TO ASSESS FIXED ASSET MANAGEMENT IN CASE OF DILLA

UNIVERSITY REFERRAL HOSPITAL

BY: SEBAK ASHENAFI

ID NO: 85325/14

A THESIS SUBMITTED TO THE DEPARTMENT OF BUSINESS

MANAGEMENT OF INFO LINK UNIVERSITY COLLAGE FOR THE
PARTIAL FULFILLMENT OF MASTERS OF BUSINESS
ADMINISTRATION

ADVISER: Dr. TILAHUN NEGATU

June, 2023

Hawassa, Ethiopia
 DECLARATION

I hereby declare that the work which is being presented in this thesis entitled to assess of fixed
asset management in case of Dilla university referral hospital is original work of my own,
has not been presented for a degree of any other university and that all sources of material used
for the thesis have been duly acknowledged.
Name: SEBAK ASHENAFI

Signature:

Date:

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 ADVISOR’S APPROVAL SHEET
This is to certify that the thesis prepared by Sebak Ashenafi entitled “to assess of fixed asset
management in case of Dilla university referral hospital”, a thesis submitted to info link
university collage Dilla campus College of business management in partial fulfillment of the
requirements for the Degree of Master of Business Administration, complies with the regulation
of the university college and meets the accepted standards with respect to originality and quality.
Advisor: Dr. TILAHUN. NEGATU
Signiture:
Date:

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 EXAMINERS’ APPROVAL SHEET

We, the undersigned, members of the Board of Examiners of the final open defense by Place for
Your Name have read and evaluated this thesis “to assess of fixed asset management in case of
Dilla university referral hospital” and examined the candidate. This is, therefore, to certify that
the thesis has been accepted in partial fulfillment of the requirements for the degree of Masters of
Business Administration.
_________________ ________________ _________________

Name of the Chairperson Signature Date

_________________ ________________ _________________

Name of Principal Advisor Signature Date

_________________ _______________ _____________

Name of Internal Examiner Signature Date

_________________ ________________ _________________

Name of External examiner Signature Date

______________________ __________________ _________________

SGS Approval Signature Date

Final approval and acceptance of the proposal is contingent upon the submission of the final
copy of the thesis to the School of Graduate Studies (SGS) through the School Graduate
Committee (DGC/SGC) of the candidate’s department.

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 Acknowledgements
First of all genuine thanks goes to the almighty of God for let me to stay in life to this day and
empowers them to wide-ranging academic life. We also would like to express deepest
appreciation to the main advisor Dr. Tilahun. Ngatu for his respected effort for the process of the
thesis and for his practical and harmonious comments which have given the benchmark for his
stance with them.

I am greatly thanks for the family special they had been assisted the schooling life and to give
advice how can we goes with my planning activity to finish the academic schooling in this
college.
Finally we would like to acknowledge all individual and institutions that have facilitated them
materially and honourably during the preparation of this thesis.

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 Table of Contents
DECLARATION..............................................................................................................................i

ADVISOR’S APPROVAL SHEET................................................................................................ii

EXAMINERS’ APPROVAL SHEET............................................................................................iii

Acknowledgements........................................................................................................................iv

List of table.....................................................................................................................................ix

List of Figure...................................................................................................................................x

Abstract...........................................................................................................................................xi

CHAPTER ONE..............................................................................................................................1

1. INTRODUCTION....................................................................................................................1

1.1 Background of the study.......................................................................................................1

1.2 Statement of the problem......................................................................................................3

1.3 Research Questions...............................................................................................................5

1.4 Objective of the study...........................................................................................................5

1.4.1 General Objective of the study..........................................................................................5

1.4.2 Specific Objective.............................................................................................................5

1.5 Significance of the Study......................................................................................................5

1.6 Scope of the Study................................................................................................................6

1.7 Limitation of the study..........................................................................................................6

1.8 Organization of the Paper.....................................................................................................6

CHAPTER TWO.............................................................................................................................7

2 REVIEW OF RELATED LITERATURE...............................................................................7

2.1 Overview of Fixed Asset Management................................................................................7

2.2 Principles of Fixed Asset Management................................................................................7

2.3 Components of an Asset Management System....................................................................8

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2.4 Public Fixed Asset Management..........................................................................................9

2.5 Fixed Assets Management Cycle........................................................................................10

2.5.1 Fixed assets planning......................................................................................................10

2.5.2 Acquisition......................................................................................................................11

2.5.3 Repair and maintain the assets........................................................................................12

2.5.4 Fixed asset disposal.........................................................................................................13

2.5.6 Fixed asset management monitoring and evaluation......................................................14

2.5.7 Fixed asset management process integrating with technology.......................................14

2.6 Challenges of Fixed Asset Management............................................................................15

2.7 Empirical Literature Review...............................................................................................18

CHAPTER THREE.......................................................................................................................22

3 RESEARCH METHODOLOGY...........................................................................................22

3.1 Introduction.........................................................................................................................22

3.4 Research Approach.............................................................................................................23

3.5 Source of Data....................................................................................................................23

3.6 Data Collection Techniques................................................................................................24

3.7 Target population................................................................................................................24

3.8 Sample size and Sampling technique.................................................................................24

3.9 Method of Data analysis.....................................................................................................25

3.10 Descriptive Statistical Analysis..........................................................................................25

3.11 Validity and Reliability Test...............................................................................................25

3.11.1 Validity Test....................................................................................................................25

3.11.2 Reliability Test................................................................................................................25

Awareness and understanding of respondents on fixed asset acquisition and management rules
and regulations...............................................................................................................................26

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Enforcement of rule, regulations and directives of fixed asset acquisition and management.......26

process of handling and follow up of fixed asset..........................................................................26

Staff professional competency and accountability system in fixed asset acquisition and
management...................................................................................................................................26

Employee Understanding and Knowledge on Fixed Asset Management....................................26

Disposal Asset Management..........................................................................................................26

The practice of planning process in fixed asset acquisition and management..............................26

3.12 Ethical Consideration..........................................................................................................26

CHAPTER FOUR.........................................................................................................................28

4 RESULTS AND DISCUSSIONS..........................................................................................28

4.1 Introduction.........................................................................................................................28

4.2 Demographic Characteristics of Respondent......................................................................28

4.2.1 Genders of the Respondents............................................................................................28

4.2.2 Age of the Respondents..................................................................................................29

4.2.3 professional qualification of the Respondents................................................................29

4.2.4 working Experience of the Respondents.........................................................................30

4.2.5 Job category....................................................................................................................30

4.3.1 Awareness and understanding of respondents on fixed asset acquisition and

management rules and regulations.................................................................................................32

4.3.2 Enforcement of rule, regulations and directives of fixed asset acquisition and
management...................................................................................................................................33

4.3.3 The process of handling and follow up of Dilla university referral hospital fixed asset 35

4.3.4 Staff professional competency and accountability system in fixed asset acquisition and
management...................................................................................................................................36

4.3.5 Employee Understanding and Knowledge on Fixed Asset Management......................38

4.3.6 Disposal Asset Management...........................................................................................39

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4.3.7 The practice of planning process in fixed asset acquisition and management................40

CHAPTER FIVE...........................................................................................................................42

5 CONCLUSION AND RECOMMENDATION.....................................................................42

5.1 Conclusion..........................................................................................................................42

5.2 Recommendations...............................................................................................................44

Reference.......................................................................................................................................46

Annexes 1 Questionnaire...............................................................................................................48

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 List of table

Table 3.1 Reliability Statistics.......................................................................................................26

Table 4.1 Genders of the Respondents..........................................................................................28
Table 4.2 Job category of the Respondents...................................................................................31
Table 4.3:-Awareness and understanding of respondents on fixed asset acquisition and
management rules and regulations.................................................................................................32
Table 4.4:-Enforcement of rule, regulations and directives of fixed asset acquisition and...........33
Table 4.5:-The process of handling and follow up of Dilla university referral hospital fixed asset
.......................................................................................................................................................35
Table 4.6:-Respondent’s response on staff professional competency...........................................36
Table 4.7: Descriptive of Employee Understanding and Knowledge on Fixed Asset Management
.......................................................................................................................................................38
Table 4.8: Description of Disposal Asset Management................................................................39
Table 4.9:-Respondents response on practice of planning process in fixed asset acquisition and 40

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 List of Figure
Figure 4.1 Age of the Respondents................................................................................................29
Figure 4.2 professional qualification of the Respondents.............................................................29
Figure 4.3 working Experience of the Respondents......................................................................30

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 Abstract
The purpose of this research was to assess of fixed asset management in case of Dilla university
referral hospital. The study employed descriptive survey design and used both qualitative and
quantitative data. The study used 126 sample which drawn from 126 total population using
census sampling method. Data were collected through questionnaire from 126 employees the
collected data were systematically arranged, organized and analyzed using SPSS to generate
descriptive statistics results presented in tables, frequency and percentage then thematically
interpreted. The study revealed that lack of understanding and enforcing rules, regulations and
directive, established system to enhancing understanding, handling and disposing fixed asset
according to rules, regulations and directive, specifying fixed asset and lack of positioning
sufficient and experienced professionals. The researcher recommended enhancing
understanding of heads of the university as well as employees by establishing systems,
maintaining accountability system in fixed asset management, fully applying of rules,
regulations and directive, establishment of modern property handling method and using
professionals.
Key words: fixed asset management, Dilla university referral hospital

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 CHAPTER ONE
1. INTRODUCTION
1.1 Background of the study

Fixed assets are the focus of public asset management. Generally, asset management bears
responsibility for every aspect of fixed assets, from planning and acquisition to disposition the
property (Yoatai Lu, 2011). However, in accordance with Generally Accepted Accounting
practice in Ireland (GAAP) and specifically FRS15 tangible fixed assets, tangible fixed assets are
defined as an asset that have physical substance and are held for use in the production or supply
of goods or services, for rental to others, or for administrative purposes on a continuing basis in
the reporting entity’s activities. This means that a fixed asset is an asset intended for continuing
use, rather than a short term temporary assets such as stocks (UCC, 2012).

Since fixed assets playing dominant role in total business the firms has realized the effective
utilization of fixed assets (Nagaraju, 2018). Therefore, many companies provide better service
and to be more efficient, organizations are always acquiring more fixed assets. Every company
and/or organization in today's economy 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 (Baez,
2004). Baez stated some example of firms that apply asset management like: United States, as in
the Dominican Republic, universities such as Pontificia Universidad Catolica Madre Maestra
(PUCMM) are required to report depreciation on fixed assets, and for that reason, these
institutions have tried to manage this type of property in the best possible manner (Ibid).

According to Nagaraju. (2018) noted that fixed asset management can lead to a substantial tax
savings in depreciation deductions; poor fixed asset practices can threaten the accuracy of
financial reports, causing re-reporting and negatively impacting the bottom line. Establishing the
highest standards of depreciation accuracy and best practices in fixed asset management will pay
off in savings and efficiency (Ibid).

The existing of fixed assets management help to the manager could make the immediate decision
to repair the management process (Atiko, Febrian & Hendrawan, 2017). Similarly, Baez (2004)
stated that having control over their fixed and controlled assets, an institution can increase

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efficiency and reduce costs associated with the mismanagement of fixed assets (excess, lost,
theft, misuse of assets, etc.).

Fixed assets are items of property that are tangible in nature; have significant value; have an
economic useful life longer than one year; maintain their identities, either as separate entities or
as identifiable components; are not repair parts or supply items; and are used in conduct of city
activities (City of Houston Texas , 2005).

Ethiopian federal democratic republic government procurement and property administration

proclamation number 649 / 2009 define a fixed assets as, tangible asset costing birr 1000 or more
than is on operational use and that has a useful economic life or more than one year. Such as
furniture , computers, heavy equipment, vehicles, ships and air craft, building roads, sewers,
bridges, irrigations systems and dam. Like private business, a government should maximize the
value of fixed assets when providing property services (Gold Hagen, 2007) cited in Yoatoi Lu
(2011).

However, traditional public asset management is still far from meeting these requirements
(Kapanava McKellar & Peterson, 2006) cited in Yaotai Lu (2011).Tag was provided by the
Finance office once the asset has been appropriately set up and recorded in the fixed asset
register (UCC, 2012). Fixed asset are highly exposed to a mischief, fraud and theft because they
have high market values so high controlling mechanisms are needed to safeguard them by
preparing well designed manuals, polices, and procedures (Kikron et al, 2014). So, the researcher
was initiated to an assessment of fixed asset management in case of Dilla university referral
hospital to answer that the sectors was acquired and managed their fixed assets based on planned,
economical and modern utilizations.

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 1.2 Statement of the problem

Fixed Assets plays very important role in relating company’s objectives. These fixed assets are
not convertible or not liquid gifted over a period of time the total owner funds and long term
liabilities are invested in fixed assets (Atiko et al., 2017). Similarly, Nagaraju (2018) noted that
since fixed assets playing dominant role in total business the firms has realized the effective
utilization of fixed assets.

Therefore, fixed asset management is very important to understand the analyzing and properly
utilized Fixed Assets effects long term sustainability of the firms which may affect liquidity and
solvency and profitability positions of the company (Vanini, 2020).

Similarly, fixed asset plays an important role in the organization’s objectives; these fixed assets
are not convertible over a period of time. If fixed assets are idle and not utilized properly it
affects the long term sustainability of the service delivery to customers (Baez, 2004).

According to Faussett, (2013) described that improper authorization of fixed assets, improper
installation and disposal of fixed assets and low physical control of fixed assets may also result
in business failure and hence it may hinder the organization’s long run success. The ineffective
utilization of fixed assets further contributes to the above stated material problems of capital
assets.

A portion of fixed asset reduced by use is converted into cash though charging depreciation. For
correct measurement of income proper measurement of depreciation is essential, as depreciation
constitutes a part of the total cost of production. Trend analysis and Ratio analysis are the
techniques used in analysis of Fixed Assets Management (Brady, 2001).

According to MOFED (2007) government fixed asset management manual provides transitory
procedure to attach the value of fixed asset in the accounts of public bodies .this requires much
effort to be done on the valuation of fixed assets. Valuation of new assets is not a problem but
valuation of assets that are in the use is not a simple task. One of the reasons for this is the need
for expert knowledge to attach values to fixed assets. MOFED (2007), also state that the creation
of professional team is very important if the process of attaching value for fixed assets and hence
incorporation of the value of fixed assets in the financial ledger card is to be successful. This
creates fertile ground for the future introductions of Accrual basis of Accounting.

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According to MOFEC (2010) findings from the observation and interview of selected public
bodies’ stock management practice; there were no uniformity in the stock management activities,
failure to comply with the existing property Administration directives and EFG accounting
system with regarding to valuation and reporting to stocks ,tendency to consider the stock
management activities as less important and relegated ,consequently paying little attentions and
personnel assignments to stock activities and huge amount of stock unused for many years in
some public bodies that a wait action for disposal.

Fixed asset management in public sectors is one of the most challenging areas in many countries
of the world. Businesses are cautious in managing their long-term assets properly and avoid
unnecessary holding of these assets. Moreover, they record, depreciate, and dispose of the assets
properly. However, this is not practical in public sectors. The problem is manifold in Ethiopia.
Excessive holding, failing to value, depreciate, and dispose of the assets are the main challenges,
and due to these challenges the loss resulting from mismanagement of the assets is substantial.
Thus, it is advisable to invest properly in fixed assets and design appropriate management system
which will help the government in reducing investment costs in long-term assets and ensuring
proper utilization of public properties (Tadewos, 2012).

In addition to the above-mentioned scholastic studies outside Ethiopia, few researchers in the
jurisdiction also conducted their studies on the practice of fixed asset management in different
public sectors. For example, Mebrahtom (2014) and Tadewos (2009) proved that the strategic
and operational goals of the public organizations in Ethiopia are highly missed due to the basic
problems of backward usage of documenting, weak usage of technology, and unskilled
manpower. Most importantly, the latter author founds that due to improper implementation of
depreciation and cost of assets the federal public organizations in Ethiopia lose a huge amount of
financial resources.

In line with the above stated problems Dilla university referral hospital is facing similar
problems regarding fixed asset management. The main problems observed by the researcher in
the university regarding fixed asset management are difficulty to plan, managing fixed assets
according to rules and regulations, staffing fixed asset with sufficient professionals and
generally, giving full attention to fixed asset management.

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Despite of the fact that different scholar conduct a research on the study area, this study was tried
to fill the gap of the study area by providing insight on geographical, conceptual, and variable
difference from the former research. Geographically this study was conducted in Dilla university
referral hospital, conceptually, this study was revolved only on assessment of fixed asset
management in the study area, and in addition to that these studies seek to use additional
variables. Therefore, this proposed study was tried to assess of fixed asset management in case of
Dilla university referral hospital.

1.3 Research Questions

To address the problem related with fixed asset management, it is important to pose the
following questions and study was tried to answers these basic questions

 What are the practices of fixed asset management process?

 What is the practice of planning, implementation process in fixed asset management?
 What is the practices of fixed assets recorded in Dilla university referral hospital?
1.4 Objective of the study
1.4.1 General Objective of the study

The general objective of the study was to assess of fixed asset management in case of Dilla
university referral hospital.
1.4.2 Specific Objective

The study has the following specific objectives.

 To evaluate the practice of fixed asset management.

 To evaluate the practice of planning, implementation process in fixed asset management.
 To assess the practices of fixed assets recorded in Dilla university referral hospital.
1.5 Significance of the Study

The primary significance of this study was to provide better insight into the fixed asset
management system that help to improve practices of the fixed asset management system of the
study area. It can be used as input for the different most concerned departments of fixed asset
management: finance, property administration, procurement, and internal audit departments to
effectively manage fixed assets. It also provides options on how to control fixed asset problems

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effectively to provide desired services and quality service provisions are properly, efficiently,
and effectively managed. It is also used as a reference for other researchers who was conducted
similar research and enhance the knowledge of the researcher too.

1.6 Scope of the Study

The study scope with geographically, methodologically, and conceptually. Conceptually the
study was focused on assessment of fixed asset management. In addition, the study was focused
only on to evaluate the practice of fixed asset management planning, and implementation process
Dilla university referral hospital. Other elements are not cover fixed asset life cycles, like;
maintenance, depreciation, and accounting systems. Geographically the study was conducted on
only Dilla university referral hospital.

1.7 Limitation of the study

Even though large sample size is essential for in-depth understanding on assessment of fixed
asset management in case of Dilla university referral hospital, this study was limit to a sample
size of 126. Even though different efforts have been made, the researcher faced some challenges
while doing this study and the study was face limitations such as internal control over fixed
assets, research was restricted by limited time period allotted for research, the collected data may
not provide exact fixed asset status and position. It may be varying from time to time and
situation to situation and the study is pointed only in a single governmental organization
1.8 Organization of the Paper
This research paper was organized in five chapters. Chapter one was deal with the introductory
part which includes background of the study, statement of the problem, research questions,
objectives of the study, significance of the study, scope of the study, limitation of the study and
organization of the paper. Chapter two was presented review of related literature including
theoretical, empirical literature and conceptual framework. Chapter three was described the
research methodology of the study; it consists research design, research approach, source of data,
data collection techniques, target population, sampling techniques and sample size, data analysis
and interpretation, reliability and validity test, ethical consideration and finally description of the
study area. Chapter four was presents the data analysis, interpretation and presentation. Chapter
five was offered major findings, conclusion and recommendations. Finally, references and
appendices was attached.

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 CHAPTER TWO
2 REVIEW OF RELATED LITERATURE
2.1 Overview of Fixed Asset Management
Broadly speaking, an asset is anything that provides a future economic benefit for every type of
service provider organization. Most importantly, the attention is on long-lasted tangible assets
that can be expressed as fixed assets or property, plant, and equipment in general.
Commonly, assets can be categorized into two classifications: tangible and intangible. The assets
that we can touch, hold or feel are typically called tangible assets. Fixed assets in accounting
principles, tangible fixed assets have the physical characteristics that a business utilizes in the
whole process of producing goods and services. They incorporate the production facilities,
buildings, equipment, vehicles, and other types of fixed assets. These operational assets of an
organization contain; furniture, computers, and similar items not used up within a single fiscal
year. On the other side, intangible assets are financing items: stocks, bonds, and mortgages
(Raymond, 2002).
2.2 Principles of Fixed Asset Management
Indiana Department of Correction Manual of Policies and Procedures (Number 04-01101, 2013),
clearly states that the department’s philosophy on fixed asset management shall be guided by the
following three (3) basic principles:
 Control: Controlling means monitoring and attending to the determinant factors that can
cause the physical damage as well as uneconomical utilization of fixed assets. Good asset
management is based on a system of checks and balances that maintain internal control.
This system can be more functional when the following element principles are
undertaken and properly implemented: Segregation of duties: No one individual shall
have absolute authority or control over these processes except his or her assigned jobs.
Fiscal audit - Internal control procedures are verified and checked by the fiscal auditors to
ensure that the principles and requirements of the fixed asset management policies, rules,
and laws are achieved accordingly.
 Accountability: It is about the responsibilities of each individual from the facility and
the central office involved in the fixed asset management process shall be clear and must
integrate the principles in fixed asset management.

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  Reporting and Evaluation: Results from physical counts shall be documented based on
agencies' standards, policies, and administrative procedures. Perpetual count records shall
be maintained at the facility and these count records and validations shall be maintained
and updated in PeopleSoft Asset Management. Results from the reporting system shall be
reviewed with facility personnel and any deviation from established objectives must be
corrected. Any major discrepancies reported or findings by the fiscal auditors during their
financial audit shall be reported to the chief financial officer for review. All facilities
shall use the standard fixed asset report.
2.3 Components of an Asset Management System
An asset management system undertakes several procedures, enhancing different components,
tools, and activities which are interdependent and interrelated. Asset management systems enable
decision-makers with tools for evaluating the possible effects of alternative decisions.
These tools develop decision-support information from quantitative data regarding the agency’s
resources, the current condition of physical assets, and estimations of their current situation
(Krugler et al, 2007). Important criteria of a good property management process, especially of
fixed and controlled assets, includes:-Determination of Fixed assets needs, Identifying
documents, implementation policies, procedures& controls needed, Procurement, Receiving,
inspection, inventory, storage & distribution of assets, disposition of damaged, obsolete or
unneeded fixed assets, recording, reporting of fixed asset transactions, Monitor and evaluate the
fixed asset management process (Baez, 2004). According to the Federal Highway Administration
(FHWA), to effectively support the asset management process, an asset management system
should include (FHWA 1999); in Krugler et al (2007).
 Goals, Objectives, and Policies: Asset management is a goal-driven management
process, and to manage assets effectively, the decision-making process must be
associated with the agency’s goals, objectives, and policies.
 Data Inventory: it is one component of an asset management system in which
information about the physical location, characteristics, usage, work history, work
planned, costs, resources, and any other information concerning the agency’s assets is
found in the data inventory.

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  Condition Assessment: it is more about the knowledge of the current condition of fixed
assets that are needed to assess the asset network's current picture and it is expressed in
terms of performance measures selected by the organization.
 Performance Modeling: Performance models are used to predict future scenarios for the
asset network and project the asset network condition over the planning horizon used to
identify future funding needs.
 Performance monitoring: Monitoring the asset performance over the planning horizon
enables to examine whether the desired level of service is being accomplished or not.
 Feedback: Feedback is a crucial component of the asset management system used for
maximizing the agency’s benefits from an asset management system through the means
of lessons learned from monitoring the ongoing.
2.4 Public Fixed Asset Management

According to (William et al, 2001), Public Fixed assets are non-consumable goods, tangible, and
have a useful life longer than one year. Fixed assets are many things to the many public sector
entities and are, in all probability, variously defined. It can be any item costing over a certain
useful life. A public sector organization’s assets represent a substantial financial investment. The
costs of acquiring, maintaining, insuring, and replacing these assets have a considerable impact
on the operations of the entity. Fixed assets are not always found in one place and are more
commonly thought of as movable assets, property, or equipment. As movable assets, they get
transferred from place to place creating a management challenge.

Assets also tend to be used up or expended over time and their value declines to the point where
they are no longer thought of as assets and can be thought of as an albatross or burden on the
organization. At the end of their useful life, most assets are apt to have some scrap or salvage
value depending on the asset. Example of fixed assets includes computers, furniture, printers,
vehicles, boats, motors, etc.

As mentioned by Lu (2011), public asset management activities are a meaningful part of public
sector functions and the management of public fixed assets owned, controlled, and used by the
state. Owing to their special nature, such as long life, high costs, depreciation, and life-cycle
management, generally, asset management bears responsibility for every aspect of fixed assets,

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from planning and acquisition to disposition of the property. Government should apply efforts to
effectively and efficiently manage its fixed assets for public service delivery.

2.5 Fixed Assets Management Cycle

2.5.1 Fixed assets planning

Planning is the first steps of the cycle before any purchase. It is the overall framework of
decision making within the organization. It is needed for fixed asset to acquire, replacement, and
disposal. In fixed asset, planning for replacement should be very important; it should be planned
at the time of acquisition and updated throughout the asset life. Strategic planning leads the
decision-making process for all spending in successful businesses. Leading companies also use
their strategic planning process to evaluate (1) their clients' and stakeholders' demands, as well as
(2) the political and economic environment in which they operate.

The basic goals and objectives of an organization are defined by a strategy plan, whereas the
precise procedures, technologies, and types of resources, including capital, required to fulfill the
performance goals are described in greater detail by an annual performance plan.

Leading companies their strategic planning process to align project outcomes, particularly capital
projects, to their overall goals.

The fixed asset requirements are planned separately but should align with strategic planning
because it affects the company’s goal and objectives. Fixed asset maintenance should also be
planned; it considers maintenance cost and all maintenance stages (Lepani, 2008).An asset
management plan is defined as: a document which sets out the Asset Strategy in order to help
determine which assets should be acquired, renewed, improved, maintained of disposed of, once
alternatives to investing in property assets have been explored’ (CIPFA, 2008; Scottish
Executive & COSLA, 2003 cited in Ngwira and Manase 2016).

According to Gopalakrishman &Sundaresan (2003), the quintessence of any manager’s job is

planning and control. The assets management plan assists with decisions over which assets to
renew, improve, maintain or dispose of by translating asset management planning into action.
This is done through the development of integrated plans for capital investment (acquisition
/development); asset maintenance; asset disposal; and workspace and accommodation plans
(Scottish Executive & COSLA, 2003; CIPFA, 2008; OGC, 2003cited in Ngwira and Manase

10
2016). The developed integrated plan is the end of outcomes of the asset management planning
process. The asset management plan is the blueprint for the asset management planning process.
The asset management plan aligns asset objectives with organizational objectives and ensures
overall efficient and effective use of assets in the medium/long term. It also provides: a platform
for structured and rigorous forward thinking; a basis for corporate and consultative strategy
development; an explicit description of the direction of the organization (or a particular aspect of
that organization, in this case, assets); a basis for future decision-making and gives a clear
statement for communicating the strategy to the organization (Ngwira and Manase, 2016).

2.5.2 Acquisition

The cycle continues with the acquisition stages through purchase, gift or other, of an asset. Since
the cost of fixed asset is huge, proper market assessment should be made to arrive on the right
quality and price. And it also supports the management for the decision for expansion and
constriction (Kimmel, et al., 1998). Fixed asset is recorded at cost in accordance with the cost
principle of accounting. Cost consists of all expenditure necessary to acquire the asset and make
it ready for its intended use. For example, the purchase price, freight cost paid by the purchaser,
and installation costs are all considered part of the cost of factory machinery. The determination
of which cost to include in plant asset account, and which cost not to include is very important. If
a cost is not included in plan asset account than it must be expensed immediately, such costs are
referred to as revenue expenditures. Capital expenditures, on the other hand, are costs that are not
expensed immediately and instead are recorded in a plant asset account. This distinction is
important because it has immediate implications for the income statement. When noncash assets
are used to pay, the cost is assessed by the cash paid in a cash transaction or by the cash
equivalent price paid when noncash assets are employed. The cash equivalent price is the more
clearly determinable of the fair market value of the asset given up or the fair market value of the
item acquired.

According to William and Merry (2011) the acquisition cost of fixed asset is measured by cash.
It should be measured by actual cost, if the actual cost is not known it could be valued by
estimated cost. The acquisition cost is not only the purchase price of the item, but it includes
freight and transportation charges, installation costs, site preparation expenditures, professional
fee, legal fee and the like. The cost of noncash assets is determined by the cash paid in a cash

11
transaction or the cash equivalent price paid when noncash assets are used to pay. are used to
pay. Current market values are not used after acquisition (Kimmel, et al., 1998).

Payment is made as per the terms of the purchase order. The payment includes the acquisition
cost, freight, and all other costs to put the asset. Once the materials are purchased it is received
by proper receiving documents identified by tagged and recorded within the fixed asset register.

There is a certain guideline for identification and tagging of fixed asset after the items are
acquired

 It's the department responsibilities to assign, record and give Fixed asset identification
number(tags) except vehicles
 All fixed asset and controlled items will be assigned an asset number up on receipt and
before the item is placed into service
 The department will give tag number to an asset in a conspicuous and convenient location

Tags will remain on the asset throughout the life of the asset. Damaged tags will be replaced as
needed. (Kimmel, et al, 1998).

2.5.3 Repair and maintain the assets

“Restoring to or maintain a state in which an item can perform an initially designated function,
and any actions targeted at this are maintenance activities,” according to the definition of
maintenance. Muyingo& Lind (2009). Maintenance is also regarded as an investment because
resources are expended now to do maintenance in order to save money or obtain greater benefits
in the future. to if the resources are not spent. However, despite this opinion maintenance is
generally separated from “true investment” because it is matter of restoring and old function or
keeping up an old function (Lind &Muyingo, 2009).

All acts taken to retain content in or restore it to a predefined condition' has also been
characterized as maintenance. It includes inspection, testing, servicing, and classification as to
service ability, repair, rebuilding, and reclamation’ (Collins English Dictionary, 2003). It
included the routine recurring work required to keep a facility (plan, building, structure, ground,
facility, utility system, or other real property) in such condition that it may be continually used,

12
at the capacity and efficiency for which it was constructed, and for the purpose for which it was
intended (Dictionary of Military and Associated Terms, US Department of Defense 2005).

It is required to initially create a maintenance program in order to achieve cost-effective

maintenance. Measurement is impossible without a clear explanation of requirements,
accomplishments, and feedback. Only after each stage has been completed can effectiveness be
measured by monitoring key performance indicators. Management and optimization are
impossible without measurement. The stages of the maintenance program are:

2.5.4 Fixed asset disposal

Disposal of stores is one of the most important functions of fixed asset management in any
organization (Osibanjo, 2007 cited in Kodua Mensah, 2014). This has become necessary as the
equipment and other items 19 tend to become surplus, obsolete, and unserviceable, over a period
of time due to its long usage. The disposal of this type of stores is needed to be done on periodic
basis (CSIR, 2007 cited in Kodua Mensah, 2014). Fixed assets to be disposed of still have value
for money in them and even when they undergo wear and tear and may still have financial value
for the institution in question. Furthermore, to get value for money in disposing of fixed assets
and equipment methods the disposal could generate huge sum of money if the following methods
resale, trade in, auction and disposal should be based on a fair market value for each surplus
item.

Disposal of assets is the withdrawal of assets from use upon the completion of its useful life
(Obaidullah 2006 cited in Kodua Mensah, 2014). Therefore, disposal as any event getting rids of
public assets through the law of the stat, in creation, variation, and transfer to the state agency in
need of the assets. Asset’s disposal or rationalization is an option when an asset is no longer
required or becomes uneconomical to maintain or rehabilitate. It provides the opportunity to
review the configurations, type and location of assets, and the service delivery processes relevant
to the activity. Similarly, an optimized decision-making tool is essential for arriving at an
optimal decision about assets rationalization (Newira and Manase, 2016).

Excessive sales forecasting and planning are a common source of surplus materials, as are
changes in the designs and specifications of fast-moving technological products. Excessive

13
forward buying, planned overbuying and overproduction represent another major source of
generation surpluses, as are inventories (Gopalakrishnan &Sundaresan, 2003).

2.5.6 Fixed asset management monitoring and evaluation

The organization should periodically evaluate the various fixed asset management process for
effectiveness and efficiency. This information should be used to enhance of modify current
processes. Managerial reports should identify trends for key performance measures. According
to Brady, “Fixed assets performance measurements are the collection of specific information
regarding the results of the fixed assets management function. It includes the measurement of the
job that is being accomplished and is considered the basis of managing by results” (Pg.114,
2001) continues describing that the benefits of performance measurements are strengthens
accountability, enhances of decision –making, improves customer service, enables businesses to
determine effective resource use and supports strategic planning and goal setting.

2.5.7 Fixed asset management process integrating with technology

Nowadays, many companies are managing their fixed assets using a database, which was not
regularly done in the past. The high costs, accountability and control of many fixed assets have
made the use of IT software extremely valuable in organizations. Implementing a sound fixed
asset administration program includes the combination of people, processes, and tools. Without
appropriate processes in place, the reliability of the data that the tools provide will be
questionable. Software tools facilitate a business ability to automate a process, while providing
valuable data about all its managed assets. World –Class Company’s nearly all-around turn to
innovation as implies of minimizing the workload and tying the settled record into the
general ledger. The burning issue in fixed asset management Fixed asset software has
overwhelmed the market in later a long time as companies proceed to explore for a total asset
administration arrangement, one viewpoint that has become increasingly important to
organizations is not only making sure the right asset is being used, but also ensuring that the
asset in question is fulfilling its intended use. Many companies look for software that will make
the organization more productive and efficient. Recent statistic show that companies lose billions

14
of dollars annually in theft. But those losses have been decreased as much as 75% among
companies actualizing asset management programs with the help of bar coding, which can give
companies with real-time information on the location, description, history, and status of every
fixed asset (Automatic, 1996).

Integration of a general ledger and asset management system can provide many benefits
according to Peterson (2002). These benefits can be reconciliation of the financial asset register
with the physical inventory, improved accuracy of information, elimination of duplicated
records, improved decision making, easier auditability and tighter control of capital investment.
Institutions should keep in mind that fixed asset management tools are not a panacea. They will
automate, but not replace, the processes that support a fixed assets management program.
Furthermore, data alone are not useful. According to Peterson (2002),”data must be organized so
as to provide information that is useful at the time needed”.

2.6 Challenges of Fixed Asset Management

The following points are the challenges that every type of organization either governmental or
nongovernmental will face during the proper management of fixed assets (GAO, 2007; Hasbi et
al., 2010; Lu, 2011).

The function of fixed assets is not adequately recognized in planning and budgeting- One typical
issue that hinders fixed asset management of organizations in achieving their goals and
objectives is that the function of fixed assets to help government agencies fulfill their missions
has not been adequately recognized in the processes of strategic planning and budgeting (Hasbi
et al, 2010); (Lu, 2011). In most cases, issues related to fixed assets are not usually on the agenda
of a government‘s strategic planning that focuses on the long-term mission of the government.
The only time when decision-makers discuss is to review budget requests for acquiring new
fixed assets. In other times of an asset‘s life, government decision makers do not often reconsider
the relation of fixed assets to the implementation of agency missions and objectives. Therefore,
the costs of ownership in the whole life cycle of new fixed assets are not regularly implemented.

Fragmented Management- According to Kaganova et al. cited in (Lu, 2011), another issue that
hinders the proper public fixed asset management in public sectors to fulfill their established
goals and objectives is fragmented management. Fragmentation of asset management means a

15
lack of centralized coordinated property management authority among different levels of
government units. Public fixed asset management is implemented by many government agencies,
each of which uses and controls a small portion of the total assets that government owns and
leases. Many studies demonstrate that compared with the private sector, public asset
management is poorer, unproductive, and wasteful in the proper management of their fixed
assets. Under fragmented management, the government loses the advantage of the economy of
scale. When the government lacks unitary strategies, rules, and policies, fragmented management
may bring about deficiencies in serving agencies, thus making it hard to fulfill the goals and
objectives of public fixed asset management.

Lack of a well-established MIS and Poor Record- GAO (2007) cited by (Lu, 2011) and Office of
the Auditor Audit service division City and county of Denver (2010) states that lack of a well-
established management information system (MIS) and inaccurate and incomplete record of
fixed assets in people soft asset management (PSAM) are the challenges for the current practice
of fixed asset management. Currently, governments at different levels attempt to establish an
information system of fixed asset management. However, because of fragmented management,
uniform measurements and standards are lacking in the management information system, and
thus MIS data are not complete. Because property valuation and depreciation are not reflected in
financial accounting, the relevant information is not available in the MIS. To overcome such the
above-stated challenges implementing an appropriate MIS could be the basic solution for any
kind of organization, either we say for private or public entities.

Lack of Accountability and Transparency- Another issue is the lack of accountability for the
decisions taken and transparency in the management process. In a sense, every person working in
the cycle of fixed asset management should be accountable for his or her activities and
transparent to the public users, unless it could a more difficult for the effective management of
the assets. Managers are accountable for the current operation of the fixed assets in their charge
and they have a responsibility to detect incipient deterioration before a severe problem occurs.
Besides, management of public fixed assets involves a large number of transactions and
procedures which depends on the accountability and transparency of the management unit. The
mischief of fixed assets may arise if relevant information is not shared among stakeholders and
the employees of public organizations including the general public. Devoid of the basic

16
knowledge of legal working procedures like policies, rules, and regulations of fixed asset
management and the principles of efficiency, economy, and effectiveness in the utilization of
fixed assets will be avoided and result in miss achievement of organizational goals (Lu, 2011).

Implementing and maintaining IFMIS is a complex task that involves the Ministry of Finance
and all line ministries. There are many risks: mentioned in (Chene, 2009) Political Challenges-
Political reforms are perceived as complex, risky, resource-intensive, and requiring major
procedural changes, often involving high-level officials lacking incentives for reform. Decision-
makers must be sold the idea that benefits exceed risks, while the incentive structure that may
undermine political will for reform has to be adequately assessed from the early stage of the
project. Many IFMIS projects have also failed due to the lack of clarity in ownership of the
system and unclear authority to implement it. Due to the institutional segmentation of public
expenditure management, it is not always immediately clear who, from the Ministry of Finance
or the Accountant General Department, should be in charge of an IFMIS project. Joint ownership
may result in a loss of accountability and real ownership of the project.

Technical Challenges- Many IFMIS projects have also failed because the basic system
functionality had not been specified from the onset of the intervention. IFMIS must be carefully
designed to meet the agency’s needs and functional requirements, including the accounting and
financial management tasks the system should perform. In some cases, interfaces with existing
IT systems have to be created to fit the country’s specific circumstances. As documents on the
functional requirements which will often serve as a blueprint for later phases of the system – are
difficult to rectify at a later stage, it is of crucial importance to spend enough time on the design
phase of the project.

Human Resources Requirement and Capacity- The low level of computer literacy in developing
countries must first be adequately addressed before such projects can be truly able. The lack of
staff with the required IT knowledge cannot be easily remedied by training and hiring. The
current salary structure and terms of employment in the public sector are usually not attractive
enough to compete with private sector employment conditions and to incentivize candidates with
required IT skills. There is also a risk that trained staff leaves for better job opportunities.

17
According to the (Indiana, 2013), there is an abundance of literature focusing on the barriers to
the public asset management application in developing countries in general which captures these
problems: The absence of a legal and institutional asset management framework. The old
perception of local government towards public assets. Some of the local government managers
suggest that public assets should be used as public tools in supporting public services. Therefore,
local government should not make any profit out of public assets. Asset management involves
many jurisdictions and applications within the local government. Each of these local
governments has its views, objectives, functions, and roles, which sometimes are not supported
by proper communication and coordination among them. The complexity of public organization
objectives. Public organizations’ objectives are not as simple as those of private entities which
only have a profit motive public organizations’ objectives must also be accountable, effective,
efficient, and most importantly, have in some cases a social return.

Economic inefficiency associated with public property holding. The lack of availability of data
required for public asset management.

2.7 Empirical Literature Review

Regarding fixed asset management systems and practice, many scholars conducted their research
in different countries and public sector agencies. For example, the research paper conducted on;
Public asset management: empirical evidence from the State Governments in the United States
(Lu, 2011) founds that the federal, state, and local governments have been making efforts to
effectively and efficiently manage their fixed assets. However, their problems suggest that
certain management elements are either missing or incorrectly incorporated into their current
management system. Governments have not identified an effective system that appropriately
incorporates each basic management component in the practice of fixed asset management. And
they do not have well-established standards for their respective jurisdiction.

Many researchers have been conducted their research in various developing African countries;
for instance, Ndumia (2011) in his research paper “asset management system in the government
of Kenya” conducted in the case of the Ministry of Finance founds that the Kenyan government
faces the following problems or challenges of fixed asset management.

18
Asset management has many limitations in sharing information among various departments on
both formal and sudden information flows. Moreover, the researcher founds that asset
management in Kenya is under a condition of many challenges or problems, like poor integration
of activities among departments, lack of standardization, categorization of assets, and lack of
asset management system flexibility in its operation.

In addition to the above-mentioned scholastic studies outside Ethiopia, few researchers in the
jurisdiction also conducted their studies on the practice of fixed asset management in different
public sectors. For example, Mebrahtom (2014) and Tadewos (2009) proved that the strategic
and operational goals of the public organizations in Ethiopia are highly missed due to the basic
problems of backward usage of documenting, weak usage of technology, and unskilled
manpower. Most importantly, the latter author founds that due to improper implementation of
depreciation and cost of assets the federal public organizations in Ethiopia lose a huge amount of
financial resources.

Asset Management is the set of activities associated with asset related tasks such as identifying
funding requirements, acquiring assets, providing logistic, maintaining assets, disposing and
renewing assets, so as to effectively and efficiently meet the desired objective (Nicholas & John,
2010).

“The process of efficiently maintaining, upgrading, and operating physical assets is referred to as
asset management. It combines design principles with sound company practices and economic
theory, as well as tools to assist decision-makers in becoming more organized and logical. Asset
management, as a result, provides a framework for both short- and long-term planning (FHWA,
1999).

The fixed asset requirements are planned separately but should align with strategic planning
because it affects the company’s goal and objectives. Fixed asset maintenance should also be
planned; it considers maintenance cost and all maintenance stages (Lepani, 2008).

An asset management plan is defined as: a document which sets out the Asset Strategy in order
to help determine which assets should be acquired, renewed, improved, maintained of disposed
of, once alternatives to investing in property assets have been explored’ (CIPFA, 2008; Scottish
Executive & COSLA, 2003 cited in Ngwira and Manase 2016).

19
According to William and Merry (2011) the acquisition cost of fixed asset is measured by cash.
It should be measured by actual cost, if the actual cost is not known it could be valued by
estimated cost. The acquisition cost is not only the purchase price of the item, but it includes
freight and transportation charges, installation costs, site preparation expenditures, professional
fee, legal fee and the like. The cost of noncash assets is determined by the cash paid in a cash
transaction or the cash equivalent price paid when noncash assets are used to pay. are used to
pay.

Maintenance is also regarded as an investment because resources are expended now to do

maintenance in order to save money or obtain greater benefits in the future, if the resources are
not spent. However, despite this opinion maintenance is generally separated from “true
investment” because it is matter of restoring and old function or keeping up an old function (Lind
&Muyingo, 2009). The researchers finally it will help to improve fixed asset management
practices of the organization and it can support similar private organizations to use the findings
and recommendations for self-study, evaluation, and application of best practices solving
problems in fixed asset management.

The study will generate evidence that can be used by the government as a reference for policy
dialogue and formulation in areas of fixed asset management cycles, principles, and best
practices, and also help to conduct similar research in government, non-government, and private
organizations both in the economic and service sectors.

This study support other similar research endeavors in the field of fixed asset management
practices. The findings and recommendations of the study can be used for strengthening the
internal control of the company and this finding used for initial data for strategic decision
making of the company.

Furthermore, Nigus (2014) pointed out the following problems of fixed asset management in
Amhara regional state public institutions: The management and employees of near to half of the
public institutions at the regional level had not the trend of monitoring and evaluation for
Record-keeping and inventory of fixed assets. The management lacks commitment to timely
disposal of nonfunctional fixed assets. There is no human resource development through training
for property officers, store keepers, and stock clerks.

20
Few kinds of research have been conducted in different developing regional states in Ethiopia,
for instance, Anwar (2015), founds that in Afar regional state public institutions faces many
problems related to their fixed asset management practices; like purchasing plan is not properly
implemented, procurement process of the assets was not clear and transparent, assets acquired
not properly recorded in fixed asset register (occurrence and completeness of the assets), there is
no segregation of duty between receiving and safe custody of the assets and there is no
monitoring and evaluation system by the management. Also, poor disposal practice of public
assets, improper accounting and reporting system, organizational structural problems, not giving
of PIN code for all assets, and poor capacity building programs are the major problems identified
in Afar regional state public sectors.

In general, in the empirical review of this study different scholars studied in different countries
as mentioned above, and most of them have the following common findings: Lack of legal and
institutional framework for the effective administration of public fixed assets.

Weak implementation of the management information system or information technology for

integrative management of fixed assets. There are managerial, structural, and capacity building
problems among different sectors of public organizations.

The researcher identified the following gaps in the assessment of fixed asset management in the
study area. Even though few scholars particularly the researchers in Ethiopia found many types
of problems with fixed asset management, they did not try to assess the practice of rules,
regulations, directive and enforcement in fixed asset management of fixed assets in detail.

Further, as to the knowledge of the researcher, there is no sufficient conducted similar research
in the branch even at Dilla university level; however, there are few types of research conducted
in Ethiopia in other public sector organizations. That is why the researcher intended to conduct
this research on the assessment of fixed asset management in the case of Dilla university referral
hospital.

21
 CHAPTER THREE
3 RESEARCH METHODOLOGY
3.1 Introduction

This chapter sets out various stages and phases that was followed in completing the study. It
involves a blueprint for the collection, measurement and analysis of data. This section is an
overall scheme, plan or structure conceived to aid the researcher in answering the raised research
question. This stage is about how research will be executed and how respondents will be
approached, as well as how the research was completed. Therefore in this section the research
identifies the procedures and techniques that was used in the collection, processing and analysis
of data. Specifically the following subsections are included; research design, research approach,
source of data, data collection techniques, target population, sampling techniques and sample
size, data analysis and interpretation, reliability and validity test, ethical consideration and finally
description of the study area.
3.2 Discussion Of Study Area
The study was conducted from on 2023 at Dilla (DURTH), SNNPRS, and Ethiopia. Dilla town is
the administrative city of Gedeo zone, bordered on east, south and west by Oromia region, and
on the north by Sidama region. According to 2007E.C census, the total number of Dilla town
population was 59,150. It is located360km from Addis Ababa and 90 km from Hawassa (the
capital city of SNNPR). The hospital in this town established in 1976E.C namely Dilla university
referral hospital (Former Dilla zonal hospital). DURTH is the only one Zonal referral teaching
hospital, it provides curative and rehabilitative services for about 2 million populations living in
SNNPR & Oromia Regional state. More than 10 health institutions were refering patients for
further & better care from inside and outside of the catchment area. This hospital staffed by
different specialist disciplines like surgery, obstetrics & gynecology, pediatrics, internal

22
medicine, dermatology and other types health professional in different level of qualities.
Emergency care area provide services 24 hours a day, 7 days a week.
3.3 Research Design
Research design provides the basic direction for carrying out a research project to obtain answer
to research questions. It is a master plan specifying the method and procedures for collecting and
analyzing the need of information (Kothari, 2004). Research design is needed because it
facilitates the smooth sailing of the various research operations, thereby making research as
efficient as possible yielding maximal information with minimal expenditure of effort, time and
money (Kothari, 2004). It helps the study to be relevant to the problem and it uses economical
procedures. The same authors discusses three types of research design, namely exploratory
(emphasizes discovery of ideas and insights), descriptive (concerned with determining the
frequency with which an event occurs or relationship between variables) and explanatory
(concerned with determining the cause and effect relationships). It specifies which approach was
used for gathering and analyzing the data. The types of research employed under this study was
descriptive research. The major purpose of descriptive research is description of the state of
affairs as it exists at present. Then this study was described to assess of fixed asset management
in case of Dilla university referral hospital.
So the researcher was used descriptive research design aiming to provide an accurate and valid
representation of variables that are relevant to the research question.

3.4 Research Approach

Depending on the nature of the research problem and the research perspectives, research
approach can be classified as quantitative, qualitative, or mixed Creswell (2014). A quantitative
approach helps the researcher to generate data in quantitative analysis in a formal rigid fashion.
On the other hand, a qualitative approach helps the researcher for subjective assessment of
attitude, opinions, and behavior research. So this study was employed mixed approaches
(quantitative and qualitative research methods) to assess of fixed asset management in case of
Dilla university referral hospital based on the questionnaire data and some other collected
secondary data.
3.5 Source of Data

23
Data collection is integral part of the research design. Generally there are two types of sources of
data namely primary and secondary data sources. Primary data are those information obtained
from the original source while secondary data are those obtained as second hand data like from
books and any other sources which is not original (Kothari, 2004). In order to collect reliable
data, both primary and secondary sources of data was the major focus of the researcher. To
achieve the objectives of this study, the primary data was collect through questionnaires.
Secondary sources of data was gathered from different sources like references books, internet,
different thesis, dissertation and projects, literatures, articles and other academic papers,
unpublished reports and others related sources.
3.6 Data Collection Techniques
In this study, the data was gathered using questionnaire: Questionnaire was the main data
collection instruments to conduct the study. In this particular study questioners will be utilize to
assess of fixed asset management in case of Dilla university referral hospital in the
Questionnaires contain dimensions of Fixed Asset Management. Primary data was collect by
using questionnaires. Both open and close ended questionnaire was design and distribute to
respondents through enumerators to get the needed information. Pre testing of the questionnaire
was carried out and depending on the result; some adjustments was made to the final version of
the questionnaire. The researcher was also guide and work with the numerators throughout the
data collection process.
3.7 Target population
Population is defined as a cluster of statistically equivalent individuals or a collection of
individuals who are genetically exchangeable (Lawson, 2012).
Target population of this study that directly related to fixed asset management. Property disposal
committee members and annual inventory committee members are indirectly involved in
property management system and familiar with the practices and challenges of the subject under
the study and considered as key informants.
The target populations for the study was 126 employees of Dilla university referral hospital
working in related to fixed asset management, which includes procurement service, finance and
accounting, disposal committee, general staff and administration staff.
3.8 Sample size and Sampling technique

24
The research was a non-probability sampling design for the census sampling method. Census is
associate with investigation of all the individual parts that form up a population. It’s a biased
methodology that's helpful once some members of a population build higher subjects than others.
The main objective of a census sample is to produce a sample that can be logically assumed to be
representative of the population, for this study used the census method because the researcher
selects only Dilla university referral hospital fixed asset management related worker. The

numbers of fixed asset management related worker staff are 126. Therefore, the total numbers of
the population of the study was 126.

3.9 Method of Data analysis

For the realization and successful accomplishment of the data collected from primary and
secondary methods, different data sources was recorded, edited, organized, analyzed, interpreted,
and presented with the research questions. This was done by using mixed data analysis method
both qualitative and quantitative analysis and data was collected from questionnaires analyzed
and presented using descriptive statistical tools by using SPSS Version 20. Tables, Frequencies
distribution, mean, standard deviation and percentages will be used to explain some
characteristics of the variables. Therefore; in this study for analyzing data descriptive statistics
was used the data collected from Dilla university referral hospital.

3.10 Descriptive Statistical Analysis

The final report of the relevant demographic characteristics of the respondents result was
produced through central tendency measurements (frequency and percentage) and the variables
mean and standard deviation was be also produced. In addition, tabular explanation was used to
present the results.
3.11 Validity and Reliability Test
3.11.1 Validity Test
Validity refers to the extent to which a measure adequately represents the underlying construct
that it is supposed to measure (Bhattacherjee, 2012). Content validity was checked through
getting the questionnaire reviewed by experts. An insight that was obtained from the pilot survey
of the 10 employee will be analyzed and used to make adjustments on the questionnaire items.
Reliability of the questionnaire items was determined using the test-retest method in which the

25
same respondents was requested to provide information for the second time (Kothari, 2005). The
results from the pilot study will be used to calculate the reliability coefficient.
3.11.2 Reliability Test
Reliability is the degree to which the measure of a construct is consistent or dependable. There
are many ways of estimating reliability one of which is internal consistency reliability. It is a
measure of consistency between different items of the same construct. If a multiple-item
construct measure is administered to respondents, the extent to which respondents rate those
items in a similar manner is a reflection of internal consistency. This reliability can be estimated
in terms of Cronbache alpha (Bhattacherjee, 2012). Zikmund (2003) stated that the researcher
should conduct the pre-testing to ensure the questionnaire’s reliability and to make sure that
measures are free from error and therefore yield consistent result. The reliability of the questions
for each variables are obtained when Cronbache alpha coefficient is at least 0.6 and the internal
consistency and reliability of the questions will be considered higher, if the result is near to 1. In
general, a reliability of a scale or item may fall between 0 and 1.
George and Mallery (2003) also stated that a reliability score of greater than 0.9 is excellent,
greater than 0.8 is good, greater than 0.7 is acceptable, greater than 0.6 questionable, greater than
0.5 is poor and less than 0.5 is unacceptable. In this study Cronbache alpha model was used to
measure the overall reliability of the data obtained from a questionnaire.
Table 3.1 Reliability Statistics
Reliability Statistics
no Cronbach' N of
s Alpha Items
1 Awareness and understanding of respondents on fixed asset .963 3
acquisition and management rules and regulations
2 Enforcement of rule, regulations and directives of fixed asset .928 3
acquisition and management
3 process of handling and follow up of fixed asset .855 4
4 Staff professional competency and accountability system in .802 5
fixed asset acquisition and management
5 Employee Understanding and Knowledge on Fixed Asset .829 3
Management

26
 6 Disposal Asset Management .849 3
7 The practice of planning process in fixed asset acquisition .849 4
and management

3.12 Ethical Consideration

Ethical considerations in thesis are critical. Ethics are the norms or standards for conduct that
distinguish between right and wrong. First, ethical standards prevent against the fabrication or
falsifying of data and therefore, promote the pursuit of knowledge and truth which is the primary
goal of thesis.
Therefore, in this study the thesis discussed and gave attention to the below ethical issues:
 The researcher has been conscious to have the required information with informed
consent.
 The discussion with selected targets was based on voluntary participation.
 The discussion is concluded with respect, confidentiality and privacy.
 The interviewed and opened question was designed in order that it didn’t harm anyone.

27
 CHAPTER FOUR
4 RESULTS AND DISCUSSIONS
4.1 Introduction

The data collected have been analyzed through Descriptive statistics mainly percentage and
frequency. Before distributing the whole questionnaire 10 questionnaires were distributed and
the reliability/consistency of items with in each variables has been tested using Cronbach’s
Alpha through the help of SPSS 20 version and all the items under each variable have been
proved to be reliable and the data analysis was proceeded after distributing 126 questionnaires to
the whole samples and 126 were fully returned accounting for 100% of the intended data
response rate.

4.2 Demographic Characteristics of Respondent

The first part of the questionnaire consists of the demographic information of the participants.
This part of the questionnaire requested a limited amount of information related to personal and
professional demographic characteristics of respondents. The table below shows the
demographic characteristics of the respondents like age, education, and work experience. The
data collected from the respondents were analyzed as follows.

4.2.1 Genders of the Respondents

Table 4.1 Genders of the Respondents

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 Gender
Frequency Percent Valid Percent Cumulative
Percent
Valid Male 70 55.6 55.6 55.6
Female 56 44.4 44.4 100.0
Total 126 100.0 100.0

Source: Own Survey, 2023

According to table 4.1 above the sex respondent out of 126 sample population 70(55.6%) males
and 56(44.4%) are female from above table the majority participated in the study are male.

4.2.2 Age of the Respondents

Figure 4.1 Age of the Respondents

Own Survey, 2023

Age of the respondent’s shows that 35.71 % of the Dilla university referral hospital employees
are between the ages 31-40, the other 29.36 % are between 41-50 Years and 18.25 % are
between 51 Years and above. However, the least 16.66% of the employees are at the age of
21-30 years. In other words, most of the employees are belonging in the productive age group
whose summation percentage is more than 80%.

29
 4.2.3 professional qualification of the Respondents

Figure 4.2 professional qualification of the Respondents

Own Survey, 2023

Education is one of the most important characteristics that might impact employee‘s ability to
implement new system and understanding any particular phenomena. Based on the above table
the educational level of employees of Dilla university referral hospital, 49.206% of the
employees are first degree holders, 13.492% of the employees are certificate and the other 7.14%
of the employees have specialization at a master‘s degree level and above, whereas 30.159% are
diploma holders. From these results, it can be concluded that the respondents had enough
education to execute the roles assigned to them effectively and efficiently.

4.2.4 working Experience of the Respondents

Figure 4.3 working Experience of the Respondents

Own Survey, 2023

30
In regarding to year of service, majority 46.82% of the Dilla university referral hospital
employees have relatively longer existence in the company, whereas 18.25% of the respondents
have an experience 0-5 years. Moreover, the other 23.81% of the respondents have an experience
of working with the university for at least 11 years. It can be therefore noted that most
respondents have been working for more than 5 years which is a significant length for an
employee to understand the university business process and culture.

4.2.5 Job category

With regard to Job category, according to table 4.5 presented, 9.5% are Management Position,
28.6% are Supervisor Position and the rest 61.9% the respondents Employee.

Table 4.2 Job category of the Respondents

Job category
Frequency Percent Valid Cumulative
Percent Percent
Valid Management Position 12 9.5 9.5 9.5
Supervisor Position 36 28.6 28.6 38.1
Employee 78 61.9 61.9 100.0
Total 126 100.0 100.0
Own Survey, 2023

4.3 Descriptive Analysis of the Study Area

This part of analysis made based on survey questioners gathered from 126 respondents using 5
point lackert scale ‘.The researcher consider his measure, an inherent assumption, which state
that with the usage of lackert scale that although the scale is truly ordinal by nature, it is assumed
to be an interval scale with which statistical properties such as the mean can be justifiable used.
It is an assumption made quite frequently in empirical studies (Edmindson, 2005). Accordingly
the paper applies mean and standard deviation as the best measure for analysis based on the
mean range developed by Al-sayaad et al. (2006 cited in Bassam, 2013) of the following table

31
Table 4.3 Five Scaled Likert’s Criterion
No Mean Range Response Option
1 1.00 – 1.80 Strongly disagree
2 1.81 – 2.60 Disagree
3 2.61 – 3.40 Neutral
4 3.41 – 4.20 Agree
5 4.21 – 5.00 Strongly agree
Source: Al-sayaad et al. (2006 cited in Bassam, 2013)

Standard deviation is a widely used measurement of variability or diversity used in statistical and
probability theory. It shows how much variation or “dispersion” there is from the average
(mean or expected value). A low standard deviation indicates that the data point tend to very
close to the mean, whereas high standard deviation indicate that the data are spread out over a
large range of values. The sample mean is to show the majority of the respondent as best
predictor of the population and hence to infer for other.

4.3.1 Awareness and understanding of respondents on fixed asset acquisition and

management rules and regulations

Table 4.3:-Awareness and understanding of respondents on fixed asset acquisition and

management rules and regulations
Descriptive Statistics
N Mean Std.
Deviation
As a member of Dilla university referral hospital employee 126 2.37 1.495
and leadership, I have understanding of fixed asset
Management rule and regulation
As a member of Dilla university referral hospital employee 126 2.20 1.470
and leadership, I have understanding of fixed asset
management directives
There is established System to increase Dilla university 126 2.13 1.453
referral hospital employee and heads of sectors
understanding of rules, regulations and directives of fixed

32
 asset management
Valid N (listwise) 126
Own Survey, 2023

As can be seen from the above table the item of which say “As a member of Dilla university
referral hospital employee and leadership, I have understanding of fixed asset Management rule
and regulation” has the highest mean value 2.37 with standard deviation 1.495. This indicated
that most of the respondents had disagree on understanding of rules and regulations.

The scale items “As a member of Dilla university referral hospital employee and leadership, I
have understanding of fixed asset management directives” has mean value of 2.20 and standard
deviation of 1.470. The respondent stated that majority Dilla university referral hospital
employee and leadership are still having not understanding on directives too. This indicates that
both employees and heads were managing fixed asset without necessary knowledge of rule,
regulations and directives.

The scale items “There is established System to increase Dilla university referral hospital
employee and heads of sectors understanding of rules, regulations and directives of fixed asset
management” has mean value of 2.13 and standard deviation of 1.453. It implies that there were
no established system to increase understanding of university employees and heads regarding
rules, regulations and directives of fixed asset acquisition and management.

The above findings are supported by empirical studies in our country. Getu (2018) reveals that
for the problem arising and wrong attitude for property handling and care comes from poor
understanding of property administration rule, regulations and directive. The study made by
Mata (2015) also reveals that there is a significant knowledge and skill gap in Addis Ababa sub
cities in property management policies and procedures.

4.3.2 Enforcement of rule, regulations and directives of fixed asset acquisition and
management
Table 4.4:-Enforcement of rule, regulations and directives of fixed asset acquisition and
management

Descriptive Statistics

33
 Statement N Mean Std.
Deviation
Accountability would be applied in the case of lose and 126 2.56 1.562
damage on fixed asset happened by the negligence of
individual.
Property Disposal committee is assigned and Performs 126 2.45 1.552
according to directive

Fixed asset acquisition and management process is performed 126 2.37 1.557
according to rules, regulations and directive
Valid N (listwise) 126

Own Survey, 2023

From the above table the mean score of the item “Accountability would be applied in the case of
lose and damage on fixed asset happened by the negligence of individual” has the highest mean
value 2.56 and standard deviation of 1.562. It has also falls to “disagree” level of the
respondents. From the above data majority of respondents disagree that no accountability is
applied in case of lose and damage on fixed asset happened by the negligence of individuals.
This indicates that accountability system is not maintained in the Dilla university referral
hospital regarding fixed asset acquisition and management in case of loses and damage happened
by negligence of individuals.

In according to the above data one can conclude some measures were taken by Dilla university
referral hospital in case of damage and loss of property by individuals there is weakness in fully
applying accountability. Data result proved from damaged and stored property in every sectors
compound including on employee’s hand the reality of less action according to rule and
regulations.
The next which state “Property Disposal committee is assigned and Performs according to
directive” has a mean value of 2.45 and standard deviation of 1.552. This mean value has a
response scale equivalent of “disagree” level. According to above data majority of respondents
said that assigning disposal committee and their performance was not based on rule and
regulations, and also selected officials’ Dilla university referral hospital disposal committee were

34
assigned according to rules and regulations but they were not still started disposal activities
except collecting properties to be disposed from different sectors of the university.

The scale item “Fixed asset acquisition and management process is performed according to rules,
regulations and directive” has the highest mean value 2.37 and standard deviation of 1.557. And
also the mean value is equivalent response scale of “disagree” level.
In according to the above data officials shows the enforcement of law and understanding of
existing property administration and disposal rules, regulations and directives was less. In
addition to this there is a problem of accountability and follow up according to rules and
regulations for damaged property as well as disposing activities was not under taking in Dilla
university referral hospital disposal. In addition to that researcher was some clues which prove
that fixed asset acquisition and management was not undertaking according to rule, regulations
and directives.

4.3.3 The process of handling and follow up of Dilla university referral hospital fixed
asset
Table 4.5:-The process of handling and follow up of Dilla university referral hospital fixed asset

Descriptive Statistics
N Mean Std.
Deviation
The handling of fixed asset in the warehouse and office is 126 2.54 1.516
suitable to meet its objective
There would be enough follow up and control on 126 2.38 1.496
utilization of fixed asset
There is focus and support of leadership for Fixed asset 126 2.44 1.562
administration.
The fixed asset disposal processes were focus on all 126 2.48 1.490
surplus and scarp, obsolete property.

Valid N (listwise) 126

Own Survey, 2023

35
The above table presents the response of respondents towards The handling of fixed asset in the
warehouse and office is suitable to meet its objective. The overall mean score of this variable is
2.54 with the standard deviation 1.516. According to fifth scaled likerts criterions of Al-sayaad et
al. (2006) of table 4.3, the mean value falls to “Disagree” level of the respondents. According to
the above result one can conclude that there were no standard store and the existing by itself not
managed properly. Due to this reason all purchased and used fixed asset and non-fixed asset
were stored at one place. In addition to this properties were stored in every corners of the office
in Dilla university referral hospital disposal.

The item “There would be enough follow up and control on utilization of fixed asset” The
overall mean score of this variable is 2.38 with the standard deviation 1.496.

The scale item “There is focus and support of leadership for fixed asset administration” has the
highest mean value 2.44 and standard deviation of 1.562. And also the mean value is equivalent
response scale of “disagree” level. It shows that fixed asset management was not got focus from
leadership in Dilla university referral hospital disposal.
The scale item “The fixed asset disposal processes were focus on all surplus and scarp, obsolete
property.” has the highest mean value 2.48 and standard deviation of 1.490. And also the mean
value is equivalent response scale of “disagree” level.
According to the above data one can conclude that even if Dilla university referral hospital
disposal didn’t under take disposal activity till now the process contains all types of properties.
4.3.4 Staff professional competency and accountability system in fixed asset
acquisition and management
Table 4.6:-Respondent’s response on staff professional competency

Descriptive Statistics
N Mean Std.
Deviation
The existing property administration structure would be 126 3.53 1.093
realizes the accountability system
The existing property management department has enough 126 2.37 1.526
employees for work

36
 The existing property management department has filled by 126 2.34 1.519
necessary professionals
The existing employees of property management department 126 2.29 1.496
have enough work experiences.
Property administration department would have a good 126 3.65 1.076
communication and alignment with Dilla university referral
hospital
Valid N (listwise) 126

Own Survey, 2023

As can be seen from the above table the item of which say “The existing property administration
structure would be realizes the accountability system” has the highest mean value 3.53 with
standard deviation 1.093. This indicated that most of the respondents had agree on the existing
property administration structure would be realizes the accountability system. This implies that
the existing property management structure would be realizing accountability system.
The scale item “The existing property management department has enough employees for work”
has the highest mean value 2.37 and standard deviation of 1.526. And also the mean value is
equivalent response scale of “disagree” level. This result shows that the property administration
department has no enough employees for work.
The item “The existing property management department has filled by necessary professionals”
has the highest mean value 2.34 and standard deviation of 1.519. And also the mean value is
equivalent response scale of “disagree” level. In accordance of the above one can observe most
of the employees of the property Administration department were nonprofessionals except few of
them which work on procurement posts.
The item “The existing employees of property management department have enough work
experiences.” The overall mean score of this variable is 2.29 with the standard deviation 1.496.
This result shows that the employees of Dilla university referral hospital which assigned at
department of property administration were not acquire related work experience needed.

The scale item “Property administration department would have a good communication and
alignment with Dilla university referral hospital” has the highest mean value 3.65 and standard
deviation of 1.076. And also the mean value is equivalent response scale of “agree” level.

37
The above staff professional competence findings were supported by different empirical studies.
Challenges in public sector property management in South Africa were lack or shortage of skills
and capabilities among property management staff (Brackertz and Kenley, 2002) cited in Mukori
(2013). The Bank didn’t timely discard assets that are no longer in service there was fixed asset
without serial numbered tag because of lack of experienced professionals (Kikron.et al, 2014).

4.3.5 Employee Understanding and Knowledge on Fixed Asset Management

Table 4.7: Descriptive of Employee Understanding and Knowledge on Fixed Asset Management
Descriptive Statistics
N Mean Std.
Deviation
Employee take on fixed Asset Management training 126 3.44 1.274
Employee have enough knowledge about the policy and 126 2.40 1.570
procedures of Fixed Asset management
Organization employee are familiar with the principles of 126 2.48 1.558
asset management
Valid N (listwise) 126

Own Survey, 2023

As can be seen from the above table the item of which say “Employee take on fixed Asset
Management training” has the highest mean value 3.44 with standard deviation 1.274. This
implies that training could enhance the university understanding and knowledge on asset
management.
The scale item “Employee have enough knowledge about the policy and procedures of Fixed
Asset management” has the highest mean value 2.40 and standard deviation of 1.570. And also
the mean value is equivalent response scale of “disagree” level.

38
The scale item “Organization employee are familiar with the principles of asset management”
has the highest mean value 2.48 and standard deviation of 1.558.
The 2 and 3 items of the above table result shows that employee have no enough knowledge
about asset policy and asset management and they are not familiar to principles of asset
management. This implies there is fixed asset management training given to the employees but
its effectiveness are not measured and could not efficiently and effectively given to the
employees.

4.3.6 Disposal Asset Management

Table 4.8: Description of Disposal Asset Management
Descriptive Statistics
N Mean Std.
Deviation
Disposition is done according to procedures in place 126 2.38 1.559

Evaluate the effectiveness assets to meets service needs 126 2.49 1.579
before disposal
Assets are dispose based on level of service the 126 2.33 1.528
stakeholders and customers expect
Valid N (listwise) 126

Own Survey, 2023

The above table presents the response of respondents towards Disposition is done according to
procedures in place. The overall mean score of this variable is 2.38 with the standard deviation
1.559. According to fifth scaled likerts criterions of Al-sayaad et al. (2006) of table 4.3, the mean
value falls to “Disagree” level of the respondents.

39
The scale item “Evaluate the effectiveness assets to meets service needs before disposal” has the
highest mean value 2.49 and standard deviation of 1.579. And also the mean value is equivalent
response scale of “disagree” level.
The scale item “Assets are dispose based on level of service the stakeholders and customers
expect” has the highest mean value 2.33 and standard deviation of 1.528. The above table
implies that there is a problem in the university on asset disposal process and method.

4.3.7 The practice of planning process in fixed asset acquisition and management
Table 4.9:-Respondents response on practice of planning process in fixed asset acquisition and
management

Descriptive Statistics
N Mean Std.
Deviation
Procurement and distribution of fixed asset performed 126 2.48 1.614
based on the demand and needs from respective sectors
The need for fixed asset is raised from individuals and 126 2.56 1.598
departments of sectors based on prepared work plan
Procurement of fixed asset is based on specification of the 126 2.45 1.578
sector.
Property disposal process should be planed as Formal 126 3.52 1.263
activity rather than committee work
Valid N (listwise) 126

Own Survey, 2023

40
As can be seen from the above table the item of which say “Procurement and distribution of
fixed asset performed based on the demand and needs from respective sectors” has the highest
mean value 2.48 with standard deviation 1.614. This indicated that most of the respondents had
disagree on Procurement and distribution of fixed asset performed based on the demand and
needs from respective sectors.
The scale item “The need for fixed asset is raised from individuals and departments of sectors
based on prepared work plan” has the highest mean value 2.56 and standard deviation of 1.598.
And also the mean value is equivalent response scale of “disagree” level. This shows that fixed
asset procurement need raised from the respective departments of Dilla university referral
hospital.

The item “Procurement of fixed asset is based on specification of the sector” has the highest
mean value 2.45 and standard deviation of 1.578. And also the mean value is equivalent response
scale of “disagree” level. In according to questioner made with Dilla university referral hospital
made that in university procurement of fixed asset was mainly based on sectors specification but
the main problem was that sometimes sectors were not specify property to be purchased
properly.

The scale item “Property disposal process should be planed as Formal activity rather than
committee work” has the highest mean value 3.52 and standard deviation of 1.263. And also the
mean value is equivalent response scale of “agree” level. In according to questioner made with
Dilla university referral hospital prove that the main challenge faced them in property disposal
activity was that since the work is done by committee it was challenging to be done on time and
by commitment.

41
 CHAPTER FIVE
5 CONCLUSION AND RECOMMENDATION
5.1 Conclusion
Acquiring fixed assets that are needed for producing products or rendering services is usual for
public organizations. Also they own them through gifts, donation, or transfer to support service
provision or carry out particular activity. These assets require efficient and effective management
throughout their life, including disposal of no longer usable assets, to drive benefit expected from
them. For under taking the task of the asset management in efficient and effective way,
dedication of all concerned bodies to whole life of property management is crucial Mata M.
(2015). The researcher concludes his findings based on the research questions as follow.
In accordance with understanding of fixed asset acquisition and management rules, regulations
and directives Dilla university referral hospital employees, finding shows that poor
understanding of property administrations rules, regulations and directives. On the other hand in
relation to establishing system to increasing understanding of employees on the fixed asset
acquisition and management rules, regulations and directives , the finding reveals that no
established system to increase understanding of rule, regulations and directives in Dilla
university referral hospital.

42
The literature indicate that absent of training regarding fixed asset management has a great
impact on the successful accomplishment of a company fixed asset policy and procedure
kikron .et al. (2014).
According to this research finding in Dilla university referral hospital accountability during
damage and loss of property negligently would not be applied. To implement asset management
policy effectively public sectors require legal frame work and asset management strategy such as
property administration proclamations and directives.
Regarding this research finding property disposal committee was not performing their duties
according to this directive. Article 8 of the EFG procurement and property administration
proclamation no.649/2009 ratifies that public bodies should make sure that property is used
economically and efficiently. They are also required to ensure property at their disposal is
registered and traced, properly handled and looked after and disposed when it is no longer useful.
As shown in the study analysis there was limitation of fixed asset acquisition and management
according to rules and regulations in Dilla university referral hospital. Material handling can be
defined as a function dealing with preparation, placing and positioning of materials to facilitate
their movement and storage. Poor material handling may result in delay leading to idling of
equipment Getu, (2018).
According to this research finding there is poor handling of fixed assets in Dilla university
referral hospital. Finding shows that there were no standard store and the existing itself not
managed properly. Due to this reasons purchased and used fixed assets were stored mixed. In
addition to this fixed assets were stored in every corner and compound of university in condition
that inviting it for damage and lose.
The study finding shows that follow up and control on utilization of fixed asset in Dilla
university referral hospital was poor. Lack of sufficient standard store, properly handling of the
existing store, lack of disposing scrap, surplus and obsolete property and poor handling of fixed
asset were the indictors of poor follow up and control of public heads and property
administration staffs.
In addition to this, proclamation also ratified that the heads of public bodies shall ensure that all
public property is used as productively as possible in carrying out the responsibilities of their
public bodies establish proper maintenance system for all public property to ensure that it will
operate as economically and effectively as possible accordance with directive of the bureau. But

43
as shown in this research finding focus and support of leadership for property administration
activity were weak in Dilla university referral hospital.
According to research finding even though disposing activities were not yet under taken in the
university, the precondition work done for disposing activities included all surplus, scrap and
obsolete properties.
Once the needs have been identified, the procurement department should develop or
communicate a plan on how to deliver the service or good required. The plan must be developed
in collaboration with the other functions within the organization, so that it is integrated into the
organization’s strategy and therefore provided for adequately Shaw, (2010) as cited in Roman L.,
(2017). In order to able to purchase the right good or service, the specifications of what the
organizations need must be clear. These specifications are used to communicate to supplier what
is needed and what should be supplied. It is therefore important to have clear, precise and
accurate specifications Shaw, (2010) as cited in Roman L. (2017).
According to this research finding there were planning procurement of fixed asset according to
demands and need of Dilla university referral hospital. In addition procurement needs were
raised from individuals and departments of the university. The research finding also shows that
the university fixed assets were also procured based on the sectors specifications, but the main
problem in specifying fixed asset were lack of capacity and awareness of public sectors to
specify fixed asset according to their need. Research finding revealed that property disposal
process were planned as formal activity in the university but disposing activity was not yet
performed except precondition work in Dilla university referral hospital.
Research finding shows that the existing property management structure would be realizing
accountability system since procurement and property administration was restructured together
as one work process separating from finance administration work process.
Article 8 of the EFG procurement and property administration proclamation no.649/2009
stipulates that public bodies are responsible to establish procurement and property administration
unit with adequate staff. But this research finding reveal that the property administration
department of Dilla university referral hospital had no enough employees for work. Research
also revealed that the existing employees were not professionally competent as well as most of
them have no sufficient experience for work.

44
Lastly the research finding shows that property administration department would have a good
communication and alignment with other sectors of Dilla university referral hospital.
5.2 Recommendations
This section presents appropriate suggestions regarding fixed asset acquisition and management
for Dilla university referral hospital. Based on the findings of the study the researcher would like
to forward the following recommendations.
 In order to enforce rule, regulations and directives awareness and understanding of this
rule, regulations and directives was crucial. So Dilla university referral hospital should
have enhance understanding of heads of public sectors as well as employees by
establishing systems such as facilitating training, making available proclamation,
directives and manuals by hard copy and soft copy.
 Dilla university referral hospital should be maintaining accountability system in property
acquisition and management activity for property which was damaged and lost by
negligence of individuals. Such individuals should be asked according to federal
government directive and financial law as well as disciplinary measures should be taken
as it will be lesson for other individuals who will commit the same act.
 Dilla university referral hospital should fully manage fixed asset based on given rule,
regulations and directives.
 Dilla university referral hospital should perform the duties of property disposal according
to directive based on threshold given for university level and report for concerned body
for fixed asset which have to dispose by Agency at federal level. To handle safely,
effectively and efficiently public property before distribution and disposal the most
important thing is storage. In this regard, the researcher recommends that Dilla university
referral hospital should build standard store and asset yard which can hold used and
purchased fixed asset separately, suitable for fixed asset management work and use it
properly.
 Dilla university referral hospital should create awareness for its sectors regarding how to
specify fixed asset to be procured by using information technology and engineering
professionals. Dilla university referral hospital should recruit sufficient and experienced
professional work force based on structure given for property administration department
in order to manage its fixed assets in productive way.

45
 Reference
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Economy, Greenwood Publishing Group, Westport, CT.

Arnold J.R.Tony, Chapman Stephen N., and Clive Lloydm, (2008). Introduction to Materials
Management 6th Edition North Carolina State University Chapel Hill.

Baez (2004). New fixed assets management process design for Pontifica Universidad Catolica
Madre y Maestra (PUCMM). Disertation Berk, (1990). Internal Control of Fixed Assets: a
Controller and Auditor’s Guide. Wiley Corporate. California: Mc Grow Hil

City of Houston, Texas. (2005). Fixed Asset Accounting and Management Procedures Manua

Faussett, (2013). Fixed Assets Management: What You Needto Know.

www.SageNorthAmerica.com

Getu Belete (2018). Practices and Challenges of Public Property Management in Oromia
National Regional State: The Case of Oromia Supreme Court Government of Jamaica (Goj)
Ministry Of Finance And The Public Service (2020).

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Overnment Of Jamaica Comprehensive Asset Management Policy For The Public Sector
Government of South Australia, 1999). Strategic Asset Management Framework (Second
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Heintz, J.A. & Parry, R.W., Jr. (2002). College Accounting (17th Edition). Ohio: South western

Horn, K. (2012). Internal Control for Municipalities. Vermont: League of Cities and Towns.
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Joint Financial Management Improvement Program. (2000). Property management systems

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Kikron Tefera Frezewd Yirga and Martha Getaneh (2014). Research Thesis: An assessment of
fixed asset management in case of United Bank share company, St. Mary’s University.

Michael J. Markow, Pe Joe Racosky, Pe. 2001). Asset Management Implementation Plan And
Tiered System Process

Nagaraju. (2018). A Study on Fixed Assets Management. Volume 5, Issue 2. ISSN NO: 2394-
8442

New Jersey Environmental Infrastructure Finance Program. (n.d). Asset Management Guidance
and Best Practices Managing Utility Assets in NewJersey Ngwira Malawi and Manase David,
(2016). Public Sector Property Asset Management John Wiley & Sons, Ltd.

Nurul Atiko, Eri Febrian and Riko Hendrawan. (2017). Fixed Asset Management In The
Indonesian Government Agencies: A Case Study At Ministry Of Trade.

Samoa Audit Office, (2012). FIXED ASSET MANAGEMENT: A better practice guide U.S.
Department of Transportation Federal Highway Administration Office of Asset Management.
(2007). Asset Management Overview Asset Management Overview

Vossen, B. (2010). A study on Bank Liquidity Management. University at Albany, State

University of New York William D. Brady, Jr. (2001). Managing Fixed Assets in the Public
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Accounting, Property Control General Fixed Assets Audit. Florida: Mc Grow Hill.

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Annexes 1 Questionnaire

INFO LINK UNIVERSITY COLLAGE HAWASSA CAMPUS

COLLEGE OF BUSINESS MANAGEMENT

MBA IN BUSINESS MANAGEMENT

Dear Respondent, This Questionnaire is held to gather data with the topic on ― assessment of
fixed asset management in case of Dilla university referral hospital. Info link University College
under the college of business management the respondent of this questionnaire is systematically
and objectively secure. So you are kindly requested to extend your cooperation for the success of
this thesis research by genuinely answering all questions in the questionnaire. I assure you that
your individual answers will be kept strictly confidential and will be use academic purpose only.
Thank You In Advance

I. Demographic Information of respondents Instruction

NB: - Encircle the letter of your choice.

1. Gender:

48
 A. Male B. Female

2. Age (in years):

A . 21-30 B. 31-40

C. D. 41-50 E. 51 and above

3. Educational Qualification:

A. Certificate B. Diploma

C. Degree D. Masters and above

4. Work Experience

A. 0- 5 B. 6- 10

C. 11 - 15 D. 16 and above

5. Job category

A. Management Position B. Supervisor Position C. Employee

II. Statement Relates To fixed asset management Practice Of Dilla university

referral hospital

How much do you agree or disagree with the following statements Relates To the General
Procurement Practice?

NB: - Please read each statement carefully and show the extent of your agreement on the
statements by putting the (√) mark in the box for your answer in the following rating scale
(Likert Scale).

Where: 1 = Strongly Agree 2 = Agree 3 = Neutral 4 = Disagree 5 = Strongly Disagree

S/N Statement 1 2 3 4 5

Awareness and understanding of respondents on fixed asset management rules and

regulations
As a member of Dilla university referral hospital employee and

49
 leadership, I have understanding of fixed asset Management
1
rule and regulation
2 As a member of Dilla university referral hospital employee and
leadership, I have understanding of fixed asset management
directives
3 There is established System to increase Dilla university referral
hospital employee and heads of sectors understanding of rules,
regulations and directives of fixed asset management
Enforcement of fixed asset management regulation, proclamation and directives
1 Accountability would be applied in the case of lose and damage
on fixed asset happened by the negligence of individual.
2 Property Disposal committee is assigned and Performs
according to directive
3 Fixed asset acquisition and management process is performed
according to rules, regulations and directive
The process of handling and follow up of Dilla university referral hospital fixed asset
1 The handling of fixed asset in the warehouse and office is
suitable to meet its objective
2 There would be enough follow up and control on utilization of
fixed asset
3 There is focus and support of leadership for Fixed asset
administration.
4 The fixed asset disposal processes were focus on all surplus and
scarp, obsolete property.
Staff professional competency and accountability system in fixed asset management
1 The existing property administration structure would be realizes
the accountability system
2 The existing property management department has enough
employees for work
3 The existing property management department has filled by

50
 necessary professionals
4 The existing employees of property management department
have enough work experiences.
5 Property administration department would have a good
communication and alignment with Dilla university referral
hospital
Descriptive of Employee Understanding and Knowledge on Fixed Asset
Management
1 Employee take on fixed Asset Management training
2 Employee have enough knowledge about the policy and
procedures of Fixed Asset management
3 Organization employee are familiar with the principles of asset
management
Description of Disposal Asset Management
1 Disposition is done according to procedures in place
2 Evaluate the effectiveness assets to meets service needs before
disposal
3 Assets are dispose based on level of service the stakeholders
and
customers expect
Asset recording
1 There are proper follow-up for the physical condition of
acquired
Properties
2 Review the property tax records
3 Dilla university referral hospital established a personal issue
items register
4 Asset information is correctly Recorded
5 Record improvements made to any of the fixed assets
6 Recorded all fixed assets on the asset register
The practice of planning process in fixed asset acquisition and management

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1 Procurement and distribution of fixed asset performed based on
the demand and needs from respective sectors
2 The need for fixed asset is raised from individuals and
departments of sectors based on prepared work plan
3 Procurement of fixed asset is based on specification of the
sector.
4 Property disposal process should be planed as Formal activity
rather than committee work
Thank you

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