Government Assets Guideline i Table of Contents PREFACE............................................................................................ii ABBREVIATIONS...............................................................................iii DEFINITIONS.....................................................................................iv 1. INTRODUCTION...........................................................................1 2. OBJECTIVE OF THE ASSETS GUIDELINE.................................1 3. STATUTORy FRAmEwORk........................................................2 4. ACCOUNTING STANDARDS.......................................................2 5. ROLES..........................................................................................3 5.1. Roles of the Permanent Secretary Treasury and Paymaster General.................................................................3 5.2.Roles of Accounting Officer .....................................................3 5.3.Roles of Accountant General..................................................4 5.4 Roles of Director of Government Assets management Division.............................................................4 5.5. Roles of Head of Procurement management Unit..................5 5.6. Roles of Director of Administration and Human Resources management........................................................6 5.7. Roles of Head/In-charge of Division/Unit or Section..............6 5.8. Roles of Internal Auditor General...........................................7 6. FORmAT OF ASSET REGISTER.................................................7 7. CLASSIFICATION OF ASSETS....................................................9 8. SOURCES OF FUND FOR ASSETS..........................................10 9. PLANNING OF PROCURABLE ASSETS...................................11 10. ACQUISITION OF ASSETS.........................................................11 11. mAINTENANCE OF ASSETS.....................................................12 12. VALUATION OF ASSETS...........................................................12 13. DEPRECIATION OF ASSETS....................................................13 14. TRANSFER OF ASSETS............................................................14 15. VERIFICATION OF ASSETS......................................................14 16. REPLACEmENT OF ASSETS....................................................14 17. ImPAIRmENT .............................................................................15 18. wRITE-OFF OF ASSET LOSSES..............................................15 19. DISPOSAL..................................................................................15 20. SAFETy AND SECURITy OF ASSETS......................................16 21. INSURANCE...............................................................................16 22. UPDATING THE GUIDELINE......................................................17 23. EFFECTIVE DATE......................................................................17
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Government Assets Guideline
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Table of ContentsPREFACE............................................................................................iiABBREVIATIONS...............................................................................iiiDEFINITIONS.....................................................................................iv1. INTRODUCTION...........................................................................12. OBJECTIVEOFTHEASSETSGUIDELINE.................................13. STATUTORyFRAmEwORk........................................................24. ACCOUNTINGSTANDARDS.......................................................25. ROLES..........................................................................................3
TheGovernmentAssetsGuidelineisaresultofextensiveconsultationsand deliberationsmade frompublic institutions.The implementationof this Guideline foresees the best opportunity in bringing aboutaccountabilityandresponsibility.
ThisguidelineopensanewchapterinmanagingGovernmentassetsinamoreorganizedandsustainablemanner. It further replaces theoldandfragmentedassetsmanagementsystemswhichhadbeeninpracticebyindividualGovernmentinstitutions.
TheguidelinewillformbasisfortheformulationofrelevantpoliciesandlegislationsinordertosystematicallysupportGovernmentdevelopmentprograms. In that regard, this guideline replaces all circulars anddirectives that were previously issued in relate to management ofGovernmentassets.
Theministry of Finance wishes to acknowledge contributions of allpartieswhomadethisworkpossible.
An Asset mean any resource controlled by the Government, fromwhichtheGovernmentexpectstoderiveeconomicbenefitsoruseforservicedeliverytothegeneralpublicoveraperiodextendingbeyondone financial year. For the purpose of thisGuideline an asset shallmeannon-currentassetswhichare furniture,equipments,plantandmachinery,buildingsaswellasmotorvehicles.Howeverthedefinitionshallbeappliedtootherassetscategorieswhendeemedfit.
Depreciable amount of an asset is the cost of the asset less theresidualvalueoftheasset.
Director of Government Assets Management Divisionistheofficerappointedby thePermanentSecretaryTreasuryand thepaymasterGeneral,chargedwiththedutyofmanagingGovernmentAssets.
Fair value –istheamountofwhichanassetcouldbeexchangedora liabilitysettled,betweenknowledgeable,willingparties inanarm’slengthtransaction.
Insurable value refers to the value of an asset at which they areconsidered to be insured; usually subjected to provisions of relatedpolicies.
Impairment refers to the loss in future economic benefit or servicepotential of an asset besides the traditional loss of value throughdepreciation.
Market is the environment in which goods and services are tradedbetweenbuyersandsellers.
Market Value is thepriceatwhichan interest in theassetmightbereasonably expected to be sold on the date of valuation betweenawilling seller and buyer both having reasonable time to negotiatewhereinbothpartieshadeachactedwithfullknowledge,prudentlyandwithoutundueinfluence.
Original in-service date is the date asset was originally placed inservice.
Paymaster General is the officer referred to in Section 6(7) of thePublicFinanceAct2001andvestedwiththepowertocontroltheissueofpublicmoneytoAccountingOfficers.
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Price is a term used for the amount asked, offered or paid for aparticulargoodorservice
Property, Plant and Equipment (PPE) aretangibleassets,extricablecombinedwithothersorrunningsinglytoassisttheoperationsofanentity, in service delivery, for rental to others, or for administrativepurposes,andexpectedtobeusedformorethanonefinancialyear.
Residual value istheestimatedamountthattheGovernmentwouldcurrentlyobtainfromthedisposaloftheasset,afterdeductingthecostofdisposal,iftheassetswereintheageandconditionexpectedattheendofitsusefullife.
Replacement Value refers to the cost of acquiring an asset atcurrent prices having utility equivalent to asset under considerationbutofmaterials,standardsanddesignaccordingtoprevalentmarkettechnology.
Revalued amount refers to the fairvalueofanassetat thedateofa revaluation less any subsequent accumulated depreciation andsubsequentaccumulatedimpairmentlosses.
Special Committee means the committee formed by the DirectorofGovernmentAssetsmanagement Division to evaluate suggestedchanges in thisGuideline,beforebeingapprovedby thePaymasterGeneral.
Straight line depreciationreferstoamethodofprovidingdepreciationbywhichassetsarewrittenoffinequalannualamounts.
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Useful life referstotheexpectedperiodoftimeoverwhichanassetistobeeconomicallyusedORtheestimatedtotalservice,expressedintermsofproductionunitsthatisexpectedtobeeconomicallyobtainedfromtheassetwhenemployedinthebusinessofanentity.
Value isaneconomicconceptreferringtothepricemostlikelytobeconcludedbythebuyersandsellersofagoodorservice.
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VISION, MISSION AND ASSETS GUIDELINE STATEMENT
The Vision of the Ministry of Finance:Tobeacentreofexcellenceinmanagingmacro-economyandfinancialsystemsforenhancingeconomicgrowth.
.The Mission of the Ministry of Finance:To promote economic growth andmacro-economic stability throughprudenteconomicandfinancialpolicies.
The ministry of Finance through Government Assets managementDivision and Accountant General’s Department has prepared andsubmittedGovernmentAssetsGuidelinewhichistheoverallframeworkgoverningthemanagementofassets.
TheGuidelineaimsatensuringthatassetsownedbytheGovernmentare systematically administered through documented managementsystemsinordertocontrolandsafeguardtheiruseinanefficientandeffectivemanner.
The Guideline provides the basis for acquisition, allocation,maintenance, disposal, accounting and other activities relating toGovernmentassets.
ThroughtheGuideline, theGovernmentshallbeable tomonitor theasset management systems basing on sufficient information whichwill enable preparation of periodical reports and annual financialstatements in accordance with acceptable International PublicAccountingStandards.2. OBJECTIVE OF THE ASSETS GUIDELINE
The general objective of thisAssetsGuideline is to set sustainableassetmanagementsystemsaimedatensuringthegovernmentmeetsitsservicedeliveryobjectiveefficientlyandeffectively.
Thisdocument constitutesaGuideline statementandshall not takeprecedenceoverthestandardsspecifiedbytheInternationalAccountingStandardsBoard.Therelevantaccountingstandardsinclude:
i. IPSAS1–Presentationoffinancialstatements.ii. IPSAS2–Cashflowstatementiii. IPSAS 3 – Accounting policies, changing in accounting
v. IPSAS21–Impairmentofnon-cash-generatedassetsvi. IPSAS22–Disclosureofinformationandfinancialstatementvii.Andanyotherstandardwhichmightberelevantforthepurpose
ofGovernmentassets.
5. ROLES
Apart from responsibilities assigned to different position or division/units in the government, they also have the roles to play to ensuregovernmentassetsarewellmanaged.Thefollowingdescribedifferentplayersandtheroleinmanagementofassets;
5.1. Roles of the Paymaster Generali. To ensure that any Accounting Officer or any entity that
ii. To assign any officer to inspect assets in all GovernmentofficesforthepurposeofcompliancetoprovisionsofthePublicFinanceAct2001.
iii. To authorize transfer between mDA’s/LGA’s and all cross-bordertransfersofGovernmentassets.
5.2. Roles of Accounting Officeri. To ensure adherence on assets procurement and disposal
procedures as stipulated in Public FinanceAct 2001, PublicProcurementAct,2004andotherapplicablelegislations.
ii. To be the principal custodian of all assets under respectivemDA/LGA.
iii. Toensurethatbothmanualandelectronicregisterareinplacetoenableeconomicalandtransparentuseofassets.
iv. Toensureproperinternalcontrolsystemsforsafeguardingandmaintenancemechanismofassetsareinplace.
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v. To ensure that assets under his/her control are properlyaccountedforinaccordancewithapplicablestandards.
vi. ToupdatetheassetregisterinaparticularGovernmententityvii. To ensure thatAssets register is submitted along with PPE
reportforcertificationofthelaterbyDGAmforfinalaccounts.viii.To ensure assets obsolescence, losses, transfers and any
changes of status occurring to assets are reported to thePaymasterGeneralforfurtheraction.
ix. ToauthorizetransfersofassetswithinthemDA/LGAx. ToprepareanannualreplacementplanofAssets.xi. ToensurethattheAssetsGuidelineisadheredto.
5.3. Roles of Accountant General
i. To ensure that all mDAs/LGAs comply with the disclosurerequirements of non-current assets as prescribed byInternationalAccountingStandardsBoard.
ii. Toensure that theassetmanagementmodule is operationalandproperlymaintained.
iii. ToconsolidatethePPEreportsfrommDAsandLGAsaspartoffinalaccountsreports.
iv. Tocollectandaccountforproceedsfromthedisposalofassets.
5.4. Roles of Director of Government Assets Management Division
i. To advise PmG on formulation and review of guideline andvariousdirectivesforeffectivemanagementofassets.
ii. Tomaintainthecentralizedassetsregister.iii. To authorize updating of asset register based on periodic
verificationofassetstoensurecompliancetotheregulations,guidelines and procedures.
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iv. ToconductphysicalverificationofassetsformDA’sandLGA’s.v. TodeterminetheidentificationsystemofGovernmentassets.vi. To ensure the classification structure related to assets is
maintainedinaccordancewithInternationalStandards.vii. To ensure assets are disposed-off in accordance with the
5.6. Roles of Director of Administration and Human Resources Management
i. ToensurethatallGovernmentloanedassetsunderemployee’spossessionarehandedoveruponterminationofservice.
ii. ToensurethatrelevantassetclearanceformisapprovedbytherelevantHeadofDivision/Unittofacilitatepaymentofterminalbenefitsoftheemployee.
iii. Toensure thateveryasset clearance form is counter signedby the Asset management Division before processing theterminationofService.
5.7. Roles of Head/In-charge of Division/Unit or Section
i. Toensurethatemployeesunderthedivision/unitsarefamiliarandadhere to theapprovedAssetmanagementPoliciesandProcedures
ii. Toensure thatassetsareproperlymaintained inaccordancewiththerespectiveassetsGuideline.
iii. Toensurethatassetsofthedepartmentarenotusedforprivategain.
iv. Tobeaccountableandresponsible forallassetsallocated torespectiveDepartment/Unit.
v. ToensurethatAccountingOfficerisnotifiedofanychangesinthestatusoftheassetsunderUnit/Department.
vi. ToensurethatinternalassettransferissubjecttoapprovalbytheAccountingOfficerandnotificationtoGAmD.
vii. Toensurethatallobsoleteassetsarereportedtothe Accounting
Officer as and when they arise and shall later reported to PMG.
viii.To perform initial investigation of any loss of assets and toreportthesameinwritingtoAccountingOfficer.
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ix. Toensurethatalllossesoccurredarereportedandappropriateactionaretaken.
5.8. Roles of Internal Auditor General
i. To developmechanisms for undertaking internal controls onassets,monitorandevaluatetheirimplementation.
ii. To review and appraise compliance with laid down Laws,Regulations,Standards,SystemsandProceduresinmDAsandLGAsinorder toensurecontrol,valueformoneyandproperaccountabilityofgovernmentassets.
iii. To conduct special and technical audits onassets to assesscompliance on procedures, rules, regulations and bestpractices.
6. FORMAT OF ASSET REGISTER
The asset register shall bemaintained in the format determined bythe Paymaster General and shall comply with the requirements ofGenerallyAcceptedAccountingPractice.
10)Category11)Status12)Type13)Custody14)Vote/Sub-Votenumberandname15)Accountingreferencecode16)Estimatedresidualvalueoftheasset17)Originalcostoftheasset18)Revaluedamountoftheasset.19)Revaluationdate20)Thepersonwhoperformedthelastrevaluation21)Thepersonwhoperformedthelastphysicalverification22)Depreciationfortheyearchargedagainstthecostoftheasset23)Accumulateddepreciationtodatefortheasset24)Impairmentlossesrecognizedduringtheyearontheasset25)Accumulated impairment losses recognized to date for the
asset26)Depreciationmethodandtheratetobeused27)Carryingvalueoftheasset28)Thedateassetisretiredfromuse29)Transfer,disposalandwriteoffdetails30)Fundingsourceoftheasset31)Currentinsurancearrangements32)whether the asset is encumbered and the nature of
encumbrance.
6.1 Maintenance of Asset Register1. AccountingOfficer shall promptly provideGovernmentAsset
management Division in writing any information required tocompiletheassetregister,andshallpromptlyadvisetheAsset
2. An asset shall remain in the asset register for as long asit physically exists. The fact that an asset has been fullydepreciated shall not in itself be a reason for removing theassetfromtheassetregisteruntilitisdisposedoff.
3. IfanassethasbeenfullydepreciatedbutisstillbeingusedbytheGovernment, it indicatesthattheasset’sestimatedusefullifehasbeenunderestimated.ThereforetheGovernmentwillhave to account for a change in estimate using the asset’sadjustedestimatedusefullife.
4. The asset register must provide information to account forlossesofassetsaccordingtoPublicFinanceRegulations2001.
7. CLASSIFICATION OF ASSETS
For the purposeof thisGuideline assets shall be classified into thefollowingcategories:
Assets
CapitalAssets
FurnitureandFixtures
OfficeEquipment
Plantandmachinery
motorVehicleCycles
RecurentAssets
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The head of Division/Units shall, in writing, provide the PaymasterGeneralwith informationorassistance required tocompileaproperclassificationofassets.
Capitalization thresholdAnAsset is classified either as capital or recurrent on the date ofacquisition.Thisclassificationwillbebasedon thevalue (costpriceoftheasset).IfanassethasacostofTsh.100,000/-andaboveisclassifiedasacapitalassetandhencereported.However if itscostislessthanTsh.100,000/-,itwillbeclassifiedasrecurrentassetandthereforeexpensedinaparticularfinancialyear.
All assets to be procured for a particular financial year shall be inaccordancewiththeannualprocurementplan.Anyotherarrangementshalldemandapprovalfromtherelevantauthority.
10. ACqUISITION OF ASSETS
Assets may be acquired through purchase, transfers, confiscation,heritance, donations and any othermethod considered appropriate.The process to be followed when assets are acquired through,purchaseinaccordancewithPublicProcurementAct,2004,transfersinaccordancewithPublicFinanceActandLocalGovernmentFinanceAct, 1982, confiscation, heritance, donations and any othermethodconsideredappropriateshallbeinaccordancewithanyotherrelatedlegislationsforacquisitionofassetsapplicableintheUnitedRepublicofTanzania.
Inthecaseofnonprocuredassets,theyshallbevaluedandrecordedonacquisitionorduringsubsequentvaluation,whichever is thebestoption.
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11. MAINTENANCE OF ASSETS
General maintenance of assets
Every head of Department / Unit shall be directly responsible forensuring that all assets under respective custody are properlymaintainedandinamannerwhichwillensurethatsuchassetsattaintheirusefuloperatinglives.
Maintenance Plan
The objective of this plan is to ensure that assets remains suitablefor their intended use and service delivery requirements and areeconomically utilized to ensure maximum long term benefit to theorganization.
Dependingon thenatureofassetseveryheadofDepartment /Unitshall ensure that a maintenance plan of assets is prepared andsubmitted to theAccountingOfficer onannual basis.Every headofUnit/DepartmentshallreportinwritingtotheAccountingOfficeronthestatusofmaintenanceplan complianceon the sixthmonthof everyfiscalyear.
Major Repair or Overhaul of an AssetForthecaseofmajorrepairoroverhaulofanassetrevaluationshallbeconductedtoascertainanewvalueandusefullifeofaparticularasset.
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13. DEPRECIATION OF ASSETS
Thedepreciableamountofanassetshallbeallocatedonasystematicbasisoveritsestimatedusefullife.TheprevailingInternationalStandardfordepreciationshallbeappliedovertheuseful lifeoftheassets.InaccordancewiththeGenerallyAcceptableValuationPrinciples(GAVP),depreciation forvaluationpurposesshallbe theadjustmentmadetothe replacementcost to reflectphysicaldeterioration, functionalandeconomicobsolescence.
Assets will be subject to annual reviews during which remainingeconomic life of an asset will be determined. Consideration will begiventotheappropriatenessoftheassetsvalueitsassetlifeandanyotherfactoraffectingitsusefulness.Significantdiscrepancieswillleadtoadjustmentoftheassetlifeorassetvalue.
For thepurposeof thisGuidelineheritageassetsmayvary invalueovertimeandtheyarenotsubjectedtonormaldepreciation.
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14. TRANSFER OF ASSETS
whenassetsare transferred,adocumentwithspecificauthorizationshallbeissuedtovalidatethetransfer.AnyexternaltransfershallbeauthorizedbyPmGwhereasanyinternaltransfershallbeauthorizedbyAccountingOfficer/headofDivision.The authorization document should also include the followinginformation;
i. Assetdescriptionii. Costoftheassetiii. Dateofacquisitioniv. Uniqueassetnumberv. Effectivedateoftransfervi. Currentowner/locationvii.Newowner/locationviii.Reasonfortransferix. SignaturebyIssuingOfficersx. SignatureofReceivingOfficersxi. SignatureofAuthorizingOfficer
15. VERIFICATION OF ASSETS
Physical verification of assets shall be undertaken once in everyfinancial year or whenever there is significant requirement inascertainingquantities,value,physicalexistence,statusandwhetherinuseornot.Thecollectedinformationwillfacilitatethereconciliationbetweenphysicalexistenceandfactsrecordedintheassetsregister.
The reasons for writing off assets shall include accident, fire, theft/fraud,willfuldestructionof theassetoranysuch reasonasmaybeapprovedbythePaymasterGeneral.Afterthewrite-off,assetregistershallbeupdatedaccordingly.
19. DISPOSAL
Disposal is an important stage of the assetmanagement life cycle.Therefore,itisrequiredtobesupportedbydisposalplanwhichshall
Procedures for asset disposal shall be in accordance with PublicProcurementRegulationsandPublicFinanceRegulationswhen theneed arises. For the case of assets held in Tanzanian Embassies,disposalmethods shall be in accordancewith the laws, regulationsandproceduresoftherespectivecountries.
Disposal of hazardous assets shall be done in accordance withenvironmentalconservationfactors.
EveryheadofUnit/Divisionshallbedirectlyresponsibleforthephysicalsafety and security of any asset controlled or usedby the entity. InexercisingthisresponsibilityeveryheadofUnit/DivisionshalladheretoanywrittenguidelineissuedbythePaymasterGeneralwithregardtosafetyandsecurityofassets.
21. INSURANCE
with respect to type, nature, value and risks involved, governmentassets may be insured through reputable insurance company. Theapplicablegovernment insurancepolicyshallbeapplied.AccountingOfficersshallbudgetforfundtocaterforinsurancepremiumintheeventofaccidentsand related liabilities.GovernmentAssetsmanagementDivisionshall issueclear instructionsonsafeuseandupkeepoftheAssets.
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22. UPDATING THE GUIDELINE
TheGovernmentAssetmanagementDivisionshallreviewprovisionsof this Guideline and shall notify all Accounting Officers throughGovernmentgazettetosubmitsuggestedchangestothisGuidelineinaprescribedformatasandwhendeemedrequired.
Therewill be Special Committeewhichwill evaluate the suggestedchanges to be included in the Guideline before submission to thePaymasterGeneralforapproval.