AUDIT OF DEFERRED MAINTENANCE

AUDIT OF DEFERRED MAINTENANCE Facility Inventory and Condition Assessment System (FICAS) Forum June 17th, 2005

Purpose of this Forum • To inform agencies and institutions of higher education about the Audit of Deferred Maintenance. • To inform agencies and institutions of higher education of the current project status. • Explain why agencies should participate in the project. • Communicate cost and requirements for the Facility Inventory and Condition Assessment System (FICAS.) • Communicate future requirements for agencies and institutions of higher education with capital requests for fiscal years 2006-2012.

Commonwealth’s Buildings • Over 11,000 buildings valued at more than $12.6 billion • Buildings range in age from new to over 100 years old. • Buildings are in a constant state of deterioration. • Many buildings are at or past the time for major renovation or replacement.

Appropriation Act C-194.10 • Directed the Auditor of Public Accounts (APA) to conduct an audit to determine the amount of deferred maintenance and the on-going major maintenance needs of the Commonwealth. • Interim Report issued December 2004 • See www.APA.virginia.gov • Final Report DUE December 2005

Appropriations Act C-194.10 • As a part of this audit, the APA is to acquire software to develop and implement throughout all state agencies and institutions to gather information on the maintenance needs of all Commonwealth owned buildings.

Interim Study Objectives • Establish a statewide definition of deferred maintenance. • Review statewide and agency specific maintenance practices. • Determine what maintenance systems exist in the Commonwealth and which agencies currently track deferred maintenance and perform facility condition assessments. • Determine the need for an RFP for a new system or whether the Commonwealth has an existing system that can be used. • Research and evaluate funding options and best management practices used by other governmental entities. • Recommend an interim and long-term plan for reducing the backlog of deferred maintenance and preventing the backlog from occurring in the future.

Final Study Objectives • Establish the data needed to determine the deferred maintenance backlog and develop an RFP for a Facility Condition Assessment System to collect this information. • Develop a methodology for phasing in the implementation of the Facility Condition Assessment System. • Develop policies and procedures for the initial and future collection and maintenance of information maintained in the Facility Condition Assessment System by agencies and institutions. • Audit the information agencies and institutions report in the Facility Condition Assessment system and determine the deferred maintenance backlog, prioritize problems, and propose deferred maintenance funding methods for the future.

Study Activities • Established a Task Force of agencies and institutions. • Surveyed 85 agencies and institutions about facility maintenance practices. • Visited Task Force member agencies to obtain an understanding of facility maintenance operations, budget, and systems used. • Researched and evaluated practices used by federal, state, and local governments to address deferred maintenance. • Developed a timeline and plan of action.

Task Force Agencies • Department of Corrections • Department of General Services • Department of Mental Health • Department of Planning and Budget • Department of Transportation • George Mason University • State Council for Higher Education of VA • Virginia Community College System

Lack of Accountability The General Assembly and the Governor cannot adequately plan for future maintenance and capital needs because: • The Commonwealth does not have a complete inventory of all of its buildings and their condition. • The Commonwealth does not require agencies to have a master plan. • The Commonwealth does not consider total life cycle costs of a building in the final design process.

Lack of Accountability • The Commonwealth does not have an established condition level at which agencies must maintain their facilities. • The Commonwealth does not provide agencies policies or guidance on how to maintain facilities. • There is no accountability or consistency in the budgeting or accounting process for operating maintenance. • Budgets are not based on need. • Facility maintenance funding and expenses are not separately tracked and account for.

Demolish or Sell • The Commonwealth appears to believe that buildings have an infinite life. • The Commonwealth does not require agencies to analyze the benefits of replacing old buildings with newer, more efficient buildings versus continuing to repair and renovate the building. • Factors to consider: • Cost of the construction and future operating costs • Economic impact of moving or operating more efficiently • Ability of the building to meet the current and future programmatic needs of the agency

Definitions • Deferred Maintenance (DM) occurs when the facility owner leaves unperformed planned maintenance, repairs, replacement, and renewal projects due to a lack of resources or perceived low priority and deferral of the activity results in a progressive deterioration of the facility condition or performance. The cost of the deterioration including capital costs, operating costs, and productivity losses is expected to increase if the activity continues to be deferred. • Facilitymeans any existing, purchased or constructed, roofed or walled structure that is located, is built, installed, or established on property owned by the Commonwealth’s agencies and institutions for which the agency or institution is responsible for maintenance and operation.

Definitions • Facility Condition Assessments (FCA) are detailed periodic physical inspections of a facility by qualified personnel to fully determine and document the condition of the facility or item of equipment and to identify repair, rehabilitation, and replacement needs and costs. • Life Cycle Assessments (LCA) are physical inspections of a facility by qualified personnel to inventory and collect information about the building’s capital components, size of the building, and age of the building and equipment. This assessment allows the personnel to quantitatively adjust the lifespan of the components to reflect its real condition. The assessment information collected is entered into a cost model to estimate the existing deferred maintenance and future renewal requirements for the capital components.

APA Project Status • We have contracted with Vanderweil Facility Advisors, Inc (VFA) to provide a hosted Facility Inventory and Condition Assessment System (FICAS). • Website live as of June 6, 2005 • http://vaficas.vfafacility.com • Agencies will perform a combination of detailed facility condition assessments and life cycle assessments to populate the new system. • APA will audit, analyze, and prioritize the collected information to determine the deferred maintenance needs. • APA will issue final report by December 2005. • APA will transfer administration of FICAS and the Deferred Maintenance program to DGS by May 2006.

What Can FICAS DO? • Comprehensive asset portfolio tool that allows for the collection, storage, and reporting of facilities and infrastructure condition data and related asset data. • Provides different modules which include Asset Condition Detail, Funding Analysis, Project Planning, and Ad-hoc query tools. • Used to establish budgetary requirements for deferred maintenance backlogs, capital renewal strategies, and other facilities requirements. • Provides the foundation for informed decision making in regards to facilities and infrastructure condition, multi-year capital budgeting, and capital project planning.

How Does the DATA Get ENTERED? • Two options • Detailed Facility Condition Assessments • Life Cycle Assessments • Use internal staff • Must attend VFA training prior to entering • Hire third party assessor • Data must be consistent with FICAS • Must be certified by VFA

SYSTEM PRESENTATIONDavid Raffin, Business DirectorPeter Scanlon, VA FICAS Project Manager http://vaficas.vfafacility.com

Direction from DPB and DGS • All state agencies and institutions are to use this system, applying the criteria set forth by DGS and DPB, to record information on their facilities and their condition. • APA will provide all agencies and institutions the capability to participate in this project, and to use FICAS to record Life Cycle and Facility Condition Assessments of their facilities.

Required - Criteria (1) • By September 1, 2005 all state agencies and institutions SHALL record (inventory) in FICAS those facilities for which they are responsible.

Required – Criteria (2) • By September 1, 2005 a Life Cycle Assessment or a Facility Condition Assessment SHALL be completed and recorded in FICAS for any existing facility for which the agency has presented to the Department of Planning and Budget a capital outlay renovation or improvement request for the period 2006–2012. DPB may require the more detailed Facility Condition Assessment for some 2006-2008 project requests.

Required - Criteria (3) • A Life Cycle or Facility Condition Assessment recorded in FICAS need NOT be completed if any of the following apply: • The facility is abandoned or condemned and there is no planned future use based on the agency or institution’s land use plan. • The facility totals less than 2,500 gross square feet. • The facility is small or specialized in nature, such as a VDOT chemical dome or spreader rack, picnic shelter, barns and storage sheds, monuments, utilities infrastructure systems, or any facility with a temporary occupancy permit. • Any other covered facility which the agency or institution chooses to exclude, when excluding it from this requirement has been specifically requested and approved by DPB.

Optional - Criteria (4) • A Facility Condition Assessment should be completed for any facility greater than ten (10) years old, within the limits of available resources.

Optional - Criteria (5) • A Life Cycle Assessment should be completed if the facility is less than ten (10) years old and mission critical, within the limits of available resources.

Optional - Criteria (6) • Agencies and institutions MAY complete a Life Cycle or Facility Condition Assessment in FICAS for any other facilities identified in Criteria (1), and are encouraged to do so by September 1, 2005, within the limits of available resources.

Task Force Participation to Date • Department of Corrections (DOC) • Assessed via VFA • Department of General Service (DGS) • Assessed via VFA • Department of Mental Health, Mental Retardation, and Substance Abuse Services (DMHRASAS) • Assessed via AME • Department of Transportation (VDOT) • Assessed via VFA • George Mason University (GMU) • Assessed via EMG and AME • Virginia Community College System (VCCS) • Assessed via AME

Questions You May be Asking Yourself • How does each agency obtain access to FICAS? • Hosted environment via web-enabled. • User license fee • Attend VFA training • How much does FICAS cost the agency? • $1,400 annually per user prorated starting June • APA will pay for one user for this initial year! • What does the $1,400 cover? • Access to the system, training, support, and uploading of LCA tool.

Questions You May be Asking Yourself • When and where is training? • Tentatively July 18-29 Richmond, Roanoke, Tidewater • What is the incentive for participating? • $$$$$ for Capital Projects • Include in APA Final Report • How does each agency meet the September deadline? • Use internal staff who are properly trained using the LCA tool or detailed FCA. • Hire third-party vendor. How? Use the existing DGS statewide contract or current agency contractor.

Questions You May be Asking Yourself • What if my agency already has condition assessment data? Could this data be imported into FICAS? • Yes, if it is currently in an acceptable transferable format. The importing of existing data should be negotiated with VFA. APA should participate in this process. • What if my agency has a current inventory listing of buildings? Could this be imported into FICAS? • Yes, if it is currently in an acceptable transferable format. This should be negotiated with VFA. APA should participate in this process. • Does the system have the capabilities for infrastructure? • Yes, only through a detailed FCA. However, infrastructure is not required to be included at this time.

Confirmation Dates • Submit to Auditor of Public Accounts, Department of General Services, and Department of Planning and Budget by • June 30, 2005 • a list of FICAS users • plans for LCA or FCA on capital requests • July 15, 2005 • Buildings where assessments will be completed • Process and methodology for inventorying all buildings

APA Contacts Suzanne Owens, FICAS Project Manager Senior Audit Specialist, Capital Asset Mgt 804-225-3350 Suzanne.Owens@apa.virginia.gov DeAnn Compton, FICAS Contract Administrator Audit Director, Capital Asset Management 804-225-3350 ext 344 DeAnn.Compton@apa.virginia.gov

Questions??www.apa.virginia.gov

AUDIT OF DEFERRED MAINTENANCE