6. ASSET MANAGEMENT
POLICY CONTAINS:
6.
6.A GENERAL POLICIES
6.B DISPOSAL OF FIXED ASSETS
Objectives

Asset management is the process of guiding the acquisition, use and disposal of assets to
make the most of their service delivery potential and manage the related risks and costs
over their entire life.
General Policies
6.A

Any staff member having custody of company assets is responsible for the safekeeping of
such assets, and any loss or damage to such may be charged against the staff member in the
event of negligence or fraud.

Fixed assets may only be acquired based on the Approved Budget. Any acquisition cost
exceeding the budgeted level is subject to obtaining further authorization/supplementary
budget approval from the Board of Directors. Unless otherwise agreed in writing by the
Board of Directors, the acquisition of fixed assets must be made through a competitive
bidding process with special consideration given to the purchase of technology products.

A comprehensive fixed asset register should be maintained by the Financial Controller. The
information contained in the register should include:
o Asset tag number,
o Description of the item,
o Name of supplier,
o Make and/or Model,
o Serial Number,
o Original Value,
o Date of Acquisition,
o Remark, etc

All fixed assets should be insured in full against any damages and losses.

The fixed asset records include a schedule of all fixed assets along with copies of invoices for
all fixed asset purchases. The Finance Department should conduct a full physical inspection
at least once every three years to verify the accuracy of the fixed asset schedules.

A printout of all recorded fixed assets should be prepared by the Finance Department by
asset classification annually to maintain a hard copy for back up purposes.

A central location should maintain possession of all Asset titles and a designated individual
should be responsible for maintaining and updating all Asset records.
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6. ASSET MANAGEMENT
6.B
Disposal of Fixed Assets

To achieve the best possible outcome for the school by gaining the best available net return
when selling and to ensure the school is even-handed, open and honest in all dealings.

Clear processes are required so that across the business such matters are handled in a
similar way which is fair to all parties, irrespective of the school. Similarly all concerned
should be fully aware of the rules governing this area and it is expected that these
procedures are adhered to in order to provide consistency in the manner in which it is
managed.
6.B.i
Asset Disposal Decision

Items can be available for disposal because they are:
o required to be disposed of under a particular policy eg. motor vehicles
o no longer required due to changed procedures, functions or usage patterns;
o occupying storage space and not being needed in the foreseeable future;
o reaching their optimum selling time to maximise returns;
o no longer complying with occupational health and safety standards;
o found to contain hazardous materials (Disposal of such items should only be carried
out after prior discussion with appropriate experts); and/or
o beyond repair but able to be sold for scrap.

The best value outcome to the school must be a major consideration when disposing of
assets. Asset disposal decisions, and the reasons for taking them, should be documented.
Not only does this assist in audit and other examinations, but it highlights successes and
problems for future reference.

In the interests of promoting fair dealing and openness, the school must not sell or
otherwise transfer surplus assets to staff (or their relatives or friends) unless arising from a
public competitive process i.e. tendering or advertised sale which is open to the public.
Where a member of the public and the staff member offer an equal price, the item must be
sold to a member of the public.

Disposal should be based on a fair market value for each surplus item. The price established
will be based on current market value and condition of the equipment and under no
circumstances may goods be donated to staff.
6.B.ii
Preparation for Disposal

Assets identified for disposal may be dispensed with using one of the disposal options within
this policy. The choice of the most appropriate disposal option will normally be influenced by
the nature of the goods for disposal and by their location and market value. The Director
shall make the final decision on the disposal option, but the Accountant and Principal may
make recommendations as required.

Many decisions in this policy require an assessment of the market value of an item. Such
assessments should be undertaken by the Head of Department. The assessment should take
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6. ASSET MANAGEMENT
into consideration the original purchase price, the age of the equipment, an assessment of
the usefulness of the equipment and of its possible market value. The Director may also
consult with the Principal, Accountant or ICT Manager (in the case of IT equipment) to
ensure the best possible decision.

In all cases, assets disposed of must be reported on an 'Asset Disposal' form and provided to
the Accountant to ensure they are removed from the central asset register.
6.B.iii
Methods of Asset Disposal
Destroyed
Trade-In
Sale by
Agent
Tender
Private
Sale
Donation

Tender: Items with an initial individual cost of US$10,000 (or equivalent currency) or more
must be disposed of by public tender unless the item is more than 10 years old. Other items
may be disposed of by tender where the items are known to have a market value but the
amount is unclear.
o Tendering is the most expensive disposal procedure and should only be undertaken
where there is a clear net return to the school from such a process. Exceptions to
this rule can be authorized only by the Board of Directors and all such exceptions
must be fully documented.

Private sale: involves assigning a price to the item(s) and publicising the item’s availability
for sale and the price in a suitable manner. This may range from an internet or newspaper
advertisement to a general email notice. To ensure a fair price is paid in the case of a private
sale, an independent person (outside the department concerned and with appropriate
expertise eg. the ICT department in the case of computers) should be involved and confirm
that the sale price is appropriate.
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6. ASSET MANAGEMENT
o
o
Prospective buyers should be given adequate opportunity to inspect the goods prior
to sale. Collection or forwarding of the goods is normally contingent on the
presentation to the Accountant of evidence of payment of the sale price.
The item may on receipt of an offer, be sold to the first person to make such an
offer.

Donation: Where the Director has determined that the item(s) have no residual value, and
where their disposal is therefore unlikely to produce offsetting revenue, the Director may
authorise the donation of the goods to another organisation. Ideally, such donations should
be to organisations and not to individuals. Organisations with a community service role are
recommended. This includes schools, charities and volunteer organisations.
o Donations must be approved and documented by the Board of Directors and
there must be confirmation documented by the Accountant that the goods have
no residual value and no significant market value.

Sale by Agent: the school may in some circumstances engage an agent to undertake the
disposal by sale of goods. Where an agent is to undertake sales on behalf of the school, it is
important to advise the agent, in writing, of the school's instructions relating to the sale.
Information might include timeframe for sale, target revenue, condition and location of
assets, reserve price, and end-user restrictions.
o This advice is the formal agreement or contract with the agent and constitutes the
authority for the agent to undertake the sale in accordance with the school's
requirements. The advice should be signed by the Director.

Trade-in: Items may be traded in where this maximises the net return to the school. The
asset number of the item traded-in and the value of the trade-in should be shown on the
Purchase Order of the new item.

Destroyed: Items with no market value and no use to any other organisation or person may
be destroyed in an appropriate and safe manner. An Asset Disposal Form (Appendix XX)
must be completed and authorised by the Board of Directors and forwarded to the
Accountant for updating the asset register.
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