Kwadukuza IDP 2011 - KZN Development Planning

8.17 Policy on InfrastructureInvestments and Capital ProjectsThis Policy is hereby adopted to guide KwaDukuzaMunicipality’s’ Infrastructure investments and CapitalProjects. The environment is dynamic and the policy willhave to be reviewed and refined as and when required togive effect to changing circumstances. Sources of fundingare generally scarce and needs are unlimited which willalways result in prioritization of projects.8.18 Asset Management PolicyThe objective of the asset management policy is to prescribethe accounting and administrative policies and proceduresrelating to property, plant and equipment (PPE), which arefixed assets of KwaDukuza Municipality.A summary of principles supported in this policy are:• A fixed asset is defined in GAMAP 17 as a tangibleitem of property, plant or equipment held by themunicipality for use in the production or supply ofgoods or services and which is expected to be usedduring more than one reporting period (financialyear). Thus a fixed asset is an asset either movableor immovable owned by or under the control ofthe municipality or from which the municipalityreasonably expects to derive economic benefits, orreasonably expects to use in service delivery, over aperiod extending beyond one financial year.to all departments, in regard to the control of orsafekeeping of the municipality’s fixed assets.• All fixed assets shall be carried in the fixed assetregister, and appropriately recorded in the annualfinancial statements at their original cost or fair valueless any accumulated depreciation.• Heritage assets are not depreciated as they areregarded as having an infinite life.• Every head of department shall at least once duringevery financial year, and in compliance with therelevant written directives issued by the chief financialofficer, undertake a comprehensive verification of allfixed assets controlled or used by the departmentconcerned.• Assets are eliminated from the Statement of FinancialPosition on disposal or retirement. The differencebetween the net book value of assets (cost lessaccumulated depreciation) and the sales proceedsis reflected as a gain or loss in the statement of thefinancial performance.With the verification process in running, this policy iscurrently under review and will be updated as soon as itis finalized.• The fixed asset register shall be maintained in theformat determined by the chief financial officer,which format shall comply with the requirements ofgenerally recognized accounting practice (GRAP) andgenerally accepted municipal accounting practice(GAMAP) and any other accounting requirementswhich may be prescribed.• Fixed assets are classified under the followingheadings:Land (not held as investment assets)Infrastructure assets (assets which are part of anetwork of similar assets)Heritage assets (culturally significant resources)Community assets (resources contributing to the wellbeing of the community)Investment assets (resources held for operational orcapital gain)Other assets (ordinary operational resources)• Every head of department shall be directly responsiblefor the safekeeping of any fixed assets controlledby the department in question. In exercising thisresponsibility, every head of department shall adhereto any written directives issued by the chief financialofficer to the department in question, or generallyChapter 8105