Public asset valuation

17 Apr 2013

Valuer-General Victoria (VGV) has been a branch of the former Department of Sustainability and Environment but has now transferred to the Department of Transport, Planning and Local Government under recent machinery of government changes. VGV provides independent valuations to public sector agencies. It is not subject to oversight or independent review of its valuation services. Therefore VGV's governance arrangements and processes for assuring high quality advice and valuations should be of the highest order.

VGV's processes for assuring the validity of its valuations are not rigorous. Its quality assurance is based on a review of compliance with relevant standards and directions without in-depth scrutiny of valuation decisions, and additional quality assurance checks are required. Further, VGV lacks strong governance arrangements to guide its operations.

VGV has inadequate business management processes and it does not have effective performance management targets or benchmarks to guide its monitoring and reporting of performance.

VGV's unsatisfactory client engagement means that a number of government agency clients have reservations about the quality of its financial reporting valuation advice, and are not satisfied with the service provided.

Although VGV operates autonomously as an independent provider of public asset valuations, the Department of Treasury and Finance (DTF) has an important role in administering the financial reporting framework for public agencies. DTF’s financial reporting direction has not provided sufficient guidance to VGV and public sector agencies about how infrastructure assets are to be valued.

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