Deferred Maintenance for the Fiscal Year Ended

September 30, 2014 AOC oversees over 17.4 million square feet of facilities and more than 587 acres of grounds on Capitol Hill and off-site areas. AOC is responsible for ensuring that the historic facilities entrusted to its care remain in a safe and suitable condition for the current and future needs of Congress, the Supreme Court and the American public. FASAB Statement of Federal Financial Accounting Standard (SFFAS) No. 6, Accounting for Property, Plant and Equipment (as amended) defines deferred maintenance as 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.

SFFAS No. 6 requires that the estimated cost to remedy accumulated deferred maintenance on AOC’s property, plant and equipment (PP&E) be disclosed annually. AOC defines its acceptable level of condition of PP&E to be good to excellent based on the Facility Condition Index. PP&E of less than good condition are determined to require significantly more maintenance than facilities in better condition. The three major classes of capital- ized assets for which deferred maintenance was tracked are: buildings and other structures, stewardship land and heritage assets and does not include capital equipment. To evaluate the condition of buildings, other structures and grounds, AOC uses the Facility Condition Assessment (FCA) to identify deferred maintenance, capital renewal, capital improvements and capital construction projects. The cost models in the FCA are considered early planning estimates used to identify liabilities but are not derived by fully completed construction drawings. The focus of this disclosure is solely deferred maintenance, as identified through the FCA and does not include capital renewal, capital improvements and capital construction projects; however, AOC continues to monitor capital renewal projects that, if not funded, could become deferred maintenance in the near future. Deferred maintenance calculations are based on AOC facility values, which are updated yearly. AOC has completed an initial FCA on all buildings and grounds under its purview with some exceptions. Exceptions have not been included in the figures. AOC continues to complete and update the FCA for all Capitol facilities. As a result, the FCA for some of these facilities are underway or in the planning stage and will be reported in subsequent reports.

AOC’s estimate of the amount of accumulated deferred maintenance work required to bring facilities to a good condition, based on the Facility Condition Index, is approximately $273 million for the fiscal year ending September 30, 2014. Footnote 10 Table 49 depicts deferred maintenance costs, by category, at the beginning and end of the fiscal year.

Footnote 10 AOC aims to maintain its assets in at least good condition. Condition is defined by the Facility Condition Index, which is calculated as the cost of deferred maintenance divided by the current replacement value. A ratio of less than 0.02 is considered excellent. A ratio of 0.02 to 0.05 is judged good. A ratio of 0.05 to 0.10 is deemed fair. A ratio of more than 0.10 is considered poor. AOC’s goal is to attain a ratio of less than 0.05 (or good condition) for its assets. Although an asset may be rated as being in acceptable condition, individual systems within that asset may require deferred maintenance to return the system to an acceptable operating condition.

Table: Deferred Maintenance, See Full Report, Page 139

For further information on deferred maintenance costs, plus data on the capital renewal costs, please see the Management Challenges and Looking Ahead section of this report.

Photo Caption: AOC has initiated Phase 1 of the multi-year Olmsted Terrace Stone & Metals Preservation project to repair, clean and preserve the masonry at the U.S. Capitol.