CPPM Policy Chapter 5: Capital Asset Management

This Core Policy and Procedures Manual chapter outlines the role of the Province in managing the overall capital plan, and for ministries and agencies in managing their capital asset projects. Ministry and agency capital plans require aggregation into a single provincial plan to determine priorities and overall funding.

Policy covers the need to fully consider alternative procurement approaches to build and operate public assets, such as public-private partnerships, out-sourcing and risk transference. A reference link is provided to the Capital Asset Management Framework that contains standards, guidelines and tools to support public sector capital management. 

• 5.0 Capital Asset Management
  • 5.1 Objectives
  • 5.2 General
  • 5.3 Policy
  • 5.4 Information and References

5.1 Objectives

• fair, open and transparent management of capital assets
• spending within fiscal limits and supported by appropriate due diligence
• risks are managed effectively and economically, and the public interest is protected
• best practices for capital asset management are promoted

5.2 General

Hospitals, schools, highways and other capital assets are necessary to provide government services, and are essential for economic growth. Ministries and agencies have a key role in ensuring that capital assets are managed cost-effectively. The Province's ability to manage risks across government is supported by consolidated capital planning. All ministry and agency capital plans need to be aggregated into a single, provincial plan to gauge priorities and establish funding.

The Financial Administration Act (FAA) (section 4.1) authorizes Treasury Board and the Minister of Finance to provide central direction on capital management to government and government bodies, including Crown corporations and the broader public sector. In addition, the Budget Transparency and Accountability Act (BTAA) requires public agencies to publish financial and other information on major capital projects with provincial contributions over $50 million. For capital project disclosure requirements with respect to ministry service plans and reports, refer to chapter 3, Planning, Budgeting and Reporting.

Roles and Responsibilities

The Ministry of Finance supports Treasury Board and the Minister of Finance on matters relating to capital asset expenditures. Treasury Board Staff, Ministry of Finance, maintains the standards and guidelines that make up the Capital Asset Management Framework. Ministries are responsible for preparing capital plans consistent with their service plans. Some ministries are also responsible for directly managing and monitoring capital projects.

The Office of the Chief Information Officer (OCIO) supports the capital planning process by developing a detailed three-year capital plan for the Consolidated Revenue Fund (CRF) IM/IT Capital Investments, with a 10 year outlook.  The OCIO manages the IM/IT Capital Investment Plan by making recommendations and reporting on IM/IT capital projects within the Plan, as outlined in the IM/IT Capital Investment Management Framework.  See link to the IM/IT Capital Investment Management Framework.

Ministries are responsible for directly managing and monitoring their IM/IT capital projects and reporting back to the OCIO on CRF IM/IT capital projects.

Local agencies such as school districts, health authorities and post-secondary institutions are responsible for delivering programs consistent with their mandates and their ministries' strategic directions. Crown corporations are responsible for planning and implementing capital plans and projects and maintaining their capital assets, consistent with their mandates and strategic objectives. Agencies are required to consult with the Provincial Treasury, Ministry of Finance, prior to embarking on financing initiatives regarding privatizations, corporate restructuring and alternative procurement of capital assets.

5.3 Policy

1. Capital management decisions must be based on meeting service needs rather than the delivery method. No one way is inherently better in building and operating public assets and safeguarding the public interest. The full range of options needs to be considered to arrive at the best value for money.
2. Private sector procurement must be fair, open and competitive, and consistent with government procurement policy.
3. A public private partnership (PPP) must be considered the base case procurement option where the provincial contribution to the capital cost exceeds $50 million, including Information Technology/ Information Management projects. This policy applies to ministries, Crown agencies and other agencies within the government reporting entity, and to local government projects.
4. Ministries and agencies must manage capital assets effectively throughout their life cycle. This includes:
   • development of rolling, multi-year capital plans consistent with their service plans;
   • identification of key items in capital plans, such as project ranking, budget and cost controls, forecasting and inventory information;
   • due diligence supported by business cases outlining all potential costs, risks and benefits; and
   • consideration of alternative procurement approaches (such as public-private partnerships, out-sourcing, etc.) and risk transference
5. Ministries and agencies that have demonstrated the ability to manage capital projects will be permitted to carry out their capital plans with minimal intervention. At the same time, they will be held accountable for managing capital assets efficiently.
6. Ministries and agencies must measure performance and report results with respect to their capital plans.

5.4 Information and References

The Capital Asset Management Framework on the Treasury Board Staff internet site contains standards, guidelines and tools to support public sector capital management.

The IM/IT Capital Investment Management Framework provides the roles, responsibilities and processes for all CRF IM/IT capital investments.

Partnerships British Columbia is a company owned by the Province and reports to the Minister of Finance. Its mandate is to promote and support public-private partnership projects and to identify options for maximizing the value of public capital assets. For additional information on public private partnerships, refer to Partnerships British Columbia.

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