Deferred Maintenance Reporting for Federal Facilities: Meeting the Requirements of Federal Accounting Standards Advisory Board Standard Number 6, as Amended (2001)

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DEFINITIONAL ISSUES AND POTENTIAL REVISIONS 29 Applied Management Engineering Model Management of the Facilities Portfolio: A Practical Approach to Institutional Facility Renewal and Deferred Maintenance describes a time- and condition-based approach to deferred maintenance reporting developed by Applied Management Engineering (AME, 1991). The approach provides a comprehensive process of identification, costing, and prioritization of short-and long-range facility maintenance and repair requirements, recommended critical management indicators and reporting tools, and a detailed approach to capital planning and budgeting. The goal is to achieve a clearly defined equilibrium for all facility assets and maintenance of their functional and financial value over the long term through steady and predictable reinvestment based on facility condition, age and complexity (EMR, 2000). The AME approach requires a comprehensive condition assessment of all assets that identifies long- and short-term maintenance and repair requirements, their estimated costs, and their relative priorities for accomplishment. The priority ranking is based on assigned condition codes and an indication of when the deficiency should be corrected. The study provides formulas for the projection of maintenance and repair backlogs and for the funding required to eliminate the backlog. The backlog projection uses the current backlog, the current replacement value and inflation rate, factors for backlog and physical deterioration, and average inventory growth and planned funding to project the backlog for any future year (EMR, 2000). The methodology involves a combination of time- and condition-related data; it is complex, and requires a significant amount of data and continuous condition assessment surveys. University of Virginia Model A condition-based approach used by the University of Virginia (UVA) is described in “How to Inspect Your Facilities and Still Have Money Left to Repair Them” (Syme and Oschrin, 1996). UVA began its program in 1980 as a formal assessment inspection program to document the condition of each of its 600 buildings, of which 390 were at least 30 years old, 235 were at least 50 years old, and 57 were 100 or more years old. One of the primary purposes of the program was to identify the dollar value of the maintenance backlog. Initially, inspections focused only on maintenance deficiencies as defined by the budget process, that is, deficiencies that could be funded out of maintenance accounts. Deficiencies were defined as “the repair of an existing building, or any of its permanent components or systems, back to their original condition.” Inspections were done on a four- to-six-year cycle for the majority of facilities, and over time the inspection data were entered into a computerized database. Annual reports were published that showed “the replacement value of each of our [UVA's] buildings, the estimated dollar value of the deficiencies we [inspectors] found, and the resulting Facilities Condition Index (deficiency value divided by replacement value)” (Syme and Oschrin, 1996). This system became the model for an effort to produce similar data on all the institutions of higher education in the Commonwealth of Virginia. In time the model evolved such that inspectors are looking not only at deficiencies that are strictly maintenance items but also “renewal deficiencies” related to modernization, code compliance, and hazardous material abatement. As noted in the article: