To view or download this policy as a PDF click Community and General Policies Documents

Purpose

To articulate the method(s) of asset disposal by Council and ensure that the Council is disposing, in a way that is transparent, accountable and meets the requirements of the Local Government Act, Legislation and any other subordinate legislation.

Scope

This policy covers all assets owned by the Council. It does not cover who is delegated to dispose of assets; this is covered in the Delegations register.

Definition and Terms

Asset: A single item with a GST exclusive cost of $5,000 or more and with a useful life of 12 months or more.

Portable & attractive item: A single item with GST exclusive cost of less than $5,000 and are susceptible to theft or loss due to their portable nature and attractiveness for personal use or resale.

Legislation and Reference

NT Local Government Act 2019
Local Government (General) Regulations 2021
Guideline 4: Assets 2021 LGA 2019
CDRC Accounting and Policy Manual
CDRC Asset Management Plans
CDRC Assets and Portable and Attractive Items Policy

Policy Statement

Disposal of Assets

All disposal of assets must be undertaken in accordance with the Local Government Act 2019 (and associated regulations and guidelines), the Delegations register, and the guidelines set down in this policy document.

As part of the annual budgeting process, a disposal schedule must be prepared and approved according to the Delegations register. The recommendation to sell or dispose of any major asset must be approved by the Council prior to sale or disposal.

Funded assets are to be disposed of in accordance with the funding agreement. All asset disposals must be a transparent and open process. Auction or tender is required for sale of assets with an estimated disposal value of over $5,000. Lower value assets will be disposed of as agreed by the Director based on the principle of transparency and openness.

Disposal of fleet assets will be based on the CDRC Fleet Asset Management Plan, ‘Total Cost of Ownership’ analysis as well as national and local industry indicators and benchmarks. Fleet will normally be disposed of when depreciation begins to have adverse effects on the sale price of an item.

Fleet assets must be sold by auction at an established auction organisation in Alice Springs (or elsewhere if this demonstrates a better return).

Conflict of Interest

The officer responsible for the disposal of any Council asset and the CEO or relevant Director must ensure that no conflict of interest occurs in or as a result of the asset disposal process

Reasons for Disposal

 A decision to dispose of an asset may be based on one or more of the following:

• Obsolescence.
• Non‐compliance with work, health and safety standards.
• No use expected in the foreseeable future.
• No usage in the previous year.
• Optimum time to maximise return.
• Discovery of hazardous chemicals or materials present in the asset.
• Uneconomical to repair.

Preparing Assests for Sale

A check must be carried out to ensure assets do not contain:

• Additional items not intended for sale.
• Confidential documents (records, files, papers).
• Documents on Council letterhead or which may be used for fraudulent purposes.
• Software (which could lead to a breach of licence or contain confidential data).
• Hazardous materials.

As much as is practical, any “Central Desert Regional Council” identifying mark should be removed or obliterated. Spare parts held for a particular item should be disposed of in one parcel with the asset.

Proceeds from Sale of Assets

Income from funded assets will be treated in accordance with the funding agreement. In regards to fleet, revenues from disposed fleet items will be returned to the fleet replacement reserve.
In regards to other assets, the proceeds on disposal will go back to corporate revenue and be spent in a manner that Council determines.

Write Offs

Assets are required to be written off in the following situations:

• Loss of the asset
• Theft of the asset
• The asset has become unserviceable and the recoverable value is less than the resale value
• The asset has become obsolete and the recoverable value is less than the resale value
• The asset has been condemned

Records

When assets are disposed of, or written off, an Asset Disposal Form will be completed by the relevant person and returned to Finance. Either a copy of receipt or other proof of disposal from the contracted auctioneer, the licensed scrap dealer or the tip site, or a letter acknowledging receipt of asset and its nominal value from the recipient of the asset is required to be attached to the Assets Disposal Form.

Responsibilities

The Finance Manager is responsible for the development, compliance, monitoring and review of this Policy. This person is also responsible for putting in place systems and procedures to ensure compliance with both applicable accounting standards and the stewardship of expendable items not captured within the accounting definition of an asset (e.g. portable and attractive items).

Reporting

Disposals, additions, impairment and revaluation of assets is reported to Council including any transfers to asset related reserves via the Finance Report in the period they occur.

Review History