Deferred Maintenance Reporting


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Issues in Deferred Maintenance


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This report presents the findings from an examination of public agency practices (federal, state, and local) in analyzing and reporting deferred maintenance on their facilities, such as roads, bridges, buildings, water or sewer systems, etc. The study team examined existing literature (the results of which are presented in detail in a separate report), and followed up on a small number of past and active Federal, state, and local agency efforts (including field visits to review the activities in New York City and San Jose, California). The study revealed a highly limited amount of either literature or actual ongoing efforts by public agencies directly addressed to the analysis and reporting of deferred maintenance. A consensus appears to exist that "deferred maintenance" should be defined to mean that maintenance and repair needed to bring current assets up to at least a minimum-acceptable physical condition level. Improvements in the asset's capacity or its capability over the original intent for the assets should not be included. Deferred maintenance is usually expressed in reports as the cost to bring assets back to an acceptable physical condition. The needed repairs can include costs that are considered to be capital costs. That is, costs are not limited to only those funded out of operating budget appropriations. The literature and field interviews make a strong case for reporting annually the amount of deferred maintenance. Such information is needed for proper stewardship of public assets and can provide needed information to public officials to help them make more informed judgments as to the allocation of scarce public resources.




Deferred Maintenance Reporting for Federal Facilities


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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.




Mortgaging the Future


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Deferred Maintenance


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Financial Management


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Aimd-98-42 Deferred Maintenance Reporting


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AIMD-98-42 Deferred Maintenance Reporting: Challenges to Implementation