Prepared by Consulting and Audit Canada - April 1998
Executive Summary
The purpose of this Asset and Inventory Management Strategy is to establish a
framework for the management of materiel within the IFMS/SAP environment (the
Integrated Financial and Materiel System). The Strategy takes into account
fundamental issues raised by the various stakeholders, such as planning,
tracking requirements, inventory management, loans, acquisition cards, and
facilities management. Asset and inventory management information constitutes
the common thread amongst these fundamental issues, and thereby is the
centrepiece of the Strategy.
Our study has included interviews with stakeholders in the Corporate Services
Branch and in the Treasury Board Secretariat policy area. We have also taken
into account major trends impacting on the materiel management area, such as the
increasing popularity of acquisition cards. The following is an outline of the
major sections of the report.
- A depiction of the Current Materiel Management Workflow is presented on
page (v).
- A depiction of the Proposed Materiel Management Workflow model is
presented on page (vi).
- A brief discussion and analysis of the trends and issues that have shaped
our thinking, and key definitions, is presented in Sections 2 to 4 of this
report. These Sections provide the rationale for our proposed Framework.
- A Draft Accountability Framework is presented in Section 5. The proposed
Framework is supplemented by a Summary Responsibility Chart on page 17.
- Section 6 concludes the report with the identification of Next Steps that
we see as a way to progress towards the proposed Framework.
This Strategy is based on the requirements and constraints expressed by
TB/Fin stakeholders, in order to make the approach workable within the current
environment. The Department of Finance and the Treasury Board Secretariat, like
many other departments, have suffered from significant reductions in the
administrative support functions, affecting the workload of remaining staff.
However, the effective use of automation through the implementation of SAP, can
make this strategy workable with available resources. Simplicity of design and
current resourcing levels were taken into account in the design of the Strategy.
The principal recommendations embedded in our strategy are presented in the
following table:
Recommendation
|
Suggested OPI
|
Relating to Existing or New Assets
|
It is of our opinion that the next step in the
implementation of the Draft Asset and Inventory Management Strategy should
be to consult with all stakeholders in order to assess the workability of,
and gain acceptance for, the proposed roles and responsibilities. |
FSD |
n/a |
All acquisition card transactions over $500
would be flagged by Procurement and Payment Services, in order to capture
all controllable assets. Arrangements would then be made to complete an
Asset Master Record. This addresses one of the key concerns of the Office
of the Auditor General in their recent audit of acquisition cards. |
Proc. & Pymt. |
New |
All loans of materiel would be accounted for
centrally, to limit TB/Fin's exposure to negative public perceptions due
to ineffective controls over such materiel. A one-time inventory of items
currently out on loan is required, as well as a system for capturing these
in the future. |
RC's, ASD-FMM, ISD |
Existing and New |
The MARS inventory system would be replaced by
SAP, including the use of SAP's long text field in the Asset Master
Records for capturing data on repairs and maintenance. |
ASD-FMM, ISD |
Existing and New |
The threshold for capital assets should
be set at $5,000 for financial reporting purposes. This, based on our
discussions with TB officials, is not out of line with Treasury Board
policy, and is a level used in the private sector as related to us by TB
officials. Also, it does not impose an additional workload on TB/Fin. |
FSD |
Existing and New |
For tracking and inventory control purposes, controllable
assets are defined as items costing more than $1,000, and items of an
attractive nature (Computer equipment - desktop and portable (monitors and
CPU's), printers, fax machines, electronic overhead projection equipment,
cellular phones, personal electronic organizers, televisions, video
cassette recorders and other video equipment). |
n/a |
Existing and New |
SAP should be used as the principal enabler to
central asset management, in terms of tracking asset movement and repairs. |
n/a |
Existing and New |
Responsibility Center staff would not have
direct access to SAP for maintaining asset master records up to date, but
would input the information through an Intranet interface. Although the
concept of web-enabling SAP still has many unknowns at this time, it is of
our opinion that, basically, RC's should not have direct access to the
Asset Master Records, but merely input the asset information on an
electronic form, which would be verified by ASD-FMM before it is uploaded
to SAP. Until this is implemented, the input would have to be done through
the use of paper forms. |
RC's, FSD |
New |
Significant government-wide initiatives such as the implementation of SAP and
the increased use of acquisition cards, present concrete opportunities. The SAP
system, once implemented in TB/Fin, will enable significant improvements in
materiel management planning information, without the need for additional
resources. For example, SAP provides an opportunity to phase out obsolete
systems like MARS and introduce an enterprise system that eliminates duplicate
entries and improves the quality of reporting.
Our Framework also offers a solution to one of the government-wide side
effects of acquisition cards on materiel management, as highlighted by the
Office of the Auditor General in his report on Acquisition Cards. Because items
tend not to be recorded in central systems when purchased through acquisition
cards, the quality of planning information gradually deteriorates in the long
term as systems represent a gradually decreasing percentage of the total
population of departmental assets. It is our understanding that, in TB/Fin,
approximately 10% of transactions of more than $500 are made through acquisition
cards. Our solution takes into account the need for relative simplicity required
by this low transaction volume, as well as the risk of future deterioration of
asset management information.
Our discussions have indicated that, from a departmental perspective, the
planning of long term materiel acquisitions suffers from an information gap, as
well as from a lack of integration with corporate planning, budgeting, real
property, personnel and financial systems. Improvements in materiel management
information and the implementation of SAP were seen, as a general consensus, as
ways of facilitating materiel management planning. It is our understanding,
based on our discussions with representatives of the Materiel Management
Institute, that the discipline of materiel management is moving towards a more
proactive role, including that of planning. Supported by better planning
information and tighter linkages to corporate systems and structures, the
materiel management function will be in a position to bring improvements to the
way the Departments manage their assets.
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