13. Assets and Public Property

13.1 Introduction

This Chapter contains instructions and procedures relating to the management of public property. Public property includes any property in the custody of, or under the control of, the Commonwealth. Assets are a sub-set of public property.

Assets are classified as current and non-current assets:

Reportable non-current assets

Reportable non-current assets are recorded in the department’s Asset Register in SAP and are reported in the department’s financial statements.

All non-current assets with a purchase price equivalent to AUD 2,000 or more are reportable. Examples are motor vehicles, furniture, computers, PABX, software and leasehold improvements.

Revaluations of non-current assets are undertaken on instruction from the CFO. Revaluations are conducted to meet financial reporting guidelines. Revaluations are coordinated and recorded by FSB.

Finance leases

Assets under finance lease that meet the reporting threshold of AUD 2,000 are reportable non-current assets.

A finance lease is a lease where the department acts as if it were, in effect, the owner of the leased item. For example, a photocopier is leased by the department, where the department is responsible for the maintenance, repairs and servicing of the photocopier. Finance lease payments equate to the purchase price of the asset and a finance (interest) charge.

FSB coordinates the valuation and recording of finance leases and their presentation in the financial statements.

Asset management

The key objectives of strategic asset management are to ensure that:

The following are examples of procedural requirements that contribute to sound asset management:

Capital Management Plans

A Capital Management Plan (CMP) is a plan that identifies acquisitions and disposals of assets over a planning period. Work unit managers must maintain a CMP to facilitate proper management and use of assets under their control. CFO instructions for the preparation of CMPs are provided twice yearly.

13.2 Acquisition of Assets

Instructions

  1. Work unit managers are responsible for the development of five year CMPs in accordance with instructions issued by the CFO.
  2. Commonwealth Procurement Guidelines, the DFAT Procurement Manual and Section 8 of this Manual cover requirements relating to the spending of public money and are applicable to the purchase of assets.
  3. Before acquiring an asset consideration should be given to:
    • Whether the purchase is included in the CMP, or, if not and priorities have changed, whether it can be accommodated within the overall capital budget.
    • The financial outcome of lease-versus-buy options.
    • Compatibility with existing assets (especially for IT assets).

Procedure

Responsibility

Capital Management Plans
Asset acquisitions

Frequency/Conditions

Action

Work unit Managers
Employees responsible for procurement, Approvers and Approver’s agents

13.3 Acquisition of Particular Items

This section provides instructions relating to:

Instructions

Assets Received as Gifts

  1. Finance Managers and Branch Heads must ensure assets received as gifts are recorded in the SAP Asset Register.

Computers

  1. If the value of PC equipment purchased is AUD 2,000 or more it must be recorded in the SAP Asset Register. The asset value of PC equipment includes the combined cost of:
    • CPU
    • Monitor
    • Keyboard
    • Mouse
    • Extra RAM
    • Larger capacity hard disk
    • Any other component
  2. A specialist monitor valued at AUD 2,000 or more and purchased as a separate item should be recorded separately.
  3. Do not include the cost of any installed software in the value of any computer.
  4. If the gross value of an owned laptop is equal to or greater than the reportable asset threshold (AUD 2,000) it is to be recorded on the SAP Asset Register. The gross value includes the combined actual cost of:
    • Laptop computer
    • Power adaptor
    • External disk drive
    • Case supplied with the laptop
    • Any other component

Software

  1. Any individual software package with a gross value of AUD 2,000 or more must be recorded in the SAP Asset Register as a separate item.
  2. Departmental officials must ensure commercially developed software used under licence is not passed on to any user who is not a party to the licence agreement.
  3. Finance Managers must nominate an official responsible for the oversight of software installation, the use of software and the maintenance of a software register. Multiple copies of software packages should be recorded in the software register as multiple copies. A copy of the post's software register must be forwarded to ISB/IPB on request and should include the following details:
    • Product ID number
    • Product name
    • Product description
    • Licence ID number
    • Maximum number of users
    • Location
    • Cost
    • Any additional details that may be required by ISB/IPB as advised from time to time

Intellectual Property and Assets under Development/Construction

  1. Intellectual property and assets under construction includes items such as:
    • Material subject to copyright
    • Computer software developed in-house by departmental contractors or employees in the course of their official duties
    • Software that the department owns or has taken on licence that has been developed for, or tailored to, the department's specific requirements by commercial entities, contractors or consultants
  2. Managers who have approval to develop such assets should notify the Director, BDS prior to the commencement of development. The Director, BDS will provide details on the costing methodology, recording and disclosure of intellectual property and assets under construction.
  3. The Director, FPS must advise the accounting treatment in relation to the costs and income associated with the sale of intellectual property on a case-by-case basis.
  4. Rights to use intellectual property can have considerable value. Employees are required to protect such rights and to ensure that any financial benefit that could arise benefits the department or the Commonwealth as a whole.
  5. In circumstances where Commonwealth intellectual property is to be made available to another party by sale, licence or other means, advice should be sought from International Organisations and Legal Division (ILD) to ensure that the Commonwealth's interests are protected.

Artworks and Antiques

  1. The Artworks Advisory Committee provides a decision making forum for art management issues that arise in Australia and at overseas posts that may have departmental-wide implications.
  2. Posts should lease rather than purchase artworks. Ownership of artwork brings with it significant expenses associated with appropriate conservation and preservation. Ongoing copyright issues, particularly in cases where artists retain the right to determine how works should be displayed on departmental property may also complicate ownership.
  3. Antiques and works of art acquired by DFAT must be recorded in the SAP Asset Register if the gross value is AUD 2,000 or more.
  4. Antiques and works of art acquired by DFAT should be photographed, and photographs retained on file, to facilitate identification.
  5. Works of art on lease from Artbank are to be recorded separately on an Artbank register at the respective location (see Section 13.10). They are not included in the DFAT Asset Register.

Library Materials

  1. Library materials are recorded separately in the Accessions Register maintained by the Librarian, DFAT Canberra. Library materials include:
    • Library monographs valued at AUD 300 or more
    • Volumes valued at less than AUD 300 each, but which form part of a set of books (eg the Australian Encyclopaedia)
    • "Gratis" and other material considered to be of long-term value to the Library.
  2. STOs and posts should similarly record library materials.

Leasehold Improvements

  1. Leasehold improvements include fitouts or renovations of leased office accommodation or leased residential property. Examples are recarpeting, painting and structural improvements to a leased property upon commencement of a lease (initial office/residential fitout), and the subsequent refurbishment of office/residential leased accommodation. Leasehold improvements also include immoveable fixtures – for example, the installation of air-conditioning or security systems.
  2. If the value of a leasehold improvement is AUD 2,000 or more it must be recorded in the SAP Asset Register. Leasehold improvements are initially recorded at cost as one asset per leased property, with further improvements being added to the asset as they occur. A detailed cost breakdown for each leasehold improvement asset should be attached to the relevant asset master record. Posts, STOs and Canberra will record leasehold improvements as they are acquired.
  3. The asset value of a leasehold improvement is determined as follows:
    • Initial fitout or refurbishment/renovation of a leased property: The value is the total cost of the components of a fitout, refurbishment or renovation project. If the cost of the project totals AUD 2,000 or more, the fitout/refurbishment is to be recorded on the SAP Asset Register as a leasehold improvement. The value of a fitout or refurbishment is the total cost of the freight, materials, installation and labour for carpeting, painting, lighting, window treatments of a fixed nature (eg tinting, security features), plumbing and any other structural alterations (eg barriers, security doors, counters, etc.).
    • Immoveable fixtures: the total cost of freight, materials, installation and labour costs.

Leasehold improvements do not include moveable furniture and fittings. Items such as whitegoods and furnishings like rugs, including where ordered as part of an initial house-lot, do not form part of a leasehold improvement. These items should be assessed individually and recorded as furniture and fittings in the SAP Asset Register if their cost is AUD 2,000 or more. Furnishings purchased as a set, such as a dining setting or curtains purchased as a set for a residence, should be assessed as a set and recorded under furniture and fittings accordingly.

Maintenance and repairs do not fall within the definition of a leasehold improvement. The repainting of offices undertaken as maintenance, rather than as part of a refurbishment project, would not be considered a leasehold improvement.

  1. To comply with financial statement reporting requirements, leasehold improvements are subject to revaluation from time to time. Revaluations are coordinated and recorded by FSB, Canberra.
  2. The recording of leasehold improvements in the SAP Asset Register is conducted as follows:
    • If, at the commencement of a renovation project, the projected cost is AUD 2,000 or more, all payments contributing to the cost of the associated leasehold improvement, even where payments individually may not equal AUD 2,000 or more, are to be recorded against a leasehold improvement asset.
    • There may be up to two leasehold improvement assets for each leased property: an asset at cost (ie leasehold improvements are added to this asset as and when they occur); and a revalued asset (ie no further payments should be added to this asset).
  3. For specific guidance on leasehold improvements refer to the Director, FPS.

13.4 Recording Non-Current Assets

Instructions

  1. Branch Heads and Finance Managers must ensure that all reportable assets purchased by their work areas, including those purchased from budgets provided by other areas of the department (eg from overseas property, public affairs funds, etc) are recorded in the SAP Asset Register. Departmental non-current assets are classified as reportable or non-reportable assets according to the thresholds outlined at Section 13.1.
  2. Branch Heads and Finance Managers must ensure that reportable assets are labelled to enable easy identification for stocktake purposes. The use of bar codes is recommended.
  3. The Director, FPS must ensure that revalued assets and assets acquired under finance lease are recorded.
  4. Branch Heads and Finance Managers (offices and posts) must provide information on finance leases to FSB, Canberra as requested to allow them to be included in the Asset Register. (See Section 13.1 for the definition of a finance lease.)

Asset Values

  1. Assets should initially be recorded in the SAP Asset Register at their gross value.
  2. Gross value includes the cash purchase price, any trade-in allowances, freight and installation costs.
  3. Maintenance costs and refundable taxes (eg GST, VAT) are not included in gross value.
  4. Any group of assets purchased and maintained as a unit are to be valued on a group basis. A unit is defined as requiring its components to perform its functions (eg the value of the sum of the component parts of a personal computer is to be recorded as the total asset value (see the FMM Asset Management Framework). Other examples are dining settings and curtains for a residence/office where purchased as a set.
  5. Where items are purchased in bulk, such as furniture ordered as a house-lot, the value of the items is to be assessed individually, except in the case of a set, such as a dining setting. In such cases, only those items or sets of items that meet the reporting threshold of AUD 2,000 should be recorded in the SAP Asset Register.
  6. Assets are to be recorded against the appropriate asset class. See FMM Asset Management Framework for a list of asset classes.
  7. Assets are to be recorded in AUD. Where purchases are made in foreign currency SAP calculates the AUD amount at the Spot rate on the day the invoice is paid.
    Note: When considering the asset purchase, affordability must be assessed using the Budget Exchange Rate (BER) as the work area budget is reduced at the BER.

Procedures

Responsibility

Posts and State/Territory Offices
Canberra

Frequency/Conditions

Action

13.5 Upgrade of Assets

Instructions

  1. Where an existing asset has been upgraded, and the gross value of the upgrade is AUD 2,000 or more, it must be recorded in the SAP Asset Register (eg the addition of air-conditioning valued at AUD 2,000 or more to a motor vehicle must be recorded).
  2. The value of an upgrade is to be added to the value of the original asset and not recorded as a separate item. Repairs and maintenance do not constitute an upgrade.

Procedure

Responsibility

  1. Finance Managers at Posts and State/Territory Offices
  2. Director, FPS
  3. AS ISB/IPB for ISB/IPB IT asset upgrades

Frequency/Conditions

  1. As required

Action

  1. Determine the gross value of the upgrade.
  2. Update the original Asset Record within the month of purchase to include the value of the upgrade in accordance with SAP Instructions and Help Cards.

13.6 Disposal of Assets — Sale, Transfer and Write-off

The Commonwealth’s general policy for the disposal of departmental property that, wherever it is economical to do so, the property should be:

When sale or transfer is not appropriate, gifting can be considered.

Instructions

  1. Assets may be disposed of by:
    • Sale or trade-in at market price.
    • Transfer to another Commonwealth agency with or without payment.
    • Write-off where the asset is unserviceable, worn out or obsolete, or lost or damaged (see Section 13.8).
    • Gift (see Section 13.13) when sale or transfer is not appropriate.
  2. Assets that are surplus to requirements or are unserviceable should be disposed of so as to gain the best net outcome for the Commonwealth.
  3. An Asset Disposal Report, AM 3 (refer to the FMM Forms folder) must be provided to the approving officer. The approval thresholds are based on the acquisition value of an asset or group of assets.

Approval of disposal by sale, transfer or write-off

  1. IT assets (eg SATIN equipment) controlled by ISB/IPB:
    • Where the acquisition value was less than $250,000 disposal can be approved by AS ISB/IPB.
    • Where the acquisition value was greater than $250,000 disposal must be approved by CFO.
  2. Other assets:
    • Where the acquisition value was less than $100,000 disposal can be approved by Branch Heads (Canberra), STO and overseas Finance Managers.
    • Where the acquisition value was greater than $100,000 disposal must be approved by the CFO.
  3. For assets that are surplus to requirements and have historical or cultural significance, the CFO should be contacted, and full details of the asset provided, before any action is taken on disposal.
  4. The transfer of an asset within the department does not constitute the disposal of an asset. However, when assets are transferred from one location to another the SAP Asset Register should be updated by the transferring work area to reflect the new location.

Approval of disposal by gift

  1. The CFO must approve all proposals to gift departmental assets. Refer to Section 13.13.

Sale of assets

  1. In most cases assets should be sold by auction or public tender. However, in special cases other methods such as restricted tender sales, pre-priced sales or sale through brokers or dealers may be appropriate.
  2. DFAT officials may not purchase surplus government assets unless they submit an offer in a public tender process, successfully bid at a public auction, buy at a public pre-priced sale or respond to a "for sale" advertisement in the press.
  3. Officials interested in purchasing the assets on offer should not be involved in the disposal process.
  4. When selling assets that were purchased free of customs duty or sales tax, the price should include an allowance for customs duty and sales tax if the purchaser is not entitled to an exemption.
  5. Conditions of sale should include a requirement that payment for items is to be received in cash or bank cheque prior to purchasers taking delivery of items. Personal cheques should only be accepted on the basis that the goods will not be available until the cheque is cleared.
  6. Before disposing of computers all information must be removed from hard drives and any other data storage devices in accordance with guidelines issued by ISB/IPB in conjunction with the Australian Technical Services (ATS).

Recording Asset Disposals

  1. Apart from DID, Branch Heads (Canberra) should forward the original of the Asset Disposal Report, AM 3 (refer to the FMM Forms folder) to the Director, FPS prior to the end of the month in which the asset was disposed of.
  2. At Posts and STO the Finance Manager is responsible for ensuring that:
    • The Asset Disposal Report is retained on file for audit purposes
    • Disposals are processed in SAP in accordance with SAP Instructions and Help Cards, prior to the end of the month in which the asset disposal action was undertaken

Procedure

Responsibility

Frequency/Conditions

Action

Sale, Transfer, Trade-in and Write-off of Assets

13.7 Disposal of property found on Departmental premises

Instructions

  1. The department may dispose property (other than money) if:
    • The property is found on premises under the control of the Department; and
    • The property is not claimed by the owner within three months from the date it was found.
  2. The department must dispose of the property by sale, unless it is impracticable, or undesirable in the public interest, to do so and treat the proceeds as administered receipts.
  3. If the department has disposed of property by sale; and the owner of the property makes a claim on the department in respect of the property immediately before the sale the department must pay to the person an amount equal to the amount for which the property was sold less the aggregate of any amounts reasonably spend by the department for the storage, maintenance or disposal of the property. If the property is sold by the department, any right in respect of the property vested in a person before the sale ceases to exist at the time of the sale.

13.8 Loss or Damage of an Asset

Instructions

  1. In Australia, loss or damage to an asset must be reported to the Branch Head (Canberra) or the Finance Manager (State/Territory Offices) as soon as possible.
  2. Overseas, loss or damage to an asset must be reported to the Finance Manager, or to the Head of Mission at a one officer post, as soon as possible.
  3. Where a Branch Head or Finance Manager had nominal custody of an asset at the time it was lost or damaged, the loss or damage must be reported in writing to their immediate supervisor. The immediate supervisor is responsible for ensuring that the procedures in this Section are complied with and, if fraud or misconduct is suspected, for reporting the incident to the Conduct and Ethics Unit.
  4. The employee who had nominal custody of the asset at the time of its loss or damage may be liable to pay to the Commonwealth the amount of the loss or damage:
    • If the employee took reasonable steps to prevent the loss/damage, it may be determined that the employee is not liable to pay for the loss/damage.
    • Where an employee’s misconduct or deliberate and serious disregard of reasonable standards of care caused or contributed to the loss/damage the matter is to be referred to the Conduct and Ethics Unit for investigation.
    • If the employee’s misconduct or disregard was not the sole cause of the loss/damage, the employee is only liable to pay an amount that is just and equitable having regard to the employee’s share of the responsibility for the loss/damage.

Responsibility

Frequency/Conditions

Action

Employee with nominal custody of the asset
Branch Heads (Canberra), STO and Overseas Finance Managers

13.9 Stocktakes

Instructions

  1. Correct stocktaking on a regular basis is an essential element of non-current asset management and accountability.
  2. Branch Heads and Finance Managers are responsible for ensuring that stocktakes of reportable assets, and on required registers (see Section 13.10), are conducted in accordance with the following instructions.

Reportable non-current assets

  1. The Chief Finance Officer advises when stocktakes of reportable non-current assets including ISB/IPB IT assets, should commence and where and when the results should be submitted. Stocktakes of reportable non-current assets are generally an annual requirement. ISB/IPB assets located in Australia are subject to annual stocktakes where ISB/IPB assets located overseas are subject to a stocktake on a three year cyclical basis. However, work areas may wish to undertake more frequent stocktakes.
  2. Stocktakes of additional registers, including portable and attractive items should be completed annually, refer to FMM Chapter 13.10.
  3. The objectives of the stocktake are to:
  4. Ensure that all DFAT-owned, non-current assets with a gross value of AUD 2,000 or more are recorded in the SAP Asset Register;
  5. Ensure that all assets recorded in the SAP Asset Register are in existence;
  6. Identify assets that are surplus to requirements that may subsequently be transferred within the department;
  7. Identify obsolete and/or damaged assets that should be disposed of and removed from the SAP Asset Register; and
  8. Identify assets that have been missing for two consecutive stocktakes that should be removed from the SAP Assets Register.
  9. Any apparent discrepancies between the stocktake and the SAP Asset Register listing must be thoroughly investigated to confirm whether there are, in fact, deficiencies or surpluses of assets.
  10. Any assets that have been identified as missing for two consecutive stocktakes will require the completion of a "Report on Lost or Damaged Assets" and a request for write-off (refer to Form AM4).

Additional stocktakes - of required registers (refer FMM Chapter 13.10)

  1. In addition to the annual stocktake conducted on instruction from the CFO, stocktakes of:
  2. Commonwealth owned "Portable and Attractive" items must be conducted annually;
  3. Commonwealth owned assets of DFAT-occupied residences, including recreational cottages but excluding contents that are an integral part of the building's structure, must be conducted annually;
  4. Furniture and fittings owned by the landlord at each office location should be conducted annually; and
  5. Library materials should be conducted at least once every five years.

Procedure

Responsibility

Frequency/Conditions

Action

Reportable Non-Current Assets
Stocktakers
Director FPS
Additional stocktakes

13.10 Revaluation and Depreciation

Instructions

  1. The Director, FPS is to ensure that revaluations of non-current assets are undertaken in accordance with the Finance Minister’s Orders for the purpose of meeting financial reporting guidelines for non-current assets.
  2. Depreciation must be calculated on all non-current assets with a gross value of AUD 2,000 or more.

Procedure

Responsibility

Frequency/Conditions

Action

13.11 Additional Registers of Public Property

Instructions

  1. Some non-reportable assets are required to be recorded on a register, separate to the SAP Asset Register. Required registers include:
    • Commonwealth owned items considered "portable and attractive" (eg mobile telephones, cameras, palm pilots, laptops).
    • Commonwealth-owned items that do not meet the AUD 2,000 Assets Threshold in DFAT occupied residences, including recreational cottages but excluding contents that are an integral part of the building's structure.
    • Furniture and fittings owned by the landlord at each office and residential location (eg filing cabinets).
  2. In addition, based on local conditions, Branch Heads and STO and Overseas Finance Managers are to:
    • Ensure that the required registers of non-reportable assets are maintained.
    • Ensure that stocktakes of registered items are undertaken in accordance with FMM Chapter 13.8.
    • Determine the need for optional registers of other non-reportable assets which need to be carefully managed.
  3. Where practicable, items in required registers mentioned above should be marked to indicate that they are the property of the Australian Government and use a different numbering arrangement to differentiate them from reportable assets non-current asset numbers.
    • When recording tool kits, representation and settling in/out kits, etc. it is advisable to itemise components.
  4. In addition to the annual stocktake conducted on instruction from the CFO, stocktakes of:
    • Commonwealth owned Portable and Attractive items must be conducted annually.
    • Commonwealth owned items that do not meet the AUD 2,000 Assets Threshold in DFAT occupied residences, including recreational cottages but excluding contents that are an integral part of the building’s structure must be conducted annually.
    • Furniture and fittings owned by the landlord at each office and residential location should be conducted annually.
    • Library materials should be conducted at least every five years.
  5. Disposal of items on additional registers should be approved by Branch Head or Finance Manager. An Asset Disposal Report (AM3) should be completed and filed.

Procedure

Responsibility

Frequency/Conditions

Action

Determine the need for optional registers.

Maintain additional registers.

Dispose of items on additional registers approved by Branch Head or Finance Manager. Complete and file the Asset Disposal Report (AM3).

13.12 Issue/Loan of Non-Current Assets

Instructions

  1. Branch Heads (Canberra) and STO and Overseas Finance Managers are responsible for issuing instructions related to the use and safekeeping of assets. (Refer to Asset Management Framework.)
  2. Branch Heads (Canberra) and STO and Overseas Finance Managers must ensure that records are maintained to document the removal of assets from the place of work. These records must contain the following information:
    • Details of the item, including asset number, description, make, model and serial number.
    • Name and signature of the receiving employee.
    • Date issued.
    • Date the item is returned and the name and signature of the receiving employee.
  3. Departmental assets may be provided to staff on a personal long-term issue or short-term loan basis. Persons issued with such items are responsible for:
    • Exercising personal care at all times over the use and control of the items (eg small portable electronic items should be placed in a locked drawer or cupboard when not in use).
    • Reporting any theft, loss, or damage of the items to the Branch Head (Canberra) or STO and Overseas Finance Manager immediately.
    • Paying for damages, if it is determined that misconduct or negligence is a factor in any loss of or damage to the asset.
    • Returning the item when it is no longer required or when terminating employment, attachment or assignment at a location.
    • Separate instructions apply to the use of owned and leased motor vehicles as issued in Administrative Circulars from time to time.

Procedure

Responsibility

Frequency/Conditions

Action

13.13 Gifting Public Property

The Finance Minister has delegated the power to approve proposals to gift property under section 43(b) of the FMA Act to agency Chief Executives.

Note: The Finance Minister’s delegation relates to property that was not purchased for purpose of gifting.

Instructions

  1. Government policy is that, when considering disposal of public property, wherever it is economical to do so, the property should be disposed of by sale at market price or transferred to another agency (with or without payment) that has a use for the property. When sale or transfer is not appropriate, gifting can be considered.
  2. Proposals to gift DFAT property, including assets, must be approved by the CFO as the Secretary’s delegate using the Request to Gift DFAT Property form (refer to the FMM Forms folder).
  3. The gifting of reportable assets is to be documented on an Asset Disposal Report, AM 3. (Refer to the FMM Forms folder). A copy of the AM 3 is to be provided to the Director, FPS within the month that the asset was gifted.
  4. If gifted property consists of a reportable asset, the gifting of the asset must be recorded in SAP as a disposal.

Gifting to a foreign national, foreign organisation or foreign government

  1. If the recipient of a proposed gift is a foreign national, foreign organisation or foreign Government, the delegate (including non-DFAT delegates) must be satisfied of the appropriateness of the proposed gift. The delegate may seek assistance from the relevant DFAT geographical area in determining the appropriateness of the proposed gift.
  2. For a gift of DFAT property the work area should consult with the relevant geographic area if they are unsure of the appropriateness of the proposed DFAT gift before seeking the CFO's approval. The outcome of this advice should be included in the request to the CFO.
  3. Agencies requiring DFAT’s assistance in determining the appropriateness of the proposed gift should be advised they can send such requests to the CFO (via the Financial Management inbox). Inquiries will be forwarded to the relevant geographic area for direct response to the agency.

Procedure

Responsibility

Frequency/Conditions

Action

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