Crown asset disposal process
This page contains information for tertiary education institutions (TEIs) wishing to dispose of Crown assets under their management that no longer meet their needs and to reinvest a portion of the net proceeds of the disposal.
A TEI wishing to dispose of a Crown asset that it no longer requires and reinvest the net proceeds should read the Crown Asset Policy Guidelines (PDF, 118 Kb) and discuss its application with its Investment Manager before submitting an application.
The Crown asset transfer and disposal policy sets out a standard process so that when a TEI applies to the Crown to dispose of a Crown-owned asset for which it no longer has an educational need, it knows how the application will be assessed, and how and when decisions will be made.
TEIs must complete the Crown Asset Transfer/Disposal Form (Word, 107 Kb), sign it where indicated, and either print and post it along with an accompanying cover letter to the address indicated on the form, or email it to firstname.lastname@example.org
The Crown Asset Transfer/Disposal form must be accompanied by a completed Asset verification spreadsheet (Excel, 111 Kb), a completed Risk Profile Assessment template (RPA) and project scoping template for the proposed reinvestment project. The RPA and project scoping template are available from our Business Cases web page.
The asset verification spreadsheet seeks information from institutions on the Crown owned assets that they manage, asks for information concerning the ongoing educational use of each asset, and asks whether they wish the asset to be transferred or disposed of. It also asks for details of land and building assets owned directly by TEIs.
The RPA and project scoping document are components of the Government’s better business case process. The RPA comprises 26 multiple-choice questions. These identify, at a high level, the presence of risk indicators for a project and produce an indicative risk rating. In the first instance TEIs only need to forward this to TEC.
The project scoping template is intended to provide sufficient information about the project to enable consideration of the level of effort required for the development of a business case for the investment of any net proceeds of sale from the disposal of TEI managed Crown assets.
TEC will use the information in these documents to reach agreement with the TEI on the scope and depth of analysis that will be required in a subsequent business case. A business case is required for all disposals where a TEI seeks to reinvest the net proceeds of sale.
TEIs wishing to dispose of some Crown assets that they no longer require and retain the net proceeds and transfer others into their legal title should complete one application covering both outcomes.
Key Points and eligibility criteria
The following are key points related to the Crown title disposal and reinvestment process.
- The process only applies to Crown assets managed by TEIs since at least 1990.
- The policy enables a TEI to reinvest 80% of the net proceeds of the sale of a Crown asset that it manages and that is surplus to its requirements. It may be possible for TEIs to receive more than 80% of the net proceeds.
- To receive any part of the net proceeds of sale the TEI must complete a business case describing how it intends to reinvest the proceeds of the Crown asset declared as surplus and why this is the best use of the funding released. In addition the proposed reinvestment must not be contrary to the Crown’s objective of achieving a more efficiently managed tertiary asset base.
- The Minister for Tertiary Education, Skills and Employment and the Minister of Finance (joint Ministers) will assess applications for the reinvestment of the net proceeds of sale based on advice from officials and the TEI’s business case for the reinvestment proposal. An assessment undertaken by the TEC will provide recommendations to joint Ministers and will be based on the criteria set out in the document Crown Asset Policy Guidelines. The disposal will then be subject to the existing statutory and policy clearances.
- The net asset sale proceeds should be reinvested by TEIs in productive assets that will support the TEI's Investment Plan and are consistent with the TEI’s strategic plan and strategic capital asset plan. Cabinet has agreed that any reinvestment should be for capital projects and the TEC expects this to be for long-term capital assets, ie, those with an expected life of more than 10 years.
- The policy does allow for investment in capital assets with an expected life of less than 10 years, or in operational expenses in rare circumstances. If a TEI has no capital needs but has a surplus Crown asset, the TEI can (with joint Ministers’ agreement) seek Cabinet approval to receive 80% of the net disposal proceeds to spend on operational costs.
- A prerequisite for any disposal of Crown assets and retention of a portion of net proceeds is that the TEI integrates the Government’s Capital Asset Management programme into its ongoing long term strategic financial planning and reporting systems.
- As is currently the case, all disposal costs will be subtracted from the gross sale proceeds before the net proceeds are divided between the TEI and the Crown.
- If another Crown agency wishes to acquire surplus Crown property in TEI management, it will purchase the property from the Ministry of Education. The TEI will receive a portion of the net proceeds of sale as agreed by joint Ministers, just as if the property had been sold on the open market. If the Ministry of Education itself wants to retain the property for another educational use, compensation for the TEI will be considered on a case by case basis. Decisions will be made by Ministers based on advice from officials.
TEIs should contact Sharon Cottrell (Phone 04 462 4501) for more information about the disposal of Crown title assets and the retention of a portion of the net proceeds on sale.
22 July 2015
22 July 2015