Across Australia, state governments are increasingly requiring that councils and local government organisations have comprehensive asset management plans in place. The Asset Management Policy in NSW, the Asset Management Accountability Framework (AMAF) in Victoria and the Strategic Asset Management Frameworks (SAMF) in Western Australia, South Australia and Queensland are examples.
It’s a challenging task, and many councils across Australia struggle with compliance. As Julian Watts, Director, Engineering & Asset Management, KPMG, says that most councils in Australia have multiple asset registers stored in disparate spreadsheets, and sometimes none at all, resulting in "difficulty in establishing a clear understanding of what assets are actually owned, across all asset classes of infrastructure, property, plant and equipment".
If you have an effective asset management plan in place, you should be able to answer the following questions:
1. What assets do you have and where are they?
While this sounds like it should be the absolute basics, a surprising number of councils fail to keep an updated account of their portfolio of assets. In NSW alone, ten high risk issues across NSW councils were identified in the April 2018 NSW Auditor General’s report into the accuracy of asset registers, restricted assets and asset revaluations. Having an accurate, up-to-date fixed asset register provides information on the age and potential lifespan of assets and forms a basis for decisions on risk and insurance issues. Inaccurate registers can result in higher taxes and insurance premiums.
2. What condition and lifecycle stage are your assets in?
Knowing the condition of your assets is not only critical to plan maintenance, it’s also a legal requirement to set out annual maintenance requirements that keep assets at their existing condition. Unfortunately, many councils have huge maintenance backlogs. A digital data collection and storage system can enable preventative and predictive maintenance, by using algorithms to estimate when assets may fail. This can save time and money and extend the useful life of assets.
3. What is the utilisation of your assets?
Managing local government asset management goes beyond managing the condition of council assets. It’s also about how the community interacts with the assets and ensuring that the facilities will support your services both now, and in the future. COVID has effectively rewritten the rules of the game, forcing many public facilities to close and others to be repurposed. Having data on the utilisation of assets enables unused spaces and equipment to be repurposed or disposed of/sold if they are no longer required.
4. What investment is needed to repair and replace assets?
A report into Queensland councils found that the vast majority hadn’t linked their AMPs to financial forecasts. Many were rolling over forecasts from previous years’ estimates instead of forecasting requirements based on actual asset condition and needs. The report warned that "this can result in councils not appropriately maintaining assets and services being interrupted". This has a negative impact on the communities that the local government services, meaning (often vital) facilities are unsafe, unused and falling further into disrepair.
5. Are you currently compliant with the latest regulations?
Councils must comply with a range of requirements and regulations when it comes to the register of their assets. These vary from state to state, but they include issues such as having a fair valuation of assets, keeping maintenance and service logs about essential safety measures and having an asbestos register. There are audits to assess the systems and processes that are in place to gather, manage and report on infrastructure assets. Having comprehensive, accurate and up-to-data information on assets makes this process more efficient.
Developing a comprehensive asset management plan can be challenging if you can’t easily answer some or all of these questions. Leveraging technology and utilising a powerful and efficient digital platform accelerates this process. AssetFuture partners with councils to help them manage their assets efficiently and enable robust decision making. Whether you already have a robust Asset Register, disparate data, or no data at all, AssetFuture can enable your journey to compliance by generating Asset Registers and enabling the creation of Asset Management Plans for your organisation.
To find out more about AssetFuture in Local Government, click here.