Author | Dasagen Pather, Solutions Specialist
Through all the legislative requirements of GRAP and mSCOA, we have seen a growing emphasis on asset management within local government during the past decade. Naturally, there has also been a lot of focus on software systems to support the various requirements.
Still, for the most part, these system requirements tend to take on a compliance role that is heavily finance orientated. While compliance is essential, it is equally important to deeply consider whether the current processes and systems ingrained within local government are genuinely aiding the physical management of assets. In addition, you would be hard-pressed to find software systems that are equally able to meet the financial compliance and technical requirements to manage and report on public assets managed by municipalities.
Much has been done to successfully break down silos between finance and technical directorates of asset management within local government entities, and one cannot deny the importance of each of their respective roles. Open communication, collaboration, and consistency remain key, which begs the question, “Why can’t the same principle be applied to their respective software systems?”.
An asset management system supported by accountants will always steer more towards financial compliance and reporting; while a system supported by engineers will always be more technically inclined and sound. In this technologically advanced day and age, nothing stops two specialised systems, like an ERP or accounting system, to integrate or “speak” with a technical system like an enterprise asset management system (EAMS) or computerised maintenance management system (CMMS).
Over the last couple of years, the general observation is that South African municipalities have placed a lot of time, effort, and money into eradicating the backlog of infrastructure to its people. These efforts have ensured better equality and access to services. Still, the same focus and efforts have not been applied to the operations or the maintenance requirements of these existing, recently acquired or newly built assets. Failing infrastructure and the resulting implications has since forced a lot of attention on the need to maintain assets better, promote sustainable service delivery and delaying capital expenditure as far as possible. To ensure that public assets are taken care of, the National Treasury has since stipulated that a fixed percentage of municipal budgets must be allocated towards operations and maintenance.
Most municipalities are used to financial management systems, systems that cater for asset verifications and the development and support of sound asset registers. While these municipalities tend to follow all the supply chain regulations very well, the best interests of physical and proper asset management are lacking. Yet, many opportunities for improvement could be unleashed when using a CMMS to support their maintenance management. The basic functions of maintenance work planning and control, job card creation, the more advanced artisan or service provider tracking or measurement, stores or spare parts administration and optimisation, and associated reporting could significantly improve the work lives of municipal employees and service delivery by these municipalities. The negative impact of reactive and inefficient maintenance, experienced by the majority of local government, can be reversed by using the appropriate software systems supported by the proper training and business processes.
Sadly, many municipalities cannot provide a history of the service or maintenance of the assets to which they are custodians. This vital information is a building block for predictive maintenance that prevents unplanned breakdowns and setbacks that cost thousands, sometimes millions of rands. Therefore, municipalities must differentiate between the different software systems to better serve their broader financial compliance and especially their physical asset management requirements.
Each municipality also needs to acknowledge their level of maturity in asset management and their competency when it comes to investigating systems. Furthermore, municipalities need to ensure that this translates into their terms of references and scope of works that seek to find best-fit systems to avoid the common problem of broad and all-encompassing scopes that are unattainable and usually too advanced for the needs of the entity to begin with.
To end, we must never lose sight of the fact that software systems are a means to enable the people in support of something, in this case, asset management. It is a mistake to think that a software system will automatically solve all of the problems faced by local government. Instead, municipalities need to be practical and specific about what they wish to achieve and they need to focus their attention on the sound management of physical assets and not just accounting compliance. Not one over the other, but both in unison and in support of better asset and maintenance management to ensure sustainable service delivery and empowered asset custodians. Only then can it be confirmed that a system has indeed bettered the management of public assets by responsible municipal asset owners.
 Generally Recognised Accounting Practices
 Municipal Standard Chart of Accounts