Federal Real Property: Government's Fiscal Exposure from Repair and Maintenance Backlogs Is Unclear

In 2008, we reviewed six agencies and found processes in place for the agencies to periodically assess the condition of their assets--processes that the agencies also generally used to identify repair and maintenance backlogs for their assets. However, the agencies differed in how they conducted these condition assessments and how they define and estimate their repair and maintenance backlogs. This variation is not unexpected because, according to Office of Management and Budget (OMB) officials, the Federal Real Property Profile (FRPP)--the inventory system for the federal real property portfolio created by the Federal Real Property Council (FRPC) and overseen by OMB--was purposefully vague in defining repair needs so agencies could use their existing data collection and reporting processes. Thus, the information is not comparable across agencies. Also, the information can neither be totaled to obtain a government-wide estimate nor used to understand the government's potential fiscal exposure associated with its real property repair and maintenance backlogs. To provide a realistic estimate of the government's fiscal exposure resulting from repair and maintenance backlogs, we recommended that OMB, in conjunction with FRPC and in consultation with the Financial Accounting Standards Advisory Board (FASAB), explore the potential for developing a uniform reporting requirement in the FRPP that would capture the government's fiscal exposure related to real property repair and maintenance. Subsequently, in 2011, FASAB, as supported by OMB and in coordination with other federal agencies, amended existing standards for financial reporting of deferred repairs and maintenance to establish uniformity across reporting agencies. In the process of amending these standards, OMB considered whether to establish similar definitions of deferred repair and maintenance pertaining to data that agencies provide to the FRPP. While OMB does not plan to change FRPP reporting requirements related to agencies' repair and maintenance needs, the standardization of financial reporting of deferred repairs and maintenance provides decision makers with improved information on the government's fiscal exposure from repairing and maintaining its real property that better positions them to address future costs.