Environment and Parks
The Department of Environment and Parks should improve its asset management monitoring and recording processes for dam and water management structures.
ALBERTA ENVIRONMENTAL MONITORING, EVALUATION AND REPORTING AGENCY
There are no new recommendations to AEMERA in this report.
NATURAL RESOURCES CONSERVATION BOARD
There are no new recommendations to the NRCB in this report.
The Department of Environment and Parks has a large, diverse and complex asset base of dam and water management structures. There are, among others, two important reasons for recording and monitoring these assets. First, the assets represent significant economic resources and the department needs to know how much its assets are worth. The history and value of each asset is tracked in an asset management accounting system used government-wide. Second, the department needs to know the assets’ condition and replacement cost. These estimates for replacing the dam and water management structures are recorded in the Environment Infrastructure Management System (EIMS), which is used by the department’s engineers who inspect the dams and water management structures. The replacement cost is the amount estimated to completely replace the dam and water management structure to bring it up to a brand new state. More importantly, EIMS tracks the condition of the dam and water management structures and is one source of information to help the department’s management assess the book value of each asset. In other words, EIMS tracks indicators that a dam or water management structure has significantly deteriorated, in which case the asset’s value may need to be reduced (written down) in the financial records.
The department’s processes to reliably assess the value of its dam and water management structure assets are insufficient. In particular, the department was not able to:
- compare and align the two systems used for tracking these assets—the Environment Infrastructure Management System and the asset management accounting system
- provide definitive evidence that assets are counted once and only once, and that assets are being amortized based on their appropriate life cycles
- show evidence of a robust asset impairment testing policy