Water Infrastructure:

Comprehensive Asset Management Has Potential to Help Utilities Better Identify Needs and Plan Future Investments

GAO-04-461: Published: Mar 19, 2004. Publicly Released: Apr 20, 2004.

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Having invested billions of dollars in drinking water and wastewater infrastructure, the federal government has a major interest in protecting its investment and in ensuring that future assistance goes to utilities that are built and managed to meet key regulatory requirements. The Congress has been considering, among other things, requiring utilities to develop comprehensive asset management plans. Some utilities are already implementing asset management voluntarily. The asset management approach minimizes the total cost of buying, operating, maintaining, replacing, and disposing of capital assets during their life cycles, while achieving service goals. This report discusses (1) the benefits and challenges for water utilities in implementing comprehensive asset management and (2) the federal government's potential role in encouraging utilities to use it.

Drinking water and wastewater utilities that GAO reviewed reported benefiting from comprehensive asset management but also finding certain challenges. The benefits include (1) improved decision making about their capital assets and (2) more productive relationships with governing authorities, rate payers, and others. For example, utilities reported that collecting accurate data about their assets provides a better understanding of their maintenance, rehabilitation, and replacement needs and thus helps utility managers make better investment decisions. Among the challenges to implementing asset management, utilities cited collecting and managing needed data and making the cultural changes necessary to integrate information and decision making across departments. Utilities also reported that the shorter-term focus of their governing bodies can hamper long-term planning efforts. EPA currently sponsors initiatives to promote the use of asset management, including educational materials, technical assistance, and research. While this is a good first step, GAO found that EPA could better coordinate some activities. For example, EPA has no central repository to facilitate information sharing within and across its drinking water and wastewater programs, which would help avoid duplication of effort. Water industry officials see a role for EPA in promoting asset management as a tool to help utilities meet infrastructure-related regulatory requirements; they also noted that establishing an EPA Web site would be useful for disseminating asset management information to utilities. The officials raised concerns, however, about the implications of mandating asset management, citing challenges in defining an adequate asset management plan and in the ability of states to oversee and enforce compliance.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: Given the potential of comprehensive asset management to help water utilities better identify and manage their infrastructure needs, the Administrator, EPA, should take steps to strengthen the agency's existing initiatives on asset management and ensure that relevant information is accessible to those who need it. Specifically, the Administrator should strengthen efforts to educate utilities on how implementing asset management can help them comply with certain regulatory requirements that focus in whole or in part on the adequacy of utility infrastructure and the management practices that affect it.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: In response to GAO's report, EPA provides a two-day "hands on" advanced asset management workshop on best practices in this area. EPA conducted several advanced asset management training sessions over the last few years in different parts of the country. In addition, EPA developed documents, such as the Building an Asset Management Team Fact Sheet, designed to help promote asset management at the local level. These documents will help local communities understand that properly managed assets allow facilities to comply with regulations when the assets are used and are functioning as intended. Finally, EPA uses regulatory compliance as a key marketing hook when engaging small utilities on implementing asset management with the Check Up Program for Small Systems (CUPSS) software tool, which was developed in response to this GAO report on asset management.

    Recommendation: Given the potential of comprehensive asset management to help water utilities better identify and manage their infrastructure needs, the Administrator, EPA, should take steps to strengthen the agency's existing initiatives on asset management and ensure that relevant information is accessible to those who need it. Specifically, the Administrator should explore opportunities to take advantage of asset management tools and informational materials developed by other federal agencies.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: Discussions between EPA and the Office of Asset Management within the Department of Transportation's Federal Highway Administration resulted in an agreement to exchange information, coordinate activities, provide training, and provide technical expertise and advice in support of each other's Infrastructure Asset Management Programs. The two agencies are also working to publish a set of case studies that focus on defining commonalities in asset management and working together to advance the state of the practice of asset management.

    Recommendation: Given the potential of comprehensive asset management to help water utilities better identify and manage their infrastructure needs, the Administrator, EPA, should take steps to strengthen the agency's existing initiatives on asset management and ensure that relevant information is accessible to those who need it. Specifically, the Administrator should better coordinate ongoing and planned initiatives to promote asset management within and across the drinking water and wastewater programs to leverage limited resources and reduce the potential for duplication.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: In response to this recommendation, EPA established a Sustainable Infrastructure Initiative to coordinate across offices on EPA's "four pillar" strategy for addressing the challenges of sustaining aging infrastructure. One of the four pillars includes asset management. Among other things, staffs from the various offices meet to share information, transfer knowledge, and coordinate plans.

    Recommendation: Given the potential of comprehensive asset management to help water utilities better identify and manage their infrastructure needs, the Administrator, EPA, should take steps to strengthen the agency's existing initiatives on asset management and ensure that relevant information is accessible to those who need it. Specifically, the Administrator should establish a Web site to provide a central repository of information on comprehensive asset management so that drinking water and wastewater utilities have direct and easy access to information that will help them better manage their infrastructure.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: In response to GAO's report, EPA has partnered with the Water Environment Research Foundation and the AWWA Research Foundation to develop the Sustainable Infrastructure Management Program Learning Environment (SIMPLE). This sector-based knowledge management system has information about best and appropriate asset management practices for wastewater treatment facilities. In addition, EPA funded the establishment of an asset management website in conjunction with Penn State University. This website has a series of videos and source documents on asset management practices to help elected officials and water and wastewater managers make smart choices as they address water and wastewater infrastructure issues.

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