Managing Risks and Using Metrics in Transportation Asset Management Financial Plans

This third installment of a five-part financial report series addresses two related components of financial plans. The first is how to identify, communicate, manage and perhaps capitalize upon the risks inherent in long-term strategies for financing complex and aging infrastructure assets. The second is how to use financial performance measures to illustrate the adequacy of investment levels and the magnitude of accumulating backlogs. These two topics are closely related. How well risks are managed can influence how well the assets perform. In this report, two tools are explained that can help explain the potential risks and rewards inherent in an agency’s asset management and financial plan. A risk register is a simple matrix-like document that summarizes the risks, their consequences, likelihood and impact surrounding the financial plan. The risk register provides an at-a-glance summation of the risks that will determine the success of the financial plan. Also, this report presents a series of financial metrics to accompany the plans. These metrics provide “shorthand” ratios that illustrate the degree of adequacy of the financial plan to sustain asset conditions. The metrics are like heuristics or rules of thumb that allow the “body politic” to understand benchmarks of whether the financial plan is adequate to sustain assets, and if not, by how much.

Language

  • English

Media Info

Subject/Index Terms

Filing Info

  • Accession Number: 01608544
  • Record Type: Publication
  • Report/Paper Numbers: FHWA-HIF-15-020
  • Files: TRIS, ATRI, USDOT
  • Created Date: Jul 20 2016 7:56AM