Performance Audit of the Facilities Management Division Major Maintenance Reserve Fund

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.

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.