In 2005, South Africa took a significant step towards better asset management. A decree was issued, mandating each department to maintain two separate asset registers: a major asset register for assets valued at R5 000 or more, and a minor asset register for assets valued at less than R5 000.
Additionally, departments holding assets under operating leases, despite not owning these assets, were required to maintain a separate register. The same applied to departments holding assets under finance leases, which are considered “owned” by the department.
Despite multiple extensions to the initial deadline for updating these registers, questions remain. Do these departments or local government entities possess a legitimate asset register? Or are they merely relying on manual or spreadsheet-based asset registers?
Some may have invested in high-priced systems that function as financial systems with an additional asset register component. However, the effectiveness of such systems remains largely unknown.
The Department of Cooperative Governance and Traditional Affairs recently released an updated report on the status of municipalities within South Africa. Many municipalities nationwide are currently under administration due to challenges such as financial mismanagement, governance shortcomings, and infrastructural degradation.
Since October 2016, a total of 24 municipalities have been placed under administration for various reasons, predominantly financial mismanagement, and governance failures. This data highlights the ongoing challenges faced by municipalities across the country and the efforts being made to address them.
This situation underscores a prevalent issue: many government departments appear to lack the necessary capabilities for effective asset management. An audit by the Auditor General’s office is likely to reveal that the asset registers of many departments are deficient in substance and may be of limited utility.
An effective asset register should encompass the value of the assets, the date of acquisition, and any pertinent maintenance reports. Additional data may include warranties, owner’s manuals, availability, and the current condition of the asset. This comprehensive information can facilitate informed decision-making regarding necessary repair services and spare parts procurement. It can also assist in identifying your organization’s assets in the event of theft or destruction.
If government departments adhere to a comprehensive asset register and implement the Best Maintenance Practices, they will gain a clear understanding of how tangible, specific, attainable, and validated standards apply to maintenance management. They will also understand the significance of the anticipated outcomes derived from aiming for and achieving the performance benchmarks set by these best practices.
Delaying maintenance is not a sustainable financial strategy for resource management at national, provincial, or local government levels. Deferred maintenance results in a decrease in the useful lifespan of buildings and other infrastructures. As maintenance is postponed, the infrastructure begins to deteriorate, a process that accelerates over time, thereby increasing the financial resources required to restore the infrastructure to its original state.
The degradation of aging public facilities and infrastructure in most municipalities is becoming increasingly apparent. This neglect is now prominently displayed by the media through images of our deteriorating infrastructure. It is noticeable how government officials struggle when tasked with explaining why the infrastructure has degraded to a point where public safety is compromised and extensive work is needed for restoration.
Even in periods of financial stability, council members and municipal management have failed to allocate sufficient annual funding for routine maintenance, repair, replacement, and capital improvements. However, is the lack of funding the sole reason for the deplorable state of the infrastructure assets, or are there other contributing factors? This is a question that needs to be addressed as we move forward in our quest for better asset management.
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