It is generally understood and often emphasized in the literature on governments that they are accountable for managing a diversified public sector asset portfolio. The purpose of this paper is to point out that to manage the entrusted assets governments need to be able to keep a sound record of them, and that most central and local authorities, or public institutions that have appeared to play the roles of either supervisors or custodians of certain assets in Croatia have performed asset management practise prioritizing financial assets, with some not even knowing what fixed assets they own, manage or use. Thus, this paper seeks to provide the audience with the information on the need for sound accounting and reporting for fixed government assets in Croatia, and how that information needs to be linked with the existing asset management regulatory framework, budgetary accounting regulatory framework, and the ongoing asset management practices.
The paper researches reasons for the necessity of setting a sound (centralized, comprehensive and transparent) asset register as crucial precondition for assuring transparency in consolidating, reporting on and utilizing fixed assets. It argues that the lack of reliable information on public sector fixed assets in place obscures determining assets’ value, budgeting for asset management activities, and measuring public sector asset management outcomes. In addition, asset coverage/classification shows considerable diversity across regulatory frameworks, assets are managed on an ad-hoc, often reactive basis and asset-related data are scattered, being recorded, if recorded at all, in balance sheets, off-balance sheet and analytical records of budgetary and extra-budgetary users.
The paper further attempts to facilitate better understanding of public sector asset management as an integral part of public sector financial management reforms, and proposes preconditions necessary for commencing proper public sector fixed asset management practice in Croatia. The findings of this study are of interest to policy-makers and regulators in Croatia but also in countries that are currently pursuing public sector asset management and accounting reform.