3.3 Asset management policy and procedures guide
An asset management policy and procedures guide (AMG) is a key element of better practice entities' internal control environment. An AMG clearly establishes what is required to record, account for, control and safeguard assets within the Commonwealth legislative environment. An AMG can be structured to give practical direction as to how to undertake day-to-day management of assets. An AMG can also reinforce the strategic direction of the entity through the outcomes of the asset management strategy and Capital Management Planning process. For entities with a small or more ‘standard’ asset base, it may be more efficient to incorporate the key parts of an AMG into its CEIs, or similar policy and procedures guidance material. As illustrated in Figure 3.14 below, in managing an entity's asset base, an AMG is structured so as to consolidate and provide a central resource on an entity's operational policies and procedures covering all aspects of an asset's life cycle from planning to acquisition, maintenance, operation and disposal.
Figure 3.14: Operational policies and procedures
The structure of an AMG should be logical so that it reflects an entity's business activities, typically under a framework similar to that illustrated in Figure 3.15 below.
Figure 3.15: Elements of an asset management guide
The key elements for most entities are likely to encompass:
- acquisition and divestment: the procurement and disposal processes are explained;
- recording: defines what constitutes an asset, asset thresholds and grouping, asset classes and the asset register;
- control and management: sets out what is required under the regulatory environment and details operational requirements including asset management roles and responsibilities, physical security, stocktakes, personal issues and loans, losses and damages, asset performance indicators, disposals, write offs and insurance; and
- accounting: provides guidance on accounting for assets including valuation, impairment, useful lives, restructure, assets held for disposal, depreciation methods and rates, and heritage and cultural assets.
A checklist of topics typically included in an AMG as well as further commentary on significant and more complex areas of asset accounting are discussed in Section 4.7 of this Guide.