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Performance audit of the Facilities Management Division major maintenance reserve fund
September 16, 2014
New Read the latest follow-up report
The King County Council established the Major Maintenance Reserve Fund in 1993 to ensure a stable source of funding to maintain county-owned buildings. However, competition for scarce general funds and missed opportunities to enhance management practices and communication have resulted in a large backlog of deferred maintenance. To enable the county to provide more efficient and cost-effective stewardship in the future, our report includes several recommendations to improve management practices and communications.
The Auditor has followed up on the report to evaluate implementation of our recommendations. See the most updated information below.
Of the 6 recommendations:
| DONE | 6 | Recommendations have been fully implemented. Auditor will no longer monitor. |
|---|---|---|
| PROGRESS | 0 | Recommendations are in progress or partially implemented. Auditor will continue to monitor. |
| OPEN | 0 | Recommendations remain unresolved. Auditor will continue to monitor. |
| CLOSED | 0 | Recommendations no longer applicable. Auditor will no longer monitor. |
Summary
King County has invested $117 million in the Major Maintenance Reserve Fund to provide for the maintenance and repair of county buildings in the past 15 years. We reviewed the financing, management, and implementation of the Facilities Management Division’s major maintenance program to determine whether this investment has effectively provided for the county’s major maintenance needs.
The idea of pre-funding major maintenance to reduce spikes in maintenance spending is a good one; however, there are opportunities to more effectively implement this concept. Despite stipulation in King County Code that the fund be fully financed, it received only 34 percent of the funds needed to perform major maintenance between 2002 and 2010. The backlog of critical work required before 2016 is about $100 million, and consequences of this backlog could begin to affect county operations. For example, the electrical system in the King County Courthouse is far past its intended life span and could fail at any time, rendering the building unusable.
The Facilities Management Division should proactively approach funding limitations by taking advantage of opportunities to effectively communicate the extent of major maintenance needs. The financial model the division has been using to predict major maintenance costs contains flaws that render its predictions unreliable. In addition, because the division has not adequately tracked building condition, it is unable to measure the impact of major maintenance spending decisions.
We recommend that the division improve data collection and tracking methods and strengthen communication with decision-makers to enable them to make strategic decisions about major maintenance funding. It should also ensure that its revised financial model accurately predicts the full cost of major maintenance for buildings in the Major Maintenance Reserve Fund portfolio. In addition, we recommend that the County Executive and County Council set target building condition levels for the division to use in measuring and reporting the performance of the major maintenance program.
Reports related to this audit
Click on the image(s) below to view the follow-up reports.
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December 28, 2017 |
December 21, 2016 |
Click on the image(s) below to view related reports.
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August 25, 2015 |
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November 17, 2011 |
August 16, 2010 |
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February 12, 2008 |
Audit team
Larry Brubaker, Chelsea Lei, Laina Poon, and David Dean conducted this audit. If you have any questions or would like more information, please call the King County Auditor's Office at 206-477-1033 or contact us by email KCAO@kingcounty.gov.