades and additions –Improving the capacity and effectiveness of an asset above that of the initial design purpose Rehabilitation and refurbishment –Required due to neglect, unsatisfactory maintenance or degeneration of an asset

6. 6 Relevant transaction types Owned and leasehold property –Residential and non-residential buildings either owned or leased by government –To get a full picture of spending on property Machinery and equipment All other asset types Either own account or outsourced

7. 7 Item Asset Maintenance & repair (M&R) Project Owned and leasehold property Owned & leasehold property: Contracted property M&R Upgrade & additions (U&A) Rehab & refurbishment (R&R) Owned & leasehold property: Contracted property R&R Owned & leasehold property: Contracted property U&A Relevant property asset category Projects: Existing infrastructure: M&R Current Projects: Existing infrastructure: U&A Capital Projects: Existing infrastructure: R&R Capital

8. 8 Item Asset Maintenance & repair (M&R) Project Machinery and equipment Contractors: M&R of machinery & equipment Upgrade & additions (U&A) Rehab & refurbishment (R&R) Contractors: R&R of machinery & equipment Contractors: U&A to machinery & equipment Relevant asset category Projects: Not related to infrastructure: M&R Current Projects: Not related to infrastructure: U&A Capital Projects: Not related to infrastructure: R&R Capital

9. 9 Item Asset Maintenance & repair (M&R) Project Other asset types Contractors: M&R of other asset types Upgrade & additions (U&A) Rehab & refurbishment (R&R) Contractors: R&R of other asset types Contractors: U&A to other asset types Relevant other asset category Projects: Existing or not related to Inf: M&R Current Projects: Existing or not related to Inf: U&A Capital Projects: Existing or not related to Inf: R&R Capital

10. 10 QUESTIONS? NATIONAL TREASURY SCOA PROJECT TEAM: CALL CENTRE: (012) 315 5311 E-MAIL: SCOA@TREASURY.GOV.ZASCOA@TREASURY.GOV.ZA WEBSITE: WWW.TREASURY.GOV.ZAWWW.TREASURY.GOV.ZA External links, SCOA link