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LGA ‘Infrastructure and Asset Management (Policy and Planning) Information Paper

  • -

    August 2006

What does the Act require?

The Local Government Act, 1999 and its regulations require:

  • the preparation and consideration by Councils of a report, in certain circumstances, on the prudential aspects of a project where major asset acquisition or construction is contemplated (see Section 48 of the Act);

  • Councils to include, in developing its contracts and tenders policy, a policy on the sale and disposal of assets (see Section 49 of the Act);

  • CEOs to ensure that assets are properly managed and maintained, including:

    • the maintenance of accounting records of assets;

    • the adoption of an internal control policy which safeguards assets;

    • the creation and maintenance of registers of community land and roads;

    • reporting on assets in the Council’s financial statements; and,

    • the revaluation, in accordance with Australian Accounting Standards, of all material non-current assets, with land and infrastructure assets being revalued at least every five years.

As mentioned previously, changes made in 2005 to the Local Government Act require Councils to develop and adopt infrastructure and asset management plans relating to the management and development of infrastructure and major assets by Councils for a period of

at least 10


spanning 10


Councils are also required and the two documents need

to adopt long term to be consistent.




What are the issues for Councils?

When developing asset management plans Councils should consider the following key issues:

  • 1.

    Assets exist to support the delivery of a range and level of services to achieve a set of outcomes determined in consultation with the community.

  • 2.

    Asset management is a subset of strategic planning and, as such it is an integral consideration in the creation of strategic management plans.

  • 3.

    In evaluating alternatives for asset acquisition, the life-cycle costs and benefits of assets need to be considered and compared with the outcomes required to be produced by the asset.

  • 4.

    Assets are not always renewed. Furthermore acquiring more assets is not necessarily the solution to increased service demand.

  • 5.

    Asset performance must be monitored and action taken to renew (including upgrade/rehabilitate) or retire assets that do not provide appropriate service levels and outcomes.

  • 6.

    Each asset must be assigned to a person who has the responsibility to achieve service levels and outcomes with the asset.

It is communities, through their elected bodies, who have the pre-eminent role in setting the service levels required to meet their needs.

CEOs and their management teams, working with their elected bodies and communities, must ensure that assets are acquired, maintained and replaced in a manner that meets the 4

DME 25101

LGA Financial Sustainability Program – www.lga.sa.gov.au/goto/fsp

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