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Property Management Standard Written into Texas Appropriations Bill

Texas state agencies and universities can avoid cuts in budgeted funds by reporting lost or damaged property according to ASTM E 2131, Standard Practice for Assessing Loss, Damage, or Destruction (LDD) of Property. Article 9.03, a new rider to the state appropriations bill that passed in June, authorizes the Comptroller of Public Accounts to withhold 50 percent of lost property value exceeding the ASTM standard.

Article 9.03 states, “The Comptroller shall withhold from the General Revenue Funds appropriated to the state agency or institution of higher education by this Act an amount equal to 50 percent of the value of the lost property provided that the loss falls outside the standards promulgated by the American Society for Testing and Materials. If a state agency or institution of higher education subsequently recovers or accounts for lost property to the satisfaction of the Comptroller, the Comptroller shall release to the state agency or institution of higher education a proportional amount of previously withheld General Revenue Funds.”

“ASTM Standard E 2131 on Assessing Loss, Damage, or Destruction of Property provides a much needed benchmark for property managers,” said Gary Quinn, property manager, General Services Division, Texas Department of Transportation, Austin. “For years, many property managers had to research and make a case for themselves and to their management for what was an acceptable level of loss, damage or destruction of property. The ASTM standard provides the needed benchmark to use for management purposes.

“The rider in the Texas Appropriations Bill was initially more severe when it was first proposed,” Quinn explained. “It simply stated that funds in the amount of 50 percent of the lost or stolen property would be withheld from a state agency’s appropriation each year. Subsequent to the publishing of ASTM Standard E 2131, the rider was amended to only ‘penalize’ agencies that did not meet the standard. Most agencies in the state of Texas are within the standard. The standard, in effect, provides not only the benchmark for all agencies to achieve, but a financial incentive.”

Standard E 2131 was developed by ASTM Committee E53 on Property Management Systems. E53 vice-chairman Lyle Hestermann, property manager, Capital Resources, Raytheon, Ft. Wayne, Ind., said, “A vital indicator of the overall health and effectiveness of a property management system is the amount of loss, damage and destruction (LDD) that occurs; it follows that the amount of LDD is also a key datum of risk management. The state of Texas’ adoption of the LDD standard within a few short months of its being published is a clear sign of the relevance and importance of this and other property related standards.”

“I feel the recent actions of the State of Texas and the U.S. Department of Energy are evidence that government is moving in the right direction,” affirmed Stephen J. Michelsen, executive vice president, National Property Managers Association. “However, this represents only a fraction of the public and private organizations which could adopt the ASTM E53 standards into their internal measurement and control systems. We believe that the broader recognition of these standards would allow organizations to evaluate their performance in terms of goals which are of consensus value and to measure their performance in achieving those goals by using professionally accepted measures.”

For further technical information, contact Lyle V. Hestermann, Property Manager, Capital Resources, Raytheon, Ft. Wayne, Ind. (phone: 219/429-4082). For Committee E53 meeting or membership details, contact Pat Picariello, ASTM (phone: 610/832-9720). //

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