Deferred Maintenance for the Fiscal Year Ended September 30, 2007

FY 2007 Financial Report
Bureau of Resource Management
November 2007

The Department occupies more than 3,000 government-owned or long-term leased real properties at more than 260 overseas locations. It uses a condition assessment survey method to evaluate the asset's condition, and determine the repair and maintenance requirements for its overseas buildings.

SFFAS No. 6, Accounting for Property, Plant, and Equipment, requires that deferred maintenance (measured using the condition survey method) and the description of the requirements or standards for acceptable operating condition be disclosed. Fundamentally, the Department considers all of its overseas facilities to be in an "acceptable condition" in that they serve their required mission. Adopting standard criteria for a classification of acceptable condition is difficult due to the complex environment in which the Department operates.

From a budgetary perspective, funding for maintenance and repair has been insufficient in the past. As a result, the Department has identified current maintenance and repair backlog of $151.8 million for buildings and facilities-related equipment and heritage assets that have not been funded. This figure is less than the $325.8 million reported for 2006 as a result of removing function codes (7344, 7357, 7563, 7581, and 7667) which do not incur or pertain to deferred maintenance. The current estimate is a more realistic measure of maintenance and repair work that must be done to buildings and equipment to bring them up to where the Department believes they should be.


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