Establishing and running an asset management system

The technical asset register (also called the fixed asset register or the departmental inventory register) contains detailed technical specificities of fixed assets. It contains detailed technical data for each individual asset or groups, supports life-cycle AM, and often is linked to interactive GIS maps with legal, geographic, and key technical information, illustrated in figure 1.11. Logbooks are special supporting records to register daily events, movements, or operation of individual assets. Sophisticated integrated AM systems cover all the explained functions with internal or virtual segregation of the various functional areas and a structured access hierarchy of users depicted in figure 1.13.

ESTABLISHING AND RUNNING AN ASSET MANAGEMENT SYSTEM

Municipalities, even in emerging and developing countries, Kenya included, perform bits and pieces of good AM. They develop and then operate assets with repair and maintenance under public service units led by floor managers, albeit to various degrees and with various scopes and quality. Citizens and tourists walking in cities in the developing world, however, may well notice AM shortcomings in the poor quality of roads, public transport, buildings, air, or water. Cities in emerging and developing countries often fall short in SGAM (Bolva et al. 2013). They lack reliable, complete, and consistent asset registers, and many fall short in accounting AM. Instead, they have various inventories, financial reports, and balance sheet reports that cover assets and critical asset information often only partially (Kenyan examples are discussed in part II).

Therefore, cities in most emerging and developing countries are in desperate need to establish a reliable AM system from scratch (DPLG 2006): that is, to establish a completely new system and then transfer available data into the system while filling information gaps by uploading an enormous volume of new information derived from field verification of assets and liabilities. Kenya’s devolution of the local government system with the amalgamation of 1,500 former local entities into 47 counties has amplified the need to establish basic AM frameworks, systems, and procedures and to urgently collect, verify, and register required information. In the following sections we summarize and explain the most critical issues in establishing AM, without aiming to be exhaustive.

Recognizing the dual nature of land, buildings, and infrastructure

Assets such as land, buildings, and infrastructure have a dual nature: they are immovable property (real property), but at the same time they are accounting assets. Their dual nature should be recognized when they are transferred to counties and later when the counties manage them. In particular, the counties’ legal rights to their parcels of real property should be properly verified, documented with title deeds, and protected. Furthermore, the fact that such property is “immovable” does not guarantee that it will not be lost or stolen. For example, in many countries (including Armenia, Bulgaria, Indonesia, Kosovo, the Kyrgyz Republic, and the Russian Federation), when local governments were introduced, some municipal land and buildings and the revenue streams they generated were grabbed by private actors, often through legally questionable transactions (Kaganova 2008). Reports completed by County Asset and Liability