When an asset is no longer fit for purpose, agencies need to decide whether it can be refurbished to extend its life, or if it should be disposed of and replaced.
Assets should be maintained and used for as long as they are fit for purpose.
Proactively managing assets through your renewals programme and asset register means you can renew assets before they fail or if they are no longer fit for purpose.
If requirements change, consider how assets can be renewed or recycled before deciding to dispose of them.
Aim to reuse and recycle soft fit-out assets instead of purchasing new assets – as long as this is feasible, economically sensible and facilitates new ways of working. Hard fit-out surfaces should be of a type to ensure that any damage caused when agency fixtures are removed is minimal. Where possible, mount signage to timber or plaster surfaces, not tile or stone.
When the Department of Internal Affairs (DIA) fitted out its new head office accommodation, it installed 1800mm x 1800mm L-shaped corner desks.
After the initial lease term on the office space was renewed for a further 9 years, the DIA began looking at how it could make better use of the space and accommodate more staff. Considering a number of options, they concluded that they needed rectangular desks of 1800mm x 800mm.
Any costs involved with replacing the existing desks were going to be significant. The originally acquired desks, while fully depreciated, were still in relatively good physical condition.
The DIA’s Team Leader for Facilities Management noticed that the leg sets on the existing L-shaped desks were almost the same – save for one extra leg – as those on the newer rectangular desks. This opened up the possibility of refurbishing the existing L-shaped desks into 1800mm x 800mm rectangular desks, rather than buying new ones.
The initial cost to refurbish each desk was $450, compared to the purchase price of $1,100 per new desk. This included a new desk top, the removal of the extra leg, and the addition of a monitor arm to increase the useable desk area. As the department has increased the number of desks being refurbished over time, this price has continued to drop.
If you are ending a tenancy and the space is being taken over by another agency, you should leave the hard fit-out in place for the incoming agency where possible.
If the assets being left in place have a residual financial value, the incoming agency should purchase them at their current book value. The departing agency will need to provide a schedule of the assets and their current book value, verified by their Chief Financial Officer or equivalent.
Assets should only be disposed of when:
Ensure any assets you dispose of are disposed of sustainably and securely, for example that they are recycled where possible, including electronic recycling, and that security requirements are met, with data wiped from the assets.
When they are no longer required but still in usable condition, we may be able to help find another agency who can use the assets. Email the Government Property Group team to check.