Leases are commitments
to make regular payment to a lessor for the use of an asset which does not
become the legal property of the agency;
(Financial Instructions 2005 s(3))
An agency may, with the approval of
the Minister for Finance, enter into a lease
arrangement, if it has evaluated the costs and benefits of leasing and compared
them with the costs and benefits of other financing options.
(Financial Instructions 2005 s(63))
- A
cost-benefit analysis shall be carried out before entering into any lease
arrangement.
- The
analysis must consider the:
- cost
implications of entering into such an arrangement;
- the
benefits that may be derived from the lease;
- the
risks involved;
- feasibility
of applying other financing options.
- Where
leasing is the preferred option, a proposal outlining the conclusions
found in the analysis report shall be submitted to the Ministry of Finance
for approval.
- All lease documents and records shall be properly kept.
A lease register shall be maintained to record all particulars of the
lease arrangement.
(Proforma Finance Manual)