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Section VI - How the ABS operates

Chapter 21 - Management of assets

The ABS’ assets are integral to the cost-effective conduct of its business, and are part of the combination of resources required to enable delivery of services. This chapter outlines the asset management principles, including the approach to purchasing, used by the ABS during 2006–07.

The ABS directly manages its non-financial assets in accordance with the Chief Executive Instructions and Australian Accounting Standards. Most of the assets are intangible (internally generated software), valued at $95.4 million in 2006–07, with tangible assets (property plant and equipment) forming the remainder, valued at $51.3 million in 2006–07. Tangible asset values are maintained with the assistance of an independent valuer.

ASSET MANAGEMENT IN THE ABS

PRINCIPLES

Overall the ABS asset management principles are designed to ensure that asset management practices and decisions support the service delivery requirements and business demands of the organisation, and that capital expenditure decisions address the full life cycle costs, benefits and risks of the assets.

The ABS’ approach to asset management encompasses the following principles:

• asset management activities are undertaken within an integrated government asset management framework
• service delivery needs guide asset management practices and decisions
• asset planning and management are integrated with corporate and business plans, as well as budgetary and reporting processes
• capital expenditure decisions are based on evaluations of alternatives that take into account full life cycle costs, benefits and risks of assets, and
• ownership, control, accountability, and reporting requirements for assets are established, clearly communicated and implemented.

The major strategic issue currently being addressed with respect to ABS assets is the effective management of its information and technology assets. During 2006–07 the ABS conducted an internal Capital Strategy Review to evaluate a range of emerging long-term issues identified within the asset portfolio. The next stage will be to identify options to address those issues and to improve longer-term strategic planning in relation to asset replacement.

The current strategies to manage this investment are:

• strategic direction and oversight by a senior executive committee
• annual development and quarterly monitoring of corporate information technology budget and work program
• enhancement and/or replacement of existing software and hardware, on a rolling program, where justified by business demands
• use of the ABS project management framework and governance arrangements for projects involving information technology
• use of an active internal auditing program, and
• use of internal cost recovery mechanisms to ensure that full costs are attributed and balanced against benefits.
  

The ABS maintains an asset register to address management, statutory reporting and user requirements.

The ABS’ assets are an integral element in the conduct of its business, and are part of the combination of resources required to enable cost-effective delivery of services.

The asset register of the ABS underpins planning policies, analysis of financial programs, capitalisation, and reviews of performance against defined objectives.

For recognition as an asset, the ABS has an expenditure capitalisation threshold of $2000 for general assets and $1000 for information and technology assets, including software. Assets expenditure greater than, or equal to, these amounts are capitalised and recorded on the assets register.

PURCHASING

Procurement in the ABS is centrally coordinated, providing procurement services and contract management support to the whole organisation. Through the centralisation of skills and support, all areas of the ABS have access to expertise. The ABS uses procurement methods consistent with Australian Government and ABS procurement policies, resulting in value for money when acquiring goods and services.

PURCHASING AND COMPETITIVE TENDERING AND CONTRACTING

The ABS undertakes a wide variety of procurement and contracting activities, with the majority of purchases classed as low value and low complexity.

The ABS conducts its procurement and contracting activities in accordance with its Chief Executive Instructions and the Commonwealth Procurement Guidelines. The ABS advertises an annual procurement plan on AusTender, and the plan is reviewed and updated as required throughout the year. The ABS has a centralised area of expertise, which provides procurement and contracting support to operational areas, and provides direct support for more complex procurement projects. Information on procurement policy and practices is disseminated to staff through an internal procurement portal.

Through the use of efficient processes and effective application of the ABS and Australian Government policies and principles, the ABS is satisfied that its approach to market testing and contracting is highly effective, resulting in value for money outcomes for the ABS. The ABS continues to invest in developing procurement skills and reviewing processes to ensure they remain efficient and contribute to value for money outcomes.

The ABS has not undertaken any competitive tendering and contracting activities during the year that have resulted in contracting out government activities previously performed by the ABS. Information on expenditure on contracts and consultancies is also available on the AusTender website (http://www.tenders.gov.au).

EXEMPT CONTRACTS

In 2006–07, the ABS did not exempted any contracts from publication by AusTender, under the Freedom of Information Act 1982.