National Academies Press: OpenBook
Suggested Citation:"ISSUES RELATED TO DEFINITIONS." 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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EXECUTIVE SUMMARY 3 any recommendations for reporting deferred maintenance for facilities or advocated specific positions. 4 ISSUES RELATED TO DEFINITIONS One of the difficulties that federal agencies have found in complying with Standard Number 6, as amended, as it relates to facilities, has been the use of terms that are not typically used in the facilities management field, that are loosely defined, and/or that do not accurately reflect facility maintenance and repair practices. Of specific concern were the FASAB (1996) definitions for maintenance and deferred maintenance, which are: maintenance—the act of keeping fixed assets in acceptable condition. It includes preventive maintenance, normal repairs, replacement of parts and structural components, and other activities needed to preserve the asset so that it continues to provide acceptable services and achieves its expected life. Maintenance excludes activities aimed at expanding the capacity of an asset or otherwise upgrading it to serve needs different from, or significantly greater than, those originally intended. deferred maintenance—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. These definitions are intended to apply to a broad class of assets, including facilities, vehicles, weapons system, and other types of property, plant, and equipment. These classes of assets have life cycles ranging from a few to 50 or more years and substantial variations in characteristics, complexity, and uses. In the case of facilities, some of these assets may be historic in nature. When applying these general definitions to specific classes of assets, problems arise. For facilities the treatment of repairs as a subset of maintenance, the use of the term “expected life,” and references to “originally intended uses” were identified as problematic. The committee has proposed for consideration the following revised definitions that it believes better reflect current facility management practices for maintenance and repair: 4 The NRC was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy's purposes of furthering knowledge and advising the federal government. Functioning in accordance with the general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the federal government, the public, and the scientific and engineering communities. Under operating procedures approved by the National Research Council, the FFC conducts activities carried out by standing committees composed primarily of federal employees to address issues of common interest. Because FFC standing committees are not appointed by the NRC and are not required to meet NRC requirements for committee composition and balance, bias, and conflict of interest, or report review, FFC reports cannot contain specific recommendations and are published under the aegis of the FFC, not the NRC.

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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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