PUBLIC SECTOR ASSET PERFORMANCE

MEASUREMENT AND REPORTING

• Introduction
– Graham Carter, APCC
– Co-author National Asset Management Guidelines
• Purpose
u pose of
o Session
Sess o
– Share ideas, information and tools
– Develop networks
– Collaborate on development of national asset management
framework
• Goals
– Consider issue of Public Sector Asset Performance
Measurement
– Use discussion paper as base, develop consistent national
policies and tools
p
 PRIVATE SECTOR ASSET PERFORMANCE
MEASUREMENT PARADIGM

• Key business driver is Profit

• Key performance measures:
– Return
R t on Investment
I t t
– Return on Assets
– Revenue Ratio
– Revenue per m²
 PRIVATE SECTOR ASSET PERFORMANCE
MEASUREMENT PARADIGM

• Key business driver is Service

• Assets do not normally have an income stream.
• Not intended to generate a profit
profit.
• Govt bodies have different asset management
imperatives associated with taxation and
depreciation of assets.
• Go
Govtt bodies
bod es need
eed su
suite
te o
of pe
performance
o a ce
measures for effective and efficient management
of public sector assets.
 Asset Ownership Rights

Govt own assets to meet requirements for service delivery.

All owners have “propriety rights” enforceable by law ie:
• To acquire, control, manage and dispose of land;
• To purchase and sell buildings, facilities, equipment and
infrastructure;
• To o co
construct,
st uct, maintain,
a ta , renovate
e o ate assets o on land
a d held;
e d;
• To enter into an arrangement with any person for
construction, maintenance;
• To renovate or demolish building,
building facilities
facilities, equipment
and infrastructure.
 Asset Ownership Responsibilities

Owners and managers have legal and moral

responsibilities to staff, tenants, clients and
community to ensure their building, facilities,
equipment and infrastructure are:
• fit for occupancy; and
• in an appropriate state of repair; and
• in an appropriate state of cleanliness; and
• in an appropriately secure condition.
 Integrated Measurement and Benchmarks

Continuous inter-relationship between the asset’s Capacity

and Utilisation, Budget
g and Actual Expenditure,
p Possible
and Actual Condition, and the asset’s Replacement Cost
and Depreciated Value.

To successfully discharge rights and responsibilities,

owners & managers must be able to manage to gaps
and tensions between these factors ie:

• Asset Utilisation - capacity V utilisation;

• Asset Costs - budget V actual expenditure;
• Asset Condition - possible condition V actual condition;
• Asset Value - replacement cost V depr value.
 Life Cycle Stages and Forces
Acquisiti Operate Refurb Operate Redevel Disposal
on & &
Maintain Maintain

Capacity
Utilisation

Budget
Actual Exp

Possible Condition
Actual Condition

Replacement Cost
Deprec
p Value
 Performance in % Terms

Utilisation Capacity Actual Use %

30,000 25,500 85%
Costs B dget
Budget Act al Exp
Actual E p
$165,000 $156,000 95%
Condition Possible Actual
5 3 60%
Value Replace Depr
$1 8m
$1.8m $1 2m
$1.2m 60%
 Asset A - Measurements of Asset Performance in Percentage
Terms
Utilisation 100%

Value 100% Condition 100%

Asset A

Costs 100%
 Comparative Measurement of Asset Performance
in Percentage Terms
Utilisation 100%
%
100
80
60
40 Asset A
20 Asset B
Asset C
Value 100% 0 Condition 100%
Asset D
Asset E
Asset
sset F

Costs 100%
 Asset A Cost per Service

$205
$200
$195
$190
$185 Asset A Cost per
$180 Service
$175
$170
$165
$160
Year 1 Year 2 Year 3 Year 4 Year 5
 Comparision of Annual Cost Per Service

$250

$200

$150
Asset A

$100 Asset B

$50

$0
Year 1 Year 2 Year 3 Year 4 Year 5
 Reporting
Need to develop linear alignment between:
• State Strategic Plan – SA & NSW 20 Yrs
• Agency
A Business
B i Pl
Plan
• State/Agency Budget – Acntg Stnds
• State/Agency Annual Report
• PI
PI’ss must relate to Strategic Objectives
and Business decisions