MANAGEMENT OF CAPITAL ASSETS BY LOCAL GOVERNMENTS: AN ASSESSMENT AND BENCHMARKING SURVEY

Olga Kaganova,Jeffrey Telgarsky

doi:10.3846/ijspm.2018.445

Olga Kaganova, Jeffrey Telgarsky

Open Access

https://doi.org/10.3846/ijspm.2018.445

Copy DOI

Abstract

There is a growing recognition of the importance of government-owned capital assets, both conceptually and in practice, in large part due to the 2008 global financial crisis. However, a sizeable gap remains between the academic and professional “universe of knowledge” surrounding government asset management, and the actual asset management practiced by governments. In particular, the majority of governments around the world are wholly uninformed when it comes to good asset management. The purpose of this paper is to reduce this gap and suggest an instrument specifically for local governments, for the evaluation of their asset management, in order to help them to identify the weakest elements of asset management and thus focus limited resources on improving these elements. The instrument consists of essentially a composite image of good asset management practices for three main asset types: buildings, land, and infrastructure. The instrument specifies each asset management practice by its key characteristics and then converts each characteristic into a survey question. Answers are scored and a total score for each asset type is calculated. The assessment instrument can be used by local governments, their advisers, and by researchers interested in comparative analysis of asset management in different jurisdictions or countries.

Highlights

Management of government capital assets began emerging as a distinctive area of public management in the late 1980s in some countries, such as Australia, New Zealand, and the UK, as well as in selected cities in the US (Utter, 1989; Audit Commission (UK), 1988; Conway, 2006; Dow, Gilles, Nichols, & Polen, 2006)
–– In some countries, there are specialized membership organizations for government asset-managing entities, such as the National Executive Forum on Public Property in Canada or Asset Management Planning Network (AMP) in the UK, which facilitate the exchange of experiences and ideas among members and occasionally launch member-requested research
Most knowledge and data accumulated within such membership organizations are for internal use only, because members are very sensitive to disclosing their data and their specific issues. –– Governmental audit and oversight entities in a number of countries, in the UK and US in particular, have played a crucial role in highlighting the importance of managing capital assets well

Summary

Introduction

Management of government capital assets (buildings, land, and infrastructure) began emerging as a distinctive area of public management in the late 1980s in some countries, such as Australia, New Zealand, and the UK, as well as in selected cities in the US (Utter, 1989; Audit Commission (UK), 1988; Conway, 2006; Dow, Gilles, Nichols, & Polen, 2006). –– Governmental audit and oversight entities in a number of countries, in the UK and US in particular, have played a crucial role in highlighting the importance of managing capital assets well. The purpose of this paper is to reduce this gap and suggest an instrument for the evaluation of asset management at the local government level. It is based on what can be called a composite image of good asset management and is very practically oriented.

Literature review

Methodology

Part 1: Buildings

Part 3: Infrastructure

Findings

Lessons from testing the survey and ways to use it