The importance of asset verification in the public sector really revolves around two aspects, namely, how prudently is taxpayers' money being employed in this domain, and are the appropriate assets being employed to promote the required levels of service.
Thus asset verification in the public sector is crucial in promoting and maintaining an accurate and complete asset register, which is compliant with the necessary regulatory requirements, which will lead to maximising the utilisation value of each asset as well as the efficient and effective management of public resources.
The importance of asset verification in the public sector is really reflected in the benefits provided to a public sector organisation that regularly executes on a well-defined asset verification plan, these are:
* Gaining control of determining the theft incidence, the shrinkage, the deterioration and the misuse of their asset base. “If you know what is happening, you can do something about it!” “If you measure it, you can manage it.”
* Regular asset verification goes a long way in ensuring that the public sector organisation knows what it owns and where it is, thus being able to produce the reports which comply with requirements such as the PFMA, GRAP, etc.
* Physical asset verification exercises are crucial in determining the variances between what is being financially accounted for on the asset register and what is actually present; and more importantly, reconciling these differences within the ambit of specified regulations.
* The credibility of the accuracy of the organisation's asset register is enhanced when supported by asset verification exercises, which have been conducted in an approved manner.
* Asset verification exercises support the maintaining of an audit trail in terms of the asset life cycle process.
* Asset verification exercises, in general, support the condition assessment process, the identification of assets that would be better used elsewhere in the public sector, and thus lead to the streamlining of budgets for maintenance as well as avoiding the “writing-off” of assets that still can provide value to the organisation.
* Asset verification in the public sector can lead to the substantial reduction of insurance premiums and more successful insurance claims, given the fact that due to regular asset verification exercises, the organisation now has substantially more accurate knowledge of assets that may no longer be on the books, as well as having verified information of assets still on the books.
There is no doubt that an effective asset verification plan, in any public sector organisation, will invariably lead to improved control over the asset register, which will enable public sector organisations to make far more informed decisions about capital expenditure and replacement budgeting, as well as preventive maintenance scheduling.
This all leads to providing accurate values in terms of the organisation's asset base as well as using the available resources efficiently and effectively, and thus ensuring that required service levels are maintained to the benefit of the citizenry.
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