Asset Management
- Publication no: AP-R459-14
- ISBN: 978-1-925037-66-1
- Published: 7 May 2014
- PDF (free) Download
This report outlines the process for asset management plans (AMPs) and long-term financial plans (LTFPs) in Australia, as well as the compilation and use of financial sustainability indicators in this regard.
The report examines legislation and guidelines for asset management and financial management across jurisdictions and goes on to examine recent studies on financial sustainability in Australia. A survey of current practice was also undertaken across a sample of local governments in Australia, as well as a number of road and transport agencies. The survey found that while asset management planning and long-term financial planning are coordinated across functions at local government level, there is some room for improvement, especially in terms of integration of these functions. Road and transport agencies were also found to not be under the same legal obligations as local government regarding AMPs, LTFPs and financial sustainability indicators but in some cases were working towards this level of co-operation.
The use of financial sustainability indicators for asset management planning is generally extensive but the use of specific indicators, namely the asset sustainability ratio, asset consumption ratio and renewal funding ratio, needs to be better understood. The study found that the implications for asset management of the financial sustainability indicators are especially important given they are also dependent upon asset valuation, residual value, useful life and depreciation approaches adopted by the organisations involved.
- 1. Introduction
- 1.1. Background
- 1.2. Objectives and Scope of Study
- 1.3. Methodology
- 1.3.1. Literature Review
- 1.3.2. Survey and Analysis of Current Practice
- 1.3.3. Webinar on Survey Findings and Development of Response
- 1.3.4. Reporting and Dissemination
- 1.3.5. Key Milestones
- 2. Literature Review
- 2.1. Asset Management Planning and Financial Planning: A Two-way Relationship
- 2.2. Asset Management Planning
- 2.2.1. Asset Management Planning Process
- 2.2.2. Asset Management Policy
- 2.2.3. Asset Management Strategy
- 2.2.4. Asset Management Plan
- 2.2.5. Legal Requirements
- 2.3. Financial Planning
- 2.3.1. Long-term Financial Plan
- 2.3.2. Financial Data
- 2.3.3. Legal Requirements
- 2.4. Financial Reporting
- 2.4.1. Future Economic Benefits
- 2.5. Accounting for Infrastructure
- 2.6. Asset Valuation
- 2.7. Asset Renewal
- 2.8. Guidance on Financial Management and Asset Management
- 2.9. Performance and Practices of Road and Transport Agencies in Australia
- 2.9.1. Asset Valuation Requirements and Practices
- 2.9.2. Condition Assessment
- 2.9.3. Non-traditional Assets
- 2.9.4. Network Classification and Cost Allocation
- 2.9.5. Cost Implications of Incremental Loads on Road Pavement
- 2.9.6. National Performance Indicators
- 2.9.7. Network Performance Indicators
- 2.10. Financial Sustainability
- 2.10.1. Local Government Frameworks for Financial Sustainability
- 2.10.2. Financial Sustainability Indicators
- 2.10.3. Implications of the Financial Sustainability Indicators for Asset Management
- 2.10.4. Financial Sustainability of Local Government in Australia
- 2.10.5. Financial Sustainability across States
- 2.10.6. IPWEA NSW Local Government Benchmarking Studies
- 2.10.7. ALGA National State of the Assets Pilot (2012)
- 2.11. Implications and Issues
- 3. Survey of Current Practice
- 3.1. Issues Covered in Questionnaire
- 3.2. Local Authorities Sample Selection
- 3.3. State Treasuries and Audit Offices
- 3.4. Road and Transport Agencies
- 3.5. Survey Response
- 3.6. Key Survey Findings
- 4. Review of Published Audits
- 4.1. Review of Published Audits: Findings
- 5. Presentation of Survey Findings and Development of Response
- 5.1. Response to Survey Findings
- 6. Conclusions and Recommendations
- References
- Appendix A Accounting for Infrastructure
- Appendix B Questionnaire Used in Survey of Current Practice
- Appendix C Selection of Local Government Survey Sample
- C.1 Step 1: Population Data
- C.2 Step 2: Local Government Data
- C.3 Step 3 Sample
- Appendix D Survey Results
- D.1 Area of Responsibility of Respondents
- D.2 Legislation and Guidelines
- D.3 Linkages between Functions
- D.4 Asset Management Planning
- D.5 Financial Planning and Reporting
- D.6 Communication and Sharing of Data between Functions
- D.7 Financial Sustainability
- D.8 Asset Valuation Practices
- D.9 Funding Issues
- Appendix E Review of Published Audits
- E.1 Victoria
- E.2 Queensland
- E.2.1 Financial Capital Sustainability
- E.2.2 Infrastructure Capital Sustainability
- E.2.3 Compilation of Financial Sustainability Indicators
- E.3 South Australia
- E.3.1 Operating Surplus/Deficit
- E.3.2 Operating Surplus Ratio
- E.3.3 Net Financial Liabilities Ratio
- E.3.4 Capital Investment Expenditure (New/Upgraded Assets, Renewal and Replacement)
- E.3.5 Need for Asset Management Information