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New guidelines to track assets used in development projects
View(s):The Finance Ministry’s Department of Management Audit has issued guidelines to monitor and track construction and movable assets – such as vehicles, laptops and furniture – acquired in the execution of development projects after longstanding problems were identified.
These projects are typically financed through foreign or domestic sources, and expenditures are incurred through the relevant ministries. But construction and movable assets are frequently not properly recorded in central government accounts before they are transferred to the respective implementing agencies or State-owned enterprises (SOEs), a circular released by the department states.
Separately, movable assets that are depreciated (lost value over time due to wear and tear and other factors) and accounted for as part of project costs are often not transferred at their net book value with adequate documentation, it points out.
To address these concerns and “to enhance transparency and accountability in public asset management,” the department has developed asset transfer guidelines to assist ministries and project management units to ensure that all construction-related assets are capitalised (recognising the asset on the balance sheet as a long-term asset) and recorded in the books of the line ministries before being transferred to the relevant SOEs.
Such transfers must also be supported by formal agreements and acknowledged in the asset registers of both parties. There must also be a final project audit to verify, among other things, that assets are properly accounted for.
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