B. Deferred Maintenance and Repairs


The AOC oversees more than 18.4 million square feet of facilities and over 570 acres of grounds, and is responsible for ensuring that the historic facilities and grounds 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’s Statement of Federal Financial Accounting Standards 42, Deferred Maintenance and Repairs, defines deferred maintenance and repairs (DM&R) as maintenance and repairs that were not performed when they should have been, or were scheduled, and are delayed for a future period. This standard requires federal entities to discuss: (1) maintenance and repairs policies, (2) how maintenance and repairs activities are ranked and prioritized, (3) factors considered in determining acceptable condition standards, (4) whether DM&R relate solely to capitalized general property, plant and equipment (PP&E) and stewardship PP&E or also to noncapitalized or fully depreciated general PP&E, (5) PP&E for which management does not measure and/or report DM&R and the rationale, (6) beginning and ending DM&R balances by category and (7) significant changes from the prior year.


To meet this standard, the AOC defines its acceptable level of condition to be “good to very good” based on the Facility Condition Index. The index is based upon the facility replacement values, which the AOC updates annually, and identified deferred maintenance and repairs. The AOC tracks DM&R for three categories of capitalized assets: (1) buildings and other structures, (2) grounds (i.e., stewardship land) and (3) heritage assets. While the AOC tracks capital equipment deferred maintenance and repairs, none was identified for FY 2019. Noncapitalized and fully depreciated PP&E are excluded from the DM&R estimate.


The AOC uses facility condition assessments (FCAs) to evaluate the assets’ condition and to identify deferred maintenance, capital renewal, capital improvements and capital construction


work elements. The FCA tracks maintenance and repairs activities as work elements that are scheduled for completion. Rank and prioritization for the work elements are based on the scheduled year, as well as project risk (which is scored as low, medium, high and critical). The FCA cost models are considered early planning estimates to identify liabilities — they are not derived from fully completed construction drawings. The focus of this disclosure is solely deferred maintenance and repairs, as identified through the FCAs, and excludes capital renewal, capital improvements and capital construction work elements. Nonetheless, the AOC monitors capital renewal work elements that, if not funded, could become deferred maintenance in the near future. Capital renewal work elements, identified within a five-year period, are combined with deferred maintenance and repairs and this figure is referred to as “backlog” at the AOC.


The AOC completed an initial FCA on most buildings and grounds under its stewardship, with some exceptions (identified in the note to the table below). The AOC continues to complete and update the FCAs for all facilities for which it is responsible. As a result, the FCAs for some of these facilities are underway, or in the planning stages, and will be included in subsequent reports.


The AOC’s estimate of the amount of deferred maintenance and repairs work required to bring facilities to a “good” condition, based on the Facility Condition Index, was $593 million for the fiscal year ending September 30, 2019.8 The increase over the prior year is mostly related to additional deferred maintenance identified during reassess ments of the Capitol Power Plant, James Madison Memorial Building, Rayburn House Office Building and the tunnel connecting the Cannon House Office Building to U.S. Capitol.


8


The 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 “very good,” 0.02 to 0.05 is judged “good,” 0.05 to 0.10 is deemed “fair” and more than 0.10 is considered “poor.” The 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 and repairs to return the system to an acceptable operating condition.


Deferred Maintenance and Repairs ($ in Thousands required to achieve “good” condition) CATEGORY


Buildings and Other Structures Grounds


Heritage Assets Total


AS OF 10/01/18 $488,960 $12,102 $572


$501,634


AS OF 9/30/19 $579,564 $12,646 $356


$592,566


CHANGE $90,604 $544


($216) $90,932


The September 30, 2019 figure excludes the pedestrian tunnels and the 14 E Street, SE Maintenance Shop (both currently under assessment), the U.S. Capitol Police Courier Acceptance Facility, U.S. Supreme Court Building and the Thurgood Marshall Federal Judiciary Building. Deferred maintenance calculations are based on FY 2018 AOC replacement values, updated in April 2019.


124 Section III • Financial Information ARCHITECT OF THE CAPITOL


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