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THE VALUE OF THE

THE VALUE OF THE. VALUE FOR MONEY AUDIT FACILITIES MANAGEMENT. SCOPE OF THE AUDIT. First value-for-money audit of university sector following expansion of powers of Auditor General of Ontario in 2005

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THE VALUE OF THE

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  1. THE VALUE OF THE VALUE FOR MONEY AUDIT FACILITIES MANAGEMENT

  2. SCOPE OF THE AUDIT • First value-for-money audit of university sector following expansion of powers of Auditor General of Ontario in 2005 • Objective: to assess whether selected universities had adequate policies, procedures and systems to manage and maintain academic and administrative facilities cost effectively • Three universities (Carleton, Guelph, McMaster) selected for site visits/detailed review • Remaining 15 universities and Ontario College of Art and Design surveyed by questionnaire • Since 2001 all universities fund and use a common capital asset management system

  3. SCOPE OF THE AUDIT Areas of focus: • Facilities Renewal/Deferred Maintenance • Utilization of Facilities • Information for controlling costs • Monitoring Performance and Quality • Purchasing Policies and Procedures- no findings/recommendations • VFM Audit did not cover construction of new facilities/building retrofits

  4. MANAGING THE PROCESS • Very important to establish one university contact point for AG audit team • Very important to orient Auditor General to complexity of universities; more similar to municipalities than schools which they had audited • Maintain contact; touch base often • Beware of scope creep

  5. Recommendation 1Renewal of Facilities • Maintain the asset management system • Periodically verify accuracy of capital renewal models • Periodically re-inspect facility condition • Periodic independent review • Maintain and update information in database • MTCU should work with universities to develop plan to reduce deferred maintenance • Recognition of magnitude of the problem • Has resulted in additional one time funding

  6. Recommendation 2Renewal of Facilities • Implement formal project ranking procedures to prioritize renewal projects • Understanding that there is not nearly enough funding to do what is required. • Tactical vs. strategic • Must be able to demonstrate due diligence in prioritizing projects • Standard risk assessment principles (e.g. Curie newsletter 1993) • Other considerations (e.g. new VFA module)

  7. Recommendation 3Utilization of Facilities • To minimize space needs and associated facility costs, universities should: • have adequate systems to analyse and report on utilization and capacity of space • set utilization objectives to be achieved over 3 to 5-year timeline • Charge for space ???

  8. Recommendation 4Information for Controlling Costs • To help manage facility costs, universities should implement systems and procedures to provide information to: • take into account facility costs when making decisions and planning • perform internal and external cost comparisons to identify good and poor practices

  9. Recommendation 5Monitoring Performance and Quality Control • To help ensure that they receive value for money they spend, universities should: • establish service level objectives • implement supervisory inspections of staff and contractor work • use survey results and complaint information to help evaluate performance

  10. OUTCOMES • Independent verification of Universities case regarding deferred maintenance backlog - estimated at $1.6 billion in 2006 • Validation of overall good stewardship of our facilities • Significant increase in one-time funding to universities for campus renewal ($335 million for 2007/8 and 2008/9 compared to $26.7 annually)

  11. OUTCOMES • Objective confirmation of need for more effective use of existing space/link to deferred maintenance in some cases • Identification of facilities/space as a valuable resource • Built credibility within government regarding need to invest in facilities/infrastructure

  12. RISKS • Failure to develop processes to maximize space utilization • Government ongoing funding for campus renewal does not materialize • Implementation of AGO recommendations dependent on resources • Universities miss opportunity to effect change

  13. NEXT STEPS • Public Accounts Committee • Possible audit follow up in 2009

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