Disposals

1) The Chief Executive Officer or delegate may authorize the disposal of agency assets -

a) by sale;

b) by transfer to another state entity or another government;

c) by gift to a non-government organisation which contributes to government outcomes; or

d) as scrap.

2) Approval from the Ministry of Finance is required before disposing of any state asset.

3) The sale of assets must be carried out in a transparent and competitive way to ensure that maximum value for money is obtained.

(Financial Instructions 2005 s(59))

Disposal of Fixed Assets

• The Deputy CEO has authority to approve the disposal of any “agency asset” using approved disposal methods in Finance Instruction 6.7.10.
• Where the written approval of the Ministry of Finance has been obtained, the Deputy CEO has authority to approve the disposal of any “state asset” using an approved disposal method in Finance Instruction 6.7.11.
• The accounts officer shall update the fixed assets register to reflect assets that have been disposed of.

Sale of Assets

• Where a fixed asset is to be disposed of by sale, the Deputy CEO shall determine which of the following methods of sale to use:
• public auction
• trade-in
• tender process
• direct dealing
• The Deputy CEO shall determine the most cost-effective method of sale taking into account factors such as the condition of the asset, its value and the likely number of potential buyers and provided that:

o the approval of the Controller of Government Supplies is obtained as to the method of sale of any assets valued at more than $3,000.

• A direct sale may only be made where the asset is valued at less than $100.
• For obsolete, partly damaged or deficient assets valued in excess of $1,000, sale shall be by way of a public auction unless the Deputy CEO or Controller (if obsolete assets are valued at more than $3000) approves that a tender be used.
• The public auction shall be organised by the Controller of Government Supplies. The accounts officer must provide the Controller with the list of items for sale, their cost price and their date of acquisition. The auctioneer shall be responsible for determining the minimum auction price for each item.

• Assets sold by way of a tender process must be in accordance with the tender procedures outlined in Part 3 of the Finance Instructions and Part 2 of the Manual.

Transfer of Asset

• An asset may be disposed of by transferring to another agency.

• Before an asset is transferred, the accounts officer must ensure that there is a written agreement for transfer with the other agency.

Gift to Non-Government Organisation

• Where the Deputy CEO has given written approval, assets may be given as a gift to a non-government organisation provided it contributes to the outcomes of government.

Disposal of Assets as Scrap

• Assets that are damaged and cannot be used shall be disposed of as scrap once approval is obtained for their write-off in accordance with Part 14 of the Manual.
• The destruction or dumping of such assets shall be carried out in a safe manner approved by the Deputy CEO.

Writing Off Losses of Assets

• In cases where a loss of an asset occurs through theft, fraud or negligence, the asset may be written off.
• Any loss or write off shall be dealt with in accordance with Part 14 of the Manual.

(Pro-forma Finance Manual)