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Suggested Citation:"Deferred Maintenance." National Research Council. 2001. Deferred Maintenance Reporting for Federal Facilities: Meeting the Requirements of Federal Accounting Standards Advisory Board Standard Number 6, as Amended. Washington, DC: The National Academies Press. doi: 10.17226/10095.
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Page 47

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APPENDIX A 47 reported the maintenance and repair funding it currently receives to be about 1.3 percent of the current replacement value of all its facilities, and the Architect of the Capitol's Office reported funding at a level of about 1.7 percent. Deferred Maintenance If funds are not available to address identified maintenance and repair needs, these projects may be deferred or delayed indefinitely. Deferred maintenance, is defined in the Statement of Federal Financial Accounting Standards Number 6, Accounting for Property, Plant, and Equipment, as “maintenance that was not performed when it should have been or was scheduled to be, and which, therefore, is put off or delayed for a future period (GAO, 1998). Deferred maintenance, also called unfunded maintenance, backlog of maintenance and repair, or unaccomplished maintenance, is generally quantified as the estimated cost of the maintenance and repair needed to bring a facility up to a minimum acceptable condition. The significance of the existence of deferred maintenance is that it “implies that the quality and/or reliability of service provided by infrastructure on which maintenance has been deferred is lower than it should be and thus the infrastructure is not or will not later be adequately serving the public” (Urban Institute, 1994). A report by the American Public Works Association, Plan. Predict. Prevent. How to Reinvest in Public Buildings, found that “in the short-term, deferring maintenance will diminish the quality of building services. In the long-term, deferred maintenance can lead to shortened building life and reduced asset value” (APWA, 1992). In a series of reports, the GAO came to the following conclusions about the deferred maintenance of federal facilities: The Pentagon is a classic example of the federal government's failure to invest adequately in federal buildings...Needed structural repairs and upgrades to the Pentagon were deferred for more than a decade, and the General Services Administration (GSA) now estimates that its renovation will cost more than $1 billion and take at least 13 years to complete (GAO, 1991). Other federal buildings have been neglected ... and now need major repairs and alterations to bring them up to acceptable quality, health and safety standards. The total number of federal buildings with deferred major repair and alteration requirements is unknown but our work suggests that the number may be substantial. Continuing to defer needed repairs and alterations accelerates deterioration and obsolescence and results in higher eventual costs to the government...(GAO, 1991). Most federal research laboratories are experiencing common problems with aging facilities--leaking roofs and gutters, drafty window frames, power outages, and poor ventilating systems that do not meet industry standards for air circulation...the eight agencies GAO reviewed reported backlogs of more than $3.8 billion in needed laboratory repairs (GAO, 1993).

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Deferred Maintenance Reporting for Federal Facilities: Meeting the Requirements of Federal Accounting Standards Advisory Board Standard Number 6, as Amended Get This Book
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In 1996 the Federal Accounting Standards Advisory Board (FASAB) 1 enacted Standard Number 6, Accounting for Property, Plant, and Equipment (PP&E), the first government-wide initiative requiring federal agencies to report dollar amounts of deferred maintenance annually. The FASAB has identified four overall objectives in federal financial reporting: budgetary integrity, operating performance, stewardship, and systems and control. FASAB Standard Number 6, as amended, focuses on operating performance and stewardship. The FFC Standing Committee on Operations and Maintenance has prepared this report to identify potential issues that should be considered in any future amendments to the standard and to suggest approaches for resolving them. The committee's intent is to assist the CFO Council, federal agencies, the FASAB, and others as they consider how best to meet the objectives of federal financial reporting for facilities.

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