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ASSET MANAGEMENT
FRAMEWORK
FOR
WESTERN AUSTRALIAN
PUBLIC SECTOR AGENCIES
August 2005
Preface
Table of Contents
Foreword ........................................................................................1
Chapter 1: Introduction ................................................................2
1.1 Background ..........................................................................2
1.2 Scope ....................................................................................3
Chapter 2: Planning ......................................................................4
2.1 Corporate Planning..............................................................4
2.2 Asset Planning......................................................................4
2.3 The Strategic Asset Plan ......................................................6
Chapter 3: Implementation ..........................................................8
3.1 Delivering the Strategic Asset Plan ....................................8
3.2 Capital Investment Plan ......................................................8
3.3 Maintenance Plan ..............................................................10
3.4 Asset Disposal Plan ............................................................11
CONTENTS
Table of Figures
Figure 1: Agency Planning within the Outcome Based
Management Framework..............................................5
Figure 2: Asset Planning Process ..................................................7
Figure 3: Implementation Processes ............................................9
Foreword
The Functional Review Taskforce recommended the development and implemention of appropriate
strategies to strengthen asset management policies and practices, having particular regard to the
recommendations of the Pricewaterhouse Coopers 2002 report on governance and management of
Western Australian public sector assets.
To address this, the Department of Treasury and Finance has worked in collaboration with the Department
of Housing and Works to develop a framework that:
promotes linkages between the agencies management of their asset portfolios with asset planning
and corporate planning processes;
outlines the processes to manage assets through the life cycle from planning to disposal, including an
increased emphasis on maintaining existing assets; and
provides support to agencies in following the processes.
The results of this work have been the development of the Strategic Asset Management Framework.
The Framework, developed in consultation with agencies, comprises the four key components of the
asset management life cycle. These components are asset planning, capital investment, maintenance,
and asset disposal.
To support the Framework, previously published policies such as the Project Evaluation Guidelines have
been updated and condensed to ease accessibility, readability and usage by agencies. In addition, new
policies have been developed, to provide clearer guidance to agencies in the areas of asset planning and
maintenance.
Reporting requirements under the Framework have been kept to the minimum necessary, to encourage
use and application of the Framework and supporting policies, and assist agencies to improve the
performance of their assets, and, thereby, the organisations financial performance.
Timothy Marney
UNDER TREASURER
August 2005
Chapter 1: Introduction
1.1 Background
Managing government assets requires a strategic approach, to enable government to meet
community needs, provide and sustain public assets and to achieve service outcomes.
Asset management assists government, through its agencies, to meet its desired outcomes
effectively and efficiently by:
making the best possible use of existing assets;
maximising value for money when investing in new assets; and
making decisions to invest in, retain or divest assets that take into consideration and protect
the needs of current and future generations.
This Strategic Asset Management Framework is designed to assist agencies to make informed
decisions on the assets it needs to support service delivery. It builds on the 1998 policy Strategic
Asset Management Policy An Overview.
The key objectives of the Strategic Asset Management Framework are:
to integrate the Governments asset management policies and make them more accessible;
and
to make stronger links between planning asset needs and implementing asset decisions.
The Framework also highlights the need for agencies to ensure that their corporate planning
processes are integrated with their asset planning processes. In this context, agencies are also
encouraged to explore alternative solutions to purchasing new assets or retaining any existing
assets that are under-performing or under-utilised.
This Framework document outlines the major components of asset management, and shows the
broad relationships between them. In addition, supporting policies have been developed to
provide guidance for each component.
1.2 Scope
This Strategic Asset Management Framework is to be applied by general government agencies,
public financial corporations and public non-financial corporations in accordance with all relevant
legislation, Treasurers Instructions and related government policies.
However, agencies that are required, by legislation, to produce Statements of Corporate Intent
(SCI) and Strategic Development Plans (SDP) are not bound by this policy, but are expected to
adopt the principles of the Framework in meeting their statutory obligations, although there are
several reporting requirements, predominantly relating to the capital investment process, with
which all agencies are expected to comply. Further guidance about reporting requirements is
provided in Strategic Asset Plans.
In addition, as agencies vary widely in terms of their size and nature, the Framework may have
limited application to some agencies. In this context, each agency should adopt a common
sense approach towards implementation. Any document that is developed to meet external
reporting requirements should be clear and concise, and prepared to an appropriate level of length
and detail.
If there is any doubt about the applicability of any aspect of the Strategic Asset Management
Framework, or how to address any reporting requirement, please contact your Department of
Treasury and Finance analyst for advice.
Where an Information and Communications Technology (ICT) project is being considered, the
agency should also consult the Office of e-Government in the Department of the Premier and
Cabinet and the Government Procurement Division of the Department of Treasury and Finance.
Chapter 2: Planning
2.1 Corporate Planning
Corporate planning has an important influence on asset management.
Agencies invest in, and retain, the capital resources required to deliver agreed levels of services to
achieve the desired outcomes.
The resources utilised by the agency should be clearly aligned with the agencys desired outcomes,
and at least one goal in the Governments strategic planning framework.1 Agencies performance
against these agency-level outcomes is assessed using key effectiveness and efficiency indicators.
Figure 1 illustrates how agencies may conduct planning at strategic and business levels, to identify
and secure the resources required to deliver agreed services through Outcome Based Management
(OBM).2 Such planning, which may include consultation with the community or key stakeholders,
is usually conducted on a cyclical basis, perhaps every two to three years.
1
2
Better Planning: Better Services. Department of the Premier and Cabinet, 2003.
Outcome Based Management: Guidelines for use in the Western Australian Public Sector. Department of Treasury
and Finance, 2004.
Agency Mission
Statement
Agency strategic
planning processes
Agency business
and operational
planning processes
Human
Resources
{{
Agency Level
Outcomes
Key Performance
Indicators of
effectiveness and
efficiency
Agency Services
(delivered to achieve
outcomes)
Input resources
required
to deliver services:
Information
Resources
Financial
Resources
Agency Internal
Performance
Measures (optional)
Physical
Resources
Demonstrated need
for physical assets
from business
planning process
Consideration of
non-asset solutions
Identify ideal
asset mix
Review
existing assets
Planning
Undertake
gap analysis
Formulate
Strategic Asset Plan
Development of a
Capital Investment Plan
Development of a
Maintenance Plan
Development of an
Asset Disposal Plan
7
Implementation
Chapter 3: Implementation
3.1 Delivering the Strategic Asset Plan
This chapter outlines the key processes to implement each of the capital investment, maintenance,
and asset disposal implications that were identified in the Strategic Asset Plan.
These processes are outlined in Figure 3.
Partnerships for Growth: Policies and Guidelines for Public Private Partnerships in Western Australia, Department
of Treasury and Finance, 2002.
Strategic
Asset Plan
Maintenance
Plan
Capital
Investment Plan
Review Current
Maintenance Program
Asset
Disposal Plan
Concept Development
& Evaluation
Prioritise
Maintenance Needs
Agency
Evaluation
Project
Definition
Define
Tolerable Limit
Implementation
Delivery
Assess Current
Resources
Review
Review
Develop Maintenance
Schedule
10
11
12
Contacts
Further information is available from the following sources:
Issue
Contact
General Queries
Assistant Director
Asset Planning and Management
Department of Treasury and Finance
(08) 9222 9380
Agency Resources
Department of Treasury and Finance
Reception - (08) 9222 9336
Building Procurement
Asset Disposal