C.4 Asset management information system option

FIGURE C.4

Asset management information system option

AMDR General asset register, ledgers

Financial assets Bank deposits, stocks and investments, bonds and loans, receivables, pension fund

IFMIS general ledger Finance and Economic Planning Department Supply Chain Management Department

Sector departments Technical registers DIRs for fixed assets

Education, youth, social and culture, ICT, public services, land, housing, city planning, public works, road, transport, trade, industry, tourism, wildlife, water, energy, forestry, environment, finance and economic planning, agriculture, livestock, fisheries Acquisition and disposal

Planning Operation and maintenance Refurbishment

Nonfinancial assets Tangible assets, intangible assets, inventories

Debt and liability management

Source: World Bank. Note: AMDR = Asset Management Directorate; DIRs = departmental inventory registers; ICT = information and communication technology; IFMIS = integrated financial management information system.

Establishing the core AM system and initial procedures

Based on the approval of the AM policy, strategy, and plan, the AMDR will set up the core initial AM system and draft initial procedures for the established bodies and to ensure coordination across various sectors, entities, and functions. AMDR will then draft job descriptions for the key AM functions, positions, and staff.

Developing and maintaining asset registers

Reliable information and asset inventories and registers are the most critical pillars of a solid AM system. The AMDR will commence a program for developing asset registers in a sequenced and gradual way in several phases. The first phase includes defining the asset hierarchy and framework for asset inventorying and starting extensive data collection to form the initial asset inventory during the first year. The data collection and inventorying require close cooperation of sectors and entities under them, like directors of asset groups or networks (for example, roads or drainage) and managers of large individual facilities (for example, city hall or stadium). Developing the initial asset inventories with good or partial data is the most substantial development action of the interim asset management plan.

This data collection requires substantial professional capacity, expertise, and experience in asset inventories and registers, so ideally it would be supported by a consulting firm specializing in asset registers and inventorying, because county officers in sectors will not have enough time for extensive data collection in addition to their daily tasks. Counties with a small number of fixed assets may be able to develop an initial asset inventory with in-house staff and capacities and may

obtain only supporting data management software from the market. AMDR should develop terms of reference and obtain funds to hire a firm for asset verification and tagging. The inventory will form the basis for more advanced asset registers; the inventorying should be considered a continual exercise and the inventory and the subsequent registers as living, emerging documents.

Establishing the initial asset inventories by sectors and then consolidating them at the county or AMDR level to an integrated central asset register will be a learning process for the staff of the sectors, directorates, or facilities. They will work together and then take over the information results or actual inventories from the consulting firm, and they will then need to populate them with subsequent collection of information (for example, filling information gaps and verifying or valuating assets). The AMDR will coordinate the process by hiring a consulting firm; but asset inventorying will require very substantive involvement and work by the sectors and other units responsible for groups of assets or levels and functions of asset management. Sectors and the directorates of asset networks or groups will need to take full ownership of the asset inventories; they will be responsible for gradually populating the inventories and ensuring reliable information is recorded, errors corrected, and registers updated until a high level of accuracy is achieved.

The Department of Land in cooperation with the chief valuer will take over the records of land with county ownership from the mass valuation project that has identified not only private land but land owned by NCC and attached updated market values to the land parcels based on land transaction data from the national land registry. The results of mass valuation will be the basis of the land asset register that will also inform the building register.

Developing human capacities

Adequate human capacities and mixes of skills are vital pillars of a wellfunctioning AM system. It is assumed that the respective sectors and units of the county have most of the required capacities; in contrast, they may face shortages in adequate skill mixes, knowledge, and experience in advanced asset management. Further development of the AM system and capacities may require insourcing several skilled specialists in temporary or permanent positions and also hiring specialized firms to complete specific development actions at required timelines and quality levels. Decisions on required insourcing capacities will be made based on a brief capacity and skill assessment.

The AMDR will design and begin various capacity-building programs for targeted groups of county staff to support implementation of the new elements, plans, rules, and procedures in the new AM system. The AMDR will need to bring in external training capacities to provide training in best international practices tailored to Kenya’s situations and the emerging asset management framework unless national entities (the National Treasury’s National Assets and Liabilities Management Department, Intergovernmental Relations Technical Committee, or the Office of the Auditor General) organize such trainings for some or all counties. AMDR will seek international donors’ support in capacity building. The county results, procedures, and documents will be offered to other counties for training purposes; likewise, representatives of selected counties may be invited for capacity-building events. Possible capacity-building actions include the following:

• AM workshop for elected officers and high-level officers (chief officers of sectors): – Aims to explain the AM policy, strategy, and plan, and some specific critical actions tailored to the county strategic management level (half to one day) • AM training for directors and network or asset group, facility managers, and

AMDR staff: – Aims to explain AM fundamentals, key systems and subsystems, rules, and procedures with templates, tailored to the specific responsibilities and work requirements of the trainees (4 days) • AM training for field staff of sectors responsible for various operation aspects of the asset management: – Aims to explain AM fundamentals, key systems and subsystems, rules, and procedures with templates, tailored to the specific responsibilities and work requirements of the trainees (2 days)

CONSOLIDATING DEVELOPMENT PLANS AND ACTUAL PERFORMANCE AT THE COUNTY LEVEL

The AMDR will start collecting some AM information in structured forms to support monitoring the strategic objectives spelled out in the county strategic plan and the AM strategy. The key objectives include gradually increasing development spending to 40 percent of the total budget year by year, increasing spending on repair and maintenance, and increasing funds for and expanding preventive maintenance.

AMDR will start establishing the baseline data for measuring progress on the noted strategic performance areas and consolidate results at the county level in the first year. Then AMDR will continue collecting the respective data to measure, exhibit, and share with higher-level county management the progress toward fulfilling these critical strategic objectives. Collecting these baseline data requires good cooperation among the AMDR and the service sectors, networks or asset group directors, and facility managers. The sectors and managers also will benefit from these benchmarks and performance measurement indicators; such indicators also can be included in the AM Action Plan.

REFERENCE

Cambridge (City of). 2013. Asset Management Plan—Core Service Sustainability. Ontario,

Canada: City of Cambridge. https://www.cambridge.ca/en/learn-about/resources/Asset -Management-Plan---City-of-Cambridge---AODA.pdf.

APPENDIX D

County Asset and Liability Management Committee

INTRODUCTION

Asset management (AM) is a process of making and implementing decisions about operating, maintaining, refurbishing, acquiring, disposing of, or developing assets cost-effectively, with the ultimate objective of providing the best possible services to local citizens. AM is a complex and permanent process. It includes three different and interrelated functions: strategic asset management, life cycle-technical asset management, and accounting-financial asset management. All three functions include financial aspects and need to be linked to county financial management and budgeting.

Good AM is important for several reasons. First, fixed assets are used to deliver local services, so the range and quality of public services often depend on the existence and condition of the related fixed assets. In general, the availability of fixed assets and the quality of their management define both the quality of life and the power of the local economy. Second, land owned by local governments is a crucial resource for providing space and resources for further urban development. Third, immovable property (land, buildings, infrastructure facilities, and networks) is typically the most valuable component of all the fixed assets owned by urban local governments. Fourth, the quality of AM can have a strong impact on the local budget. Accordingly, prudent asset management can reduce budget expenses on operation and maintenance of assets without jeopardizing their condition or the quality of related services; likewise, good asset policies and practices can increase budget revenues substantially.

Strategic AM is a higher-level management function for all types of assets; it consists of high-level decisions on the overall asset portfolio of fixed, financial, or intangible assets and decisions about transforming the wealth of the county from one of these forms to another: for example, spending money to build infrastructure or buy land, or selling land to generate money to fund construction of public facilities like schools, roads, and so forth. Strategic AM is therefore a domain of the highest decision bodies of the county that should discuss and approve asset decisions of a strategic nature, or of a large value or volume.