Asset Management

Dan Harper

Senior Manager - Resilience & Capability

7 June 2019

2

DRFA Introduction

• The new Commonwealth Disaster Recovery Funding

Arrangements (DRFA) replace the previous Natural

Disaster Relief and Recovery Arrangements (NDRRA).

• The DRFA came into effect on 1 November 2018.

• Through the DRFA, Commonwealth funding is provided

to assist States (and local governments) with costs

associated with disaster relief and recovery assistance

measures.

3

Commonwealth Funding Arrangements

Under NDRRA & DRFA there are four

categories of eligible funding:

• Category A – Personal hardship measures

• Category B – Asset

reconstruction/restoration & financial

instruments

• Category C – Community recovery

packages

• Category D – Exceptional circumstances

Changes between NDRRA & DRFA occur in Cats A & B.

4

Changes under DRFA – Category B

• New funding model

o upfront estimation model – reconstruction of essential public assets

• New measures:

o emergency works; and,

o immediate reconstruction works

• Enhanced oversight of Category B claims

o control objectives (assurance framework)

• Amended eligible time periods for claims

• Further strengthening of asset pre and post-disaster condition evidence.

5

Essential Public Assets Reconstruction

• State and local governments are now required to

undertake cost estimates of damage to essential public

assets.

• Estimates must be undertaken on a project by project

level.

• Estimates must be developed through either market

response or cost estimation.

• Assets reconstructed to their pre-disaster function.

6

Essential Public Asset Reconstruction

Claim lifecycle

• Damage assessment (including pre & post disaster

condition)

• Cost estimation

• Contingency & cost escalation

• Procurement

• Monitoring of actual expenditure against estimates

7

• The Inter-Departmental Committee (IDC) engaged

Deloitte to develop an end-to-end estimation model and

associated guidelines.

• New model for the restoration of essential public assets

(REPA) developed.

• This documentation was approved by the IDC as

working documents.

• https://www.dtf.vic.gov.au/natural-disaster-financial-

assistance/events-post-1-november-2018

8

VAGO Audit - Key Recommendations

• VAGO made 7 recommendations, four of which are

particularly relevant:

• clearly determine and document the information that

they need for effective asset reporting and

decision‐making, including ensuring Disaster Recovery

Funding Arrangements needs are met

• establish more consistent and systematic

processes for data collection on all asset classes to a

level commensurate to the criticality of the asset and

implement them to collect the information

9

VAGO Audit Key Findings

• integrate asset management information systems so

staff can easily record and access data to enable

analysis for planning and decision‐making particularly

with the requirements for asset pre and post-condition

information.

• evaluate their capability, including resources, skills

and training to meet their identified asset management

needs, potentially using the National Asset Management

Assessment Framework

10

Local Government Asset Management

MAV’s STEP Asset Management & Financial

Sustainability Program

• Supports councils to effectively deliver services to their

communities

• Enhances quality, access and useability of information

DELWP-LGV Finance and Accounting Support Team

(FAST) Program

• Aim is to help improve the financial sustainability of rural

and regional councils

11

Asset Management Project - Work Program

• IDC has asked LGV to investigate local government

asset management and develop strategies that improve

the ability of local governments and CMAs to lodge a

valid claim through the DRFA

• July 2019 – DELWP-LGV will engage a consultant to

inform a Business Case, including:

– Costed options to improve local government and

CMA asset management capability and capacity

• October 2019 – Asset Management Project findings will

be presented to the Natural Disaster Funding Reform

IDC

Conclusion

Further queries

LGV.emergencies@delwp.vic.gov.au