Dáil Éireann Debate, Wednesday - 23 June 2004
61 Mr. P. Breen asked the Minister for Finance if a review will be arranged of the policies and practices in relation to the disposal of equipment and stocks which are surplus to requirement by public sector bodies to ensure that value for money from such disposal is maximised. [18654/04]
View answerFirst, I would point out that primary responsibility for management and disposal of their assets rests with Government Departments and public bodies. As Accounting Officers, Secretaries General of Departments are personally accountable to the Public Accounts Committee, PAC, for the regularity and propriety of transactions and for economy and efficiency in the use of resources and systems in their Departments.
My Department has a strong concern to ensure that all public assets are properly managed, accounted for and disposed of in a manner which secures maximum value for money for the taxpayer and there are a number arrangements in place to ensure that this is the case.
The Department of Finance Public Financial Procedures, or Blue Book, provides general guidance to Civil Service Departments on asset management. Departments are required to have asset management systems in place which ensure that assets are acquired only when needed, are adequately controlled and maintained, are properly safeguarded and disposed of, and that utilisation is monitored. Guidelines on internal audit standards provide that the range of activities conducted by internal audit functions in Departments and offices should include reviewing the compliance with procedures for the acquisition and disposal of assets and their safeguarding.
My Department's 1994 Guidelines on Public Procurement, or Green Book, states that the disposal or letting of property should be dealt with by competitive tendering or by auction in order to ensure that disposals are both transparent and likely to achieve a fair price. It also provides for the possible disposal of surplus materials elsewhere in the public sector and this possibility should be investigated before disposal by contacting other likely users.
Department of Finance Circular 30/03 sets out the principles, intended to maximise value for money, which should be applied when disposing of IT equipment. Among the requirements are that disposal of unwanted equipment should be carried out in the most financially advantageous manner possible, including minimising storage and removal costs and that it should be sold at market value, in accordance with the general guidelines for the disposal of State assets, regardless of the depreciated book value. This may include sale to staff. Any items found to have zero market value may be given free to staff, schools, charities etc.
The conditions attaching to the capital envelopes announced in the budget include a requirement on Departments to enter into appropriate contractual arrangements for all grants of public funding to private companies and individuals or community groups to safeguard the State's interest in such assets.
As part of updated procedures for the control and management of expenditure, which included incentives for Departments to improve efficiency and cost-effectiveness, the Government decided in November 2002 that Departments could use the proceeds from the disposal of surplus property to finance high priority capital projects within their area of responsibility. The prior approval of my Department is required to any such proposal.
As regards semi-State bodies, the Code of Practice for the Governance of State Bodies addresses in considerable detail the disposal of assets by any State-sponsored body — whether commercial or non-commercial. The code was approved by Government in October 2001 and is binding on all State-sponsored bodies. Under the code it is necessary to ensure that transparency applies and that a fair market price is achieved. The disposal of assets with an anticipated value at or above a threshold of €70,000 should be by auction or competitive tendering. Any exceptional cases, where assets above the threshold have been disposed of without auction or competitive tendering, must be set out in detail and explained in the chairp erson's annual report to the relevant Minister. Chairpersons are required to affirm, in their annual report to their respective Ministers, that the disposal procedures set out in the code have been complied with.
I believe that the guidance and arrangements in relation to the management and disposal of assets which are in place provide sufficient encouragement and advice to Departments and public bodies to enable them to secure maximum value for money in relation to the management and disposal of their assets.
