January 16, 2006
By Tammy O'Reilly
ALL assets owned by the City of Johannesburg have finally been accurately recorded in a comprehensive database.
The asset management team, under the corporate finance department, has spent the last few years painstakingly gathering information on quantity, location and value of most of the City's assets.
To date the net book value of these assets is R9-billion, made up of the value of land and buildings; infrastructure like roads; community assets such as libraries, stadiums and community centres; heritage assets; and other items like furniture and office equipment.
Utilities, agencies and corporatised entities manage their own moveable assets in terms of the asset management and recording policy adopted by the board of each such unit.
It is important for the City council to keep a record of all the City's assets as it ensures the physical security of each asset and that resources are allocated to the areas of greatest need. It is also accountable for the use of the assets.
The need to update the asset register arose after the initial restructuring of Johannesburg in 1995, when 11 local authorities were combined to form just four metropolitan local councils, or MLCs. In 2000 these four authorities were again amalgamated into one to form the City of Johannesburg.
While the number of governing institutions may have decreased, the merging of the authorities meant the combining of the assets. A logistical nightmare ensued for the asset management team, since there were major discrepancies between what the City claimed to own on paper and what it could actually show.
"When the four MLCs existed, their databases [did not talk] to each other," explained Simphiwe Ngejane, the asset manager in the City's corporate finance department.
"What was showing on balance sheets did not tally with the actual value of the asset on hand. This situation carried on until the City of Johannesburg was established in 2000."
When staff were redeployed, assets like computers and furniture were moved without notification and, in some instances, were stolen. Also, because of the downsizing of some units, those who should have been responsible for the monitoring and collation of assets had left the council, leaving no-one accountable for the inconsistencies in the register.
"Only a few people were left to carry the burden, which is one of the reasons why we took the asset records of those local authorities as they were."
Ngejane said it was "impractically impossible" to determine physically the whereabouts of every single asset so in some cases the City had resorted to estimation of figures.
From the spreadsheets on which they were recorded, the information was transferred to the Venus system.
In 2002 legislation was passed forcing all municipalities to convert from fund accounting to Generally Accepted Municipal Accounting Practice (Gamap) standards. This was introduced nationally to ensure consistency in the accounting treatment of transactions and in account balances in municipalities.
Johannesburg was nominated as one of the municipalities to pilot the implementation of Gamap in 2003.
"While Venus was being configured to conform to Gamap, we were upgrading our data so that it was uploadable to Venus for Gamap purposes. We welcomed the system as it was a move from the spreadsheets to a more reliable asset management system," Ngejane said.
Between September 2004 and April 2005 the asset management unit engaged contractors physically to put barcodes on all movable assets. The City is now able to verify the location of these assets including their cost, the date they were acquired and their classification.
From now, moveable assets will be verified twice a year.
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