State Asset Management Case Study

The practice of state asset management being recognized by many countries due to its essential role to perform public service provision. Many countries realize that efficient and effective state asset management policies and practices will give more benefits more than the government’s initial investment. State asset management practices in every country may different as there is a difference in some aspects such as different in definition and scope of the asset, accounting and information system used, the level of private sector and civil society involved, and asset utilization policies. However, despite the variance in state asset management practices, there some common challenges were identified as well as lack of accountability and governance …show more content…
The reform process is more obvious by the introduction of law number 6/2006 concerning Central/Regional State Asset Management and the establishment of Directorate General of State Asset Management, the only institution under the Ministry of Finance that is mandated to manage the state asset. Before 2006, built and purchased new assets for sustain performance of government functions were the main focus of the government. At least there are seven major problems regarding state asset management that leads to the need of state asset management reform. These problems included inaccurate asset register; the absence of public sector accounting and financial reporting standards; inadequate planning; lack of ownership; lack of supervision; inappropriate utilization and disposal; and inapposite asset management (Hadiyanto, 2009 & Mardiasmo, 2012). In general, the asset management at that time were implemented with lack of governance and accountability which is then lead to inefficient and ineffectiveness in public …show more content…
It is present a life cycle of asset start from budgeting, acquisition, utilization, maintenance and monitoring, valuation, disposal, change/hand over, administration, control mechanism, and capacity building function. Asset manager role began to be applied to ensure professionalism in state asset management practices and as a part of accountability the managerial and reporting aspects of state asset management are integrated into state financial reporting. In addition, to strengthening state asset management, the government issued technical guidelines and standard operating procedures for every aspect of life cycle of the