Capital asset management for TEIs
Te whakahaere rawa o ngā Pūtahi Mātauranga Matua
This section sets out the Government’s, and our, expectations and requirements for how tertiary education institutions (TEIs) manage capital assets. It provides TEIs with tools, templates and advice to help them better manage their capital assets, the supporting systems and processes.
This section sets out the Government’s, and our, expectations and requirements for how tertiary education institutions (TEIs) manage capital assets. It provides TEIs with tools, templates and advice to help them better manage their capital assets, the supporting systems and processes.
Why is the Government interested in the asset management of TEIs?
The tertiary education sector collectively manages around $9.5 billion of land and buildings. This makes it one of the largest social asset portfolios across the most capital intensive government agencies.
The Government has an interest in these assets being effectively managed. This includes:
- owning the right assets
- managing the assets
- funding the assets
- managing risks to the Crown balance sheet.
These are all critical ingredients to the ongoing provision of high-quality and cost-effective public services.
What is capital asset management?
Capital asset management (CAM) involves meeting required levels of customer service while ensuring individual investments and long-term priorities are aligned in the most cost-effective way. It requires the active stewardship of resources for present and future customers.
TEIs with capital Crown assets must currently: Assessing the asset management capability of tertiary education institutions We review these assessments to ensure that asset management standards are being maintained and/or improved. The assessments also let us know the level of maturity of each TEI’s asset management capability. Each assessment report includes a performance improvement plan that TEIs are expected to implement. In 2015, the Government updated its expectations for managing investments and both physical and intangible assets for: Cabinet Office Circular CO(15) 5 Investment Management and Asset Performance in the State Services The 2015 Circular supersedes the Cabinet Office Circular CO(10)2 released in 2010 which sets out Cabinet’s expectations for approval of, and assurances relating to: Under these expectations, TEIs were allowed to set their own sensible and aspirational targets for capital asset management. These targets were to be based on the scale of assets under the TEI’s management and how critical those assets were to the delivery of essential services. The following aspects are continued from the 2010 Cabinet Office Circular, although they may not all apply to TEIs: Since 2010, we have introduced various elements of good capital asset management for TEIs including: The Treasury has taken these initiatives into account and decided that TEIs will not be subjected to some of the onerous requirements of the 2015 Circular, specifically the requirement for an Investor Confidence Rating. However, the Treasury has identified a number of areas for improvement and agreed to allow us to set our own timetable to achieve these improvements. We are working closely with the TEI Sector Reference Group on capital asset management to decide how to meet the Treasury’s expectations. Meanwhile, if you have any questions send them to: camenquiries@tec.govt.nz.What must TEIs do?
New 2015 requirements for capital asset management
Our initiatives and next steps to meet the Treasury’s requirements