Federal Real Property:
Improved Transparency Could Help Efforts to Manage Agencies' Maintenance and Repair Backlogs
GAO-14-188: Published: Jan 23, 2014. Publicly Released: Feb 24, 2014.
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What GAO Found
The five federal agencies GAO reviewed--the General Services Administration (GSA) and the Departments of Energy (DOE), Homeland Security (DHS), the Interior, and Veterans' Affairs (VA)--reported fiscal year 2012 deferred maintenance and repair backlog estimates that ranged from nearly $1 billion to $20 billion. In accordance with Federal Accounting Standards Advisory Board (FASAB) standards, agencies report backlog estimates in required supplementary information accompanying their financial statements in their annual financial reports. In addition, data reported by agencies and included in the Federal Real Property Profile (FRPP)--a database overseen by the Office of Management and Budget (OMB) in coordination with agencies comprising the Federal Real Property Council (FRPC)--provides information that can be used to estimate an agency's backlog. FASAB and FRPP guidelines do not share a common definition of deferred maintenance, and an agency can make different determinations when reporting information in its financial reports and to FRPP, resulting in dissimilar backlog estimates. In addition, agencies use different methods to determine and report backlogs, making estimates across agencies not comparable. For example, Interior excludes, while DHS includes, costs for some assets scheduled for disposal. In 2011 and 2012, FASAB adopted new standards that (1) clarify the definition of deferred maintenance and repair and (2) emphasize the need for consistency over time in determining and reporting backlogs. FRPC is considering incorporating the FASAB definition of deferred maintenance and repair in its fiscal year 2014 FRPP reporting guidance. These changes may result in improved information on agencies' backlogs and prove beneficial over time.
All five of the selected agencies followed eight of the nine leading practices GAO identified for managing maintenance and repair backlogs, such as the leading practice of identifying primary methods for delivering maintenance and repair activities. Four of the five agencies, however, generally did not employ a ninth leading practice--structuring budgets to identify the funding allotted (1) for maintenance and repairs and (2) to address existing backlogs. This leading practice emphasizes that sufficiently funding maintenance and repairs is important because the costs to address backlogs may be significantly greater than if maintenance and repairs had been undertaken when needed. In 2012, GAO found that agencies' budgeting processes differ to reflect the controls the appropriations committees consider important; the National Research Council (NRC) of the National Academies has also reported that agencies' budgets vary, in part, due to their different missions. OMB and FRPC agencies are working to refine FRPP data and develop performance measures that reflect current federal real-property management priorities. Thus, as OMB and FRPC agencies work to improve FRPC data and develop new performance metrics, the opportunity exists to revise requirements for agencies to collect and report costs agencies expend on annual maintenance and to address deferred maintenance and repair backlogs. Having greater information on agencies' annual funding of maintenance and repairs--and the corresponding effects on their maintenance and repair backlogs--would provide transparency about agencies' efforts to manage their real property assets and promote improved effectiveness of federal real property spending.
Why GAO Did This Study
GAO has designated federal real property as a high-risk area due, in part, to deferred maintenance and repair that contributes to deteriorating assets. GAO has reported that the eventual need to address deferred maintenance and repair could significantly affect future budget resources.
GAO was asked to review federal deferred maintenance and repair backlogs. GAO examined, among other things, (1) selected agencies' estimated fiscal year 2012 deferred maintenance and repair backlogs and (2) the strategies, if any, these agencies used to reduce their backlogs and how those strategies compared to leading practices. GAO selected five agencies for review that had a high ratio of deferred maintenance and repairs to annual operating costs. GAO identified leading practices in managing maintenance and repair backlogs from NRC reports, analyzed data and documents from the selected agencies and the NRC, and interviewed officials from OMB, FASAB, and the selected agencies.
What GAO Recommends
GAO recommends that OMB, in collaboration with agencies, collect and report information on (1) agencies' costs for annual maintenance and repair performed, and (2) funding spent to manage their existing backlogs. OMB agreed with our recommendations. Technical comments from OMB, DHS, DOE, GSA, VA, and the Interior were incorporated as appropriate.
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Recommendations for Executive Action
Status: Closed - Implemented
Comments: GAO has designated federal real property as a high-risk area. In 2008, GAO reported that deferred maintenance and repair contributes to deteriorating assets and represents a fiscal exposure that may have a significant effect on future budget resources and the nation's long-term fiscal sustainability. In January 2014, GAO reported that five selected agencies--to include the Departments of Energy, Homeland Security, the Interior, and Veterans Affairs and the General Services Administration (GSA)--had reported billions of dollars in deferred maintenance and repair backlogs, including estimates ranging from $0.8 billion to $20.2 billion. GAO found that all five of the agencies followed eight of the nine leading practices GAO identified for managing maintenance and repair backlogs, such as the leading practice of identifying primary methods for delivering maintenance and repair activities. Four of the five agencies, however, generally did not employ a ninth leading practice which involved, in part, structuring their budgets to identify the funding annually allotted for maintenance and repairs. GAO found that while agencies' budgets may not be structured to provide information on funding allotted to address maintenance and repairs, information agencies reported to the Federal Real Property Profile (FRPP)--a database overseen by Office of Management and Budget (OMB) in coordination with GSA and agencies comprising the Federal Real Property Council (FRPC)--contains some data elements that might be used to obtain insight in this area. Specifically, FRPP contains "repair needs" data that estimates agencies' maintenance and repair backlogs. However, because the "annual operating cost" data element in FRPP did not differentiate the amount spent on recurring maintenance and repairs from other annual operating expenses, such as costs for janitorial services and utilities, GAO found that the data were not sufficiently useful to allow full insight into agencies' funding of maintenance and repairs. Therefore, GAO recommended that the Director of OMB should require the OMB Deputy Director for Management, as chair of the FRPC, in collaboration and consultation with FRPC member agencies, to collect information through the FRPP or other mechanisms on agencies' costs for annual recurring maintenance and repair performed, and report summary-level information in the FRPC's fiscal year report. In 2015, OMB worked with the FRPC to develop a method to collect annual recurring maintenance and repair data in the FRPP. This effort included developing separate definitions for "operations" and "maintenance" costs, which were reported in the FRPP as a combined cost number. In December 2016, GSA, in conjunction with OMB, issued a memorandum to FRPC member agencies requiring them to develop processes for reporting operations and maintenance costs as separate data elements in accordance with the FRPP's revised definitions for these data elements. Agencies are to use the revised definitions to report operations and maintenance cost data for the December 2018 FRPP reporting cycle. By making changes to the FRPP to convey information on funding annually expended on recurring maintenance, OMB is in a better position to provide increased transparency about the funding amounts agencies are spending to maintain their assets as well as improve government accountability, oversight, and effectiveness of federal spending.
Recommendation: To provide increased transparency about the funding amounts agencies are spending to maintain their assets and manage their backlogs, the Director of OMB should require the OMB Deputy Director for Management, as chair of the FRPC, in collaboration and consultation with FRPC member agencies, to collect information through FRPP or other mechanisms on agencies' costs for annual recurring maintenance and repair performed--information that is currently incorporated within agencies' annual operating costs--and report summary level information in the FRPC's fiscal year report. This recommendation is not intended to limit FRPC from continuing to collect and report on agencies' overall annual operating costs, which can include annual maintenance costs plus other operating expenses such as the cost of utilities.
Agency Affected: Executive Office of the President: Office of Management and Budget
Status: Closed - Not Implemented
Comments: While we continue to believe that there is value to collecting and reporting information on funding agencies annually spend to address existing deferred maintenance and repair deficiencies, we recognize that differences in 1) agencies' approaches to tracking expenditures and 2) the capabilities of agencies' financial systems limit OMB's ability to collect comparable data agency-to-agency so that it can conduct meaningful analyses. Given that OMB plans no further action to implement the recommendation, we are closing it as not implemented.
Recommendation: To provide increased transparency about the funding amounts agencies are spending to maintain their assets and manage their backlogs, the Director of OMB should require the OMB Deputy Director for Management, as chair of the FRPC, in collaboration and consultation with FRPC member agencies, to collect information--through FRPP or other mechanisms--on funding agencies annually spent to address existing deferred maintenance and repair deficiencies and report summary level information in the FRPC's fiscal year report.
Agency Affected: Executive Office of the President: Office of Management and Budget