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This guide contains a series of practical tools to assist with the development of an Asset Management Plan for a facility.

Sport and recreation facilities are integral to our daily lives and we all rely on them to help us to continue our healthy and active lifestyles. It is now more widely acknowledged that whole of life asset management is critical to sustain a level of service to clients and provide a return to you as the owner or operator of the facility.

We expect our sport and recreation assets to provide specific services at an acceptable level. Whether it is a playing field or a large recreation building, each needs to be managed so that they do what we expect of them.

When you have developed an effective asset management plan you will be ready for a range of eventualities that could affect the future of your asset. It will also give you confidence that you can adapt to the effects of environmental, social and economic factors.

Whether you are in local government or a sporting organisation, this guide will provide you with an appreciation of the benefits of strategic asset management. It will also help you to consider the financial and economic requirements of asset management and the treatment and management of risk and liability.

We have included practical examples and appendices to show you how to apply asset management principles effectively to enable you to continue to provide and maintain key assets with a greater level of sustainability. You can adapt the appendices as needed so they reflect your particular organisation’s needs.

Sport and recreation facilities

A guide for sport and recreation facility owners and managers.

January 2004
ISBN: 0-975040030


This resource contains comments of a general nature only and is not intended to be relied upon as a substitute for professional advice. No responsibility will be accepted by the Department of Sport and Recreation for loss occasioned to any person doing anything as a result of any material in this resource.

This guide was prepared by Brett Treby and Rob Didcoe of the Department of Sport and Recreation’s Facilities Branch.


Western Australians are fortunate to have a large number of quality sport and recreation facilities. They are a key feature of our successful sport and recreation industry and a vital part of the way we live.

The community expects facilities to be safe and attractive places in which to be physically active. It expects well-maintained facilities that reflect value for money and a reason to keep coming back.

So, it is vital that anyone who is responsible for the management and maintenance of a sport and recreation facility has an asset management plan in place.

In many cases the managers of the most recently built facilities in WA are already doing this, but there are many ageing and poorly maintained facilities that need attention.

Maintaining or renewing these facilities has been complicated by issues such as:

  • A lack of planning information due to poor quality asset registers or a lack of registers being kept;
  • Too much focus on creating assets rather than renewing them;
  • Maintenance allowances in council budgets are often not a true reflection of need and do not support sound asset management principles;
  • Increasing community expectations of what will be provided, how much, where and the standard at which it will be provided;
  • Councils believe they have to have the same type and quality of facilities as neighbouring councils or towns; and
  • Increasing corporate governance requirements.

The department developed this Asset Management Guide as a starting point for local government officers, elected members and state sporting organisations to develop asset management plans.

It is a reference tool that I expect will become an important part of your business management and, when applied, will reflect your desire to achieve good corporate governance.

I commend this guide to you and wish you well as you begin to develop and implement comprehensive asset management plans so that Western Australians can continue to enjoy access to sport and recreation facilities that encourage and promote physically active lifestyles.

Executive summary

You are reading this guide because you are responsible for the management and maintenance of sporting and recreational facilities.

It contains a series of practical tools to help you through the process of developing an asset management plan so that your facilities are productive and sustainable.

Sport and recreation facilities are integral to our daily lives and we all rely on them to help us to continue our healthy and active lifestyles.

It is now more widely acknowledged that whole of life asset management is critical to sustain a level of service to clients and provide a return to you as the owner or operator of the facility.

We expect our sport and recreation assets to provide specific services at an acceptable level. Whether it is a playing field or a large recreation building, each needs to be managed so that they do what we expect of them.

When you have developed an effective asset management plan you will be ready for a range of eventualities that could affect the future of your asset. It will also give you confidence that you can adapt to the effects of environmental, social and economic factors.

Whether you are in local government or a sporting organisation, this guide will provide you with an appreciation of the benefits of strategic asset management. It will also help you to consider the financial and economic requirements of asset management and the treatment and management of risk and liability.

We have included practical examples and appendices to show you how to apply asset management principles effectively to enable you to continue to provide and maintain key assets with a greater level of sustainability. You can adapt the appendices as needed so they reflect your particular organisation’s needs.

This guide

You can apply asset management principles equally to all physical assets including: infrastructure; property; heritage; reserves; water bodies; and plant and equipment.

A critical issue is the extent and degree to which these principles need to be translated into management action.

Whether you are an executive or senior manager in a local authority, executive officer or office bearer of a sporting body or recreation group, it is important for you to identify your key assets.

Asset management principles

Below are some primary considerations for asset management principles:

  • Asset management decisions are integrated with strategic planning;
  • Asset planning decisions are based on an evaluation of alternatives that consider ‘life cycle’ costs, benefits and risks of ownership;
  • Establish accountability for asset condition, use and performance;
  • Disposal decisions are based on analysis of the methods that will achieve the best available net return in an environment of social equity; and
  • Establish an effective internal control structure for asset management.

1.0 Integrated planning

Deciding whether to acquire, replace, use, maintain or dispose of an asset should be part of your organisation’s overall strategic plan.

You can achieve this by linking assets with program delivery standards and strategies.

As a local authority, sport or recreation organisation or multi-sport facility, developing an asset strategy will complement your operational or business plans.

Key success factors

  • Asset functions are assessed against and matched with program delivery standards or service delivery strategies;
  • The asset strategy time frame is matched with the corporate planning horizon (typically five years) and ideally extends over the life of longer-lived assets; and
  • Capital and recurrent (operating) costs are incorporated in the asset strategy which link with budgets in the financial management strategy.

Principal issues

1.1 Integrating asset provision and the organisation’s strategic goals

All organisations need direction and should undertake regular strategic planning. A typical strategic plan looks ahead up to five years. Part of the strategic planning process will include issues or events that could have an impact on your organisation’s operations.

Asset management planning should be part of the mission and vision of your organisation so you should link resource planning to your long-term objectives.

The Local Government Act 1995 requires all local authorities to undertake an annual “Principle Activities Plan” that looks at what the authority will do over the next 12 months. Many councils are now including longer-term strategic planning in addition to principle activity planning.

Similarly, your sport or recreation organisation should set out your long-term strategic goals to give you an appreciation of the need for asset management and provision to support program initiatives.

In an environment of sustainability your organisation must also consider the needs of user groups and the capacity of current assets to meet those needs.

You should consider:

  • Standards — Asset delivery that is consistent with the level of service or participation by user groups.
  • Utilisation — Providing opportunities for the asset to deliver services to the maximum number of users.
  • Maintenance — Maintaining the asset to ensure it achieves its useful functional life at optimum service delivery standards, in addition to minimising (recurrent) operating expenditure.
  • Legal Obligations or Regulator Standards — Ensuring that the provision and management of assets fully consider both stated and prevailing legal obligations and regulatory standards.

We will look at each of these key strategic areas later in this guide.

1.2 Demand/Gap Analysis

User demand is a fundamental component of any asset provision and management analysis.

It is an effective way to determine current and projected usage of a facility and any shortfall between that demand and the present level of asset provision.

So, if your organisation is considering taking over or acquiring an asset you should find out what the facility or asset is currently delivering and how it is being used.

These investigations should include:

  • Trend Analysis;
  • Demand Analysis;
  • Supply Analysis; and
  • Gap/Deficiency Analysis.

The results should help you to identify any areas that deviate from the present level of asset provision. A needs analysis will provide useful information to help you make quality asset management decisions.

Information on how to conduct a needs analysis can be found at the department website.

A needs analysis is normally undertaken for new facilities, but the process works equally well with new or upgraded facility or asset provision. Implementing and reviewing a needs analysis can be subjective and should be supported by empirical data and standards for like facilities or assets.

In cases where it is critical for you to comply with existing standards you should refer to ISO9001: 2000 which details the methodology to be used.

You should only take action in relation to an identified gap in asset service provision if it is consistent with your organisation’s strategic goals and if it falls within your organisation’s area of responsibility.

1.3 Understanding critical success factors

Critical success factors are those issues that your organisation decides are fundamental to the successful running of your facility or asset.

They are linked closely with associated risk management strategies and the paramount reasons for undertaking asset management strategies.

An example would be the effective management of a chemical system at an aquatic centre. Providing a primary and back-up system to correctly disburse chemicals would be critical to the success of the management of the facility.

Critical success factors need not involve life-threatening situations, but would typically be those that would stop you from delivering the primary service provided by your asset.

Critical success factors should be identified while undertaking strategic asset planning and apply a weighting to ensure that each separate critical success factor is highlighted and addressed as part of an integrated asset management plan.

Integrating your asset management strategy into an operational or business plan will provide you with a framework to get the optimum use out of existing and new assets.

2.0 Asset planning

An effective asset planning framework will include an evaluation of the alternatives to acquiring a new asset and the replacement of an existing asset. The evaluation will include a comparison of life-cycle costs.

An acquisition plan details the rationale for acquiring, upgrading or replacing an asset.

It will include:

  • The method of acquisition;
  • Timing and amount of capital; and
  • Recurrent funding required.

Key success factors

  • Management has established that existing assets are fully utilised, meet functional requirements and perform at optimal levels;
  • Genuine consideration has been given to the decision of ‘non-asset’ solutions such as use of the private sector or demand management; and
  • All costs, expressed and implied, are included in consideration of life-cycle costs.

Implied costs may include a notional interest cost on funds used to acquire assets.

Expressed costs will include direct and indirect operating costs.

Principal issues

2.1 Scenario planning

Scenario planning is extremely important when considering the key factors that will influence asset planning in the future.

The aim of scenario planning is to identify signposts (either triggers or warnings) and decide upon the most appropriate way to exploit opportunities or minimise threats.

Scenario planning will help your organisation to see how different forces can manipulate the future and help you to understand and prepare for uncertainty.

For the sport and recreation industry, scenario planning will help you to consider participation and utilisation trends; changing demographics; changing legal obligations and make more informed asset provision decisions.

To gain an understanding of the benefits of scenario planning, you must look at current situations and compare them with the rationale supporting the original decision.


Consider the air handling system associated with an aquatic redevelopment.

The system collects air from inside the complex and pumps it outside and provides fresher outdoor air for patrons inside the facility. The problem is that both air vents are located on the same external wall. The primary issue is that the exhaust vent was located on the windward side of the supply vent, which meant that some of the exhausted air was being drawn back into the building.

Scenario planning would have considered alternative designs to achieve better construction and operational outcomes.

The optimum approach to scenario planning can be distilled into the following points:

  • Clarifying the strategic directions your organisation wishes to pursue and using scenario planning to consider options including how to anticipate uncertainty.
  • Analysing the full range of macro and micro-environmental forces affecting a decision. These may include political, environmental, economic and social forces.
  • Create and play out scenarios structured around critical drivers, environmental forces and uncertainties associated with the decision focus. Combine analytical thinking with intuition.
  • Relate the potential outcomes of the scenarios to an organisation’s strategic business initiatives.
2.2 Consideration of asset/non-asset solutions

You should consider all available alternatives if your asset planning is to address community demand for new or improved sport or recreation services.

This would include:

  • Investigating the options for enhanced or expanded services at an existing owned or externally leased facility (program based alternatives);
  • Considering an option to expand asset provision at an existing owned facility or externally leased facility (asset based alternatives);
  • Contemplate the costs and implications of constructing additional facilities to meet the community need, or refurbishment or redevelopment to address needs; and
  • Analysing the alternatives for including the private sector in providing or building facilities to meet community needs.

Each of these points should be considered against a baseline option of the consequences of adopting a ‘do nothing’ alternative.

As a logical follow on from scenario planning, the implications of deciding either an asset or non-asset solution should be supported by qualitative, quantitative and empirical data to show the benefits, consequences and costs associated with each alternative.

There are two basic asset alternatives you must consider if you are planning to acquire a new asset to satisfy a community need:

  • Improve the performance of your existing asset; or
  • Build, purchase, share lease or enter into an arrangement with the private sector.

The capacity to recover full operational costs – let alone capital costs — in the provision of community sporting or recreational facilities is minimal. This is due largely to clubs and sporting groups historically having dedicated use of facilities, which limits opportunities to maximise use. Returns would be greater if the operational and capital costs could be spread across a larger user base. Therefore, collocation is a highly effective model compared with single use facilities.

For many years, lawn bowls has enjoyed broad community sport. However, our changing society and community preferences have diminished the sport’s sustainability of facilities. A declining membership base and the need to upgrade facilities has meant the sport has had to consider broader options.

A number of bowling clubs in the metropolitan area have considered two successful options:

  • Amalgamation — which results in greater club strength and viability; and
  • Collocation with similar sports, such as petanque.

Both approaches result in a level of concern among members but the opportunity to expand the membership base provides a greater opportunity for the facility to be sustainable by using a non-asset approach.

2.3 Materiality

Materiality refers to issues that are directly relevant to the decisions you make about asset management. They may include:

  • Financial impact of a proposal including capital and operational costs;
  • Design of a facility that supports another asset and is constructed elsewhere, i.e. facilities that support like for like designs and services;
  • Technical or functional complexity of a project;
  • Environmental impact and the potential requirement for public environmental review;
  • Financial comparisons of the options; and
  • Relative level of risk involved – asset performance, political, financial, procurement, delivery or management.

You should consider each of these issues and weigh each one to reflect their order and level of importance.

2.4 Maintaining assets at an agreed level of service

Having previously established that an asset exists to provide a specific service, you must now work out how the asset will deliver an agreed level of service and continue to meet the expectations of those who use it.

The owner and the operator must agree on their roles and responsibilities whether they are the same organisation or separate. Roles and responsibilities must be put in writing and clearly state the expectations of each party.

Setting benchmarks provides a sound basis on which to establish what the asset is expected to achieve operationally.

Benchmarking would look at key result areas (KRAs) necessary to understand and agree upon operational parameters and outcomes. The owner and the operator would use the KRAs to identify and agree upon key performance indicators (KPIs).

See Appendix A for examples of KRAs and KPIs.

Once these have been established and agreed, it is customary for the asset owner and operator to form a joint working group to meet and discuss the ongoing performance of the asset. The working group should meet monthly or a minimum of every three months.

The agreement between the owner and the operator should also provide the opportunity to vary the delivery of services provided by the asset.


A more efficient and cost-effective asset management framework that will reduce demand for new assets, extend asset life, lower program costs and improve delivery of services or products.

3.0 Accountability for assets


An operation and maintenance plan which establishes standards for the level of use, condition, maintenance and performance of assets. The plans also document the resources required to operate and maintain assets.

Key success factors

  • Control of, and accountability for, assets is established at the program level;
  • Fiscal responsibility for assets is established through the budget process and by attributing and allocating costs;
  • Establishing condition, use and performance measures; and
  • The standard of performance of assets is considered as part of the next planning cycle.

Principal issues

3.1 Asset accounting principles and their effects on depreciation

The contemporary accounting model is accrual accounting, which recognises debts and revenues when they are incurred or earned. The other more traditional method is cash accounting, which recognises debts and revenues when they are received or paid.

For asset management, an overarching principle in accrual accounting requires that funds (as a balance sheet item) be set aside in reserve accounts to replace the asset at the end of its economic life.


Swimming pool filtration and pumping equipment may have an economic life of 15 years.

With straight-line depreciation, the full new purchase price of the asset ($500,000) would be divided by 15 and that amount ($33,333) placed into a reserve account each year.

The annual depreciated (or accumulated) amount of $33,333 becomes a cost to the organisation and is recognised as a non-current liability on the balance sheet.

Additionally, works undertaken that materially affect the life, capacity or performance of the asset need to be recognised as capital expenditure and have a direct impact on the calculations of depreciation.

Further information can be gained by accessing Accounting Standard AASB 1021.

In a cash accounting environment, some organisations may not account for depreciation by this method. However, in terms of sustainable asset management, setting aside funding for future replacement is highly regarded.

In appreciating the financial impacts that operational changes have on assets, you should factor issues such as betterment, rehabilitation, acquisitions, enhancements or replacements into the depreciation equation.

Capital investment decisions concerning these issues are dealt with in 3.2 below, though they are based upon operational performance requirements.

Costs associated with consumable items associated with the asset are not considered capital expenditure and are not considered within the depreciation equation.

3.2 Performance requirements,condition recording and reporting

When you review an asset you should remember that it exists to serve a specific purpose. You should also consider the issues raised in the Integrated Planning section of this guide (see page 6).

Asset performance should directly relate to operational requirements in the strategic plan and demonstrate that they are required and are performing at the desired level (refer 2.4 on page 10).

To ensure that performance requirements are being met, you should carry out regular condition reports. While closely linked to the risk management process, condition reporting is where you examine your asset to be sure that its operation service delivery targets are being met.

Assessing the condition of an asset involves systematically examining components and systems and documenting their condition according to the relevant standards for each element.

Recording the assessments will help with forecasting and benchmarking maintenance expenditure. The information will help to keep your asset register current. It will also be a guide to identifying under-utilised and over-utilised assets.

Equally important is the environmental condition of the asset. This means where the primary asset or facility is located and what is surrounding it that may influence its performance.

A condition report will identify risks immediately near the primary asset that demand attention.

For examples see Appendices D, E, F, G, H.

The reporting of asset condition has a direct bearing on the preparation of your organisation’s annual budget for operational and capital expenditure, in addition to strategic planning implications.

3.3 Management and maintenance of an asset register

Your organisation should develop and maintain an accurate asset register to:

  • Record the existence of an asset;
  • Determine its residual value;
  • Apportion a ‘life of asset’ value; and
  • Factor changes in either economic or service values.

Recording and maintaining information on an asset register must be carried out according to provisions set out by Australian Accounting Standards Board (AASB).

It is important that the information is calculated as it relates to asset life and depreciation rates. To ensure accuracy in financial reporting and reserve account management, the calculation of annual depreciation for like assets should occur equally between different organisations.

3.4 Creating, storing and communicating asset information

Information on asset management should be recorded and stored so that it is easily maintained and transparent across operating systems. This can be done using common proprietary software packages and generic spreadsheets.

Your organisation should follow contemporary management practices and have up to date asset recording systems, electronically and in hard copy. Copies of this information should also be stored off site in the event that it is destroyed.

The information should be user friendly and easy to understand. Where possible you should include footnotes or explanatory comments so that all staff can clearly understand what has been recorded and where it is kept, with cross-referencing to explanatory notes, accounting standards or legislative requirements. The information should be distributed from time to time to maintain its operational integrity.


Effective accountability mechanisms will establish a culture where assets are adequately maintained and protected and, through optimisation of performance, maximise their outputs or service potential.

4.0 Internal control structures

An effective internal control structure will establish and promulgate asset policies and procedures and use an information system that provides reliable, relevant and timely data with which to make informed asset management decisions.


A policy and procedure manual which details the requirements for effective governance of assets is complemented by an information system, based on an asset register, which provides the financial and non-financial information necessary to manage assets.

Key success factors

  • The policies and procedures address all aspects of the asset life cycle, are promulgated to all relevant staff and are updated regularly;
  • Staff involved in asset management receive training commensurate with their responsibilities;
  • The asset register contains data on acquisition, asset identification, accountability information, performance, disposal and accounting;
  • The asset register is integrated with the financial and budgetary systems; and
  • Asset information is readily accessible to staff who are accountable for assets.

Principal issues

4.1 Economics and budgetary management

In simple terms, your organisation must budget for the full costs associated with the development and management of assets or facilities. This provision extends beyond the cost of building or buying the asset and includes all costs associated with running and maintaining the asset until you no longer own or operate it.

Where possible you should involve the operational staff in the development of the budget because they have detailed knowledge of the day-to-day and ongoing costs associated with the asset. However, ultimate budgetary control rests with the manager appointed to oversee the facility or asset.

The budget must incorporate the full life-cycle costs associated with the asset. Life-cycle costing is a complex process and should be based upon the concepts of accrual accounting. The Department of Sport and Recreation will develop life cycle costing guidelines in the near future. Until then, we encourage you to consult the relevant Australian Standard AS/NZS 4536:1999.

4.2 Service level agreements

A service level agreement (SLA) is a contract between a facility asset owner or manager and an organisation engaged to deliver services associated with the primary asset

From a customer’s perspective, there should be a seamless relationship between the principal and the SLA organisation.

The delivery of this service is affected by a number of key elements:

  • Services to be delivered;
  • Performance tracking and reporting;
  • Problem management;
  • Form and consideration; and
  • Roles and responsibilities.

For an example of a service level agreement see Appendix B.

Services to be delivered

The principal — or asset owner — typically enters into an arrangement where a service or number of services associated with the function of an asset are provided by a second organisation.

The principal must be satisfied that these services, while important, are not core to the function of the asset or facility and can be adequately carried out by other parties. In these circumstances, it is important that the principal establishes a risk management strategy directly associated with the service that is being transferred to the second party.

Once the risk management strategy has been established, both parties should develop a formal agreement setting out the rights and responsibilities associated with the services to be undertaken.

This kind of arrangement must support an agreed level of asset performance to ensure that continuity of asset service is assured to users.

Performance tracking and reporting

The principal must ensure that the level of service being provided by the contracted organisation supports both a level of service continuity and asset quality.

Both organisations should agree on how to measure and track performance, particularly in relation to asset management. The aim is to make sure that the principal is fully aware of the condition and serviceability of its assets and facilities.

Problem management

The SLA must clearly set out the rights and obligations of the principal and service provider, particularly the delivery of services and management of facilities and assets under the control of the service provider.

Both parties should be clear on their rights and obligations so that each understands the other’s obligations.

A management committee should be established and it should meet regularly to discuss issues of service delivery, management and maintenance of the principal’s assets or facilities. This type of forum is the best way to ensure that both parties have regular contact.

Form and consideration

The SLA should clearly set out the fees and charges associated with the contract. Further, both parties should understand the true level of their economic exposure.

The SLA must also detail penalties for breaches of contract by either party, and how they will be identified. The contract should clearly state how issues can be mediated and/or remedies available to each party, including (but not limited to) liquidated damages.

Roles and responsibilities

In order for the relationship between the principal and the service provider to be maintained, the SLA should clearly document the roles and responsibilities of each party.

Further, it is important that each organisation agree to a process that provides the opportunity to contractually amend their roles and responsibilities to deliver process benefits that will enhance asset or facility utilisation.

4.3 Linking asset management to risk management (AS4360 and Handbook 246 – 2002)

Risk management has become a formal management tool to systematically identify and manage risks throughout the life-cycle of an asset. The process helps to meet service delivery more efficiently and reduces the prospect of financial loss.

To better appreciate risk management, it is recommended that you consult Australian Standard, AS4360 and Handbook 246 (2002) Guidelines for Managing Risk in Sport and Recreation.

To identify risk, you should first have a clear understanding of the environment in which your asset operates and a strategic view of factors that could impact on your operation. This would include but not be limited to:

  • The commercial or community environment in which the organisation operates;
  • An appreciation of the relevant stakeholders; and
  • The application of a SWOT (strengths, weaknesses, opportunities and threats) analysis.

Once you have done this, you will gain a clear understanding of your organisation’s goals, objectives and strategies. You will further understand your organisation’s capabilities and limitations and will be in a better position to develop strategies to address each area of concern identified.

Undertaking this approach will identify a series of risks to your organisation.

Once identified, you should assess the likelihood of the risk in terms of occurrence and the consequences associated with the risk occurring.

The three primary stages of risk management are:

  • Identification of areas of risk;
  • Assessment of the risk; and
  • Treatment of the risk.

Your organisation should also develop and maintain a risk register that would include:

  • The risk itself;
  • For each risk identified, the consequences of an event happening and its likelihood;
  • For each risk identified, the adequacy of existing controls;
  • Likelihood rating;
  • Consequences rating;
  • Level of risk (treated); and
  • Risk priority.

Having identified and categorised each risk, you then need to monitor and treat it. Adopting the following steps will help this process:

  • Assign responsibilities for actions;
  • Accountabilities for activities;
  • Establish performance criteria;
  • Establish time frames; and
  • Establish procedures for monitoring.

See Appendix C for a detailed risk management procedure.

This process should be closely aligned to the performance of an asset or facility. It is important to monitor risks and the effectiveness of risk treatment plans regularly.

The frequency will depend on the type of risk.


An effective internal control structure that provides the framework to improve asset management. Without it there is limited scope for informed decision-making or implementation of management’s intentions.


20 Appendix A
Example: Service Levels
21 Appendix B
Building Maintenance Services
  • Service Level Agreement
27 Appendix C
Risky Business — A Club Guide to Risk Management
33 Appendix D
Building Condition Assessment (BCA)
  • Draft Methodology
37 Appendix E
Sport Specific Condition Assessment
38 Appendix F
Building Condition Assessment
  • Client’s Site Level: Consolidated Feedback Report
42 Appendix G
Sport Specific Condition Assessment
  • External Services
  • Internal Services
46 Appendix H
  • External Services
47 Appendix I
Water Efficiency Checklist for Buildings
49 Appendix J
Site Security Inspection
50 Appendix K
Project Building Checklist
Legislative Compliance Checklist
Occupational Safety and Health

5.0 Disposal

An effective asset disposal framework should include alternatives for the disposal of surplus, obsolete, under-performing or unserviceable assets. Alternatives should be evaluated in cost-benefit terms.


A plan that sets out the reasons; time frame; method; and expected proceeds for the disposal of an asset.

Key success factors

  • Under-utilised and under-performing assets are identified in a systematic review process;
  • Critical examination of reasons for under-utilisation or poor performance and corrective action is taken or a disposal decision is made;
  • Analysis of disposal methods considers the potential market value, the location and volume of assets, the ability to support other government programs, and environmental implications; and
  • Regular evaluation of disposal performance.

Principal issues

5.1 Disposal plan – redevelop,refurbish or dispose

Once an asset or facility has reached the end of its functional or physical life you will have to decide whether to dispose or decommission, update or replace it. Each has financial and organisational implications.

The following components should be considered:

  • Retirement cost impacts;
  • Environmental analysis;
  • Occupational Safety and Health (OS&H) analysis;
  • Replacement or renewal scheme;
  • Disposal salvage value; and
  • Redeployment or retraining of employees.
Retirement cost impacts

You must carefully consider how you will retire or dispose of an asset if the service it provides is to be ongoing.

In cases where you have decided on replacement, you should develop a project plan or business case to smooth the progress of the decommissioning or disposal, and the seamless provision of a new or refurbished facility.

Environmental analysis

You may be required to undertake an environmental analysis of the disposal of an asset or facility. This may involve the physical structure and the materials or components that may be considered detrimental to the environment such as asbestos sheeting.

There may also be environmental issues that require the site itself to undergo remediation as a consequence of the facility being decommissioned.

Occupational Safety and Health Analysis

This level of analysis looks at the potential for impacts on workers involved in the decommissioning, staff or the surrounding community during the decommissioning of an asset or facility.

This would be the case in the decommissioning of a chemical plant, a power generation plant or some aspects of an aquatic facility.

Occupational Safety and Health Analysis

Replacing an asset may result in new opportunities for a facility other than demolition. There may be scope for it to be used for something else.

Recent examples in the metropolitan area include converting former lawn bowling facilities into community centres and parks for use by the surrounding residents.

Occupational Safety and Health Analysis

Effective management of the disposal process will minimise holding surplus and under-performing assets and will maximise return to the owner.

6.0 Glossary of terms

A tool for continuous improvement that involves quantifying internal performance and then comparing performance against an external group.
Business case
A process that studies issues including requirements, definition of current baseline, risk allocation and management, knowledge management and how to maintain control, methods of service delivery, human resources and costs/benefits. Also referred to as an acquisition strategy or contract strategy.
A process that studies issues including requirements, definition of current baseline, risk allocation and management, knowledge management and how to maintain control, methods of service delivery, human resources and costs/benefits. Also referred to as an acquisition strategy or contract strategy.
An agreement entered into between two or more parties, which involves an exchange of specific goods and or services for specified financial reimbursement or other considerations. The terms of the agreement are usually set out in writing, and the signing of the contract creates specific legal obligations. However, verbal contracts can be formal and are enforceable.
Facility management
A business practice that optimises people, process, assets and the work environment to support the delivery of a facility owner’s business objectives. (Facility Management Association)
Intellectual property
Includes patents, registered design, trademarks or names, copyright and other protected rights.
Key performance indicators (KPIs)
Measures of performance utilising indices derived from specific measurements of data relating to each key result area. Indicators are concerned with variables such as efficiency, effectiveness and financial return and are a subset of KRAs.
Key result area (KRAs)
Linked to the strategic planning process is a series identified important outcomes formulated to deliver upon organisational business plans.
A piece of physical machinery that forms part of a facility.
Risk Management
The culture, processes and structures directed towards the effective management of potential opportunities and diverse effects.
Service level agreement (SLA)
These are either internal (e.g. between a facilities department and its customers) or external (between client and service provider). SLAs usually specify the outputs or outcomes that are required, including conditions, incentives and penalties.
Parties with an interest or who are affected by an outcome, such as shareholders, customers, clients, facility departments and service providers.
The process of compiling documents such as conditions of contract and specifications, the requesting of proposals from service providers, the preparation of tenders and the evaluation, negotiation and award of contract.
Value management

A structured process that seeks to ensure that all necessary functions of a project are provided at the lowest cost, while maintaining required levels of quality.

More information

Facilities Planning Coordinator
Department of Local Government, Sport and Cultural Industries
Telephone 61 8 9492 9825
Facsimile 61 8 9492 9711
Email the department
Page reviewed 11 September 2023