REPUBLIC OF KENYA THE NATIONAL TREASURY AND PLANNING ASSETS MANAGEMENT INDICATOR GUIDELINES IN THE PUBLIC SECTOR PERFORMANCE CONTRACTING. (20™ CYCLE)Preface In the endeavor to improve service delivery in the Public service, the Government continues to use performance contracting as a key accountability tool, Performance contracting is part of the broader public sector reforms aimed at improving efficiency and effectiveness in the management of public service. The 20th Cycle of performance contracting requires that the MDAs, the constitutional commissions and independent offices to be guided and supported in the identification of their performance indicators and annual targets during the implementation of the Performance contracting. The roles and responsibilities of key players have clearly been identified to facilitate effective understanding of the various performance contracting processes. National Treasury and Planning has a role to play as the specialized agencies in performance contracting and is supposed to develop performance indicators and sub indicators in Assets management for implementation by MDAs. It should also receive quarterly reports on the relevant performance indicators analyze them and provide feedback within 15 days from date of receipt. To actualize the above requirements, the National treasury have prepared guidelines and the scoring criteria, Furthermore, to ensure that there is a standard way of operations, there was a need for the development of a hand book to be used as a guide and reference point. ‘The handbook is structured in such a way that it covers areas on guideline on Asset management for performance contracting, the processes to be followed, Evaluation and scoring criteria used, and quality assurance criteria. This hand book will be subject to changes and revisions as dictated by the change of events.TABLE OF CONTENTS PREFACE. DEFINITIONS OF TERMS... TABLE OF CONTENTS. INTRODUCTION ASSETS MANAGEMENT SUB-INDICATORS FOR THE 20TH CYCLE PERFORMANCE CONTRACTING (PC) EVALUATION. GUIDELINES TO THE ACTIVITIES IN ACHIEVING THE INDICATOR. 1. ESTABLISHMENT OF ASSET MANAGEMENT STRUCTURES... [REPORT FOR ESTABLISHMENT AND OPERATIONALIZATION OF ASSET MANAGEMENT STRUCTURES STRUCTURE - DATE ESTABLISHED... ComPostrion/ DESIGNATIONS ‘NUMBER OF OFFICERS... LETTERS OF APPOINTMENT/.. DEPLOYMENT (ATTACH A COPY).. NO OF MEETINGS HELD (MINUTES)... ASSETS MANAGEMENT COMMITTEE... ASSET MANAGEMENT UNIT. 2. OWNERSHIP DOCUMENTS... 3. MAINTAIN AND UPDATE ASSETS REGISTERS USING THE PRESCRIBED REPORTING TEMPLATES ISSUED BY THE NATIONAL TREASURY (60%). EVALUATION CRITERIA. 4. DISPOSAL OF IDLE ASSETS - ENSURE DISPOSAL OF UNSERVICEABLE, OBSOLETE AND SURPLUS ASSETS BY WAY OF SALE, TRANSFER TO OTHER PUBLIC INSTITUTIONS, DESTRUCTION, DONATION OR OTHER AUTHORIZED METHODS OF DISPOSAL AND IN ALL CASES IN FULL CONFORMITY TO THE EXISTING LEGAL REQUIREMENTS (40%) ASSET DISPOSAL EVALUATION CRITERIA «nse 5, REPORTING TIMELINES PART TWO... EVALUATION CRITERL DISPOSAL OF IDLE ASSETS... ASSET DISPOSAL EVALUATION CRITERIADEFINITIONS OF TERMS “Asset” is a resource owned, or in some cases, controlled, by an individual or organization as a result of past events and from which future economic benefiisor social benefits are expected to flow to the entity. Assets may be movable or immovable property, tangible or intangible, and include equipment, land, buildings, animals, inventory, cash and cash equivalents, receivables, investments, natural resources like wildlife and, intellectual rights vested in thestate or proprietary rights. “Asset management” is a systematic process of planning, acquisition, operating, maintaining and disposing of assets in the most cost-effective mannerincluding all costs, risks and performance attributes. “Accounting officer” has the same meaning assigned to it in section 2 of the Public Finance Management Act, 2012 “Public Sector Accounting Standards Board” has the same meaning assigned to it in sei the Public Finance Management Act, 2012. 2 of “Cabinet Secretary” has the same meaning assigned to it in section 2 of the Public Finance Management Act, 2012. “National Treasury” has the same meaning assigned to it in section 2 of the Public Finance Management Act, 2012.The title of the National Treasury to be used at a point in time may take the title as provided for under executive ordersissued from time to time, “Public entity” has the meaning assigned to it in section 2 of the Public Procurement and Asset Disposal Act, 2015.PART ONE: ASSETS MANAGEMENT INDICATOR GUIDELINES. INTRODUCTION ‘These guidelines are intended to provide guidance on the implementation of the asset management indicator for the 20" Cycle and facilitate Ministries, Departments and Agencies (MDAs) in undertaking and reporting on the activities for the Financial Year (FY) 2023/24. Assets Management Sub-indicators for the 20th Cycle Performance Contracting (PC) In the 20" cycle performance contract, MDAs are required to undertake the following: a) Maintain and update Assets Registers using the prescribed reporting templates issued by the National Treasury; and b) Disposal of Idle Assets - Ensure disposal of unserviceable, obsolete and surplus assets by way of sale, transfer to other public institutions, destruction, donation or other authorized ‘methods of disposal and in all cases in full conformity to the existing legal requirements. Evaluation All MDAS are required to submit quarterly and annual reports to the National Treasury using the prescribed format. The National Treasury will assess the annual performance of MDAs and issue a score at the end of the contract period.GUIDELINES TO THE ACTIVITIES IN ACHIEVING THE INDICATOR 1. Establishment of Asset Management Structures Public sector entities are expected to ensure adequate asset management structures and systems are in place for prudent management of public assets, towards this end, MDAs shall establish assets ‘management committees and asset management units. The performance in of this requirement will not be scored, but will serve as an enabler towards achieving the asset management performance indictor, Detailed guidelines on establishment of assets management structures can be accessed at htips://wwww.treasury.go.ke/wp-content/uploads/202 1/03/Asset-Liability-Mat-Policy.-doc- Final.pdi Report for establishment and operationalization of asset management structures Structure | Date Composition’ | Number of | letters of No of meetings established | designations | Officers | appointment/ | held (Minutes) deployment (attach a copy) Assets: management | committee Asset management unit Ownership documents Over the years, some public entities have not had proof of ownership of their assets, specifically land and buildings due to lack of these documents. This has been highlighted in various audit reports. All Accounting officers are supposed to ensure that entities under their jurisdiction have documents of ownership for ALL assets. Where an entity is a body corporate, the documents of ownership should be in the name of the entity and under the custody of the Accounting Officer. In all other instances, the documents of ownership on land and building should be in the name of Cabinet Secretary to the Treasury of Kenya and be under the custody of the National Treasury. The status of ownership document for the assets should be clearly indicated in their respective asset register reporting template and soft copies of land and buildings title documents be sent to nalm @treasury.go.ke when submitting the assets register reporting templates, The requirement on ownership documents will be considered when assessing the completeness of the asset's registers reporting templates under activity 33. Maintain and update Assets Re; the National Treasury (60%) All MDAs are required to submit quarterly and annual reports to The National Treasury using the prescribed format. Prescribed reporting templates and guidelines to support MDAs in implementation of this performance indicator can be accessed from the National Treasury website at huips://www.treasury.go.ke/wp-content/uploads/202 1/03/General lig sters using the prescribed report g templates issued by Jelines-on-asset-and- anagem Evaluation eriteria | Sub-Activity Evidence of Achievement | Weight % Maintain a register of assets in the | Completed asset registers of 30 format prescribed by the National | all asset categories Treasury in separate asset registers for | - All templates | each category of asset, such as land, buildings, investment property, lease, columns filled. | - All relevant column intangible assets among others. totals tallied. tips treasury.go.ke/reporting - EXCEL templates format/IFMIS. | Submit all categories of Assets| - Evidence of receipt 10 registers as prescribed in the reporting /submission of copies templates issued by the National of assets registers to Treasury and PSASB in an EXCEL National Treasury. format (soft copy) [email protected]. The reporting templates should be submitted quarterly by 15" of the subsequent month after every quarter. «© Ifan entity fails to submit the assets registers or fails 10 adhere to the prescribed format, no score will be awarded for this activity. Incase an MDA does not have any asset in a category, it should be indicated NONE in that particular reporting | template.4. Disposal of Idle Assets - Ensure disposal of unserviceable, obsolete and surplus assets by way of sale, transfer to other public institutions, destruction, donation or other authorized methods of disposal and in all eases in full conformity to the existing legal requirements (40%) There are many idle and unserviceable assets that are not disposed of by public entities. Failure to dispose of assets leads to wastage due to deterioration of assets value and additional costs being incurred as a result of holding such assets. The assessment of this indicator will aim to establish whether a public entity fulfills its asset disposal obligations under PART XIV of the Public Procurement and Assets Disposal Regulations 2020 and whether the procedures there-in are adhered to and that the entity has fully implemented its disposal plan. Asset Disposal Evaluation Criteria Evaluation will be done after receipt by the National Treasury of the quarterly and annual reports on the implementation of the annual asset disposal plans and graded as follows: 5. Reporting Timelines 1. Quarterly reports for asset management structures, ownership documents and asset registers should be submitted quarterly by 15" of the subsequent month after every quarter. 2. Public Sector entities will be required to submit their annual disposal plans by 15" of October of the financial year. 3. Quarterly disposal implementation reports showing the status of implementation by 15'* day of the subsequent month after every quarter for the purpose of performance evaluation, 4, Report submitted beyond the due date shall attract a penalty of up to 0% of the total quarterly score for submission. 5. The National Treasury shall provide feedback on the reports submitted within 30 days after the submission deadline, NB: All reports to be submitted to the National Treasury through the official email nalm@ treasury.go.kiEVALUATION CRITERIA PART TW oO Evaluation criteria are benchmark, Standard, o factor against which performance and suitability of a technical capability, activity\, product or plan is measured, (On Assets management performance contracting, below are the evaluation criteria’s to be applied to ensure that there is a fair and proper scoring for all the MDAs Submitall catego registers as prescribed in the reporting templates issued by the National Treasury and PSASB in an EXCEL format | Goft copy) | [email protected]. The reporting templates should be submitted quarterly | by 15® of the subsequent month after every quarter. receipt Isubmission of copies of assets registers to National Treasury. accounting officer Forwarding letter Sub-Activity Evidence Scoring criteria | Weight % Maintain a register of assets in | Completed asset | Prescribed format 20% | 50 the format prescribed by the | registers in excel Patera ‘National Treasury in separate | format of all | “I! #8set categories =10% asset registers for each | asset categories | (N/24) category of asset, such as land, buildings, investment | A!! templates | All Columns filled (20) 7 columns filled. property, lease, intangible -Proper description = 4 assets among others. | All___relevant i hutps:/iwww.treasury.go.ke/re | column totals | “Value mt Lorting templates tallied. ownership information =4 -Condition =4 | -All columns of Assets | Evidence of | Submission and signed by | 10Disposal of Lule Assets - Ensure disposal of unserviceable, obsolete and surplus assets by way of sale, transfer to other public institutions, destruction, donation or other authorized methods of disposal and in all cases in full conformity to the existing legal requirements There are many idle and unserviceable assets that are not disposed of by public entities. Failure to dispose of assets leads to wastage due to deterioration of assets value and additional costs being incurred as a result of holding such assets. ‘The assessment of this indicator will aim to establish whether a public entity fulfills its asset disposal obligations under PART XIV of the Public Procurement and Disposal Regulations 2020 and whether the procedures there-in are adhered to and that the entity has fully implemented its disposal plan. Asset Disposal Evaluation Criteria Evaluation will be done after receipt by the National Treasury of the quarterly and annual reports on the implementation of the annual asset disposal plans and graded as follows: No | Activity Evidence Weight % T | Preparation and | © Submission of approved Disposal Plan in | 10 submission of line with PPAD Act and PPAD | i 2 th oem Bevel Regulations 2020 by 15" of October 2023. Disposal Plan to nalm@ireasu 2. | Disposal Status| © Disposal implementation _ process | 5 Report (Evidence will inelude establishment of to be submitted to | disposal committee, request to departments for [email protected] | identification of items for disposal) © Disposal Report- tender notice, bids invitation, letter of award 10 ‘© Disposal process closure, (Disposal proceeds, destruction | 15 Certificate transferring documents) © Ian entity fails to submit the annual asset disposal reports no score will be awarded for this activity © For the documentation in this activity, entities should send soft copy extracts with key information, Actual documents will be verified during sampled verification exercises.