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 26 also be difficult to provide with any level of accuracy or consistency because this type of information is not typically tracked for facilities. However, variations on life-cycle costing methodologies have been developed. Some of these are described below as potential alternative approaches that could be used by federal agencies to meet the objectives of FASAB Standard #6, as amended. OTHER POTENTIAL APPROACHES TO DEFERRED MAINTENANCE REPORTING FOR FACILITIES One of the overall objectives of federal financial accounting is to “provide a framework for assessing the existing financial reporting systems of the federal government and for considering how new accounting standards might help to enhance accountability and decision-making in a cost-effective manner” (FASAB, 1993). Alternative approaches for reporting deferred maintenance and repairs for facilities are described below. All involve some form of life-cycle costing, condition assessment survey data, or a combination of the two. For those agencies that do not have comprehensive condition assessment survey information available, one or more of these approaches may provide a cost-effective method for calculating deferred maintenance and repairs to comply with FASAB Standard Number 6, as amended. Alabama Commission on Higher Education Model A 1986 article by Cushing Phillips, Jr., “Facilities Renewal: The Formula Approach,” describes a method for estimating the amount of money required for facilities renewal for a college or university or other type of facilities inventory. Facilities renewal is defined as “the complete reworking of a building (or facility), including the expected useful life equal to that of a new facility.” The primary interest of the agency developing the methodology was to generate values for total renewal allowance and total renewal backlog as the basis for budget recommendations for annual operating budgets and capital budgets. At the time the formula was developed, the author was working for the Alabama Commission on Higher Education. Alabama's public colleges and universities had a “heavy backlog of deferred maintenance,” due in part to “rapid expansion and short operating and maintenance appropriations” (Phillips, 1986). Most of the institutions had “less than adequate data as to the actual amounts and the projects making up this backlog” and “had not made recent or complete maintenance inspections or evaluations of their plants” (Phillips, 1986). The author notes that: Even if we were able to obtain valid and certifiable estimates of the amount and cost of needed repair and renovation on each campus, we still would have only a “snap-shot” of our problem. It is entirely possible that mechanical failures or unanticipated roof problems next year would invalidate our conclusions. In short, unless we were able to obtain annual (or at the least biennial) reports from each campus showing current inspection results, we would have difficulty presenting a current and defensible statement of needs to the Governor and the Legislature. (Phillips, 1986)