Reference

Remarks

D1.1

An adequate asset register is integral to effective asset management. It is the basis of an asset management information system and should contain relevant data beyond that required for financial reporting. The size and complexity of an asset register will depend on the number and type of assets held by an entity. The volume of purchases, transfers and disposals in a year is also an indicator of the degree of sophistication required for asset recording and reporting. The features of a good asset register include :

D1.2

Asset policies extend beyond accounting policies. They should be comprehensive, covering all phases of the asset life cycle (planning, acquisition, operation and maintenance and disposal) and should address principles of asset management. The development and promulgation of comprehensive asset policies and procedures are important elements of the internal control structure of a department. The absence of asset policies and procedure manuals, or the existence of outdated manuals, is generally an indicator that internal controls are less reliable and effective. The primary reason for this is that policy and procedure statements are the principle means by which management's intentions are communicated to staff. These are also an initial reference point for new staff. In their absence, staff must rely on "word of mouth" and "on-the-job" training to decide policy.

D1.3

It is important that proper investment cost analyses are done prior to the acquisition of expensive assets. Part of this investigation will resolve around the costs to repair/maintain existing equipment if replacement of such assets is being considered.

D1.4

The effectiveness of existing assets in supporting programme delivery should be determined. Evaluations are to include the evaluation of asset performance. Asset performance is to be reviewed regularly against best practice benchmarks to identify assets that are under-performing, or costly to own or operate.

D2.1

The prime function of an efficient Logistics Directorate is to have the right product at the right time, at the right price and at the right location. This lends itself to the temptation to want to please everybody all the time resulting in :

The performance indicator/requirement therefore aims to measure :

D2.2

In terms of Treasury Regulation 10.1.1 the accounting officer of a department must take full responsibility and ensure that proper control systems exist for assets and that preventative mechanisms are in place to eliminate theft, losses, wastage and misuse. Stores and equipment must be subject to stocktaking at least once every financial year. Where the quantity of stores or equipment is too large to allow a complete check in a single occasion, stocktaking may be carried out continuously or in progressive phases.

D3.1

The amount owing to a department by debtors who have received a service but who have not yet paid for it, is generally a significant current asset. The accounting officer must take effective and appropriate steps to collect all money due to the department, if necessary by installments. Each department will be expected to :

Collection measures should be progressive and should include the following routine actions :

D3.2

Each month the accounting officer should prepare an age analysis by type of debt. This should include detailed listings to allow follow-up on individual accounts. These reports should also include data summarised according to the overall collection performance.

D3.3

In terms of Treasury Regulation 11.4, an accounting officer may write off a debt if he or she is satisfied that :

- recovery of the debt would be uneconomical;

- recovery would cause undue hardship to the debtor or his or  her dependants; or

- it would be to the advantage of the state to effect a settlement of its claim or to waive the claim.

An accounting officer must ensure that all debts written-off are done in accordance with a write-off policy determined by the accounting officer. All debts written off must be disclosed in the annual report, indicating the policy in terms of which the debt was written off.

D4.1

In terms of Treasury Regulation 8.2.3 all payments due to creditors must be settled within 30 days from receipt of an invoice unless determined otherwise in a contract or other agreement, or in the case of civil claims, from the date of settlement or court judgement.

D4.2

The records of the department must be capable of showing, at least monthly, a profile of amounts payable, showing for each category, the number and value of amounts outstanding.

D4.3

The accounting officer is responsible for establishing systems, procedures and processes to ensure efficient and effective cash management. Sound cash management includes accepting discount by effecting early payments if so offered by creditors.