Source: https://oag.parliament.nz/2017/local-authorities-assets/part2.htm
Timestamp: 2020-08-14 01:45:30
Document Index: 392464575

Matched Legal Cases: ['art 2', 'art 2', 'art 3', 'art 4', 'art 2', 'art2']

Part 2: Knowing which asset information is most important — Office of the Auditor-General New Zealand
Getting the right information to effectively manage public assets: Lessons from local authorities
Part 2: Knowing which asset information is most important
Part 3: Gathering and managing asset information
Part 4: Getting asset information to the people who need it
Part 2: Knowing which asset information is most important Getting the right information to effectively manage public assets: Lessons from local authorities. https://oag.parliament.nz/2017/local-authorities-assets/part2.htm https://oag.parliament.nz/@@site-logo/logo.png
Getting the right information to effectively manage public assets: Lessons from local authorities.
factors that help local authorities determine what asset information they need, including the right types of information for their most important assets;
understanding and considering the intended uses of asset information when defining those needs; and
deciding on approaches that best prioritise resources towards more accurate information on the most important assets.
The five local authorities understood the relationship between their assets and the services they deliver. However, they need to improve how they identify and prioritise gathering information about their most important assets. Prioritising the most important assets will help the five local authorities to use their limited resources to best effect.
The five local authorities had identified the right types of information they needed to gather, record, and retain. They also understood how this information helped them know more about the actual condition of their assets, what they needed for day-to-day asset management, and how the information could support them to make well-informed decisions about maintaining and replacing their assets.
Local authorities need to identify which assets matter most
We expected the five local authorities to understand how their assets, and the services that they provide, contribute to positive outcomes for their communities. We also expected the local authorities to use this knowledge when identifying and prioritising gathering information about their most important assets.
The relationship between services and assets and positive outcomes for communities
The five local authorities understood how the services that their assets provide support their communities, which was demonstrated in their strategic documents and other publicly available information. Staff from local authorities described how their asset management and information roles contributed to providing positive community outcomes.
Dunedin City Council demonstrated the relationship succinctly in its strategic documents. The Council explained the relationship between the overall good public health outcomes it works towards and asset types, such as those that provide drinking water and solid waste services. Making these connections clear to the public does not need to be complex or require high levels of detail.
Tauranga City Council also clearly understood the relationship and took an approach to asset information that was driven by its strategic needs. The Council understood the value of having high-quality asset information. This was reinforced to staff when they were involved in identifying and agreeing on what the asset information would be used for.
The five local authorities all drew a connection between their assets and the community outcomes they were working towards. Understanding this connection is important for local authorities to be able to identify the most important assets.
Local authorities need to improve how they identify their most important assets
Local authorities need to know which of their assets are the most important to support the continued delivery of services. If they do not focus their efforts towards their most important assets, they risk not using their limited resources effectively. This could affect the quality of the information that was needed to make important decisions about the assets, which is likely to affect the quality of services provided to communities.
One key way of identifying the most important assets is to assess how critical a local authority's assets are to it continuing to deliver essential services to its community. A criticality assessment of an asset typically evaluates the consequences to the community of the asset failing and the impact of that failure. These consequences are used to help determine where the asset is rated on a scale of higher to lower criticality. An asset with a higher criticality rating is likely to be one of the more important assets to a local authority.
The five local authorities were all at different stages of implementing criticality assessments, which evaluate and identify the criticality of assets. Overall, the five local authorities' level of understanding of which assets were of highest criticality – and therefore were some of the most important assets – was lower than we expected.
Two local authorities were well progressed in developing and implementing criticality assessments for most of their assets. Two other local authorities had recognised that their previous approaches to criticality assessment were lacking and were developing new methodologies. However, they still had some progress to make before the new methodologies could be used. One local authority had documented its intended approach to criticality assessments, but there was little evidence that this was incorporated into how it managed its assets overall.
Tauranga City Council had implemented criticality assessments over its roading assets and much of its "three waters"1 services assets. The Council had identified one key asset class where full implementation of criticality assessment across those assets was still required, and was working to address that.
Tauranga City Council staff told us that using criticality assessments brings benefits to its management of assets. It recognised that it needed enhanced asset information for more important assets, which have higher and different management needs.
It was unclear how one of the five local authorities assessed the criticality of its assets or applied this knowledge to determine its asset information needs. We were told that some experienced staff knew which assets were the most important. However, we could not see how this knowledge, held by only a few people, was being used to formally identify the higher information needs relating to those assets.
One other local authority had also relied on knowledge held by specific people in its organisation and found it difficult to access that knowledge and experience. However, this local authority understood the need to capture and formally document this information and was actively working towards that. The local authority was working on bringing that information into its development of criticality methodologies, and its initial identification of which assets were likely to be of highest criticality. These assessments were also informed by both external expertise and other staff experience.
Although the knowledge of experienced staff is valuable, local authorities cannot get the full benefit of this knowledge if it remains limited to only some staff and is not formally documented. Local authorities in similar situations need to bring this information into the organisation's systems, where knowledge is less likely to be lost and will be accessible to everyone who needs it.
By using criticality assessments, local authorities can better identify their asset information needs and prioritise information on their most important assets. Local authorities and other asset-intensive organisations that have not yet identified those assets need to address this urgently. Decisions on the most important assets are far reaching, potentially more complex, and likely to need enhanced information to be properly informed. If local authorities cannot identify their most important assets they risk making poor decisions for their communities.
Knowing which assets have highest criticality helps planning for resilience
Identifying the assets with highest criticality also helps local authorities to plan for resilience. Planning for resilience is about understanding how the overall network of assets copes with significant events, such as earthquakes and flooding, and how it continues to operate effectively.
We spoke to local authority staff who felt a deep responsibility to ensure that the local authority's assets could continue operating and delivering services after significant events.
Staff told us that, as well as understanding which of a local authority's own assets were of highest criticality, knowing how local businesses planned to respond to a large-scale event can help the local authority assess the future resilience needs of its asset networks. In practical terms, that might mean the local authority knowing which assets need to operate continuously to deliver essential services to the community, based on knowing which local businesses will be able and ready to cope on their own after a shock event, or an event that evolves over time, such as climate change. A number of local authority staff talked about the potential effects of climate change, and some thought that more needed to be done to plan for these.
Processes to identify asset information needs should consider how information will be used
We expected the five local authorities to get input from people who plan and manage assets so that they could ensure that the asset information gathered meets the needs of those who use the information. We also expected local authorities to consider the needs of those who use asset information for other purposes, including those who value or insure assets and those who prepare financial reports.
The five local authorities had taken appropriate steps to consider the needs of people in their organisation who use the asset information. This included people in the wider business, such as those who prepared financial reports, valued the assets, and arranged insurance cover, and predictive modellers. Workshops had been organised with these people to understand and identify their asset information needs.
The five local authorities had identified and documented the types of asset information that needed to be gathered, recorded, and retained. Documentation included job task checklists, contract arrangements with organisations that gather asset information, and published codes of practice for the assets that developers install in land-use development.
The asset information needs were documented in formats that were relevant to the asset information gatherers and specific to the different types of information. These formats were designed to communicate what asset information was to be gathered.
We did not see a lot of evidence that the five local authorities were regularly reviewing their asset information needs. We encourage all local authorities to regularly review what information is needed about which assets, so they can respond quickly when those needs change.
Local authorities need to prioritise their different information-gathering approaches
For their asset information to be used reliably, the five local authorities need to understand its level of accuracy and completeness. This was referred to by local authority staff as "information confidence".
Understanding the implications and potential consequences of different levels of information confidence can help inform decision-makers about how reliable the information is and assess whether it is reliable enough for the decisions they are making.
In principle, a physical inspection of an asset is likely to give higher information confidence. However, because of the cost involved, it is usually not possible to conduct physical inspections of all assets or of whole networks of assets, such as a city's underground wastewater pipes. A physical inspection is also not always straightforward, particularly for underground assets that are difficult and costly to access, such as the pipes that supply drinking water.
The five local authorities were trying to get information confidence by using a combination of different approaches to obtain information about the condition of their assets. This involved a combination of evidence-based information through physical inspections, making estimations about assets based on existing information on comparable assets, and making theoretical estimations about an asset's condition.
The five local authorities were all able to identify particular areas of asset information that they needed more confidence in, particularly where that information was older. Two local authorities had provided evidence of some independent reviews of the accuracy and reliability of their asset information.
Waimakariri District Council had acknowledged the need to increase information confidence in some of its asset types, having previously used a largely theory-based approach, and worked to improve the quality of its asset information. Improvements in that quality enabled it to more confidently extend forecasts in its long-term plan and infrastructure strategy out to 100 years, aligning these better to the expected life of water asset networks. The improvement in information confidence also helped the Council have more meaningful conversations with its community about how it faces future challenges.
Local authorities with older asset infrastructure and stable or declining community demographics face different challenges. The water infrastructure of one local authority that we looked at is older, with some of it being in advanced stages of deterioration, with high rates of failing assets. The local authority has set up a project to help it shift from using a balance of evidence and theoretical-based asset information towards a more evidence-based approach. The Council may find it difficult to balance pressing and urgent needs with preparing for future demands.
Using a combination of methods to gather asset information of the accuracy needed is a pragmatic way to use limited resources. How best to determine this combination, and effectively targeting it, is not easy – skilled local authority staff need to make a professional judgement based on their knowledge of which assets are the most important, including those of highest criticality to ongoing service delivery. This will help local authorities to obtain high-quality information that they can have confidence in where they need it, including in planning for asset renewals and replacements.
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