Section 13: Asset and Inventory

Management
13.1 Overview
Schools have substantial investments in stores, equipment, furniture, books and other
learning materials. Although most items are covered by insurance administered within the
Department, proper asset management procedures must be followed on purchases, custody,
loss or disposal of these items to ensure accurate and up-to-date information is maintained.
This policy is aimed to guide schools in accounting for assets in accordance with relevant
accounting standards and legislation.
By keeping appropriate records and identifying valuable items of school equipment and
furniture, losses can be minimised and the value of the assets can be used to deliver
educational services for the school.
It is crucial that schools strictly follow asset management policy and guidelines to ensure
accurate reporting and accountability of assets are recorded in CASES21 Finance system.

13.2 Asset acquisition, recognition and recording

An asset is a resource that, according to the Statement of Accounting Concepts 4 –
Definitions and Recognition of the Elements of Financial Statements “represents service
potential or future economic benefits controlled by the entity (government department which
includes schools) as a result of past transactions or other past events”. This is the minimum
dollar value of an item as determined under the Financial Management Act 1994, Part 5
Financial Responsibility.

13.2.1 Mandatory policy (Must do):

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13.2.1.1 Purchases must be made in compliance with the Procurement Policy

for Victorian Government Schools
Depending on the value of the goods purchased, oral or written
quotations or tenders are required when acquisitions are being made.
13.2.1.2 School councils have authority to enter into construction contracts for
building structure improvements for up to $50,000.

13.2.1.3 If a school is considering building structure improvements greater than

$50,000, the school must discuss this with the Victorian Schools
Building Authority first through an email request to
[email protected].

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13.2.1.4 Apply the following recognition criteria as per Australian Accounting

Standard AASB 116 Property, Plant and Equipment to items
purchased to determine if they are to be recognised as assets:
 The school must benefit from the asset item;
 The item has a useful life of 12 months or more;
 The cost of the item can be measured;
 The item has a GST exclusive purchase cost greater than or equal
to $5,000. (The purchase cost must include any delivery and
installation costs. Where the delivery and installation charge covers
multiple items, the costs must be apportioned to each item.)
13.2.1.5 Items determined to be assets must be entered into the CASES21
Finance Asset Register.
13.2.1.6 Items that meet the asset recognition criteria are capital acquisitions
and must be recorded with a GST code of G10.

13.2.1.7 New assets must be added to the CASES21 Finance Asset Register
within 30 days of acquisition.

13.2.1.8 Portable and attractive items, which may be subject to risk of loss/theft
that fall under the asset recognition threshold of greater than or equal
to $5,000 must also be recorded. These items are recorded as
expenses with a GST code of G11 and recorded in the Asset Register
using the “AA” categories. For example, computers, audio-visual and
photographic equipment.

13.3 Identification of assets

Identification of an asset or asset tagging is vital for schools. A good asset labelling system
with ID numbers enable clear identification of assets, which facilitates the process of asset
verification and loss prevention. A standard and consistent approach must be adopted
across all schools.

13.3.1 Mandatory policy (Must do):

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13.3.1.1 The identification of assets must form part of the start to end process
of asset creation. Schools must tag an asset as soon as it has been
created in CASES21 Finance Asset register and assigned a
CASES21 asset code number.

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13.3.1.2 Where appropriate, every asset must be bar coded with stickers
(preferable method), engraved or stamped with the name of the
school and asset number at the earliest practical date.

13.4 Repairs and maintenance

During the school year, various works will be performed around the school’s premises which
would generally be classified under repairs and maintenance. It is crucial that schools
understand the nature of these transactions. Repairs and maintenance is necessary to allow
the continued use of existing assets.
Repairs and maintenance works merely maintain assets in their original state. The works do
not enhance the use of the asset, nor do they extend the expected useful life of the asset.

13.4.1 Mandatory policy (Must do):

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13.4.1.1 A repairs and maintenance related work is not capital in nature, as it

does not provide future economic benefits. Therefore, all repairs and
maintenance costs are to be expensed. (i.e. using GL Chart of
Account codes 86XXX other than asset codes beginning with 26XXX.

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13.4.2 Examples that differentiate between capital assets and operating
expenses

Description Capital Operating

Individual cost of an item that meets the asset definition and Yes No
recognition criteria, and the Department’s capital threshold of
greater than or equal to $5,000.

Individual cost of an item that does not meet the Department’s No Yes
capital threshold of greater than or equal to $5,000.
Training cost – relates to training of team member which does not No Yes
contribute to the asset directly.
Painting (internal and external). No Yes

Fit out costs for affixed items greater than or equal to $5,000; for Yes No
example, converting a small room to a theatre.
Cost of replacing tables and chairs for a room if individually less No Yes
than $5,000.
Major classroom, canteen, hall refurbishments greater than or Yes No
equal to $5,000.
Purchase of Information Technology equipment less than $5,000. No Yes

Complete replacement of carpet greater than or equal to $5,000. Yes No

Replacement of a section of carpet. No Yes

Replacing a roof that incorporates new materials, or new Yes No

technology (e.g. more durable or weather-resistant materials are
used) greater than or equal to $5,000.

Repairs for any damage to a section of a roof. No Yes

13.4.3 Examples of common repairs and maintenance expenses

Description Capital Operating

Patchwork for leaking roofs, damaged sections of walls, worn No Yes

sections of walkways, potholes and bike tracks.
Maintenance for blocked drains. No Yes

Replacing broken sections of pipes. No Yes

Chemical treatment of pipes for tree root intrusion. No Yes

Grinding footpath trip hazards. No Yes

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 Description Capital Operating

Gutter cleaning. No Yes

Maintenance of electrical hazards. No Yes

Maintenance of water leaks from taps, toilets and student drinking No Yes
fountains (bubblers).
Water testing. No Yes

Street cleaning. No Yes

Annual cleaning. No Yes

Scheduled and ongoing preventative maintenance. No Yes

13.5 Asset renewals and upgrades

Asset renewals relate to the complete replacement that restores the asset to a ‘like new’
condition’. Asset upgrades relate to expenditure that enhances an existing asset and
increases the life of the asset beyond its original life.
Asset renewals and upgrades occur after the initial asset acquisition. It must be treated as
capital as these activities enhance the use of the asset, its service potential, extend its
expected useful life (beyond 12 months) and provide future economic benefits. Asset renewals
are distinguished from general repairs relating to reactive/planned maintenance that merely
restore the assets through ‘wear and tear’.

13.5.1 Mandatory policy (Must do):

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13.5.1.1 Asset renewals and upgrades are to be capitalised if the item has a
useful life of 12 months or more and has a GST exclusive purchase
cost greater than or equal to $5,000. It is also essential that the
replaced/renewed asset is derecognised (disposed).

13.5.2 Examples that differentiate between capital assets and operating

expenses for asset renewals

Description Capital Operating

Carpet, Tiling and Linoleum replacement for entire area (Complete Yes No
renewal) greater than or equal to $5,000.
Carpet, Tiling and Linoleum replacement for part of area (Part No Yes
renewal).

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 Description Capital Operating

Landscape development renewals for entire area (Complete Yes No

renewal) greater than or equal to $5,000, including:
 Complete wall replacement;
 Re-pavement of entire area;
 Re-sewing/re-sodding of entire area;
 Asphalt resurfacing of entire area.
Landscape maintenance (section/ part of repair): No Yes
 Section of wall replacement;
 Re-pavement of section;
 Re-sewing/re-sodding of section;
 Asphalt resurfacing of section.
Oval/Court and Pitch resurfacing (complete renewal) greater than Yes No
or equal to $5,000:
 Resurfacing for entire oval (renewing old synthetic grass with
new synthetic grass);
 Resurfacing for entire court/pitch area.
Oval/ Court and Pitch maintenance (section/ part of repair) No Yes
Resurfacing or part repair of a section of the oval / court / pitch
area.
Replacement of entire roof greater than or equal to $5,000. Yes No

Maintenance of roof - Replacement of a section of the roof. No Yes

Replacement of performing arts room equipment where individual Yes No

equipment is greater than or equal to $5,000

Resealing for the entire road surface greater than or equal to Yes No
$5,000.
Resealing for part or short section of the road. No Yes

Gravel re-sheeting for entire road length greater than or equal to Yes No
$5,000.
Gravel re-sheeting for part of or short sections of the road length. No Yes

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13.5.3 Examples of common asset upgrades

Description Capital Operating

Electrical system upgrade greater than or equal to $5,000. Yes No

Drainage and grounds upgrades greater than or equal to $5,000. Yes No

Building/Structural extensions or enhancements greater than or Yes No

equal to $5,000 (for example, changing domestic kitchen to a
commercial kitchen).
Car park extensions greater than or equal to $5,000. Yes No

Oval/Court and Pitch resurfacing greater than or equal to $5,000 Yes No

 Changing from natural grass to synthetic grass;
 Changing from asphalt to rubber.
Replacing pumps with greater capacity greater than or equal to Yes No
$5,000.
Replacing timber with concrete greater than or equal to $5,000. Yes No

Sprinkler system upgrades greater than or equal to $5,000. Yes No

Widening footpaths greater than or equal to $5,000. Yes No

Pavement upgrade – higher standard greater than or equal to Yes No

$5,000 (for example, upgrading from gravel surface to concrete).

Enlarging a grandstand at a sporting facility greater than or equal Yes No

to $5,000.

13.6 Fit out costs

The purchase price and installation of fit out items (e.g. office partitioning) are capitalised as
their own separately identifiable fit out if has a GST exclusive purchase cost greater than or
equal to $5,000. Installations are capitalised as they are ‘directly attributable’ in bringing the
fit-out items to the condition and location ready for use.
Only items that are ‘affixed’ (for example carpet, blackboard (if fixed to the wall), blinds and
curtains) are to form part of the initial fit out. All moveable items (such as tables, chairs,
desks, shelves and moveable whiteboards) are capitalised separately if they individually
meet the Department’s threshold of greater than or equal to $5,000.

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13.6.1 Examples that differentiate between assets that are part of initial fit out
cost and separately identifiable plant and equipment

Description Initial Fit Separate

Out asset
Partitions. Yes No

Affixed cabinets. Yes No

Blinds and curtains. Yes No

Affixed projectors. Yes No

Portable projectors greater than or equal to $5,000. No Yes

Affixed digital boards. Yes No

Portable digital boards greater than or equal to $5,000. No Yes

Carpet for entire room. Yes No

Tables and chairs individually greater than or equal to $5,000. No Yes

Moveable shelves individually greater than or equal to $5,000. No Yes

Affixed shelves. Yes No

13.6.2 Case Studies of initial Fit Out of a school classroom

Case Study – Initial Fit Out of a school classroom
As an example, if you had a classroom that has:
• 18 tables @ $118.00 each
• 24 chairs @ $23.00 each
• a desk and chair for the teacher @ $249. 00 and $68.00
• two sets of book shelves @ $350. 00
• a blackboard @ $450. 00
• a whiteboard (mobile) @ $250. 00
• carpet @ $3750. 00
• blinds or curtains @ $1534. 00.
The total dollar value of the furnit ure and fittings in this room would be $5,734. 0 0,
as the only items that are capitalis ed in the initial fit out are ‘affixed’ items such a s
the carpet, blackboard (if fixed to the wall), blinds and curtains. All moveable
items such as tables, chairs, desks, shelves and the movea ble whiteboard are
capitalis ed separat ely if they individually meet the Depart m ent’s threshold of
$5,000. If the individual items are <$5,000 then the item must be expens ed to the
most appropriat e CASES 21 Chart of account code.

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13.7 Asset stocktake guidelines
The accuracy and completeness of appropriate records is an essential basis for adequate
asset verification.

13.7.1 Mandatory policy (Must do):

Stocktake

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13.7.1.1 A physical stocktake of all assets must be conducted every two years.
Each item must be sighted at least once every two years.
An asset stocktake:
 can be performed in stages throughout the year;
 must minimise interference to educational programs.
Could be conducted on:
 certain asset categories or groups of assets each month or in particular
months;
 during each term; or
 during vacation periods.

13.7.1.2 For attractive items or shared items (e.g. cameras), it would be prudent to
sight these items at least once a term.

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13.7.1.3 When carrying out stocktakes or asset verifications, regardless of the

method used, the following procedures must be observed:
 The principal must nominate the date or period of time for the stocktake
to take place.
 A stocktaking officer must be appointed by the principal to conduct and
supervise the stocktake. This person will be independent and must not
have custody of any asset to be counted. Assistant stocktaking officers
(i.e. business manager), being persons who have knowledge of the
location and identity of the items in particular areas, must also be
appointed. An assistant stocktaking officer can be someone who has
the responsibility for, or custody of, assets.
 Stocktake sheets listing all assets held by the school, by name and
location, must be prepared from the asset register.
 The stocktake sheets must list the serial numbers or other unique
identifying reference against each asset to assist with the asset
recognition.
 On the appointed date, the areas designated for the stocktake must be
systematically checked for assets listed on the appropriate stocktake
sheet by the stocktaking officer and one other person. The quantity of
each item must be recorded on the stocktake sheet. The serial
numbers or unique identifiers must also be confirmed on the stocktake
sheet.
 If a third party is engaged to conduct the stocktake, the use of
electronic equipment may be used rather than stocktake sheets. The
information that is to be provided in the stocktake sheets must be the
same as what is entered into the electronic equipment used to conduct
the stocktake.
 Items encountered that match the definition of an asset that is not on
the stocktake sheet/report issued by the third party conducting the
stocktake must be recorded for checking on the asset register.
 On completion of the physical check of each stocktake sheet/report
from the third party in the stocktake, the stocktaking officer must
reconcile the count on the stocktake sheet/report from third party
engaged to conduct stocktake against the asset register.
 Where discrepancies are disclosed the items involved are subject to a
recount.
 All stocktake sheets or reports produced by the third party must be
signed off by the officers who conducted the count and all
discrepancies notified in writing to the principal.

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13.7.1.4 The stocktake results must accurately reconcile the physical assets to the
assets recorded in the CASES21 Finance Asset register.
13.7.1.5 All adjustments identified by the stocktake must be approved by the
school council before an adjustment is recorded in CASES21 Asset
register.

Discrepancies in Stocktake or Loss of Assets

If a stocktake reveals a substantial discrepancy (for example items of equipment/furniture
located that are not recorded in the asset register and/ or loss of equipment recorded in the
equipment register), the following action must be taken:

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13.7.1.6 In the case of items not being recorded in the asset register, the matter
must be drawn to the attention of the principal.

13.7.1.7 An investigation must be undertaken to identify how the items were

acquired. Only then will it be possible to determine whether the items are
owned by the school and is in its custody, the value (cost) of the items and
whether they should be treated as school assets.
13.7.1.8 In the case of asset additions because of stocktaking activities, the school
must:
 Determine the fair value of the asset and advise Schools Financial
Management Support team, if the value of the asset is greater than or
equal to $5,000. Email: [email protected]
 Schools Financial Management Support team will liaise with Financial
Services Division (FSD) to assess the asset and verify the value. If the
value of the asset is found to be less than $5,000 then the school must
create the asset in CASES21 using ‘PY’ as the asset type and assign a
value of zero. If the asset is found to be greater than or equal to $5,000
then the school will be advised of the appropriate asset type by FSD,
process an asset additions journal to adjust the quantity and price for
the asset, process a subsequent General Ledger journal to reflect the
value added in the additions journal and send supporting
documentation to [email protected]

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13.7.1.9 In the case of loss of equipment, an officer must be appointed by the

principal to investigate. The principal must be provided with a written report
of discrepancies stating what action has been taken to locate the missing
items.

13.7.1.10 The principal must then recommend to the school council the appropriate
action/s that must be taken.
Regulations require that all cases of suspected or actual theft, wilful
damage, arson, irregularity or fraud in receipt or disposal of money or
other property of any kind is to be reported to the regional director and
relevant department personnel. Refer to section 3 Risk Management.
13.7.1.11 A police report must be filed if the value of the stolen/lost asset is above
the Department’s capitalisation threshold (greater than or equal to $5,000).

13.7.1.12 If the school council is satisfied that any missing item cannot be recovered
and appropriate action has been taken as above, the next action is to write
off the item and adjust the asset register in CASES21.

13.7.2 Stocktake of Library Materials

The increasing importance of library resources in the educational programs of schools and
the number, variety and monetary value of these resources make the effectiveness of the
library’s stock control methods central to the safeguarding of assets and the efficient
operation of the library.

13.7.3 Mandatory policy (Must do):

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13.7.3.1 A full stocktake of library books and publications is to be carried out once
every two years.
13.7.3.2 While educational evaluations of libraries such as culling, updating the
catalogue and reorganising records can be conducted at any time, the
stocktake provides a good opportunity to carry out these tasks.
13.7.3.3 Stocktakes are to be conducted in liaison with the library manager at such
times as the principal considers best to achieve the aims of effective
stock and education management of the library resource. This is to be
achieved with a minimum of interference to the school’s educational
program.

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13.7.3.4 The most desirable method of conducting the stocktake will be to carry
out a complete stocktake of all library resources at the one time. The
advantage of this is that it provides a comprehensive review of the
effectiveness of stock-control methods at a particular time.

13.7.3.5 Other options include:

 a half stocktake annually; or
 a progressive stocktake of the library covering each area at convenient
intervals over two years or a shorter period.
13.7.3.6 Irrespective of the method and frequency of the stocktake, it is recognised
that staff involved can normally only effectively perform a stocktake if
entry by pupils and other non-involved staff to the stocktaking area is
prevented or very strictly controlled. The degree to which access to the
library is to be limited or prevented is clearly one which must be clarified
by the principal in discussion with the library manager prior to the
commencement of the stocktaking exercise.
13.7.3.7 The library manager is responsible for the initiation and maintenance of
effective stock-control methods within the library.
13.7.3.8 As a result of a stocktake, the library’s records must accurately show for
the area covered:
 accession of items available for use;
 accession of items missing;
 accession of items written off as unsuitable for continued inclusion in
the library;
 the total net stock at the end of the period covered by the stocktake.
13.7.3.9 At the conclusion of the stocktake, whether full or progressive, a
stocktake statement must be prepared.
13.7.3.10 After the stocktake is completed the library manager:
 presents the stocktake statement to the principal and discusses
appropriate follow-up action;
 with the approval of the principal, writes off items that have been culled
from the collection or lost, damaged or missing for more than two
years and makes appropriate notations in the accession or card
register;
 removes the shelf-list cards for written-off items.

13.7.3.11 Where schools suffer loss or damage to library materials as a result of

vandalism, theft, fire, flood, rain etc. the library manager must discuss

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with the principal what action must be taken to assess and quantity the
loss or damage and whether a full or partial stocktake is required.

Adjusting for duplicate entries in Asset register

13.7.4 Mandatory policy (Must do):

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13.7.4.1 Complete a write-off transaction – Refer to CASES21 Finance Business

Process Guide Section 4 – Assets for guidance on disposals.

13.7.4.2 Complete Asset Status Change Request form

13.8 Receipt of Donated Property, Equipment or

Materials
13.8.1 Mandatory policy (Must do):

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13.8.1.1 The receipt of donated equipment or materials must be reported by

the principal at the next school council meeting and minuted.

13.8.1.2 The school must perform the following:

 Determine the fair value of the asset and advise the Schools
Financial Management Support team. Email:
[email protected] if the value of the
asset is greater than or equal to $5,000.
 The Schools Financial Management Support team will liaise with
Financial Services Division (FSD) to assess the asset and verify
the value. If the value of the asset is found to be less than $5,000
then the school should create the asset in CASES21 using ‘DO’ as
the asset type and assign a value of zero. If the asset is found to
be greater than or equal to $5,000 then the school will be advised
of the appropriate asset type by FSD, process an asset additions
journal to adjust the quantity and price for the asset, process a
subsequent General Ledger journal to reflect the value added in
the additions journal and send supporting documentation to
[email protected]

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13.8.1.3 Schools must inform the Department if they have received a donated
parcel of land and or a building. Email the Schools Financial
Management Support team at
[email protected]

13.8.1.4 Schools are also required to contact the Victorian Schools Building
Authority with all the relevant details regarding the donation of land
and or a building, as either of these assets must be recorded onto the
Department’s asset register at fair value.
Please send an email to the school asset account
[email protected] describing the asset. A Victorian Schools
Building Authority team member will then be in contact with you.

13.9 Hire/Leasing of Equipment

School councils have the necessary authority to enter into hire/lease of equipment
agreements provided the conditions stipulated in Part 2.3 Division 3 Section 2.3.6 (3) of the
Education and Training Reform Act 2006 and must be strictly adhered to.

13.9.1 Mandatory policy (Must do):

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13.9.1.1 A school may enter into an operating lease agreement. For example,
a school may lease a photocopier for a period of 3 years.
13.9.1.2 Equipment leased via an operating lease must be included in the
CASES21 Asset module (Asset Register) with a purchase cost of
$0.00, quantity, lease start and end date and monthly lease cost.
13.9.1.3 Leased assets are not covered under School Equipment Coverage
Scheme (SECS) for insurance and schools must obtain their own
insurance for leased items.

13.9.2 Prohibited policy (Must not do):

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13.9.2.1 School councils do not have the authority to borrow money so

therefore are unable to enter into finance leases (as opposed to
operating leases).

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13.10 Insurance on Stores
13.10.1 Overview
The Department’s School Equipment Coverage Scheme (SECS) applies to school
equipment and stores.

13.10.2 Prohibited policy (Must not):

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13.10.2.1 Leased assets are not covered under School Equipment Coverage
Scheme (SECS) for insurance and schools must obtain their own
insurance for leased items.

13.10.3 Additional resources

 SECS Policy and Guidelines can be viewed from the following link: School Equipment
Coverage Scheme – Policy & Guidelines.

13.11 Library Materials

13.11.1 Mandatory policy (Must do):

Identification and Recording Library Materials

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13.11.1.1 The library manager is responsible for maintaining methods of stock

control that accounts for all library books, textbooks, and other non-
accountable items and materials.

13.11.1.2 Where there is no library manager, the direct responsibility is assigned

to the principal.

13.11.1.3 All library materials received from any source, except materials having
a low value or short life, are to be actioned as soon as practical after
receipt. The following are typical items that are to be recorded: books,
maps, audio materials, projected visual materials, video materials,
pictures, charts, microfilms and computer materials.

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The accession of Library Materials

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13.11.1.4 Alternative methods of the accession of library materials are:

 a library register/book;
 a card register (cards filed in ascending number order) and/or order
slip;
 a periodical card register (for newspapers, magazines and other
periodicals);
 electronic tracking e.g. bar coding.

Library Loan Records

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13.11.1.5 A record of items on loan must be maintained. School councils may

implement a library fine system to encourage the return of borrowed
materials.

13.12 Other Assets and Textbooks

Schools are required to operate effective stock control over all equipment, textbooks, class
sets etc.

13.12.1 Mandatory policy (Must do):

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13.12.1.2 Works of art with a value in excess of $200 must be recorded in the
CASES21 Finance asset register.

13.12.1.3 Assets won as prizes, must be added to the CASES21 Finance asset
register at their fair value at the time they were acquired.

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13.13 Inventory Control
Inventory may be divided into two types:
 trade (canteen stock, school uniforms, stationery and office equipment such as calculators
that are sold to pupils and staff);
 consumable items used in the day-to-day running of the school.
They are items that must be monitored and managed for the efficient running of the school
and for insurance purposes.

13.13.1 Mandatory policy (Must do):

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13.13.1.1 Inventory items must be recorded separately.

13.13.2 Prohibited policy (Must not do):

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13.13.2.1 Inventory items must not be recorded on the CASES21 Finance asset
register.

13.13.3 Hazardous Substances

All chemicals must be considered dangerous. Effective stock control of chemicals is
therefore essential.

13.13.4 Mandatory policy (Must do):

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13.13.4.1 Schools must base their control of chemical stocks on the use of
secure areas for the storage of dangerous or bulk reserve supplies,
and stock cards that note receipt and issue of chemicals.
13.13.4.2 Schools must comply with the Dangerous Goods (Storage and
Handling) Regulations 2000 and the Occupational Health and Safety
(Hazardous Substances) 1999 by maintaining a Chemicals/Hazardous
Substances/ Dangerous Goods Register together with Material Safety
Data Sheets (MSDs) obtained from the supplier.

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13.13.5 Additional Resources
For further information, refer to the, Health, Safety and Worker's Compensation website.

13.13.6 Class and Library Materials

Effective stock control over class and library materials is essential.

13.13.7 Mandatory policy (Must do):

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13.13.7.1 When textbooks and similar learning materials are issued on loan to
students, a record of the issue must be maintained to facilitate their
return.
13.13.7.2 In cases of low-value or short-duration loans, the principal must
implement an alternative system of control. Schools must develop
systems appropriate to their circumstances.

13.14 Loan of Equipment to Community Groups or

Individuals
13.14.1 Mandatory policy (Must do):

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13.14.1.1 A principal may make loans of specified items of school equipment to

individual students.

13.14.1.2 The officer who is designated this authority is responsible for ensuring
that records, including the signature of the student borrowing the
article, are maintained to allow for the recovery of the article.
13.14.1.3 When equipment is lent by the school principal, a receipt signed by
the borrower must be obtained and a record of the loan must be
maintained to facilitate its return.

13.14.1.4 If library materials or textbooks are lent to students, teachers or other

school-based staff, a record of the loan must be maintained to
facilitate their return.

13.14.1.5 Items borrowed for personal use must be insured by the borrower.

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13.15 Transfer of assets between schools
13.15.1 Mandatory policy (Must do):

Sequence Information
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13.15.1.1 When a school transfers an asset, the receiving school must enter the
asset at the same value as the transferring school has written off the
asset.

13.15.1.2 The items must be at current Net Book Value (NBV).

13.15.1.3 Schools must ensure that an Asset Status Change Request form is
completed and approved by the principal before any physical items
are transferred.
For further guidance contact the Schools Financial Management
Support team. Email: [email protected]

13.16 Transfer of Materials or Equipment

When materials or equipment are transferred between Government schools or to an office of
the Department without a change being made to their value, a transfer advice giving full
details, must be completed in triplicate by the dispatching schools.

13.16.1 Mandatory policy (Must do):

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13.16.1.1 Schools must ensure that an Asset Status Change Request form is
completed and approved by the principal before any physical items
are transferred out.

13.17 Disposal of Surplus or Unserviceable Assets

of Materials
School councils, under Part 2.3, Division 5, Section 2.3.1.8 of the Education and Training
Reform Act 2006, can sell assets/equipment, goods or other personal property acquired for
use in the school. The main purpose of this section of the Act is to enable school councils to
sell obsolete and surplus goods and equipment.

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13.17.1 Mandatory Policy (Must do):

General Policy

Sequence Information
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13.17.1.1 All surplus, obsolete or unserviceable stores or assets must be assessed

by a board of survey prior to any decision being made about disposal.

13.17.1.2 A school council can retain the proceeds of the sale of the asset if the
amount is less than $10,000. (Less than $10,000 threshold is determined
by the Minister).

13.17.1.3 If the proceeds of the sale of an asset exceeds $10,000, the school
council must seek approval in writing from their local regional director to
retain the proceeds of sale.

13.17.1.4 All money raised by the disposal of goods must be re-used to the benefit
of the educational program of the school.

Board of Survey

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13.17.1.5 In the normal course of events, three people constitute a board of survey.
The board will consist of the principal, a school council representative
and a third nominee.

13.17.1.6 The board’s role is to:

 identify obsolete or unserviceable equipment;
 recommend to school council a course of disposal action, for example,
wreck, convert to a training aid or sell;
 in the case of asset sales, advertise locally that the asset is available
for purchase and request bids from any interested person; and
 arrange for any proceeds of sale to be paid to the school or the local
regional finance manager, in accordance with the above.

13.17.1.7 Asset Status Change Request form must be completed in a timely

manner.

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13.18 Delegated authority for disposal of Buildings
School councils have the delegated authority to dispose of school assets (Buildings) with a
residual value of up to $50,000. School land is owned in the name of the Minister for
Education. Schools do not have authority to dispose of land owned by the Minister for
Education.

13.18.1 Mandatory Policy (Must do):

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13.18.1.1 Schools must seek advice on the value of an asset prior to taking local
action.

13.18.1.2 This is required regardless of whether the asset was originally funded
by the Department or by the school.

13.18.1.3 Schools are required, regardless of whether the asset was originally
funded by the Department or by the school, to provide the following:
 Send an email to the school asset account
[email protected] describing the demolition work you want
to undertake, with a marked-up school plan clearly identifying the
asset that is to be removed.
 A Victorian Schools Building Authority team member will respond
with a current asset value and the guidance for the principal to
authorise the demolition.
 Once the school has received the asset value, the school will need
to provide an email authorising the demolition work with a marked-
up (shaded or outlined in red) school plan showing the asset that
has been disposed, the date of the disposal and how the asset was
disposed (demolition, sale and removal).
 A Victorian Schools Building Authority team member will remove
the asset from the Department’s asset register.
 If the asset value is greater than $50,000, the school must discuss
the disposal of the asset with the Victorian Schools Building
Authority first through an email request to
[email protected].

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13.19 Delegated authority for disposal of assets
(Plant and Equipment and Intangibles)
13.19.1 Mandatory Policy (Must do):

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13.19.1.1 Schools must ensure that the standard form is completed for asset
disposals.

13.19.1.2 All Plant and Equipment asset disposals must be completed via the
Asset Status Change Request Form in a timely manner.

13.19.1.3 All surplus, obsolete or unserviceable stores or assets must be

assessed by a board of survey prior to any decision being made about
disposal.

13.19.1.4 All money raised by the disposal of goods must be re-used to the
benefit of the educational program of the school.

13.19.1.5 In the normal course of events, three people constitute a board of

survey. The board must consist of the principal, a school council
representative and a third nominee.

13.19.1.6 The board’s role is to:

 identify obsolete or unserviceable equipment;
 recommend to school council a course of disposal action, for
example, wreck, convert to a training aid or sell.
13.19.1.7 Schools councils have the authorisation to dispose of assets with Net
Book Value (NBV) up to $50,000 and any asset with a NBV higher
than $50,000 must be approved by the Department.

13.19.1.8 Schools must first identify the asset through the asset register to be
disposed, and then contact an asset team member by emailing
[email protected] to obtain the NBV of the
asset. This is to determine if approval is needed for the asset disposal
from the Department.

13.19.1.9 The school must get the completed approval for the disposal of the
asset before proceeding with the disposal in the CASES21 Asset
module system.

13.19.1.10 The physical disposal of the asset must be initiated soon after
CASES21 disposal.

13.19.1.11 All disposals must be signed off prior to the disposal of asset.

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 Sequence Information
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13.19.1.12 Disposal in CASES21 Asset module system will flow onto the
Department’s asset management system.

13.19.1.13 It is critical that schools file all disposal forms and supporting
documentation, as this information needs to be available upon request
by the Department.

Legislative requirements
Legislation
The advice in this section was based on requirements outlined in the following legislation:
 AASB 116 Property, Plant and Equipment, AASB 13 Fair Value Measurement, AASB 138
Intangible Assets.
 Asset Management Accountability Framework.
 Education and Training Reform Act 2006 – Part 2.3 Government School Councils.
 Education and Training Regulations 2017 – Part 4 – Government School Councils and
Parents Clubs.
 Financial Management Act 1994 – Part 5 Financial Responsibility.
 Financial Reporting Direction 103F Non-Financial Physical Assets.
 Standing Directions of the Minister for Finance 2018 under the Financial Management Act
1994.
 Statement of Accounting Concepts 4 – Definition and Recognition of the Elements of
Financial Statements.

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Definitions
Asset An asset is, according to the Statement of Accounting Concepts 4 –
Definitions and Recognition of the Elements of Financial Statements,
a resource that “represents service potential or future economic
benefits controlled by the entity (government department) as a result
of past transactions or other past events”.
The definition assumes:
 the asset will generate a positive contribution for the entity – i.e.
the service potential will be realised;
 the entity has capacity to control the asset;
 the asset possesses a value that can be measured reliably; and
 the estimated value is above the minimum amount specified in a
recognition threshold (greater than or equal to $5,000
Department’s threshold).
Asset clearing This is a holding account where transactions/amounts are recorded
account temporarily and that are to be transferred to specific asset accounts
once the purchase is complete.

Asset disposal This is the act of selling an item (usually a long-term asset) that has
been depreciated over its useful life or is no longer required by the
school.
Asset This is the minimum dollar amount below which expenditure is
recognition recorded, even if it associated with an activity that is typically capital
threshold in nature. The Department’s capitalisation threshold is greater than or
(capitalisation equal to $5,000.
threshold)
Asset register A comprehensive list of items and equipment that shows what the
school owns. An asset register is used to track and manage school
assets.
Control of an Asset control is usually evidenced by an school’s:
asset
 ability to use the asset to achieve its objectives;
 ability to restrict or change access to the asset;
 ability to surrender the asset to another entity;
 ability to dispose of the asset; and
 obligation to bear the risks associated with holding the asset.

Fair value The price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the
measurement date.

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 Finance lease This effectively transfers ownership of the leased property from the
company to the school at the end of the lease term, usually at a cost
to the school (residual).
Characteristics of a finance lease are:
 the lease is not able to be cancelled, or cancelled without the
imposition of a large penalty;
 ownership of the object leased is transferred at the end of the
lease;
 the lease contains a nominal purchase option;
 the lease term is for 76 per cent or more than the useful life of the
leased item;
 the present value of the minimum lease payments is equal or
greater than 90 per cent of the fair value of the leased item.
Importantly, school councils do not have the authority to borrow
money so therefore are unable to enter into finance leases (as
opposed to operating leases).
Net book value The net value of an asset. Equal to its original cost (its book value)
minus depreciation and amortisation.

Non-current These assets are items that are tangible – i.e. they have a physical
physical asset nature and a useful life beyond the current accounting period, typically
one year.
Non-current physical assets differ from inventory items as inventory
items are ‘consumable’ (used up, expended, have a limited life, are on
sold), or under the recognition threshold for the category.

Operating lease This is like a rental agreement where the goods are eventually
returned to the lesser (company). For example, a school leases a
photocopier for a period of three years. At the end of the three years,
the school returns the photocopier to the company without further
obligation.

Residual value The estimated amount that a school would currently obtain from
disposal of the asset, after deducting the estimated costs of disposal,
if the asset were already of the age and in the condition expected at
the end of its useful life.
Stocktake Verification of the physical existence, location and condition of assets
and inventories on a regular basis.

Useful life Is the period over which an asset is expected to be available for use
by the school.

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Additional resources
 CASES21 Finance Business Process Guide Section 4 – Assets
 Chart of Accounts for Victorian Government Schools
 School Policy and Advisory Guide

Version and revision control record

Date Version Approver Next Review
01/2019 1.2 Chief Finance Officer - Financial Services 01/2020
Division

Section13: Asset and Invent ory Management | July 2019 Page 27