Annual Report 2003-2004
 

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Your location: Performance > Outcome 4 > Output 4.1 > Reporting against effectiveness indicators

OUTPUT 4.1: Property management

Reporting against effectiveness indicators

On this page: Overview :: Provision of accommodation overseas :: Physical management of assets :: Financial management of assets

Overview

The department met the Government's overseas owned property needs in accordance with the Australian Government Property Principles—the standard that ensures that the value of the Government's property assets is maintained.

Our Overseas Property Office (OPO) is responsible for the commercial management of all aspects of the Government's overseas owned property estate. In accordance with the property principles, OPO applied rigorous commercial practice to all aspects of management of the estate throughout 2003–04.

The international security environment placed additional pressures on the management of the overseas property estate in 2003–04. The Government provided additional funding of up to $74.5 million over five years for the upgrade of security and, in some cases, the relocation of Australian missions overseas. We relocated a number of our overseas chanceries and some residential accommodation during the year in order to meet new security requirements (see output 1.2 for more information).

The department met indicative targets for maintaining the overseas property portfolio. We paid a dividend to the Government, made a return on investment and maintained a management expense ratio consistent with property industry guidelines.

Although the Government's divestment program in the overseas estate ended on 30 June 2003, we sold and bought a number of properties in 2003–04.

We maintained our practice of regular close consultation with the Department of Finance and Administration and government agencies represented at overseas posts to ensure effective interagency communication on relevant property management issues.

Provision of accommodation overseas

The Government meets its overseas property needs through a combination of owned property and property leased from private landlords.

In 2003–04, the department managed 132 owned properties in 55 locations, valued at $1.3 billion at 30 June 2004. This value was assessed by a global real estate services firm engaged by the department for this purpose. We also managed more than 600 individual leases of owned estate property to the department and other government agencies overseas.

The leased overseas estate comprises property leased by the department and other agencies from private landlords. The leased estate is funded from departmental appropriations (see Section 3—Corporate management and accountability on page 240 for information about the department's leased estate).

Throughout the year, we met the wide range of office and staff accommodation requirements of agencies representing the Australian Government's interests overseas. We responded promptly to special concerns arising from the adverse international security environment.

Physical management of assets

The department ensured that Government representatives overseas were provided with appropriate accommodation, including by maintaining a program of continuous assessment of all overseas property. This involved annual inspections by qualified facilities managers and consultation with post management and agencies.

Properties are assessed using a model developed by the department for measuring and monitoring their physical condition. The model is based on property industry standards including: expenditure on repairs and maintenance as a percentage of asset value; compliance with safety and storage codes; structural soundness; strategic importance of the individual properties; age of the properties with allowance for mid-life upgrades and refurbishments; and functionality and amenity of the properties.

The model applies a five-point scale (unsatisfactory, poor, satisfactory, good, very good). This provides a basis for determining priorities for upgrading, disposal or acquisition of property, and for refurbishment under a five-year rolling program for the owned and leased estates approved annually by the department's senior executive (see also quality and quantity information for output 4.1).

Financial management of assets

The department operates a special account to manage the overseas owned estate. The account, which is separate from our budget appropriations, was established in May 2002 by the Minister for Finance and Administration. Revenue into the special account is derived from commercially based rents paid by agencies that occupy Government-owned property overseas.

For detailed reporting on financial management of the overseas owned estate, see Quality and Quantity Information for Output 4.1. It reports on the rate of return on investment achieved from the operation of the estate in 2003–04, the annual dividend paid to the Government, equity returned from property divestment and the management expense ratio, which measures management costs.

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Department of Foreign Affairs and Trade Annual Report 2003–2004
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