Lifecycle management of central government assets – machinery and equipment

Central government machinery and equipment assets are managed well as a rule. Good asset lifecycle management contributes to the cost-efficiency of the core operations, such as police service or marine research. However, based on the audit, both the overall picture of fixed assets and the overall management of the assets should be improved. It is essential that the ministries and government agencies and institutions commit to good asset management.

All of the audited authorities planned and monitored the maintenance costs and utilization rates during the lifecycle of their machinery and equipment assets. However, there were differences between the authorities in the scope and accuracy of this information during the procurement planning phase. Moreover, some authorities did not have plans for the divestment of their assets. All of them utilized the monitoring information at least to a certain extent.

The lifecycle of investments should be taken into account better in budget planning. When preparing the budget, the ministries should present not only the acquisition cost of investments but also the maintenance costs during their entire lifecycle. Investments and their maintenance should be planned from a longer-term perspective than a single operational and financial planning period. To highlight and assess the risks of the investments, it would also be important to use sensitivity analyses more often.

The audit examined the practices applied to the lifecycle management of central government machinery and equipment assets. The lifecycle management was examined from the planning of the procurement to divestment. In the final accounts of 2019, the book value of the state-owned machinery and equipment entered in the balance sheet was about EUR 600 million. Annual investments in them have amounted to about EUR 100 million.

The audit covered those machinery and equipment assets of central government whose financial value is significant, i.e. vessels, vehicles, and other machinery and equipment. Of the organizations managing such assets, the National Audit Office selected the Finnish Defence Forces, the Finnish Border Guard, the National Police Board, the Finnish Meteorological Institute, and the Finnish Environment Institute to the audit.