The amendment, made in February 2021, requires all operators to keep an asset register, a 10-year maintenance schedule for each asset, and a three-year maintenance report to accompany the village’s annual budget.
Jess Johnson, Account Director at aged care facility management and maintenance specialists MDFM, said that although the requirement is just in NSW, other states are likely to follow suit.
“The new requirement is causing some headaches amongst retirement village operators, but it’s an important issue and at the end of the day, better asset management can also bring a lot of positives,” said Ms Johnson.
Asset management plan: What is needed
The Retirement Villages Amendment (Asset Management Plans) Regulation 2021 now requires asset management plans to have three components.
The first is an asset register, which details all items of capital that the operator is responsible for, over the purchase cost of $1,000.
“This is where operators will notice a big difference. In the past when we’ve done an asset register for a retirement village, we record a very small list of assets – an air-conditioner, a hot water heater and the oven, for example,” said Ms Johnson.
“We now need to include capital items like flooring, the roof, wall coverings and much more.”
The second and third component is a 10-year maintenance schedule for each asset, and a report with estimated maintenance costs and dates planned over the next three years – including details about the potential replacement of assets that may be nearing the end of their life.
A job too big for spreadsheets
The legislation and guidelines state what needs to be included in an asset management plan, but they aren’t prescriptive, which can make implementation confusing for village operators.
There are other challenges, too. When creating the asset register, operators must include the purchase cost, and the effective and remaining life of the asset depending on when it was purchased.
“For older villages, creating an asset register will mean a thorough onsite audit of the village to record each and every one of those items,” said Ms Johnson.
To add further complications, the three-year report must be updated within 28 days if there have been any changes during the budget approval process.
Repair and maintenance costs need to be entered straight after completion (when practical), and new major items of capital must be added to the asset register within seven days of purchase.
Given the scale of the job, Ms Johnson advises operators not to rely on spreadsheets, but a Computerised Maintenance Management System (CMMS) or Asset Management System to create and manage an effective plan.
“It would be a real challenge to track that level of detail across a large volume of assets in Excel,” said Ms Johnson.
“There’s lots of decisions to be made in the set-up which need expertise from someone who understands how an asset management plan operates in reality.”
Asset management plan made easier
Fortunately, there are tools available to cut through the confusion.
As experienced aged care asset management experts, MDFM is well-placed to help village operators create an asset management plan that does more than tick the compliance boxes.
With a firm grasp on the Act’s nuances and requirements, MDFM can set up a CMMS centred around a detailed asset register as the backbone of the asset management plan.
This not only satisfies the new guidelines, but also creates a valuable source of data to drive all types of decision-making.
Ms Johnson said MDFM can also create an asset management plan policy document for residents and stakeholders.
“Another challenge that we foresee with the amendments is opening a can of worms with so much asset data going to the residents,” said Ms Johnson.
“One useful tool that we are preparing for our clients is a policy document describing the methodology used to achieve the asset management plan. This isn’t required by the regulations, but it will provide an excellent basis for making decisions and provide more transparency to residents to substantiate those decisions.”
MDFM is currently inviting operators with asset management plan challenges to get in touch for an initial conversation, or visit the website for an instant quote on their asset register.
“We are always happy to have an informal chat with retirement village operators or aged care providers around any challenges they have with their property or asset management,” said Ms Johnson.
“Jump on our website or give us a call and start the conversation.”
To contact MDFM, visit www.mdfm.com.au or phone (02) 9742 5001.
How does one predict the remaining life of an asset?