MAINTENANCE, REPAIR, REHABILATATION, REFRUBISHMENT,

UPGRADE AND ADDITION

National/Provincial Road showsJuly/ August 2009

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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

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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

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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

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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

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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

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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

Relevant property

asset category

Relevant property

asset category

Projects: Existing

infrastructure: M&R

Current

Projects: Existing

infrastructure: U&A

Capital

Projects: Existing

infrastructure: R&R

Capital

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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

Relevant asset

category

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

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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

Relevant other asset

category

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

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QUESTIONS?

NATIONAL TREASURY SCOA PROJECT TEAM:

CALL CENTRE: (012) 315 5311E-MAIL: SCOA@TREASURY.GOV.ZAWEBSITE: WWW.TREASURY.GOV.ZA

External links, SCOA link