Our Office's theme for 2012/13 has been: Our future needs – is the public sector ready? During the year, we completed projects that look at different aspects of the public sector to consider whether we are ready for the future.
This paper provides an overview of the assets used to deliver services to the public. Its purpose is to provide a high-level view of the management of public assets, their condition and value, maintenance and renewals, and what information is reported to decision-makers about these matters. By doing this, we hope to initiate discussion by provoking relevant questions about the management of public assets rather than provide a technical assessment of asset management practices.
Methodology
For the purposes of this paper, we focused on physical assets (property, plant, and equipment assets and infrastructure assets). that are "significant" delivering public services. We use the term "assets" to mean both physical assets and classes of assets that provide services to the public.
We collected information about more than 340 large public entities that each hold more than $2 million of assets (see paragraphs 2.2-2.4). We chose this threshold to focus on major assets (rather than covering all assets held by the public sector) and to manage the effect of our information requests for our auditors and public entities.
In our recently published paper Insuring public assets, we identified a total of $225 billion of assets, based on the information collected from about 400 public entities with assets greater than $100,000 ($100,000 being chosen as a threshold of value that could be difficult for an entity to replace in the event of its loss or damage, and for which we therefore might reasonably expect insurance cover to have been considered). That total is different to the total of $214 billion identified for this paper, which is based on a smaller number of public entities.
Our auditors provided information on three main aspects of asset management:
- The assets held and the condition of those assets. Asset management starts with identifying and quantifying the assets and gathering information about their age and condition.
- Whether the assets are being maintained. Managing assets for their full life cycle requires good integrated planning, good underlying data about the assets and the services that they enable, and good asset management systems. Assets must be maintained if they are to continue delivering the services intended from them. Deferring asset maintenance for a long time can result in more breakdowns and disruption of services, substandard services, and, in the end, failure of services.
- The information used in decision-making. To help good decision-making, relevant asset information needs to be available at the right time, for the right people, about matters such as the condition of assets, investment, and levels of service that assets are required to provide
The information we got covered technology hardware assets but not software assets. In general, there is no reason why asset management principles should not apply to management of software assets as well as hardware assets.