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Asset Management Accountability Framework IHEA Professional Development Day – 19 May 2017 Warren Corlett, FIEAust CPEng Manager, Asset Management Department of Health and Human Services Asset Management Accountability Framework • Announced/ released by DTF in February 2016 • Mandated by a new Standing Direction (4.2.3 - Asset Management) of the 2016 Standing Directions of the Minister for Finance on 1 July 2016 (published February 2016) • Applies to non-current assets controlled by government departments, portfolio agencies and other public bodies • Encourages good practice asset management • To ensure assets are managed over their whole lifecycle and achieve service delivery outcomes • Framework aligns with the ISO Standard but covers some areas where the ISO Standard is silent Asset Management Accountability Framework • Has mandatory requirements that public sector agencies must meet • To lift management practice to ensure the best is made of our existing asset base • Requirements include developing: o asset management strategies, performance standards and processes to regularly monitor and improve asset management o systems to maintain assets and processes to identify and address performance failures The new Framework… Key Framework features Same principles … o service delivery focused o integrated into planning frameworks o a whole of life cycle approach o informed decision making The asset lifecycle PLANNING ACQUISITION Asset management strategy Planning for uncertainty Business cases Risk management Cost/benefit analysis Accounting treatment Non-asset alternatives Acquisition process Risk evaluation Procurement method o considerate of other government asset management policies DISPOSAL Retirement Replacement Renewal Redeployment OPERATION Monitoring Maintenance Information management Asset valuation Utilisation Functionality Relationship between the AMAF and other government policies Service planning interface with asset planning and management Accountability • The Framework formalises asset management accountability • At the start of the present financial year, the Framework was added into the Financial Management Compliance Framework • Requires the departmental secretary and the board of each portfolio agency to attest to compliance with Standing Directions (including disclosing any material deficiencies) and confirm the veracity of the organisation’s asset management system Attestation implementation timelines • For 2017-18 financial year - agencies are: o required to assess their compliance with the Framework o in the agency non-published attestation, attest to compliance and disclose material compliance deficiencies o compliance against AMAF requirements is assessed as at 30 June 2018 • For 2018-19 financial year - agencies are: o on an ongoing basis into the future, required to assess their compliance with the Framework o in the agency annual report, attest to compliance and disclose material compliance deficiencies o compliance is assessed in relation to the entire financial year What’s different under the AMAF • Over fifty mandatory asset management requirements introduced • Accountability and governance requirements increased • More stringent requirements to plan and manage asset and asset management system performance • Specific information requirements are to be documented and maintained by Accountable Officers • Reporting to government and department’s portfolio role strengthened • Tighter controls for fraud and corruption What’s different under the AMAF (continued) • Each Responsible Body’s Audit Committee has an enhanced and leading role in agency asset management governance and oversight • Public attestation by the Accountable Officer to evidence compliance with mandatory requirements as part of overall meeting the requirements of all Standing Directions • Accountability further devolved to Responsible Bodies to: o deliver and demonstrate specific performance expectations in systems, staffing and processes o set and manage against standards, monitor compliance o demonstrate appropriate asset management practice What are some key Framework requirements • Develop asset management strategies • Governance Frameworks • Performance standards • Processes to monitor & improve asset management • Establish systems for maintaining assets • Processes to identify and address performance failures Some implementation issues Resourcing Framework introduction Advice and support Going beyond reporting and compliance Asset information tools and systems Efficient data exchange Asset Information Management Systems Asset management maturity Implementation issues (continued) Getting up to speed Asset Management Strategy Asset Management Plans Establishing Standards Key Performance Indicators Attestation scale Addressing inadequate practices In closing • Portfolio agencies are encouraged to work closely to coordinate their AMAF implementation consistent with their portfolio role • For portfolio agencies, Boards are ultimately responsible for strategic management of assets under their control and for meeting AMAF requirements