4.
7 Asset management policy and procedures
guide
Physical security and control of assets
An asset management policy and procedures guide (AMG) should outline the operational requirements for entity
staff who are responsible for the management or control of publicly owned assets, including matters such as
loans, personal use and removal of assets for repair.
The AMG should address the requirements of the Commonwealth Protective and Information Security Manuals
including protective security policy, information security, personnel security and physical security, which will assist
in safeguarding an entity's assets. Standard operating procedures should be developed for all aspects of security
including:
electronic access controls, building pass and identity documents;
security infrastructure such as security alarms, management of keys and combinations, security lighting,
CCTV, guard posts and services and communications;
equipment such as security shredders, access control computers and encryption devices; and
security awareness training.
Portable and attractive items
A risk assessment will assist in establishing the likelihood and consequence of loss, misuse or misappropriation
of portable and attractive items. Where the risk is assessed above low, registers and stocktakes can be used to
track and provide control over physical security. These items are usually expensed on acquisition.
Gifting of public property
There are limited circumstances where an appropriate entity delegate, as a delegate of the Finance Minister, may
approve an asset to be used as a gift or donation. Examples include the purchase of gifts in the process of
providing official hospitality or the gifting disposal of surplus or obsolete assets to community groups.
All gifts are to be recorded in a gifts register and there are annual reporting requirements to the Finance Minister
regarding all gifts made during the reporting period.
Stock-takes
A stock-take is an important internal control mechanism that reconciles the asset register, to confirm it is a
complete and accurate record of an entity's physical asset holdings. Unreconciled differences should be subject
to investigation and follow-up of exceptions.
A stock-take can be used to:
verify the physical existence and completeness of assets recorded on the asset register;
review current useful lives and consider asset condition and asset performance indicators such as
functionality, criticality and utilisation;
review inventory levels and adherence to inventory management guidance;
verify the proof of licence for software assets and that software assets are being used according to the
terms and conditions of the licence; and
assess the accuracy of details recorded on the asset register.
For entities with large asset or inventory levels, an efficient facilitation method involves bar-code labels which can
be attached to each asset when first available for use. The stock-take can then be conducted efficiently through
the use of bar-code scanners that download results back to a central data repository.
The results of stock-takes, including remedial action on exceptions, should be signed off by a suitable delegate,
often a senior official from the entity's financial services group.
Potential list of AMG topics
The following check-list provides guidance on potential topics that can be included in an AMG. Entities may need
to tailor the AMG to suit their particular circumstances by focussing on those aspects that are most relevant.
Table 4.6: Asset management policy and procedures guide
checklist
Repairs and maintenance
Heading
Section
Asset
Overview and
management
scope
framework
Component
Principle objectives of asset management including the
creation and maintenance of an asset portfolio that contains an
optimal mix of assets to meet service delivery needs.
An overview of the inter-relationships between the asset
management guide and other components of the asset
Heading
Section
Component
management framework that link the asset portfolio with the
entity's strategic intent and service delivery needs. This will
include key inter-relationships with the asset management
strategy, risk management strategy, capital management plan and
capital budgeting process.
Key stakeholders both internal and external.
How the AMG will be communicated and made widely
available.
The AMG's review and update process.
Roles and responsibilities over all aspects of asset
Roles and
management including asset planning, budgeting, performance
responsibilities
evaluation, operations and maintenance, accountability and
disposal.
The requirements of relevant legislation and other
Legal
requirements
regulatory requirements.
How an asset is managed over its useful life to
Life-cycle
understand the longer term implications of holding assets.
approach
Explanation of the phases of an asset's life-cycle: planning,
acquisition, operation and maintenance and disposal.
Asset
Define what constitutes an asset for recording purposes.
Asset definition
recognition
Rationale and consideration of materiality when setting
Asset thresholds
asset thresholds, and process to change. Cost/benefit analysis to
establish the appropriate threshold for individual and for group
assets.
Asset groupings
and classes
Define the classes of property, plant and equipment as
being groupings of assets of a similar nature and use in an entity's
operations.
Heading
Section
Component
Establish criteria for asset aggregation and grouping.
Define the classes of property, plant and equipment as
The asset
being groupings of assets of a similar nature and use in an entity's
register
operations.
Establish criteria for asset aggregation and grouping.
Where assets do not meet the asset threshold define
Portable and
attractive items
criteria for recording portable and attractive items.
Define processes for asset procurement and interrelationships with service delivery options, asset management
strategy acquisition plan and entity-specific procurement policies
Procurement
and procedures.
process
Define procedures for physical receipt and acceptance of
assets and recording details in the Financial Management
Information System (FMIS).
Non-asset
Asset
solutions
acquisitions
Establish process for consideration of non-asset
solutions such as outsourcing and demand management
techniques.
and divestment
Provide guidance on lease versus buy decision-making
Lease versus
buy
process.
Define policies and procedures for divestment including
guidance on how to identify surplus, obsolete or underperforming
assets, how to select an appropriate disposal method, and the
Divestment
approval process required for write-offs, trade-ins, or sale to staff.
Link through to asset management strategy disposal
plan.
Asset control
and
Stock-takes
Define stock-take responsibilities and requirements to:
verify the physical existence and completeness
Heading
Section
Component
of assets recorded on the asset register;
management
assess the stock-take coverage between full
count and reconciliation and cyclical coverage on the basis of risk
profile and level of physical security;
review current useful lives and consider asset
condition and asset performance indicators such as functionality,
criticality and utilisation;
verify the proof of licence for software assets
and confirm that software assets are being used according to the
terms and conditions of the licence; and
assess the accuracy of details recorded on the
asset register.
Authority and
delegations
Personal issues
and loans
Losses and
damages
Insurance
List the various authorities and delegations that may be
exercised over an asset's life-cycle.
The entitys policies and procedures relating to personal
issues and loans.
Requirements to manage losses and damages including
relevant delegations and responsibilities.
The entity's policies and procedures to ensure all assets
are appropriately insured.
Policies and procedures on the acceptance of gifts and
recording in a gifts' register.
Gifting
Process of annual reporting requirements to the Finance
Minister of all gifts made during the reporting period.
Repairs and
maintenance
Roles and responsibilities for monitoring condition and
use of assets and for initiating repairs and maintenance.
Link to the asset management strategy maintenance plan
Heading
Section
Component
that defines the standard, level and frequency of maintenance.
Asset
The framework for establishing, recording and monitoring
performance
asset performance indicators including how the entity evaluates
indicators
asset performance.
Criteria and methodology for recording asset acquisitions
Accounting for
including roll- out of assets under construction, capitalisation of
assets
internally developed software, assets received for no or for
nominal consideration, finance leases and componentisation.
Acquisition and
disposal
Accounting for subsequent expenditure on existing
assets including part replacement of assets, enhancement,
refurbishment and maintenance activities.
Define accounting requirements for asset disposal
including meeting the requirements of AASB 5.
Transfers in/ out
Accounting for the transfer in and out of assets including
through administrative restructuring arrangements.
Define valuation cycles, methodologies and accounting
requirements
Valuation
Process for engaging independent expert valuers and/or
use of in- house valuations.
Depreciation/
useful life
Set out the entity's policies on depreciation methods,
useful lives and review processes.
Establish review process for assessing the carrying value
of assets for impairment.
Impairment
Define typical impairment indicators including use of
external and internal sources of information.
Heritage and
cultural assets
Define recognition criteria, valuation and depreciation
Heading
Section
Component
policies.
Guidance on how to determine whether curatorial and
preservation policies support indefinite useful lives.
Next : 4.8 Capital Management Plan
