Teklu Alemu Thesis Final Draft ETHIOPIAN CIVIL SERVICE UNIVERSITY

ETHIOPIAN CIVIL SERVICE UNIVERSITY
Institute of Tax and Customs Administration

Department of Public Procurement and Asset
Management
A
Thesis
on
Public Fixed Asset Management System: Challenges and
Practices of Federal Government Offices
by
Teklu Alemu Sefero
ID. No: ECSU1400182
Advisor
Amar S. Kanwar (PhD)
A Thesis Submitted to the Department of Public Procurement and Asset Management,

Institute of Tax and Customs Administration, Ethiopian Civil Service University, in
Partial Fulfillment of the Requirements for the Award of a Master’s Degree in Public
Procurement and Asset Management.
June, 2016
Addis Ababa, Ethiopia
DECLARATION
I hereby declare that this submission is my own work towards the MA in Public
Procurement and Asset management and that to the best of my knowledge. It contains no
material previously published by another person, no material which has been accepted for
the award of any other degree of the university, except where due acknowledgement has
been made in the text.
Teklu Alemu ………………….. ……………..

Signature Date
This thesis has been submitted for examination with my approval as a college supervisor.
Dr. Amar S. Kanwar ………………….. ……………..

Advisor Signature Date
i
APPROVAL
The undersigned certify that they have read and hereby recommend to the Ethiopian Civil
Service University to accept the thesis submitted by Teklu Alemu Sefero, and entitled
“Public Fixed Asset Management System: Challenges and Practices of Federal
Government Offices”, in partial fulfillment of the requirements for the award of a
Master’s Degree in Public Procurement and Asset Management.
Dr. Amar S. Kanwar ………………….. ……………..

Advisor Signature Date
Amar S. KANWAR (PhD) ………………….. ……………..

External examiner Signature Date
Dr. K. Verma ………………….. ……………..

Internal examiner Signature Date
Mata Maldaye ………………….. ……………..

Head of Department Signature Date
ii
ACKNOWLEDGEMENTS
I would first like to thank my thesis advisor Doctor Amar S. Kanwar for his constant
assistance, insightful comments, and encouragement through the process of writing this
thesis. I am also thankful to my friends Getinet Birara and Mulualem Mekuriaw who
helped me in identifying research questions and Gemechis Olani who tested my survey
questionnaire and provided comments. Their expertise and efforts ensured that I collected
pertinent data for my research through the survey. Finally, I must express my very
profound gratitude to my parents and to my friends Mintesinot Tekalign and Biruk Gebru
for providing me with unfailing support and continuous encouragement throughout my
years of study and through the process of researching and writing this thesis. This
accomplishment would not have been possible without them. Thank you.
Teklu Alemu
iii
Table of Contents
Content Page No
List of Tables ................................................................................................................ vii
List of Figures .............................................................................................................. viii
Acronyms ....................................................................................................................... ix
ABSTRACT...................................................................................................................... x
CHAPTER ONE ................................................................................................................. 1
INTRODUCTION .............................................................................................................. 1
1.1. Background to the Study ...................................................................................... 2
1.2. Statements of the Problem.................................................................................... 3
1.3. Research Questions .............................................................................................. 4
1.4. Objectives of the Study ........................................................................................ 4
1.4.1. General Objective ......................................................................................... 4
1.4.2. Specific Objectives ....................................................................................... 5
1.5. Significance of the Study ..................................................................................... 5
1.6. Scope of the Study................................................................................................ 5
1.7. Limitations of the Study ....................................................................................... 6
1.8. Description of the Study Area .............................................................................. 6
1.9. Operational Definition of Terms .......................................................................... 6
CHAPTER TWO ................................................................................................................ 7
LITERATURE REVIEW ................................................................................................... 7
2.1. Introduction .......................................................................................................... 7
2.2. Fixed Asset Definition ......................................................................................... 7
2.3. Public Fixed Assets Management ........................................................................ 7
2.3.1. Classification of Fixed Assets ....................................................................... 9
2.3.2. Recording Fixed Assets ................................................................................ 9
2.3.3. Controlling Fixed Assets............................................................................. 10
2.3.4. Valuation of Fixed Assets ........................................................................... 11
2.4. Public Asset Management system ...................................................................... 11
2.5. Public Asset Management System Components ................................................ 12
2.5.1. Capacity Building of Fixed Asset Management ......................................... 13
2.5.2. Fixed asset Management Information System ............................................ 13
iv
2.5.3. Fixed Asset Management Organization Structure ...................................... 16
2.5.4. Human Capital Strategies ........................................................................... 16
2.5.5. Legal and regulatory requirements of fixed asset management.................. 18
2.5.6. Monitoring, integrity, and transparency in fixed asset management. ......... 18
2.6. Fixed Asset Management Principles .................................................................. 18
2.7. Empirical Review ............................................................................................... 20
CHAPTER THREE .......................................................................................................... 24
RESEARCH METHODOLOGY...................................................................................... 24
3.1. Introduction ........................................................................................................ 24
3.2. Research Design ................................................................................................. 24
3.3. Sources of Data .................................................................................................. 24
3.3.2. Secondary Data Sources ............................................................................. 25
3.4. Population of the Study ...................................................................................... 25
3.5. Sampling Technique ........................................................................................... 25
3.6. Sample Size ........................................................................................................ 25
3.7. Data Analysis Techniques .................................................................................. 26
CHAPTER FOUR ............................................................................................................. 28
RESULTS AND DISCUSSION ....................................................................................... 28
4.1. Introduction ........................................................................................................ 28
4.2. Respondent’s Background.................................................................................. 28
4.2.1. Gender of Respondents ............................................................................... 28
4.2.2. Age of Respondents .................................................................................... 29
4.2.3. Educational Background of Respondents ................................................... 29
4.3. Practice of Fixed Asset Management System Components ............................... 30
4.3.1. Legal and Regulatory Requirements for Fixed Asset Management ........... 30
4.3.2. Building a Fixed Asset Management Information System ......................... 31
4.3.3. Fixed Asset Management Organization Structure ...................................... 33
4.3.4. Human Capital Strategies ........................................................................... 33
4.3.5. Monitoring Integrity and Transparency of Fixed Asset Management ........ 36
4.3.6. Capacity Building of Fixed Asset Management ......................................... 36
4.4. Fixed Asset Management System Challenges ................................................... 37
4.4.1. Administration and Management Function Related Challenges ................ 38
v
4.4.2. Technology Related Challenges ................................................................. 38
4.4.3. Personnel Related Challenges ..................................................................... 39
4.5. Factors for Inefficiency of Public Fixed Asset Management System ................ 40
4.5.1. Factors Related to Capacity Building of Fixed Asset Management ........... 41
4.5.2. Human Resource Related Factors ............................................................... 41
4.5.3. Fixed Asset Management Information System Related Factors ................. 42
4.5.4. Insufficiently Developed Legal and Regulatory Requirements .................. 42
4.5.5. Inefficient Monitoring Integrity and Transparency .................................... 43
4.5.6. Organization Structure Related Factors ...................................................... 43
4.6. Improving the System Through Fixed Asset Management Principles ............... 43
CHAPTER FIVE .............................................................................................................. 47
FINDINGS, CONCLUSION AND RECOMMENDATIONS ......................................... 47
5.1. Conclusion ............................................................................................................. 47
5.2. Findings.................................................................................................................. 48
5.3. Recommendations ................................................................................................. 49
5.4. Future Research ..................................................................................................... 50
References
Appendixes
vi
List of Tables
Table: Page No
Table 4.1. Gender of Respondents .................................................................................... 28

Table 4.2. Age of Respondents ......................................................................................... 29
Table 4.3: Legal and Regulatory Requirements for Fixed Asset Management ................ 30
Table 4.4: Building Fixed Asset Management Information System................................. 32
Table 4.5. Respondent's Opinion Regarding Fixed Asset Organizational Structure ........ 33
Table 4.6: Human Capital Strategies of the Organizations............................................... 34
Table 4.7: Monitoring Integrity and Transparency ........................................................... 35
Table 4.8: Fixed Asset Management Capacity Building .................................................. 36
Table 4. 9: Fixed Asset Management system challenges ................................................. 38
Table 4.10: Relative Importance Index ............................................................................. 40
Table 4.11: Principles of Fixed Asset Management ......................................................... 44
vii
List of Figures
Figure 4 1: Educational Background of Respondents. ..................................................... 29

Figure 4 2: Gap Analysis of Opportunities for Improvement Across the territory........... 45
viii
Acronyms
EFG: Ethiopian Federal Government
GAO: Government Accountability Office

MDLF: Manual. Palestine: Municipal Development & Leading Fund
PO: Purchase Order
RII: Relative Importance Index
SPSS: Statistical Package for the Social Science
USD: United States Dollar
ix
ABSTRACT
This study describes the public fixed asset management system challenges and practices
of federal governments offices in Ethiopia. Based on theory and current research on
public fixed asset management systems, this research examines the practice of a public
fixed asset management system. Using a descriptive research design, it attempts to
scrutinize carefully the components of fixed asset management system and how they are
affecting the management system; identify challenges and find out potential factors
facilitating inefficiency of the system. The components examined includes legal and
regulatory requirements, organization structure, management structure of assets, human
capital strategies, information and technology resources, and monitoring, integrity, and
transparency. Each component consists of a number of components that reveal the
underlying working principles of the relevant component and together determine the
standards of fixed asset management in the relevant area. The survey results demonstrate
that organizations do not satisfy the standards identified in the fixed asset management
system. Certain problems exist in the area of each component. In addition, survey results
reveal that there are challenges in the practice of the system in the study area. In most
offices, when a management element in the area of one component is widely
implemented, the relevant management elements in areas of other components are
employed and vice versa. A major contribution of this research is the identifying of a
fixed asset management system challenges and to find out factors. The public
organizations understudy may understand these challenges, design value-adding
strategies to their fixed asset management system and may find appropriate management
components to adapt to their characteristics of this system.
x
CHAPTER ONE
INTRODUCTION
Asset management, to be more specific, fixed asset management, is a very meaningful

activity in any organization. A general definition of a fixed asset is: tangible asset with a
unit value of which is determined by a directive, that is in operational use and that has a
useful economic life of more than one year (Baez, 2004).
Fixed assets are high cost items; this is a reason why organizations need to manage their
assets in an organized manner. Organizations, worldwide, need fixed assets and
management processes to control how these items are purchased, store and utilized (Baez,
2004). Public sectors, as owners of a huge amount of fixed assets, also require a fixed
asset management system in order to offer better quality service.
A fixed asset management system is a system of methods, policies, and procedures which
address the acquisition, use, control, protection, maintenance, and disposal of assets
(MDLF, 2008).Proper fixed asset management establishes and maintains a current
inventory of this type of property within the company. By doing so, Public sectors ensure
responsibility and accountability of these assets, in addition to the efficient and effective
use of them. Furthermore, a good fixed asset management program can facilitate the
physical inventory process of fixed assets, establish their insurance condition and comply
with federal, state and local policy (Baez, 2004).
The public organizations have been preserved to effectively and efficiently manage their
fixed assets. However, their problems suggest that certain management elements are
either missing or inappropriately included in their current management system.
Governments have not identified an effective system that appropriately incorporates each
fundamental management component in the practice of fixed asset management. They
have not established standards to benchmark fixed asset management in their respective
jurisdiction (Yaotai, 2011).
To apply a public asset management system, the public organizations confronted by a

number of challenges. Understanding these challenges will help these public bodies to
Public Fixed Asset Management System: Challenges and Practices of Federal Public Offices Page 1
design value-adding strategies and with the development of alternative solutions. This
study, therefore, identifies the challenges faced by Federal government offices. Lessons
learned from other countries have been used as a basis for identifying the challenges.
1.1. Background to the Study

To provide better service and to be more efficient, organizations are always acquiring
more fixed assets. Every organization needs to keep up with the ever-changing
technology to contribute to meeting market expectations. Better and improved fixed
assets can make organizations more valuable because of their use and the benefits that
these assets provide. (Gondo, 2010) Observed that, despite the existence of new and
interactive standards for recording and communicating assets and asset management,
many public sectors across the developing world have not taken advantage of the
emerging revolutionary ways in which technologies may benefit the public asset
management.
Governments are confronted by a number of challenges to apply a public asset

management system. The absence of a public asset management framework, as well as its
elements, complicates the issue even more. The lack of discussion of public asset
management and the recent decentralization government policy trend creates an
important challenge to study the discipline of public asset management further.
Understanding these challenges will help these public bodies to design value adding
strategies and with the development of alternative solutions (Hanis, 2011).
Yaotai (2011) also states that, currently, in the practice of fixed asset management,
governments confronted with a variety of challenges. For one thing, they have the
pressure to improve efficiency and effectiveness in managing their vast array of fixed
assets. This pressure is particularly large when budget is tremendously cut during
economic and financial crisis. For another, a government can hardly afford to employ
professional fixed asset management personnel because of their small revenue base and
financial difficulties. The survey also pointed out that, state governments faced by
problem about the evaluation of asset management performance and some states do not
have a complete inventory of fixed assets. This may negatively affect decision-making
for fixed asset management.
A study by Tadewos (2009), although reveals that public organizations fixed asset
management system is not appropriate; Efficiency, effectiveness, performance and other
factors contributing to the achievement of goals and objectives is not considered and not
clearly stated. The improper management of an organization's fixed assets can have a
negative effect on the institution for example, hidden costs associated with excess of
assets.
1.2. Statements of the Problem

The fixed assets of an organization are the main assets, the large amount of fixed assets,
high value, a lot of classes, long using cycle, the dispersed use locations, which lead to
the difficulty in management. Therefore, the establishment of a fixed asset management
system is very necessary to improve the management efficiency of organizations.
(Daosheng Wei, 2012)
Fixed assets represent a significant money investment for any public sector organization.
In public utility companies, for example, net plant asset often represents more than 75%
of total assets (Brady, 2001). These assets are-highly susceptible to depreciation it is one
thing to obtain an asset and another to utilize and maintain it meaningfully.
Effective systems of asset management can strengthen the performance of public sectors
significantly. According to (Gondo, 2010), despite the existence of new and interactive
standards for recording and communicating assets and asset management, many public
sectors across the developing world have not taken advantage of the emerging
revolutionary ways in which technologies may benefit the public asset management. It is
usually dispiriting occasion to find properties of organizations and government carelessly
kept, abandoned or improperly utilized.
According to Hanis (2011), Major problem besieging the fixed asset management is the
issue of poor maintenance culture by most developing countries. In the past, public
sectors in common, have not in any systematic way considered how their assets have
been used and deployed to effectively support service delivery. Questions around the
condition of the asset, fitness for purpose and long term sustainability were at best
perhaps considered informally and at worst, not at all.
A study by Tadewos (2009) reveals that, in Ethiopia, public organizations incurring
unnecessary costs due to mismanagement of fixed assets. The fixed asset management
system is not appropriate; efficiency, effectiveness, performance and other factors
contributing to the achievement of goals and objectives is not considered and not clearly
stated. It is therefore clear that there is an asset management system problem, factors for
the inefficiency and challenges which prevented the public organizations in realization of
an efficient service delivery and the achievement of goals and studies somewhat absent
on addressing such conditions from the current academic review.
Considering the current situation of public asset management, especially the problems
government faces, this study attempts to assess how the public organizations practice
fixed asset management essential components; what factors significantly affecting the
fixed asset management; and to identify what challenges are faced with them.
1.3. Research Questions

This study aimed to answer the following questions:
1. How fixed asset management system components affect the system effectiveness?
2. What are the challenges faced in adopting fixed asset management system in the
study area?
3. What are the factors that cause public fixed asset management system
inefficiency?
4. How the present public fixed asset management system can be improved to the
way that can benefit the public sectors so as to achieve their goals and objectives?
1.4. Objectives of the Study

The study aimed at achieving both general and specific objectives described below.
1.4.1. General Objective
Asset management is often one of the last options to maximize cost savings in a
competitive global economy due to its intrinsic complexity, especially in many
developing countries. However, current asset management systems show inefficiencies in
terms of addressing life cycle costs comprehensively. Thus, the general objective of the
study is to assess the practices and challenges of management systems of public fixed
assets in Ethiopia at the federal level and then to provide recommendations to improve
federal fixed asset management systems so that the agencies can gain maximum benefit
from their fixed asset holdings, considering the need for legislative changes.
1.4.2. Specific Objectives

This study seeks to establish the factors leading to the inefficiencies in public fixed asset
management at the federal level and identify challenges.
To achieve the general objective, the study intends the following specific objectives:
2. To examine the practices of public fixed asset management system components in
the study area.
3. To identify the challenges faced in adopting a Public Fixed Asset Management
system.
4. To find out the factors that facilitate inefficiency of Public fixed asset
management system in the selected study area.
5. To determine how the present public fixed asset management system can be
improved to the way that can benefit the public sector achieving their goals and
objectives.
1.5. Significance of the Study
Improvements to public asset facilities require provision for proper public asset
management system. In order to achieve this, the study is essential to help the
government to produce the best practices of public fixed asset management system for
the nation. This creates a transparency for taxpayer money, as well as improving
government’s accountability. The other contribution will be that, since it is perceived that
Ethiopian federal public organizations are faced with challenges in regards to the use of
fixed asset management systems, the study will therefore shed light on those possible
challenges.
1.6. Scope of the Study

The spatial and temporal coverage of this study is limited to the public fixed asset
management system at federal level government organizations. Since the study is abou
to study Public fixed asset management system, it focuses only on the federal public
organizations, among which five sample organizations (Ethiopian roads authority,
Ethiopian Revenues and customs Authority, Public Procurement and Property
Administration Agency, Ministry of Finance and Economic Cooperation and Public
procurement and property disposal service) have been selected to investigate the fixed
asset management system in the organizations. The sample respondents were employees
of the selected organizations who are working on a permanent basis in property
administration department.
1.7. Limitations of the Study

Due to their work overload, some of the property administration heads cannot be
contacted for interview. This may hinder the quality of the finding. However, the
researcher tried his best to obtain and ensure genuine and adequate data from the
respective organizations.
1.8. Description of the Study Area

This study covers the Federal Public organizations which are not established for profit
making purposes. Of the 23 public sector organizations which are providing pure public
services, 5 are selected which are located in Addis Ababa. This federal public
organizations selected based on the reason that the first two namely Ethiopian roads
authority and Ethiopian Revenues and customs Authority are selected by concidering
their huge asset they manage and the last three namely Public Procurement and Property
Administration Agency, Ministry of Finance and Economic Cooperation and Public
procurement and property disposal service are selected due to the reason that the study
area directly related with them. The types of fixed assets they manage are most
susceptible to mismanagement sicce their aim in not profit making and do not have
proper identification, like tamper-resistant bar code labels.This presents a challenge for
organizations.
1.9. Operational Definition of Terms

System- A system is defined as an assemblage of interrelated, interdependent elements
that interact upon each other within an environment.
Fixed Asset– Items of property that are tangible or intangible in nature; have significant
value; have an economic useful life longer than 1 year
Fixed Asset Management System-A system of methods, policies, and procedures which
address the acquisition, use, control, protection, maintenance, and disposal of assets
CHAPTER TWO
LITERATURE REVIEW
2.1. Introduction
Relevant literature on the study and views of different authors on the fixed asset
management system in the public sector are discussed in this chapter. The researcher tried
to review available theoretical and empirical literatures on public fixed asset management
system, challenges and factors for inefficiency to give a clear understanding of the
research. The following sections constitute this chapter.
2.2. Fixed Asset Definition

Fixed assets are non-consumable goods, tangible in nature and have a useful life longer
than one year. According to (Brady, 2001), "it can be any item costing over a certain
dollar amount, large or small; to an item that has a certain useful life." These fixed assets
are classified as land, improvements other than buildings, operating plants, equipment,
vehicles, and construction in progress (Peterson G. , 2006).Fixed assets can be both
movable and immovable. Items of insignificant value, while they meet the above criteria,
are normally expensed instead of being considered fixed assets.
Establishing and maintaining complete and accurate accounting records for fixed assets is
important for several reasons as stated by (Brady, 2001). First, the value of fixed assets is
large in most organizations. Therefore, adequate accounting procedures and records are
essential for effective property management and control. Second, the stewardship
responsibility involved in safeguarding such a large investment is of the utmost
importance for the good financial administration. Third, adequate fixed asset records can
assist in making management decisions. Proper use of these records may prevent
unneeded assets from being purchased. Finally, accurate and complete fixed asset records
can prevent the possible misstatement of the institutional financial statements for fixed
assets.
2.3. Public Fixed Assets Management

As defined by (Builta, 1994), asset management is “the process of maximizing value to a
property or portfolio of properties from acquisition to disposition within the objectives
defined by the owner.” This is a broad definition that describes the functions of managing
property assets either as investment assets or as operational assets. In addition, the
definition identifies the objective of fixed asset management, that is, “maximizing value
to a property or portfolio of properties” (Builta, 1994) in either case of asset management.
In the public sector, fixed assets are not purchased or constructed for commercial
investment except in government-owned enterprises. Instead, fixed assets are usually
considered as an economic resource and as a means by which government fulfills its
goals and objectives of service delivery. Ideal types of fixed assets and appropriate
management of fixed assets may determine the overall organizational performance of
fixed assets. Therefore, the major task of managing public fixed assets is providing
services for fulfilling government functions rather than having cash flow or marketing
fixed asset for profits (Builta, 1994).
Public fixed asset management is affected by various factors, such as political influence,
legal framework, regulations, organizational arrangement, administrative decisions, and
composition of stakeholders (Fernholz, 2007). These factors strongly affect acquisition
(like purchasing, transfer, and decentralization), ownership, leasing, sale, and use of
public fixed assets, and responsibilities of management. In addition, these factors also
determine the specific modes in which public fixed assets are managed, such as public-
private partnerships, coordination and cooperation between government agencies,
participation of stakeholders, measures for transparency, measures for maximizing the
value of fixed assets and improving the efficiency of using fixed assets.
Fixed asset management in the public sector barely evaluates the performance of their
properties over time (Simons, 1993).There are at least two reasons that lead to these
inactive fixed asset management practices. One reason is that fixed assets are
traditionally considered as “free goods” (Kaganova O. M., 2006). It seems that a fixed
asset user is given the asset for free because it does not take a strategic approach to
managing its fixed assets and because it does not completely recognize the value of its
assets (Gibson, 1994). Generally, the value of fixed assets is depreciated until the assets
retire. Owing to this accounting rule regarding public fixed assets, few government
entities care about the market value or fair value of the fixed assets they own (Simons,
1993). A second reason is that, unlike private enterprises, government entities do not
have a common standard (like financial requirement) to measure performance of property
asset services. Therefore, it is difficult to quantify the contribution of fixed assets that
government owns and controls (Gibson, 1994).
2.3.1. Classification of Fixed Assets

According to (Heintz, 2002), Fixed assets should always be recorded in the accounting
records of an institution. Accounting classifications of fixed asset accounts are: a)
Property (Land) - A fixed assets account that reflects the acquisition value of land and the
rights to land owned by the organization. (Improvements Other Than Buildings) - A fixed
assets account that reflects the acquisition value of permanent improvements (other than
buildings) that add value to the land or improve the use of the land. (Buildings) - A fixed
assets account that reflects the acquisition value of permanent structures owned by a
business to house persons and property; b) Operating Plants- A fixed assets account that
reflects the acquisition value of plants used to provide the services of utilities, including
both the building and the equipment; c) Equipment- A fixed assets account that reflects
the value of tangible property not permanently affixed to real property, used in carrying
out the operations of the business. Examples of equipment are machinery, furniture, and
vehicles.
2.3.2. Recording Fixed Assets

Business may acquire fixed assets by several methods. Possible acquisition methods
include purchase with a Purchase Order or PO, lease-purchase, installment purchase,
construction, and gifts. The method of acquisition of fixed assets should be properly
recorded on the books of account and in subsidiary records that provide detailed
information on each asset. An article written by Moriarty (Moriarty, 1998) says that "a lot
of financial managers do not have accurate information about what their companies
own", and continues explaining how important it is to record fixed assets in the
appropriate books.
There are many rules and regulations on what and how fixed assets should be recorded.
To avoid recording many assets with low values that do not, in the aggregate, amount to
amaterial portion of the value of the fixed assets, organizations should set minimum asset
values below which an asset is not recorded in the fixed asset records.
There are some guidelines recommended to make decisions on when to record an asset in
the fixed asset records taking into consideration its value. (Peterson G. , 2006),
recommends the following in his Accounting for Fixed Assets book:
- Land: All land and permanent rights to land should be recorded without regard to
any significant value.
- Improvements other than Buildings: Improvements other than buildings that cost
$1000 or more should be recorded as fixed assets.
- Buildings: All buildings should be recorded at acquisition cost without regard to
significant value.
- Operating Plants: All buildings classified within the operating plants account
should be recorded at acquisition cost without regard to significant value.
- Equipment and Vehicles: Equipment and vehicles costing $1000 or more should
be recorded as fixed assets.
The dollar amount used to decide whether an asset is of significant value should be a
policy decision of the institution's governing board. When an organization decides to
increase its threshold for capitalization, all old assets not meeting the new requirement
should be removed from the fixed asset records. In many cases, institutions decide upon
what movable fixed and controlled assets will be recorded and how (Peterson R. , 2002).
2.3.3. Controlling Fixed Assets

All fixed assets must be physically identified, clearly marked, and the responsibility
for their custody must be assigned. (Kriss, 1999), in his article, “ Where have all the PCs
gone?”, agrees with this statement when he says that "consistent tracking of high-tech
fixed assets can yield a number of important benefits and put real dollars on your bottom
line." One of the main reasons for fixed asset management is the need to have secure
control and accountability over the business' fixed assets (Brady, 2001). Policies and
procedures on how to control the organization's fixed assets should be in place.
Accountability of fixed and controlled assets is a key feature in the management of this
type of property. As (Brady, 2001) explains, "The primary purpose of fixed assets
management is to ensure accountability of the significant investment in fixed assets
entrusted to administrators"
2.3.4. Valuation of Fixed Assets
Fixed assets should be accounted for at cost or if the cost is not practicable determined, at
estimated historical cost. Donated fixed assets should be recorded at their estimated fair
market value when received (Peterson, 2002).The important concept is to obtain
reasonable estimated costs to record these assets on the books and establish
accountability.
As explained by (Littrell, 1998), in the article, "Fix Asset reporting: A research note",
that using estimated costs does create some margin of error in the fixed assets accounting
records as compared to the proper recording at acquisition. However, such errors should
diminish over time as the assets are retired and replaced, and estimated costs are replaced
with actual costs.
2.4. Public Asset Management system

A system is defined as an assemblage of interrelated, interdependent elements that
interact upon each other within an environment (Yaotai, 2011). Public asset management
involves a variety of components that work together for efficient service delivery and low
cost. These components involve every internal element of public asset management
including response to relevant external environmental factors. Conjointly, components of
fixed asset management constitute a public asset management system that determines the
consequences of asset management in the public sector.
Developing an appropriate system is an essential issue for effective and efficient

management of public assets. Ideally, the purpose of this strategy is to establish
mechanisms by which public asset managers provide appropriate asset services to help
government fulfill its mission, goal, and objectives. On this basis, the goals and
objectives of public asset management are dependent on the goals and objectives of
government departments and agencies. Therefore, designing an effective public asset
management system takes into account the relationship between government service
delivery and the needs of assets to implement government service delivery (Yaotai,
2011).
2.5. Public Asset Management System Components
Researchers have attempted to establish a public asset management system (or
framework) through examining functions, practices, and experiences of public asset
management. Owing to differences in research purpose and in the focus of public asset
categories, all the public asset management systems ever developed contain distinct
components. Therefore, they serve particular functions and contribute to various
consequences.
Public asset management is a systematic combination of a variety of components. These

components relate to every phase of asset management and constitute a public asset
management framework. Over the past twenty years, government of some western
countries, like Australia, France, Canada, and New Zealand, has taken measures to
reform their public property asset management. Different as their reform measures are,
these countries have addressed some similar issues in their reform of property asset
management. These issues encompass policy, cost of asset ownership, information
systems, centralization and decentralization of management responsibility, management
accountability, and privatization (Kaganova O. M., 2006). Actually, these issues are key
components of asset management reform framework. A comprehensive system of public
asset management consists of more specific components. These components mainly
include laws and regulations, inventory and information system, acquisition, asset
registration, disposition, financial reporting, organization, technology, strategic review,
and accountability (Fernholz, 2007). Within this system, components of management are
interdependent and combine to serve the functions of public asset management.
Fernholz (2007), identified seven components and established an asset management

system for local governments. The seven components are a political, legal, and regulatory
framework; inventory and information system; registration of municipal assets; the
financial reporting system; administrative and organizational considerations; technology
and asset management; and strategic views of asset management. This framework of
public asset management encompasses essential components connected with the public
asset management. In a narrow sense, it may serve as a useful toolkit for asset managers
at local government. However, the framework fails to address the process of management
from asset acquisition to asset disposition. In addition, as local government hardly
possesses appropriate expertise of asset management in certain aspects, the problem
remains unsolved in the management framework.
2.5.1. Capacity Building of Fixed Asset Management
The component of risk management regarding fixed assets means planning, organizing,
directing, and controlling resources to identify, assess, and minimize the probability of
negative, unexpected events and managing the events at their occurrence to achieve
planned organizational goals and objectives (George L. Head, 2009). Risk management is
an integral part of any operation of fixed asset management that is intended to avoid
impact and losses from risks or potential risks. Emergency management is an
organizational effort to deal with hazards, either natural or man-made, that can cause
disasters or catastrophes to public fixed assets. Partnership with private businesses refers
to collaborative relations between public fixed asset management and private contractors
and suppliers in fixed asset acquisition, operation, maintenance and repair, and
disposition.
Organizational improvement means strategies and mechanisms that help improve fixed
asset performance while maximizing asset value. Encouraging high efficiency and
effectiveness refers to incentives for more efficient and effective use of public fixed
assets. (Yaotai, 2011)
2.5.2. Fixed asset Management Information System

Significant quantities of asset data are collected, stored and used for a variety of asset
management functions and analyses. Computerized tools and integrated information
systems can interconnect various databases containing this high volume of detailed
information. These tools and systems can enable a utility to implement a comprehensive
and cost effective approach to asset identification analysis and management (Redbeam,
2016). Access to the data from other sections within the utility is often difficult, which
limits the effectiveness of the organization's knowledge base. Various data integration
options exist, including enterprise resource, planning applications, web-based systems
that link databases and other specialized software. Before embarking on an asset
management integration effort, a utility needs to consider several factors including:
leveraging existing information technology investments, phased versus one time
migration to an integrated system, and cultural and financial limitations (Redbeam,
2016).
According to (Redbeam, 2016), Asset management information Systems provide the

critical inputs for effective strategic asset management. Your asset information systems
must: Contain reliable and accurate records on the assets you manage; Provide details on
how the assets are performing; Support accurate asset valuation and job costing activities;
Schedule what needs to be done in terms of maintenance; and define other risk-related
inspections and interventions. The Top 7 issues which businesses using spreadsheets to
manage their fixed asset data are failing to address:
a. Corporate governance requirements

Today, companies of all sizes are subject to increased scrutiny by government agencies
and regulatory boards reacting to recent business reports and investors’ requests for
higher standards of accountability, transparency and overall corporate behavior. The main
goal here is to improve financial management, reporting and corporate governance.
Accurate and effective implementation, management, monitoring and updating can easily
be accomplished with a specialist fixed asset management system in place; it’s the only
real way to ensure compliance.
b. Inaccurate depreciation calculations

Nearly all spreadsheets contain errors, which is to be expected with information entered
without good controls. Whether it is the background asset data or the formula itself,
there’s little doubt that the depreciation calculations are likely to be inaccurate. Several
people within one accounting department will often access, manage and edit the same
spreadsheet, making the errors even more likely. A specialist fixed asset management
system will eliminate costly depreciation errors. Depreciation formulas and asset lives
can be defaulted for each book, based on any defined asset category. Processing
depreciation this way is both quick and easy, completed with just a click of a button.
c. Lack of an audit trail and overall security

A specialist fixed asset management system will track and record every detail of every
action made by any user, which is unattainable with spreadsheets. Dates, times and
explanations are recorded as well, making it very simple to ensure the security and
integrity of your fixed asset data. A specialist system will require a valid username and
password combination to enter the system and will enable department heads to define
security at an individual level to ensure that confidential information can be viewed only
by those that need to see it and safely hidden from those who don’t. In other words,
limited access can be set by the user, in order to restrict both read only and editing rights.
d. Inability to link ‘parent/child’ assets or conduct asset splits, batch disposals etc...
The ability to link ‘parent/child’ assets is essential to establish hierarchical relationships
and dependencies. A specialist fixed asset management system will display such links
pictorially in collapsible branches. A typical example of this might be the association
between a PC and software license, where the PC is the ‘parent’ and the license assumes
the role of the ‘child’. The option to transfer or dispose of the ‘child’ asset will
subsequently follow the transfer or disposal of the ‘parent’ asset, keeping the relationship
intact. Spreadsheets are unable to accommodate ‘parent/child’ asset relationships in such
a way, making it difficult to accurately track and manage these important hierarchical
dependencies. Their ability to conduct automated asset splits and batch disposals will
cause similar problems.
e. Access to multi-currency, multi-lingual or multi-book capabilities
If your organization operates in many different countries then multi-currency, multi-
lingual and multi-book capabilities are most likely imperative in your fixed asset
management procedures. A specialist fixed asset management system will have multi-
book capabilities to allow core asset information to be shared across any number of books
with different sets of figures, enabling compliance with both local and group depreciation
policies. Vital information (such as analysis codes, descriptions, purchase costs,
acquisition and capitalization dates, etc.) can remain constant across all books, while
details like asset life, depreciation rules and residual values can be book dependent. As
far as multi-currency capabilities go, a specialist system will allow each accounting book
to be independently configured to meet international accounting standards. Within the
asset register, each office location should be able to record and report on its own assets in
local currency. User-defined exchange rates will allow the parent company to easily view
and report on the same values in USD.
f. Unable to meet historical reporting and forecasting requirements
Composing reports and forecasts can be a complicated and daunting process, especially if
attempted in a spreadsheet. The data produced is far too important to chance inaccuracies.
A specialist fixed asset management system will incorporate standard and customized
reporting and forecasting templates to ensure an intuitive method of extracting and
analyzing asset data.
g. Lack of confidence in data integrity
Total control over your fixed asset management data simply cannot be achieved through
the use of a spreadsheet. Whether a user input error or unintentional miscalculation,
inaccuracies within your fixed asset register are inevitable. With that said how can you be
100% confident in the integrity of this vital data? A specialist system will have strict
security features in place to effortlessly address the issue. Furthermore, entering and
maintaining asset data becomes an endless task when working within the parameters of a
spreadsheet. A specialist system will automate the entire fixed asset management process.
From data import capabilities to automated reports and forecasts, a significant amount of
valuable time can be shaved off the entire process.
2.5.3. Fixed Asset Management Organization Structure

Governments at different levels establish the organization structure and decision making
mechanism of public fixed asset management by means of institutionalization through
laws and regulations. The organization structure and decision-making structure thus
established gains legitimacy and capacity to survive and prosper. In addition, from the
perspective of systems theory, as an output of laws and other components, organization
of public asset management develops a mechanism of sustainability building as a result
of internal interaction and external exchange with environment (Yaotai, 2011). An
appropriate organization structure is an indispensable premise of high organization
performance.
2.5.4. Human Capital Strategies

An organization’s people are its most important asset. People define an organization,
affect its capacity to perform, and represent the knowledge base of the organization. A
strategic human capital plan is, therefore, critical to effectively managing federal
agencies with homeland security missions and activities (Jackson, 2007). Human capital
management should take on strategic roles besides the operational functions. The needs
of fixed asset management functions should be included in strategic human capital
planning; Therefore, an agency‘s strategic human capital planning should take into
account the workforce requirement of fixed asset management (Yaotai, 2011).
Management of the fixed asset personnel needs to address critical skills, development
needs, and human capital challenges such as diversity, retention, and leadership capacity.
In addition, strategic human resource management is responsible for succession planning,
such as development of the talent of fixed asset management staff. Moreover, strategic
human capital planning should include planning for change and planning for cutback.
And it is necessary to consider all stakeholders in team development, whose involvement
may contribute to the success of fixed asset management (GAO, 2005).
public asset management intends to maximize the value to a property or portfolio of

properties within the objectives defined by the owner where the property or portfolio of
properties are either considered as a commercial investment or as an assisting
mechanism for the owner to fulfill major objectives. On this basis, public fixed asset
management is first of all susceptible to mandatory requirements which may include
laws, regulations, norms and guidance, policies, and procedures. These mandatory
requirements are implemented at different levels of government or different levels of
management. Decisions are made at different levels of management to organize activities
concerning public fixed assets in different approaches, centralization, decentralization, or
a mixture of both. To ensure that fixed asset management is sustainable, government
develops its capacity in a variety of dimensions. Then specifically, fixed assets are
acquired, utilized, maintained, repaired, and disposed of throughout the life cycle of
assets. Fixed asset services are provided for government departments and agencies to
fulfill their goals and objectives (Yaotai, 2011).
Human resources are needed to implement decisions concerning fixed asset management.
Financial and leadership investment is made to obtain a workforce for various tasks.
Employee development training is provided to improve performance of fixed asset
management. In addition, a fixed asset management information system is constructed as
a database of fixed assets to provide information for relevant decision-making. Asset
information and financial information is obtained in different approaches and managed
with up-to-date technologies. Finally, to ensure that every dimension of fixed asset
management works appropriately on the right track, monitoring and oversight are
implemented. Measures must be taken to maintain integrity and transparency throughout
the process of public fixed asset management (Yaotai, 2011).
2.5.5. Legal and regulatory requirements of fixed asset management

Public fixed asset management is based on laws and regulations for authority, structure
construction, responsibility definition, and management strategies. Public fixed asset
management structure is established in accordance with relevant laws (Yaotai, 2011).
Laws that regulate public asset management grant government agencies authority over
public fixed assets. The authority includes the rights to fixed assets and determining the
functions of a fixed asset in delivering public service. According to (Barzel, 1989), as
noted by (Yaotai, 2011), asset rights that an individual has over assets consist of the
rights to consume, obtain income from, and alienate these assets. These rights can be
categorized into legal rights and economic rights. Government is no different from
individuals in terms of rights over fixed assets. Fernholz (2006) deem that the normally
accepted rights that government has over its real properties encompass ―the right to use,
transfer and sell the property, the right to benefit from the property and in many cases the
right to exclude others from the property
2.5.6. Monitoring, integrity, and transparency in fixed asset management.

The whole process of public fixed asset management needs to be monitored to ensure that
public fixed assets function efficiently and effectively. The major areas that are usually
put under monitoring and oversight include compliance of laws and regulations,
effectiveness of policies and processes, contract implementation, performance
measurement, and financial accountability (Yaotai, 2011).
2.6. Fixed Asset Management Principles

A fixed asset management program is effective and efficient if it facilitates the attainment
of goals and objective of the organization. The matter of effectiveness and efficiency are
variously open to interpretation and will depend on the individuals and agencies
involved. According to (Brady, 2001), there are certain fixed asset management
principles that can be used as a guide for public sector agencies to use in managing their
fixed assets. These principles assist in meeting the goals and objectives of the
organization, in effective and efficient operation of the fixed asset program, in making
sound decisions, in reducing costs, and in providing incentives for management
improvements. These fixed asset management principles are:
Maximize the taxpayer’s money: the tax payer’s money is always to be maximized in
public sector. Money is a scarce resource is a well-used and true axiom in the public
sector. Fixed asset managers must be aware of the scarceness of funds and strive to
maximize the use of all assets.
Make surplus assets the first source of supply: fixed asset managers must promote the
usage of surplus assets. Policies and procedures must be established for the purchasing
department and other agency departments requiring that surplus asset be reviewed and
used prior to purchasing new assets.
Maximize the reuse of fixed assets: A sound policy to reuse fixed assets is needed.
Performance measurements should be established and performance reports developed
measuring the number of assets reused within the agency. Departments reusing assets
should be given credit for their performance thus assuring future performance.
Manage the fixed asset program effectively and efficiently: Effectively and efficiently are
two much overused words in public agencies. However, they definitely have desired
connotations. If one is effective, they are thought of as producing a decided, decisive, or
desired effect and if one is efficient, they can be thought of as being productive without
waste. It is easy to understand why mangers tend to use the two words collectively and it
is just as easy to see why mangers would apply them to fixed asset management.
Trained fixed asset managers provide superior services: the fixed asset manager is
continuously encountering a diversity of challenges involving technology, administration,
personnel and management functions. In order to direct the fixed asset management
effort of his or her organization, the manager must be adequately trained to meet these
challenges. The complexity and value of the fixed asset management job has dramatically
increased to recent years, as result, the fixed asset manager is finding it more and more
difficult to learn the skills of managing the fixed asset program.
2.7. Empirical Review

Currently, several asset-management frameworks exist, but there are no reference-models
documenting all key activities and change-management strategies, for the implementation
of asset-management. This lack is an obstacle to the prompt implementation of an asset
management system in a sector or an organization.
According to (Tadewos, 2009) there is lack of studies in the area of fixed asset
management system in Ethiopia. Despite inadequate studies on Fixed Asset Management
in Ethiopia, several investigations were made in world to evaluate fixed asset
management system of governmental institutions. There is no clearly stated procedures
and system of fixed asset management at Federal government offices in Ethiopia.
The key components of the fixed asset management system illustrate various aspects of
public asset management. Though under different cornerstones, these components work
together to constitute a management system that helps public asset management achieve
its goals and objectives (Fernholz, 2007).
Kaganova (2000) identified that the challenges of fixed asset management in public
organization are: Unavailability of data required for public asset management; Limited
human resource; The absence of legal and institutional asset management framework;
The traditional perception of local government towards public assets; Asset management
involves many jurisdictions within the local government; The complexity of public
organization objectives; and Economic inefficiency associated with public property
holding and, Property asset management arrangements in many organizations are highly
fragmented; there is confusion within organizations in relation to where responsibilities
lay for strategic asset management arrangements.
According to (Hanis, et al, 2011), Governments are confronted by a number of challenges

to apply a public asset management system. The absence of public asset management
framework, as well as its elements, complicates the issue even more. The lack of
discussion of public asset management and the recent decentralization government policy
trend creates an important challenge to study the discipline of public asset management
further. Understanding those challenges will help these public bodies to design value
adding strategies and with the development of alternative solutions.
A study was also undertaken by (Hanis, 2011) aimed at identifying the main challenges
faced by a local government in a newly-developing region when adopting a public asset-
management framework. The findings indicated there were significant challenges that the
(Indonesian case-study) government had to manage when adopting a public asset-
management framework: the absence of an institutional and legal framework to support
the asset-management application; the non-profit principle of public assets; multiple
jurisdictions involved in the public asset-management processes; the complexity of local
government objectives; the non-availability of data for managing public property, and
limited human resources.
Another study examining asset-management tools for municipal infrastructure planning

in the construction industry was carried out by (Gondo, 2010) identified the challenges
for life-cycle (maintenance/repair/renewal) costs planning faced by asset owners and
managers. His study categorized various stages for asset-management using the six
‘What’ questions: What do you own? What is it worth? What is its condition? What is the
remaining service life? What is the deferred maintenance? The responses to these
questions provided information on the currently available tools and techniques for asset-
management. From this data, (Gondo, 2010) developed an asset-management framework
with each ‘what’ establishing a growing framework for asset-management plan
implementation. This study, however, did not discover any comprehensive solution that
addresses the current and future challenges for managers.
However, (Gondo, 2010) considered integration with existing systems such as

computerized maintenance management, geographic information, and corporate legacy
systems to be the most significant challenge for developing and using decision-support
tools in the area of asset-management.
The Capital Asset Management Team in New Zealand (Walker, 2010) has identified a
number of factors that can undermine effective asset management, these are: lack of
interest and support at senior management or governance level; a project manager
without the time or skills; and no clear targets, time lines, role(s), or responsibilities, and
no active management of how planning is going.
Therefore, the lack of a strategic approach to property management led to inefficient

utilization of assets. Inefficient utilization of property assets led to problems such as
reactive management, failure to address conflicting landlord and tenant objectives, lack
of property performance monitoring, inability to develop property information systems in
order to have adequate property information to aid decision making, inadequate valuation
standards and practices (Bond, 1998), fragmented management, physical and economic
underutilization of properties, insufficient maintenance and repair, and failure to account
for the real cost of holding an asset, plus the opportunity cost (Kaganova N.-S. , 2000).
Public sector organizations were therefore not achieving goals in the way they manage
their operational property assets. This is because they lacked effective strategic asset
management system. It is therefore clear that there is an asset management problem
which prevented the realization of an efficient service delivery and the achievement of
their goals.
As mentioned by (Hanis, et al, 2011), there are four key factors that needs emphasis in
managing fixed asset management. The first key factor is in formation system. Lack of
data or incomplete data is amajor impediment to launching any reforms. Not knowing
exactly what government owns, the occupancy levels associated with each property,
property characteristics, operating costs, and maintenance requirements are immense
barriers to progress. It is widely acknowledging that governments at al llevels, as well
as private sector organizations, large and small, must provide an accurate account of
their assets and the condition of those assets in their inventory record. A fundamental
requirement for any attempt to manage portfolio assets is an accurate account of the
assets.
The second key factor is needs analysis. Real property must be managed to the
maximum economic advantage, to provide adequate facilities for users, and to respect
other relevant government policies. The third key factor is asset life cycle analysis,
especially to recognize the costs that involved in the process. There is broad consensus
that the cost of operating and maintaining fixed assets should be recognized and
addressed explicitly. Occupancy costs (implied or actual rent) also tend to be
recognized, but some countries do not apply this to all publicly owned office space.
There is more variation in the approach to recognizing and managing the costs
associated with the ownership of fixed assets. This includes three separate issues:
valuation of the asset, depreciation and cost of capital.
The fourth key factor is accountability mechanisms and performance measurement.

Accountability involves overall stewardship of assets. This means effective mechanisms
to measure results and an accounting system that will drive effective decision-making.
Government must be able to hold asset managers accountable for the assets in the
custody and be assured that these assets are serving their intended purposes and
achieving targeted result. Governments are accountable for providing quality public
services to their citizens’ at the most favorable terms. They are, among other issues,
responsible for managing a diversified public asset portfolio.
As can be seen from this brief literature review, management of fixed assets changes as a
result of difficulties triggered by many factors such as technical, economic,
environmental, political, human resources and social factors. These factors have not yet
been addressed in totality and this represents a gap in the current knowledge. Studies
addressing challenges stated above are somewhat absent from current academic review,
this work strives to fill this present gap.
CHAPTER THREE
RESEARCH METHODOLOGY
3.1. Introduction
The researcher explains how the necessary data and information was collected, presented
and analyzed to evaluate the fixed asset management system practice, identify challenges,
and to find out the factors. Reasons and justifications for the research design, research
instruments, data sources, data collections techniques, data presentation techniques and
analytical techniques used are given.
3.2. Research Design

This study employs a descriptive research design with qualitative and quantitative data
analysis approaches to depict the current phenomenon challenges and factors for the
inefficiency of fixed asset management system. Questionnaires and interviews are the
two methods used to elicit information in this descriptive research. It is helpful for better
understanding of the perceptions, practices and belief of individuals and officials who are
directly involved in the public asset management. Descriptive analysis also adopted in
analyzing the quantitative data.
3.3. Sources of Data

The study relied on both primary and secondary data in order to come up with accurate
and objective findings
3.3.1. Primary Data Sources

The primary data collected from selected public organizations in the form of semi
structured interview questions. Furthermore, a likert scale type questionnaire distributed
for asset management department experts of each office. A questionnaire is the correct
tool for this study to cater for the large data and the different level of asset management
system users in the selected public sectors. This is in line with the statement by (Naoum,
2008) which agrees that questionnaire survey is the best tool in collecting large numbers
of respondents’ experiences and views for common phenomenon. Based on this, the
study adopted this method.
3.3.2. Secondary Data Sources
Sources used to gather secondary data were, document analysis collected from published
and unpublished company documents and subject-relevant literature.
3.4. Population of the Study

The populations of this study are Federal Public organizations which are not established
for profit making purposes. According to (Tadewos, 2009), those established to maximize
the wealth or profit are better in managing their assets than fully not for profit
organizations. Hence, business type organizations excluded from the population.
As described in (Access Capital, 2011/12), there are 23 public organizations that provide
pure services. Based on the allocated time and budget, only the cases of five of these
organizations have been studied. Among these, five organizations, namely: Ethiopian
Roads Authority, Ethiopian Revenues and Customs Authority, Ministry of Finance and
Economic Cooperation, Public Procurement and Property Administration Agency, and
Public Procurement and Disposal Services Enterprise are selected purposefully. The first
two (Ethiopian Roads Authority and Ethiopian Revenues and Customs Authority) are
selected based on their huge amount of capital asset they manage and the rest three
(Ministry of Finance and Economic Development, Public Procurement and Property
Administration Agency, and Public Procurement and Disposal Services Enterprise) are
also selected purposefully due to the reason that formulation of the asset management
system policies rules and manuals are mainly their concern.
3.5. Sampling Technique

After selecting the head offices of each organization, respondents from Asset
management department of each office were selected purposefully. Purposive sampling is
the suitable method for this study to select target population and involve them in the
research. This benefits the researcher to earn an advantage on getting some important
information by selecting units with a particular purpose based on their experiences on the
department and knowledge on the subject matter.
3.6. Sample Size

According to (Kothari, 2004), it is impracticable, time consuming and to test everything
or contact every person in the entire population in conducting a research. Therefore,
smaller hunks of a unit sample should be chosen to represent the relevant attributes of the
units. Therefore, the sample populations of this study are all Asset management
department permanent employees of the five selected public service providing
organizations.
Regarding to the number of respondents, a total of 48 employees were working in

property administration department of the selected five organizations during the data
collection period. Specifically, 8 employees in Ethiopian Revenues and Customs
Authority, 10 employees in Ethiopian Roads Authority, 10 employees in Ministry of
Finance and Economic cooperation, 9 employees in Public procurement and property
disposal service and 11 employees in public procurement and property administration
agency. Therefore, a questionnaire was distributed to these property administration
department employees of each office. From 48 employees 47 questionnaires are filled
and returned. Among selected department heads of each organization only 3 were
contacted for interviews and the rest two cannot be contacted due to work overload.
Hence, the sample size of the study is fifty (50).
3.7. Data Analysis Techniques

According to (Fellows, 2008), it is important to analyze the raw data first in order to look
for a pattern. The aim of data analysis is to extract useful information and develop a
conclusion. Therefore, the data collected has been analyzed.
In analyzing the data, combinations of qualitative and quantitative methods are used.
Both procedures are not combined in regards that qualitative and quantitative data have
been analyzed qualitatively and quantitatively respectively.
Descriptive analysis is adopted in analyzing the quantitative data. Analysis of the

descriptive data carried out by establishing frequency distribution to know the achieved
score of each variable. The characteristics of the examined variables were determined
through the achieved score by using Likert’s scale categorization such as 1) strongly
disagree, 2) disagree, 3) neutral, 4) agree, and 5) strongly agree. Microsoft office
Packages and SPSS (Statistical Package for the Social Science) used to analyze data
collected.
According to (Saunders, 2003), qualitative data refer to all non-numeric data or un-
quantified data which could be a product of all research strategies. This method produces
a combination of non-standardized data that require classification and analysis through
the use of conceptualization. Hence, this method is used in analyzing interview results.
3.8. Ethical Issues

First of all the study has been permitted from the Ethiopian Civil Service University,
Public Procurement and Asset Management department in order to get acceptance by the
organizations for the provision of data. The confidentiality of responses and information
obtained from the Asset management departments of the organizations will be kept
properly. In addition, at the time of data collection the researcher gives respect to the
participants and asks permission about their voluntariness for response. The researcher
will also ethically consider not to put the participants at risk and not to act against the
human rights of the county as stated in the covering letter. For the analysis of the data
collected the researcher ethically use only for this research project with integrity. The
findings of the research were presented without any deviation from the outcome of the
research. In addition, the researcher gave full acknowledgements to all the reference
materials used in the study.
3.9. Reliability and validity of data

Validity refers to the extent to which a test measures what the research actually wishes to
measure, and the extent to which differences found with a measuring tool to reflect the
difference among respondents. The content of the research is valid and reliable in terms
of adequate coverage of investigative questions guiding the study.
The researcher believes that this study is reliable since the selected employees were
working on asset management department which is directly related with the study topic
and their answers were expected to be credible. Given the credibility of selected
respondents, the same answers would probably be given to another independent
researcher. Furthermore, ambiguous terms were not used in interviews to avoid
confusion.
CHAPTER FOUR
RESULTS AND DISCUSSION
4.1. Introduction
The previous chapter discussed appropriate methodologies of assessing public fixed asset
management system effectiveness. This chapter presents the results of the survey made
on the selected public organizations related to public fixed asset management. These
results are the responses of public fixed asset managers to the questionnaire distributed to
them and interviews made with the heads of property administration departments. The
analysis also supported by different literatures reviewed.
4.2. Respondent’s Background

This section briefly explains the background of the respondents. It is imperative because,
the background of the respondents will help generate confidence in the reliability of data
collected; and eventually the findings of the study. It is always important to have a fair
idea of the respondents so as to situate the responses within the context. As a result, the
relevant socio-demographic variables of respondents that this research covered included
sex, age and level of education.
4.2.1. Gender of Respondents
The information regarding the gender of the respondents presented in the table bellow
Table 4.1. Gender of Respondents

Gender Frequency Percent Valid Percent Cumulative Percent
Female 16 37.2 37.2 37.2
Valid Male 27 62.8 62.8 100.0
Total 43 100.0 100.0
Source: field survey, 2016
As given in table 4.1 above, when we see the first demographic variable that is a gender
division of the respondents, the majority of the respondents were males, i.e. 27(62.8%)
representing a bigger part of the sample group. The females accounted for 16(37.2%) of
the respondents. However, the selection of respondents was not gender bias; the sampling
technique ensured inclusion of all members of the population being sampled for the
study.
4.2.2. Age of Respondents
The age of the respondents was categorized in four year intervals in order to know the
particular age range that contains the majority of respondents. The following table reveals
the information regarding the age of respondents.
Table 4.2. Age of Respondents

Age Frequency Percent Valid Percent Cumulative Percent
18-25 11 25.6 25.6 25.6
26-35 24 55.8 55.8 81.4
Valid 36-45 6 14.0 14.0 95.3
46-55 2 4.7 4.7 100.0
Total 43 100.0 100.0
The age of the respondent spanned from 26 – 35, representing 24 (55.8%), 18-25
representing 11 (25.6%), 36-45 representing 6 (14%) and; 46-55 representing 2 (4.7%) of
respondents with none of the respondents ageing above 55 years. The distribution of table
4.1 suggested that, matured persons provided the needed information for this research.
4.2.3. Educational Background of Respondents

The information regarding the educational background of the respondents’ illustrated in
the figure below.
14.00% 11.60%
College diploma
74.40%
Degree
Masters Degree and above
Figure 4 1: Educational Background of Respondents.

Educational background of majority or 32(74.40%) of respondents is first degree and six

staffs have a Master Degree (MA) as indicated in figure 4.1 above. This shows us that the
respondents are more qualified and easily understand and respond the questionnaire
correctly.
4.3. Practice of Fixed Asset Management System Components
To examine the practice of the Public asset management system, respondent are asked
several questions regarding the essential components it encompasses that are connected
with the public fixed asset management and presented as follows.
4.3.1. Legal and Regulatory Requirements for Fixed Asset Management

The survey questionnaire addressed legal and regulatory requirements from nine major
dimensions of public fixed asset management system. Some legal and regulatory
requirements are enacted and enforced in a higher percentage of respondent organizations
to regulate fixed asset management while some other legal and regulatory requirements
are implemented in a lower percentage of respondents’ organizations.
Table 4.3: Legal and Regulatory Requirements for Fixed Asset Management
Please Indicate how do you agree with the following
Disagree%
Disagree%
Neutral%
Strongly
Strongly
Agree%
Agree%
Total%
statements regarding legal and regulatory
requirements for Fixed Asset Management in your
organization:
The policies, procedures and guidelines in the
9.3 11.6 25.6 44.2 9.3 100
Organization are documented.
Legal and regulatory requirements of the organization
covered Fixed asset acquisition, use, operation & 20.9 34.9 0 39.5 4.7 100
maintenance, disposal and valuation
Legal and regulatory requirements the organization
covered Fixed asset planning, e.g. Asset need analysis 18.6 58.1 4.7 9.3 9.3 100
& budgeting
All staff the organization is in charge performs their
9.3 32.6 39.5 9.3 9.3 100
responsibilities as per the regulations and guidelines
covered Centralized record management system of 9.3 4.7 9.3 69.8 7 100
fixed assets
0 37.2 9.3 53.5 0 100
covered Capitalization policies including thresholds
9.3 53.5 27.9 9.3 0 100
covered Anti-corruption
9.3 67.4 9.3 4.7 9.3 100
covered Responsibilities of fixed asset managers
27.9 53.5 0 18.6 0 100
covered Fixed asset performance evaluation
As given in table 4.4 above, fixed asset acquisition, use, operation & maintenance,
disposal and valuation processes of fixed asset management are not sufficiently regulated
as 20.9 % of respondents strongly disagreed & 34.9% of respondents disagreed with the
statement. The legal and regulatory requirement also does not cover planning, need
analysis and budgeting as 18.6 % of respondents strongly disagreed and 58.1% disagreed.
In addition, 53.5 % of respondents responded that anti-corruption, and performance
evaluation requirements are not sufficiently covered by legal and regulatory
requirements. Responsibilities of the fixed asset managers are not clearly stated in the
requirements as 67.4% of respondents are responded. Few areas of the fixed asset
management system are covered by legal and regulatory requirements of the
organizations such as documentation of available policies, procedures and guidelines as
44.2% of them are agreed and 9.3% are strongly agreed. Similarly centralized record
management and capitalization policies are sufficiently covered by the organizations in
their legal and regulatory requirement of fixed asset management as 69.8 and 53.5% of
respondents agreed respectively. Hence, the results reveals that the legal and regulatory
requirements practice did not cover essential areas that need to be covered to be
comprehensive.
In cases where there is a central fixed asset authority, delegated activities should be
controlled by rules, policies and procedures, and should be monitored for compliance.
The central fixed asset office should be authorized to adopt any additional rules needed to
carry out the job.
4.3.2. Building a Fixed Asset Management Information System

Access to the data from other sections within the utility is often difficult, which limits the
effectiveness of the organization's knowledge base. Various data integration options
exist, including enterprise resource, planning applications, web-based systems that link
databases and other specialized software. Before embarking on an asset management
integration effort, a utility needs to consider several factors including: leveraging existing
information technology investments, phased versus one time migration to an integrated
system, and cultural and financial limitations.
Asset management information Systems provide the critical inputs for effective strategic
asset management. Your asset information systems must: Contain reliable and accurate
records on the assets you manage; Provide details on how the assets are performing;
Support accurate asset valuation and job costing activities; Schedule what needs to be
done in terms of maintenance; and define other risk-related inspections and interventions.
On this basis, the survey investigated the establishment of a fixed asset management
information system and its effects on asset acquisition, disposition, financial input, and
financial reporting.
Table 4.4: Building Fixed Asset Management Information System
Please Indicate how do you agree
with the following statements
Disagree
Disagree
Strongly
Strongly
Neutral
regarding building Fixed Asset
Agree
Agree
Total
Management information system in
your organization:
Fixed asset category contained in your 13 6 0 22 2 43
information system 30.2% 14.0% 0.0% 51.2% 4.7% 100.0%
Age of Fixed asset contained in your 25 10 2 4 2 43
information system 58.1% 23.3% 4.7% 9.3% 4.7% 100.0%
Acquisition cost & Estimated current 20 15 2 4 2 43
value of Fixed asset contained in your 46.5% 34.9% 4.7% 9.3% 4.7% 100.0%
information system
Current status of Fixed asset contained 19 8 2 10 4 43
in your information system 44.2% 18.6% 4.7% 23.3% 9.3% 100.0%
Legal ownership of Fixed asset 4 6 0 21 12 43
contained in your information system 9.3% 14.0% 0.0% 48.8% 27.9% 100.0%
Original and Remaining useful life of 10 23 2 6 2 43
Fixed asset contained in your 23.3% 53.5% 4.7% 14.0% 4.7% 100.0%
information system
Transactions are promptly recorded 0 29 4 6 4 43
and classified to provide reliable 0.0% 67.4% 9.3% 14.0% 9.3% 100.0%
information.
The survey revealed that the fixed asset management information system does not have
strong positive effects on fixed asset acquisition, disposition, financial input and financial
reporting. As given in table 4.5 above, 25 (58.1%) of valid respondents reported that their
fixed asset information system did not contain an age of fixed assets in their organization.
In addition, as 20 (46.5%) of valid respondents strongly disagreed and 15(34.9%) of
respondent disagreed, their information system did not have an effect on financial input
in fixed asset management. The possible cause of this phenomenon is that fixed asset
managers cannot obtain any information to determine how much money is needed for
maintenance, repair, and replacement. In addition, they claimed that their information
system did not have an effect on financial reporting as 29 (67.4%) of respondents agreed.
The cause of this fact is similar to that of financial input. In a word, the low frequency of
about half of the identified elements in the fixed asset management information system
have reduced the positive effect of the fixed asset data on fundamental functions of fixed
asset management, such as acquisition, disposition, final input, and financial reporting.
4.3.3. Fixed Asset Management Organization Structure

With the fixed asset management system, organizations can implement a centralized
process at the central office while increasing efficiency in terms of; Processing Time,
Data Accuracy, and Process Control. To examine the respondent’s organization practice
regarding fixed asset management organization structure, they have asked to indicate how
they agree with the statements listed in table 4.6 below.
Table 4.5. Respondent's Opinion Regarding Fixed Asset Organizational Structure

How do you agree with the Strongly Disagree Neutral Agree Strongly Total
following statements regarding Disagree Agree
Organization Structure of your
organization:
Management responsibility is 2 4 5 22 10 43
not clear 4.7% 9.3% 11.6% 51.2% 23.3% 100.0%
There is centralized record 4 0 4 35 0 43
management system of fixed 9.3% 0.0% 9.3% 81.4% 0.0% 100.0%
assets
Here the survey data shows that there is centralized record management system of fixed
assets as 35 (81.4%) of respondents agreed. In contrast management responsibilities are
not clear in respondents’ organization as 22 (51.2%) of them agreed and 10 (23.3%) of
respondents strongly agreed.
4.3.4. Human Capital Strategies

Human capital management should take on strategic roles besides the operational
functions. The needs of fixed asset management functions should be included in strategic
human capital planning; Therefore, an agency‘s strategic human capital planning should
take into account the workforce requirement of fixed asset management (Yaotai, 2011).
Management of the fixed asset personnel needs to address critical skills, development
needs, and human capital challenges. In addition, strategic human resource management
is responsible for succession planning, such as development of the talent of fixed asset
management staff. It is necessary to consider all stakeholders in team development,
whose involvement may contribute to the success of fixed asset management (GAO,
2005). From the perspective of personnel services, the survey calls attention respondents to
give their opinion on the elements shown in table 4.6 below.
Table 4.6: Human Capital Strategies of the Organizations

Indicate how do you agree with on
statements regarding Human Strongly Strongly
Disagree Neutral Agree Total
Capital Strategies of your Disagree Agree
organization:
Position descriptions are based 4 33 2 4 0 43
on overall property management 9.3% 76.7% 4.7% 9.3% 0.0% 100.0%
goals & objectives
Employee talent development 16 21 2 0 4 43
connected with long-term goals 37.2% 48.8% 4.7% 0.0% 9.3% 100.0%
of asset management
There is Planning for innovative 11 22 4 4 2 43
work practices 25.6% 51.2% 9.3% 9.3% 4.7% 100.0%
Employees are involving in goal 10 23 2 6 2 43
setting and planning 23.3% 53.5% 4.7% 14.0% 4.7% 100.0%
Team development engaging all 10 13 14 6 0 43
stakeholders 23.3% 30.2% 32.6% 14.0% 0.0% 100.0%
There is programs to increase 5 21 9 8 0 43
employee performance 11.6% 48.8% 20.9% 18.6% 0.0% 100.0%
There is programs to meet new 5 26 6 6 0 43
work requirements 11.6% 60.5% 14.0% 14.0% 0.0% 100.0%
There is programs to satisfy long- 11 20 10 2 0 43
term need for qualified 25.6% 46.5% 23.3% 4.7% 0.0% 100.0%
employees
There is programs to meet 5 25 9 4 0 43
customer satisfaction 11.6% 58.1% 20.9% 9.3% 0.0% 100.0%
These elements are interrelated to provide human capital strategies for fixed asset
management. Responses to these elements help understand how well human capital strategy
is implemented by the organizations.
As given in table 4.6 above, the responses of the majority respondents indicates that
position description is not based on the overall fixed asset management goals and
objectives as 33 (76.7%)of valid respondents disagreed and 4 (9.3%)of valid respondents
strongly disagreed. On the other element that they are asked how employee talent
development is connected with long-term goals and objectives of the fixed asset
management, 21(48.8%) are disagreed and 16 (37.2%) are strongly disagreed. The other
identified element they are asked how it works in their organization was about planning
for innovative work practice, then they reported that the human capital strategy of their
organization not covered this element as 22 (51.2%) of valid respondents disagreed and
11(25.6%) of valid respondents strongly disagreed. Employees involvement in goal
setting and planning is weak as 23 (53.5%) disagreed and 10(23.3%) of respondents
strongly disagreed. Team development is not engaging all stallholders in some of the
organizations as reported by 13 (30.2%) of respondents who are disagreed and 10
(23.3%) of respondents strongly disagreed. There are no programs to increase employee
performance as 21 (48.8%) of respondents disagreed and 5 (11.6%) of respondents
strongly disagreed. Thus, the results indicate that the organizations human capital
strategy practicing the elements in a weak manner.
Table 4.7: Monitoring Integrity and Transparency

Indicate how do you agree with the following statements
regarding Monitoring Integrity, and Transparency of DisagreeNeutral Agree Total
fixed asset management of your organization:
There is monitoring of compliance of laws and regulations 35 2 6 43
81.40% 4.70% 14.00% 100.00%
33 2 8 43
There is monitoring of effectiveness of Policies & processes
76.80% 4.70% 18.60% 100.00%
There is Contract Monitoring(cost, schedule, performance, 6 13 24 43
quality) 13.30% 31.20% 55.60% 100.00%
There is effective internal and external control, audit& 30 5 8 43
oversight system 69.80% 11.60% 18.70% 100.00%
33 2 8 43
There is efficient appeals mechanism
76.70% 4.70% 18.60% 100.00%
Publication & distribution of information through available 15 10 18 43
media 34.90% 23.30% 41.90% 100.00%
24 13 6 43
Professional code of ethics
55.80% 30.20% 14.00% 100.00%
There are Anti-corruption measures based on legal & 28 4 11 43
regulatory guidelines 65.10% 9.30% 25.60% 100.00%
4.3.5. Monitoring Integrity and Transparency of Fixed Asset Management
To establish a mechanism of integrity and transparency in the public asset management
system, government needs to take a number of measures in various respects. The survey
asked respondents to identify the monitoring and oversight programs they have
established from a list as given in table 4.7 above.
The survey results showed that organization have initiated and implemented monitoring
programs in contract management as 24(55.6%) of respondents agreed. Comparatively,
fewer 8 (18.6%) of respondents agreed that they monitor the effectiveness of policies and
processes, compliance of lows and regulations. As only 6(14.0%) agreed, there is no
effective internal and external control audit and oversight system as 30 (69.80%) of
respondents disagreed. There are no anti-corruption measures based on legal and
regulatory guidelines as 28 (65.1%) responded. Generally, the survey results revealed that
management have not paid sufficient attention to monitoring integrity and transparency
of fixed asset management.
4.3.6. Capacity Building of Fixed Asset Management

The component of risk management regarding fixed assets means planning, organizing,
directing, and controlling resources to identify, assess, and minimize the probability of
negative, unexpected events and managing the events at their occurrence to achieve
planned organizational goals and objectives (George L. Head, 2009).
Table 4.8: Fixed Asset Management Capacity Building

Indicate how do you agree with the statements Total
regarding your Capacity Building on Fixed Assets: Disagree Neutral Agree valid %
33 6 4 43
There is a risk management program 76.70% 14.00% 9.30% 100.00%
31 10 2 43
There is emergency management program 72.10% 23.30% 4.70% 100.00%
31 8 4 43
Partnership with private business 72.10% 18.60% 9.40% 100.00%
37 2 2 41
Organization improvement 90.20% 4.90% 4.90% 100.00%
37 2 4 43
Encouraging high efficiency and effectiveness 86.00% 4.70% 9.40% 100.00%
Source: Field Survey, 2016
Risk management is an integral part of any operation of fixed asset management that is
intended to avoid impact and losses from risks or potential risks. Emergency management
is an organizational effort to deal with hazards, either natural or man-made, that can
cause disasters or catastrophes to public fixed assets. Partnership with private businesses
refers to collaborative relations between public fixed asset management and private
contractors and suppliers in fixed asset acquisition, operation, maintenance and repair,
and disposition. Organizational improvement means strategies and mechanisms that help
improve fixed asset performance while maximizing asset value. Encouraging high
efficiency and effectiveness refers to incentives for more efficient and effective use of
public fixed assets. On this basis the respondent asked to indicate their views on these
five aspects as presented in table 4.9 above.
The survey shows that 33 (76.7%) of respondent disagree with the statement that their
organization has risk management program measures for building their capacity of fixed
asset management. 31 (72.1%) of respondents also disagree that their organization has an
emergency management program. Similarly 31 (72.1%) of participants described that
there is no Partnership with private business, 37 (90.2%) disagree with the statement
there is organization improvement, 37 (86%) of respondents disagree on the statement
there is encouraging high efficiency and effectiveness. This reflects that there is an
insufficient connection between the public sector and the private sector in fixed asset
management.
4.4. Fixed Asset Management System Challenges

To identify the challenges faced in the practice of the Public Fixed Asset Management
system, respondents are asked several questions regarding Administration, Management,
Technology, and Personnel related challenges and presented as follows in table 4.9
bellow.
Table 4. 9: Fixed Asset Management system challenges
Indicate how do you agree with the
statements regarding fixed asset
management challenges in your
organization Disagree% Neutral% Agree% Total Valid %
Maintenance is challenging the fixed asset
management of the organization 11.50% 14.00% 74.50% 100.00%
Poorly Developed Processes and Audit
Trails are challenging the fixed asset
management of the organization 4.70% 4.70% 90.60% 100.00%
Management priority is displaced.
0.00% 18.60% 81.40% 100.00%
Current rules and regulations on financial
management have deficiencies. 0.00% 14.00% 86.00% 100.00%
Management performance evaluation
system has not been established. 4.70% 9.30% 86.00% 100.00%
Attitude of government towards public
assets 4.70% 32.50% 62.80% 100.00%
The complexity of public organizations
objectives 9.80% 9.80% 80.40% 100.00%
Heavy Reliance on Manual Controls and
Spreadsheets 0.00% 0.00% 100.00% 100.00%
The non-availability of data required for
managing public property 9.30% 9.30% 81.40% 100.00%
Human resources constraints
20.90% 20.90% 58.20% 100.00%
Development of young asset Management
professionals 14.70% 0.00% 85.30% 100.00%
4.4.1. Administration and Management Function Related Challenges

As the survey result indicates, administration and management related challenges faced
the respondents’ organizations. Based on the response of participants (as 51.2% agreed
and 23.3% strongly agreed) of respondents, maintenance is challenging the fixed asset
management of the organizations. About ninety-one percent (90.7%) of respondents
agreed that poorly developed processes and audit trails are also challenging the system.
Similarly displaced management priority and the complexity of public organizations
objectives are also challenging the management system of fixed assets as eighty-one
percent (81.4%) of them agreed.
4.4.2. Technology Related Challenges

The development of fixed asset management information system is to accurately reflect
the fixed asset information as the core, and make it key, which is consistent accounts,
flow data, true information, and improving management efficiency. The use of computer
network and database development technology reduces repetition in the management
process and the loopholes from the management of fixed assets, reduces workload of
managers to achieve high efficiency, without loss, integration, information technology. In
order to make the fixed asset management adapt to the needs of modern enterprise
management, the following are challenging the respondent’s organization.
a. Heavy Reliance on Manual Controls and Spreadsheets

As shown in the table 4.9 above, there is heavy reliance on spreadsheets rather than
adopting Information systems based on the response of all (100%) respondents. There are
many reasons why spreadsheets are not the solution for all business needs. With so many
potential causes of and opportunities for errors, companies must look for software
solutions that are designed for specific, specialized tasks to eliminate them and ensure
sound financial tracking and reporting.
The accurate management of fixed assets can lead to significant tax savings in
depreciation deductions, while poor fixed asset management can negatively affect the
accuracy of financial reports, causing re-reporting and ultimately impacting the bottom
line. Establishing the highest standards of depreciation accuracy and best practices in
fixed asset management will pay off in savings.
b. The non-availability of data required for managing public property

The other issue is non-availability of a data required for managing public fixed assets.
Currently, governments at different levels attempt to establish an information system of
fixed asset management. However, on-availability of appropriate data on the respondents’
organizations is still challenging as sixty-two percent (62.8%) of them agreed. Hence
decision makers have challenges to make appropriate decisions regarding reducing
operating costs, improving asset utilization, recovering asset values, and improving
property asset conditions.
4.4.3. Personnel Related Challenges

Human resource management performs fundamental roles in public fixed asset
management. Human capital staff partner with fixed asset managers to develop workforce
plans that conform to the goals of asset management and the organization’s mission
accomplishment. As shown in figure 4.2 above, about sixty-five percent (65.9%) of
respondents agreed nineteen percent (19.5%) are strongly agreed that development of
young asset Management professionals is significantly challenging fixed asset
management system in their organization. About fifty-eight percent (58.1%) of the survey
participant also agreed that the human resource constraint is a significant challenge of
fixed asset management system under the personnel related challenges.
4.5. Factors for Inefficiency of Public Fixed Asset Management System

In order to empirically ascertain the factors accounting for the inefficiency of fixed asset
management system at the federal public organizations and to give an understanding as to
the extent to which each factor contribute to inefficient fixed asset management system,
both by itself and in combination of the other factors, the Relative Importance Index (RII)
was employed. Relative Importance Index or weight is a type of relative importance
analyses. RII was used for the analysis because it best fits the purpose of this study to
identify what factor is more facilitating inefficiency of fixed asset management system.
According to (Somiah, 2015), RII aids in finding the contribution a particular variable
makes to the prediction of a criterion variable both by itself and in combination with
other predictor variables. In the calculation of the Relative Importance Index (RII), the
formula below was used
∑𝑊
𝑅𝐼𝐼 =
𝐴∗𝑁
Where, W=weighting given to each statement by the respondents and ranges from
1 to 5; A=Higher response integer (5); and N=total number of respondents.
Table 4.10: Relative Importance Index
Factors RII Rank
Insufficiently developed Legal and Regulatory requirement 0.650 4
Fixed Asset Management Information system related factors 0.700 3
Organization structure related factors 0.458 6
Human resource related factors 0.756 2
Monitoring Integrity and Transparency 0.598 5
Factors related to Capacity Building of Fixed Asset Management 0.761 1
Source: Field Survey, 2016 (see Appendix II for details)
For a five-point response item, Relative Importance Index (RII) produces a value ranging
from 0.2 - 1.0 (see appendix). Accordingly, the group index is the average of the relative
importance index of the variables in the various groups.
The values 0.650, 0.700, 0.458, 0.756, 0.598, and 0.761 indicate respectively, the RII
values of factors related to Legal and Regulatory requirement, Fixed Asset Management
Information system, Organizational structure, Human resource, Monitoring Integrity and
Transparency and Capacity Building of Fixed Asset Management, as shown in the table
4.12 above. Likewise, the RII values indicate that, primarily, factors related to Capacity
building, human resource, fixed asset management Information system related factors
highly influence the management system of fixed assets. Similarly, it suggests that, Legal
and Regulatory requirement related factors ranked the fourth significantly influential
factor that accounts for inefficient management system of public fixed assets. This was
followed by the factor related to monitoring Integrity and Transparency and Organization
structure related factors. The detailed interpretation of each factor is presented below.
4.5.1. Factors Related to Capacity Building of Fixed Asset Management

The capacity building related factor grouping variable was ranked the first significantly
influential factor that accounts for the inefficiency of fixed asset management system of
the organizations by the respondents. Thus, capacity building factors mostly influence
fixed asset management system. Individually, Lack of Partnership with private businesses
is the highest ranked variable (with RII 0.777), followed by weak emergency
management (with RII 0.763), Organization Improvement (with RII 0.761), low risk
management (with RII 0.758), and lack of encouraging high efficiency and effectiveness
(with RII 0.744).
4.5.2. Human Resource Related Factors

The Human resource related factor grouping variable was ranked the second significantly
influential factor that accounts for the inefficiency of fixed asset management system by
the respondents. Thus, Human resource related factors influencing fixed asset
management system. Individually, lack of connecting employee talent development with
long-term goals of asset management, lack of programs to satisfy the long-term need for
qualified employees, lack of planning for innovative work practices, and lack of
employee involvement in goal setting and planning are ranked the highest variables with
RII of 0.809, 0.767 and 0.753 respectively under human resource related factor. This
indicates that, connecting employee talent development with long-term goals of asset
management is more critical to the effectiveness of fixed asset management system than
the other variables in the group of capacity building factors (see appendix II).
4.5.3. Fixed Asset Management Information System Related Factors

Lack of data or incomplete data is a major impediment to launching any reforms. Not
knowing exactly what government owns, the occupancy levels associated with each
property, property characteristics, operating costs, and maintenance requirements are
immense barriers to progress.
As given in table 4.9 above, information system related factors was ranked the third
variable which contributes for mismanagement of fixed asset (with RII of 0.809).
Individually, age of fixed asset is not recorded in their information system, acquisition
cost & estimated current value of fixed asset are not contained in the information system,
original and remaining useful life of fixed asset are not contained in their information
system and, current status of fixed asset are not contained in the information with RII
value of 0.842, 0.819, 0.753 and 0.730 respectively. This indicates that, improving the
fixed asset management information system especially in this area is critical to the
effectiveness of fixed asset management system than the other variables in the group of
information system related factors (see appendix II). The implication is that, the level of
fixed asset management information system implementation is low.
4.5.4. Insufficiently Developed Legal and Regulatory Requirements

The group of factors related to legal and regulatory requirements ranked the fourth factor
facilitating the fixed asset management inefficiency as shown in table 4.9 above with RII
value of 0.650. When we see individual factors within the group, legal and regulatory
requirements of the organization covered fixed asset performance evaluation (RII 0.781),
legal and regulatory requirements the organization covered fixed asset planning, e.g.
Asset need analysis & budgeting (RII 0.735), legal and regulatory requirements the
organization covered anti-corruption (RII 0.726), legal and regulatory requirements the
organization covered, legal and regulatory requirements of the organization covered
responsibilities of Fixed asset managers (RII 0.726), legal and regulatory requirements of
the organization covered fixed asset acquisition, use, operation & maintenance, disposal
and valuation unclear regulation and working system lead to another problem i.e. Cross
jurisdictions in public asset management followed by lack of coordination.
4.5.5. Inefficient Monitoring Integrity and Transparency

The fifth ranked (RII 0.598) group of factor by respondents is inefficient monitoring
integrity and transparency. In this group of factors the highest ranked factors are; lack of
monitoring of compliance of laws and regulations (0.753), lack of monitoring of
effectiveness of policies & processes and unsuccessful internal and external control,
audit& oversight system (with RII value of 0.744), inefficient appeals mechanism (with
RII 0.735). In this regard we can understand that monitoring compliance of laws and
policies and process is lacking in the study organizations.
4.5.6. Organization Structure Related Factors

Factors related to the organization structure of fixed asset management ranked sixth with
RII of 0.458 as given in table 4.9 above. Even though it needs attention due to the reason
that centralized record management is that implement centralized asset management
provide efficient and effective asset services
4.6. Improving the System Through Fixed Asset Management Principles

Understanding the principles of sound Asset Management practices will help you design
a workflow that is secure and efficient, and can help you increase profitability. Although
a fundamental understanding of each principle in isolation will return some value, true
strength lies with growing each principle in unison in order to realize a well-rounded,
effective program; in essence, in order to build the strongest wall possible, you need each
and every brick. By improving your strategies and framework, you could save your
organization millions (Toukan, 2014). On this basis respondents are asked to indicate
how their organization is doing in line with fixed asset management principles. The
responses respondents presented in table 4.11 and further illustrated on the figure 4.2 as
follows.
Table 4.11: Principles of Fixed Asset Management
Principles of fixed asset management Strongly Agree Neutral Disagree Strongly Total
Agree Disagree
Taxpayers 0 2 14 21 6 43
Make surplus assets Maximize
Fixed asset managers in the organization are
Money
aware of the scarceness of funds and strive to 0.0% 4.7% 32.6% 48.8% 14.0% 100.0%
maximize the use of all assets
Fixed asset managers are promoting the usage 0 0 4 37 2 43
of surplus assets 0.0% 0.0% 9.3% 86.0% 4.7% 100.0%
the first source of
Policies and procedures established for 0 4 2 35 2 43

purchasing department and other agency 0.0% 9.3% 4.7% 81.4% 4.7% 100.0%
departments requiring that surplus assets be
supply
reviewed and used prior to purchasing new

assets.
A sound policy is established to reuse of fixed 0 8 0 31 4 43
Trained fixed asset Manage fixed Maximize the reuse
assets 0.0% 18.6 0.0% 72.1% 9.3% 100.0%

Performance measurements are established 0 4 2 26 11 43
managers provide asset effectively of fixed assets
and reports developed measuring the number 0.0% 9.3% 4.7% 60.5% 25.6% 100.0%
of assets reused
Departments reusing fixed assets are 0 4 2 29 8 43
encouraged for their performance thus 0.0% 9.3% 4.7% 67.4% 18.6% 100.0%
assuring future performance.
0 5 10 19 9 43
superior services and efficiently
Responsibility and accountability for both 0.0% 11.6% 23.3% 44.2% 20.9% 100.0%
ownership and control of assets been
determined and communicated
0 2 4 32 5 43
0.0% 4.7% 9.3% 74.4% 11.6% 100.0%
The fixed asset manager is adequately trained
to meet fixed asset management challenges
The scope for improvement is illustrated by the gap analysis arrived at by each
organization completing a self-assessment of their current condition of the practices are
weather in line with the principles of fixed asset management or not against leading
practice with in the organizations. The analysis is illustrated in figure 4.2 which is an
aggregate assessment across the five organizations. The inner line (light blue irregular
line) is the aggregate current position and the outer circle represents leading practice
(rated as a score of ‘5’). Zero represents an organization which has no or less
understanding or skills in the specific practice area.
The results show significant areas for improvement (i.e. the ‘gaps’ between current
maturity and leading practice) indicating the ways how the fixed asset managers
Gap Analysis
Fixed asset managers in the

organization are aware of the
scarceness of funds and
strive to maximize the use of
all assets
0.46
The fixed asset manager is 0.45
Fixed asset managers are
adequately trained to meet 0.44
promoting the usage of
fixed asset management 0.43 …
0.42 surplus assets
challenges 0.41 0.41 0.41
0.40
0.39 Policies and procedures
Responsibility and 0.38 established for purchasing
accountability for both 0.37 department and other agency
ownership and control of 0.45 0.36 0.44
departments requiring that
assets been determined and
surplus assets be reviewed
communicated
and used prior to…
0.46
0.41
Departments reusing fixed 0.40
assets are encouraged for A sound policy is established
their performance thus to reuse of fixed assets
assuring future performance.
Performance measurements
are established and
performance reports
developed measuring the
number of assets reused
within the organization.
Figure 4 2: Gap Analysis of Opportunities for Improvement Across the territory

need to be focused. They inform the level of potential efficiency that can be released by
moving to leading practice.
There are top four opportunities for improvement across the territory derived from the
‘gap analyses. The first suggested opportunity (with the aggregate rate of 0.40) is that
there are improvement opportunities in establishing performance measurements and
developing reports measuring the number of assets reused. Some gaps need addressing in
order to maximize the reuse of fixed assets in the organizations. The rest three
improvement opportunities are given (with equal rate of 0.41) are, promoting the usage of
surplus assets by the fixed asset managers, Encouraging departments reusing fixed assets
for their performance thus assuring future performance and , adequately training fixed
asset managers to meet fixed asset management challenges.
Interview Results
An interview made with the heads of property administration departments of the selected
organizations on the fixed asset management system. The major areas of questions were
the components of public fixed asset management discussed in the literature review part
of the paper. The discussion of the interview is presented below.
In the first place the interviewees were asked how the organization is practicing the fixed
asset management components specifically the legal and regulatory requirements, fixed
asset management information system, fixed asset personnel, fixed asset organization
structure, fixed asset management process and capacity building, and monitoring,
integrity, and transparency.
According to interviewees’ explanation, the components, legal and regulatory

requirement, fixed asset management information system, fixed asset human resource,
process and capacity building and monitoring integrity and transparency are practiced in
the organizations have deficiencies. They claimed that all the components practiced have
deficiencies in some environment, particularly in assigning appropriate employees on
appropriate duty, monitoring and oversight programs have not served expected roles in
performance measurement and effectiveness of policies and processes. Fixed asset
management is not transparent in the appeals mechanism and publication and distribution
of relevant information.
In general the interviewees conclude that the fixed asset management system is
inconsistent; while it is better in a few it is worse in most of the organizations. The major
cause for this according to the interviewees is there is insufficient monitoring of
government to make organizations take corrective measures.
CHAPTER FIVE
FINDINGS, CONCLUSION AND RECOMMENDATIONS
To pinpoint the major findings of the study and indicate recommendations that can help
in the improvement of the fixed asset management system in the public Organizations,
this chapter is organized as section 5.1. A conclusion which presents major findings of
the study, section 5.2 which presents the main findings, 5.3. presents recommendations
based on the findings, and section 5.4 future researches suggested based on findings and
conclusions.
5.1. Conclusion
Fixed asset management system is a policy, methods and practices employed for the
attainment of organizational objectives. These objectives are ensuring operational
efficiency, safeguarding assets and adherence to rules and regulations. Both government
and private institutions need a guarantee that the fixed asset management system in their
organization is effective enough in attaining such objectives. As indicated in the
literature, customarily the management of organizations performs this task through
monitoring the effectiveness of management system they designed. Though,
managements may use different criteria’s to evaluate effectiveness of the fixed assets.
Fixed asset management system effectiveness results from an effective function the
principles of fixed asset management. As indicated by (Brady, 2001) an effective
functioning of the principles assists in meeting the goals and objectives of the
organization, on effective and efficient operation of the fixed asset program, in making
sound decisions, in reducing costs, and in providing incentives for management
improvements.
The practice of fixed asset management in the Ethiopian context seems under developed.
The Public organizations fixed asset management system is not appropriate; Efficiency,
effectiveness, performance and other factors contributing to the achievement of goals and
objectives is not considered and not clearly stated. Based on this ground it was necessary
to examine the factors contributing to the inefficiency and identify challenges in the
system.
The study aimed to assess the fixed asset management system practice, identify areas of
deficiency, and then to indicate areas of emphasis to improve the fixed asset management
system. To achieve these objectives a survey method is employed in quantitative approach.
The survey method used questionnaires to employees in the organizations and analyzed
through descriptive statistics analysis. A qualitative research approach used in the study used
semi structured interviews with property administration department heads. The
questionnaires were aimed to examine whether components of fixed asset management
system were adequately practiced in the organization. The interview was used to identify
areas the department heads believe as weaknesses of fixed asset management system in the
organizations.
5.2. Findings
The detailed findings and areas of deficiencies in fixed asset management system are
summarized as follows.
– Fixed asset management system components practiced have deficiency in some

areas. As the survey revealed, Capacity building of fixed asset management does
not pay sufficient attention, certain areas of fixed asset management are not
intensely regulated, and such areas include fixed asset management performance
evaluation, centralized registration, and anti-corruption. Human resource
strategies, like employee development training, are not initiated; the fixed asset
management information system of federal government is not comprehensive. A
variety of key elements (see appendix II) are not covered by the information
system. In addition, the assessment of a fixed asset management performance did
not cover a number of frequently used measures.
– Based on the survey result, maintenance fixed asset, poorly developed processes
and audit trails, lack of management performance evaluation, heavy reliance on
manual controls and spreadsheets, the non-availability of data required for
managing public property, human resource constraints, and development of young
asset management professionals are significantly challenging the fixed asset
management system of the organizations.
– Factors related to Capacity building, human resource, fixed asset management
Information system related factors highly influence the management system of
fixed assets, followed by Legal and Regulatory requirement related factors,
factors related to monitoring Integrity and Transparency and Organization
structure related factors as the relative importance index of survey data
computation shows
– Using the gap analysis, some ways to improve the system to provide better
performance are identified. This top opportunities for improvement are:
establishing performance measurements and developing reports measuring the
number of assets reused; promoting the usage of surplus assets by the fixed asset
managers; Encouraging departments reusing fixed assets for their performance
thus assuring future performance and ; adequately training fixed asset managers
to meet fixed asset management challenges and Trained fixed asset managers
provide superior services
5.3. Recommendations
Based on the research findings the following recommendations were presented for this
study:
 Capacity building of fixed asset management needs sufficient attention especially
in fixed asset management information system to increase transparency and
efficiency through new information Systems and to overcome fixed asset
management information system related challenges like heavy reliance on manual
spreadsheets.
 Measures for building capacity of fixed asset management like risk management,
emergency management, partnership with private businesses, and encouraging
high efficiency and effectiveness of employees are needed.
 To overcome human resource related challenges, there is a significant need to
have key personnel who have the required and relevant academic or professional
training in the aspects of property asset management, who can direct the
continuously encountering diversity of challenges involving technology,
administration, personnel and management functions.
49
 Comprehension of public fixed asset management principles by the top
management of organizations to get assisted by the principles in meeting the goals
and objectives of the organization, on effective and efficient operation
of the fixed asset program, in making sound decisions, in reducing costs, and in
providing incentives for management improvements.
 The public fixed asset managers need to move away from error-prone
spreadsheets. Creating depreciation spreadsheets require a tremendous
expenditure of time, and they are prone to many problems, including: Errors in
formulae that go unnoticed and cause miscalculations;
 To ensure that the organizations are aware of the legal, regulatory and statutory
requirements that they are obliged to comply with and also ensure that the
organization has communicated these responsibilities to its relevant employees, a
regulation register and method of communication need to be developed.
 To improve the performance of the system, the gap shown in the analysis part
need to be filled up to the boarder line and the identified opportunities for
improvements need to be taken as a way for the attainment of fixed asset
management system effectiveness.
5.4. Future Research

Based on this research findings and conclusion, the proposed future research is
developing an appropriate fixed asset management system to ensure that asset
management policy and practices are consistent and successful in the public offices.
50
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Appendixes
Appendix I
ETHIOPIAN CIVIL SERVICE UNIVERSITY
INSTITUTE OF TAX & CUSTOMS ADMINISTRATION
PUBLIC PROCUREMENT AND ASSET MANAGEMENT DEPARTMENT
Questionnaire to be filled by federal public organization employees:
Dear participants,
This study is entitled Assessment of public fixed asset management system: Challenges
and practices. The investigator is Teklu Alemu who is currently a MA (Public
Procurement and Asset Management) student at Ethiopian Civil Service University. The
aim of this study is to assess the fixed asset management system practices and challenges
existing in Federal Public organizations. To supplement the data obtained from different
sources, the investigator seeks to gather relevant information from a sample of 5 Federal
government Organizations using self-administered questions. So you are kindly request
to give your honest opinion on each of questions. Please note that the researcher will keep
any individual information provided herein confidential and you don’t need to write your
name.
To the end, I would like to forward my deepest gratitude for your unreserved cooperation
in filling the questioner.
Part I: Background information of respondents.

Directions: Please put (✓) mark on your choice from the alternatives that are most
applicable answer to you in respect of each of the following items.
1. Sex: Male ࢚ Female ࢚

2. Age: 18- 25 ࢚ 26-35 ࢚ 36-45 ࢚ 46-55 ࢚Over 55 years࢚
3. Educational level: High school ࢚ Certificate࢚ Diploma Degree ࢚
Masters and above࢚
Part II: Fixed Assets Management Systems in the Organization
This questionnaire is prepared based on the key components, principles and challenges of
public fixed asset management system. Please indicate how much you agree or disagree
with each of the following statements by putting (✓)mark on the corresponding number
that best represents your opinion below as 5=strongly agree, 4=Agree, 3=Neutral,
2=Disagree, 1=strongly disagree
Fixed Asset Management System components
A. Legal and Regulatory Requirements for Fixed Asset
5 4 3 2 1
Management
1. The policies, procedures and guidelines in the Organization
are documented.
2. Legal and regulatory requirements of the organization
covered Fixed asset acquisition, use, operation &
maintenance, disposal and valuation
3. Legal and regulatory requirements the organization covered
Fixed asset planning, e.g. asset need analysis & budgeting
4. All staff the organization are in charge performs their
responsibilities as per the regulations and guidelines
covered Centralized record management system of fixed
assets
covered Capitalization policies including thresholds
covered Anti-corruption
covered Responsibilities of fixed asset managers
covered Fixed asset performance evaluation
B. Building a fixed asset management information system:
1. Fixed asset category contained in your information system
2. Age of Fixed asset contained in your information system
3. Acquisition cost & Estimated current value of Fixed asset
contained in your information system
4. Current status of Fixed asset contained in your information
system
5. Legal ownership of Fixed asset contained in your
information system
6. Original and Remaining useful life of Fixed asset contained
in your information system
7. Transactions are promptly recorded and classified to provide
reliable information.
C. Organization Structure:
1. management responsibility is not clear
2. There is centralized record management system of fixed
assets
D. Human Capital Strategies:
1. Position descriptions are based on overall property
management goals & objectives
2. Employee talent development connected with long-term
goals of asset management
3. There is Planning for innovative work practices
4. Employees are involving in goal setting and planning
5. Team development engaging all stakeholders
6. There is programs to increase employee performance
7. There is programs to meet new work requirements
8. There is programs to satisfy long-term need for qualified
employees
9. There is programs to meet customer satisfaction
E. Monitoring Integrity, and Transparency of fixed asset management:
1. There is monitoring of compliance of laws and regulations
2. There is monitoring of effectiveness of Policies & processes
3. There is Contract Monitoring(cost, schedule, performance,
quality)
4. There ineffective internal and external control, audit&
oversight system
5. There is efficient appeals mechanism
6. Publication & distribution of information through available
media
7. Professional code of ethics
8. There is Anti-corruption measures based on legal &
regulatory guidelines
F. Capacity Building of Fixed Asset Management involves:
1. Risk management
2. Emergency management
3. Partnership with private business
4. Organization improvement
5. Encouraging high efficiency and effectiveness
Fixed asset management principles
A)Maximize Taxpayers Money: 5 4 3 2 1
1. Fixed asset managers in the organization are aware of the
scarceness of funds and strive to maximize the use of all
assets
B) Make surplus assets the first source of supply:
1. Fixed asset managers are promoting the usage of surplus
assets
2. Policies and procedures established for purchasing
department and other agency departments requiring that
surplus assets be reviewed and used prior to purchasing new
assets.
C) Maximize the reuse of fixed assets:
1. A sound policy is established to reuse of fixed assets
2. Performance measurements are established and performance
reports developed measuring the number of assets reused
within the organization.
3. Departments reusing fixed assets are encouraged for their
performance thus assuring future performance.
D) Manage the fixed asset program effectively and efficiently:
1. Responsibility and accountability for both ownership and
control of assets been determined and communicated
E) Trained fixed asset managers provide superior services:
1. The fixed asset manager is adequately trained to meet fixed
asset management challenges
Fixed Asset Management challenges
A. Administration related Fixed asset management system challenges:
1. Maintenance is challenging the fixed asset management of
the organization
2. Poorly Developed Processes and Audit Trails are
challenging the fixed asset management of the organization
3. Management responsibility is not clear
4. Management priority is displaced.
B. Management function related Fixed asset management system challenges:
5. Current rules and regulations on financial management
have deficiencies.
6. Management performance evaluation system has not been
established.
7. Attitude of government towards public assets
8. The complexity of public organizations objectives
C. Technology related Fixed asset management system challenges:
9. Heavy Reliance on Manual Controls and Spreadsheets
10. The non-availability of data required for managing public
property
D. Personnel related Fixed asset management system challenges:
11. Human resources constraints
12. Development of young asset Management professionals
Dear respondent, using the following space you can put your general idea about the
Fixed Asset Management System or information you regard as necessary._____________
________________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________
.
Interview Guide Questions

1) How does the legal and regulatory framework affect organizational structure, life-
cycle management, human capital strategies, information and technology resources,
and monitoring and transparency?
2) What forms of fixed asset management organization are applied to serve different
property needs of the organization?
3) What public asset management measures are used to build up the capability of fixed
asset management?
4) To what extent does the public fixed asset management depend on the processes of
asset management principles?
5) Is life-cycle costing combined with property asset ownership in the practice of fixed
asset management?
6) To what extent does human capital planning contribute to the achievement of goals
and objectives of fixed asset management?
7) Does employee development training improve employees ‘subsequent performance
in fixed asset management? If yes, what effect does employee development training
have on employees ‘performance?
8) Is the fixed asset information system regularly updated?
9) Does the fixed asset management information system affect acquisition, disposition,
financial input, and financial reporting of fixed assets?
10) What major criteria are used to evaluate performance of fixed assets management?
11) Does monitoring or oversight produce any effect on performance of public fixed
asset management?
12) Do measures for maintaining integrity and transparency contribute to effective fixed
asset management?
13) What is your idea about the effectiveness of the fixed asset management system and
where is/are areas you suggest that needs an improvement?
Appendix I: Relative Importance Index of factors facilitating inefficiency of
fixed asset management system.
Strongly Agree
Strongly Disagree
(W/A*N)
Disagree
Neutral
Agree
A*N
RII
W
Factors
A. Legal and Regulatory requirement related factors 0.650
The policies, procedures and guidelines in the Organization are
documented. 4 5 11 19 4 115 215 0.535
Legal and regulatory requirements of the organization covered Fixed
asset acquisition, use, operation & maintenance, disposal and 9 15 0 17 2 141 215 0.656
valuation
Legal and regulatory requirements the organization covered Fixed
asset planning, e.g. asset need analysis & budgeting 8 25 2 4 4 158 215 0.735
All staff the organization are in charge performs their responsibilities
as per the regulations and guidelines 4 14 17 4 4 139 215 0.647
Legal and regulatory requirements of the organization covered
Centralized record management system of fixed assets 4 2 4 30 3 103 215 0.479
Capitalization policies including thresholds 0 16 4 23 0 122 215 0.567
Legal and regulatory requirements of the organization covered Anti-
corruption 4 23 12 4 0 156 215 0.726
Responsibilities of fixed asset managers 4 29 4 2 4 156 215 0.726
Legal and regulatory requirements of the organization covered Fixed
asset performance evaluation 12 23 0 8 0 168 215 0.781
B. Fixed Asset Management Information system related factors 0.700
Fixed asset category contained in your information system 13 6 0 22 2 135 215 0.628
Age of Fixed asset contained in your information system 25 10 2 4 2 181 215 0.842
Acquisition cost & Estimated current value of Fixed asset contained
in your information system 20 15 2 4 2 176 215 0.819
Current status of Fixed asset contained in your information system 19 8 2 10 4 157 215 0.730
Legal ownership of Fixed asset contained in your information system 4 6 0 21 12 98 215 0.456
Original and Remaining useful life of Fixed asset contained in your
information system 10 23 2 6 2 162 215 0.753
Transactions are promptly recorded and classified to provide reliable
information. 0 29 4 6 4 144 215 0.670
Organization structure related factors 0.458
management responsibility is not clear 2 4 5 22 10 95 215 0.442
There is centralized record management system of fixed assets 4 0 4 35 0 102 215 0.474
Human resource related factors 0.756
Position descriptions are based on overall property management goals
& objectives 4 33 2 4 0 166 215 0.772
Employee talent development connected with long-term goals of
asset management 16 21 2 0 4 174 215 0.809
There is Planning for innovative work practices 11 22 4 4 2 165 215 0.767
Employees are involving in goal setting and planning 10 23 2 6 2 162 215 0.753
Team development engaging all stakeholders 10 13 14 6 0 156 215 0.726
Appendix II Continued ……
Strongly Agree
Strongly Disagree
(W/A*N)
Disagree
Neutral
Agree
A*N
RII
W
Factors
There is programs to increase employee performance 5 21 9 8 0 215 0.707 152
There is programs to meet new work requirements 5 26 6 6 0 215 0.740 159
There is programs to satisfy long-term need for qualified employees 11 20 10 2 0 215 0.786 169
There is programs to meet customer satisfaction 5 25 9 4 0 215 0.744 160
Monitoring Integrity and Transparency 0.598
There is monitoring of compliance of laws and regulations 4 31 2 6 0 162 215 0.753
There is monitoring of effectiveness of Policies & processes 6 27 2 8 0 160 215 0.744
There is Contract Monitoring(cost, schedule, performance, quality) 0 10 22 11 0 128 215 0.595
There is effective internal and external control, audit& oversight
system 11 19 5 6 2 160 215 0.744
There is efficient appeals mechanism 4 29 2 8 0 158 215 0.735
Publication & distribution of information through available media 0 15 10 18 0 126 215 0.586
Professional code of ethics 0 24 13 6 0 147 215 0.684
There are Anti-corruption measures based on legal & regulatory
guidelines 0 28 4 11 0 146 215 0.679
Factors related to Capacity Building of Fixed Asset Management 0.761
Risk management 5 28 6 4 0 163 215 0.758
Emergency management 6 25 10 2 0 164 215 0.763
Partnership with private business 13 18 8 2 2 167 215 0.777
Organization improvement 0 37 2 0 2 156 205 0.761
Encouraging high efficiency and effectiveness 0 37 2 2 2 160 215 0.744

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ETHIOPIAN CIVIL SERVICE UNIVERSITY

Institute of Tax and Customs Administration

A Thesis Submitted to the Department of Public Procurement and Asset Management,

Teklu Alemu ………………….. ……………..

Dr. Amar S. Kanwar ………………….. ……………..

Dr. Amar S. Kanwar ………………….. ……………..

Amar S. KANWAR (PhD) ………………….. ……………..

Dr. K. Verma ………………….. ……………..

Mata Maldaye ………………….. ……………..

Table 4.1. Gender of Respondents .................................................................................... 28

Figure 4 1: Educational Background of Respondents. ..................................................... 29

EFG: Ethiopian Federal Government

GAO: Government Accountability Office

PO: Purchase Order

RII: Relative Importance Index

SPSS: Statistical Package for the Social Science

USD: United States Dollar

Asset management, to be more specific, fixed asset management, is a very meaningful

To apply a public asset management system, the public organizations confronted by a

1.1. Background to the Study

Governments are confronted by a number of challenges to apply a public asset

1.2. Statements of the Problem

1.3. Research Questions

1.4. Objectives of the Study

1.4.2. Specific Objectives

1.6. Scope of the Study

1.7. Limitations of the Study

1.8. Description of the Study Area

1.9. Operational Definition of Terms

2.2. Fixed Asset Definition

2.3. Public Fixed Assets Management

2.3.1. Classification of Fixed Assets

2.3.2. Recording Fixed Assets

2.3.3. Controlling Fixed Assets

2.4. Public Asset Management system

Developing an appropriate system is an essential issue for effective and efficient

Public asset management is a systematic combination of a variety of components. These

Fernholz (2007), identified seven components and established an asset management

2.5.2. Fixed asset Management Information System

According to (Redbeam, 2016), Asset management information Systems provide the

a. Corporate governance requirements

b. Inaccurate depreciation calculations

c. Lack of an audit trail and overall security

2.5.3. Fixed Asset Management Organization Structure

2.5.4. Human Capital Strategies

public asset management intends to maximize the value to a property or portfolio of

2.5.5. Legal and regulatory requirements of fixed asset management

2.5.6. Monitoring, integrity, and transparency in fixed asset management.

2.6. Fixed Asset Management Principles

2.7. Empirical Review

According to (Hanis, et al, 2011), Governments are confronted by a number of challenges

Another study examining asset-management tools for municipal infrastructure planning

However, (Gondo, 2010) considered integration with existing systems such as

Therefore, the lack of a strategic approach to property management led to inefficient

The fourth key factor is accountability mechanisms and performance measurement.

3.2. Research Design

3.3. Sources of Data

3.3.1. Primary Data Sources

3.4. Population of the Study

3.5. Sampling Technique

3.6. Sample Size

Regarding to the number of respondents, a total of 48 employees were working in