Program Performance Review

Transcription

1 Program Performance Review Facilities Maintenance Division of the Public Works and Transportation Department July 21, 2006 Report No Office of the County Auditor Evan A. Lukic, CPA County Auditor

2 Table of Contents Topic Page Executive Summary..3 Purpose and Scope 5 Background 5 Section 1: Assessment of the Facilities Maintenance Division s Accountability System...7 Section 2: Assessment of the Facilities Maintenance Division s Performance..18 Section 3: Options to Improve the Facilities Maintenance Division s Efficiency and Effectiveness.26 Appendix A 30 2

3 Executive Summary In this Program Performance Review, we (1) assess the quality of the Facilities Maintenance Division s accountability structure, (2) evaluate the Division s performance by analyzing available information, and (3) identify options to improve performance and reduce operating costs. Section 1: Assessment of the Division s Accountability System (See pages 7-17) To assess the quality of the Facilities Maintenance Division s accountability structure, we examined how well the Division has developed and implemented six key components of its performance measurement and reporting system. We conclude the Division has generally established an effective performance measurement and reporting system but could further improve its accountability structure. To improve its performance and reporting system, we recommend that the Board of County Commissioners direct the County Administrator to take the following actions: Collect more meaningful performance information, such as comparable unit cost data from a best practice organization and data on deferred maintenance needs; Use a widely accepted industry standard, the Facility Condition Index, to periodically evaluate relative building condition; Modify data verification processes, to include developing and implementing written policies and procedures containing clear and unambiguous performance measure definitions, a process for sample testing data, and independent supervisory review to ensure data reliability; and Use timeliness performance data to hold Division employees accountable for individual productivity. Section 2: Assessment of the Division s Performance (See pages 18-25) To evaluate the Facilities Maintenance Division s performance, we analyzed performance data for the past several years for four key measures. We conclude that: Since 2001, the Division has made operational changes that resulted in performance improvements including improved employee productivity; The Division substantially improved its timeliness in completing work orders from Fiscal Year 2001 to Fiscal Year 2003 but performance levels appear to have leveled off in the past three fiscal years; The Division s overall maintenance cost per square foot of $5.31 is 17.2% higher than the industry average reported by the Building Owners and Managers Association (BOMA), which Division officials largely attribute to costs associated with implementation of the Living Wage Ordinance; and The Division s Fiscal Year 2006 repair and maintenance budget of $20.2 million falls within the industry guideline of 2% to 4% of replacement cost of maintained facilities, meaning the Division is adequately funded to properly maintain buildings. 3

4 Section 3: Options to Improve the Division s Efficiency and Effectiveness (See pages 26-29) To identify options to improve performance and reduce operating costs, we examined the information the Division uses to make planning and budgetary decisions related to repairing and replacing County buildings and major systems. We conclude the Division needs better information on the present condition of maintained facilities to more effectively plan and budget for facilities maintenance. Although the Division has made strides in the past two years to obtain needed information, Division officials acknowledge they have incomplete information on each building s present condition including deferred maintenance needs, estimated costs to remedy deferred maintenance, and life expectancies of facilities and equipment. Like Broward County, many counties lack complete information about the present condition of facilities; but many organizations are conducting facility condition assessments to obtain the information needed to make cost-effective maintenance decisions. Division officials said they lack the workforce and in-house expertise to conduct facility condition assessments. However, in June 2006, the Division contacted a private contractor to investigate the feasibility and cost of implementing a pilot facility condition assessment program in Fiscal Year To improve its capacity to make cost-effective maintenance decisions, we recommend that the Board of County Commissioners direct the County Administrator to take the following actions: Complete a cost-benefit analysis of implementing a pilot facilities condition assessment program for Broward County facilities begun by the Division in June As part of its analysis, contact other jurisdictions and organizations that have well-established facilities condition assessment programs to determine methods to maximize the value of the program and coordinate with other divisions within the Public Works and Transportation Department, such as the Construction Management Division, that may benefit from the information obtained through a pilot program. Report the results of its analysis to the Board of County Commissioners no later than December 31,

5 Purpose and Scope This report presents the results of a Program Performance Review of the Facilities Maintenance Division within the Public Works and Transportation Department. The purpose of this review is to assess the Facilities Maintenance Division s accountability system, to evaluate the Facilities Maintenance Division s performance, and to identify options for improving the Division s services and reducing the Division s operating costs. To accomplish our objectives, we: Reviewed pertinent performance measurement, general management and facility maintenance literature; Analyzed available performance data on Facilities Maintenance Division operations; Analyzed information provided by Facilities Maintenance Division managers and employees relative to specific management processes and controls; Reviewed applicable Facilities Maintenance Division records and documents, including relevant policies and procedures; and Interviewed Facilities Maintenance Division managers and employees Background The Facilities Maintenance Division s purpose is to operate, maintain and ensure the optimal use of Broward County facilities and equipment at the lowest possible long range cost. As of June 2006, the Division is responsible for maintaining 98 County owned and leased buildings totaling more than 4 million square feet, with an estimated replacement value of approximately $1 billion. In addition, the Division maintains 16 parking garages totaling more than 1.7 million square feet with an estimated replacement value of $400 million. Program Goals To ensure a clean and safe working environment for County employees and citizens for County-owned or leased facilities. Program Services According to Section 6.23 of the Broward County Administrative Code, the Facilities Maintenance Division shall: Plan, develop and direct the County government s facilities management program Implement the general maintenance and custodial program for County facilities excluding the Office of Environmental Services, the Office of Integrated Waste Management, the Aviation Department, Port Everglades and the Parks and Recreation Division which have their own internal capabilities Establish standards and coordinate maintenance and custodial programs for those buildings and properties utilized but not owned by the County Provide for the security of County buildings as may be necessary 5

6 Operate County parking lots and collect fees established by the Board of County Commissioners in those areas set aside as pay lots Establish and implement policies, procedures and standards to ensure the effective and efficient utilization of facilities Coordinate with the Construction Management Division in preparing plans for the anticipated space needs of serviced organizations Coordinate with energy management section to implement the energy conservation program Develop and manage a building manager-custodian program which ensures that buildings occupied by County agencies are effectively and efficiently serviced Program Organization The Facilities Maintenance Division consists of two sections: The Administration/Operations Section provides management direction, coordination, project management, financial management, warehousing, security, and contract development and administration for the various activities of the Division; and The Maintenance Section provides building management, supervisory oversight, scheduling and completion of preventive maintenance, repair, capital renewal, equipment upgrades, light remodeling and execution of maintenance contract services at County facilities Program Resources For Fiscal Year 2006, Facilities Maintenance was appropriated $12.6 million from the general fund, $2.5 million from the Court Facilities Fee Fund, and $23.3 million from the capital fund. In addition, the Facilities Maintenance Division is responsible for managing maintenance contracts totaling $13.3 million. For Fiscal Year 2006, Facilities Maintenance had 202 full-time authorized positions. 6

7 Section 1: Assessment of the Facilities Maintenance Division s Accountability System This section presents our assessment of the Facilities Maintenance Division s accountability system. Establishing an effective accountability system is essential to ensure public funds are spent to achieve desired results and to improve public services. An effective accountability system provides quality information to enable: Citizens to hold elected officials, managers, employees and private contractors accountable for the efficient and effective use of public funds; Elected officials and other policymakers to make informed budget and policy decisions; and Managers to detect and correct operational problems in order to improve program results Our assessment examines the extent to which the Facilities Maintenance Division has developed and implemented six key components of its performance measurement and reporting system; specifically, whether the Division has: Established a complete set of performance measures, as required by the Office of Management and Budget; Collected and analyzed unit cost data for each major Division service and activity; Collected and analyzed data to assess operational efficiency and effectiveness; Contacted other local governments and private industry that provide similar services to benchmark performance; Established processes to ensure performance data reliability; and Used performance data to modify practices or change operational processes to achieve better results While the Facilities Maintenance Division has generally established an effective accountability system further improvements could be made Generally, we concluded that the Facilities Maintenance Division has established an effective performance measurement and reporting system. The Division generally meets the best practice criteria for each of the six key components we assessed. However, the Division should take actions to further improve its accountability system. Exhibit 1 on the following page provides a summary of our conclusions about the Facilities Maintenance Division s performance measurement and reporting system. 7

8 Exhibit 1 Office of the County Auditor s Assessment of the Facilities Maintenance Division s Performance Measurement and Reporting System Best Practice County Auditor s Assessment Recommendation 1 Establish a complete set of performance measures The Division s proposed Fiscal Year 2007 measures are complete; previous two fiscal years measures lacked output, efficiency and strategic outcome measures None 2 Collect and analyze unit cost data for each major service and activity The Division has collected reliable unit cost data for overall maintenance and two major services (janitorial and security) for the current year but lacks comparable historical data to track performance across time and lacks comparable data to measure Division s performance against best practice organizations Identify best practice organizations; obtain comparable data to assess Division s performance against those best practice organizations (See pages 10-12) 3 Collect and analyze internal operational data The Division systematically collects and analyzes useful performance data for various work processes but lacks meaningful information on deferred maintenance needs Develop system to collect data on deferred maintenance needs (See Section 3, pages 26-29) 4 Contact outside sources such as industry and other government agencies to benchmark performance The Division regularly contacts outside sources to benchmark performance but has not used a generally accepted industry standard the Facility Condition Index to evaluate relative building condition Use Facility Condition Index to periodically evaluate relative building condition (See pages 13-14) 5 Implement processes to ensure performance data reliability The Division previously reported inaccurate performance data; although it recently made some process changes to improve data accuracy the Division needs to make further improvements to ensure data reliability Continue to automate remaining data; develop/implement written verification procedures; establish independent review for key performance data (See Pages 14-16) 6 Use performance data to modify practices and improve results The Division routinely uses performance data to track the timeliness of various work processes Use new timeliness data to hold employees accountable for performance (See pages 16-17) Source: Office of the County Auditor analysis 8

9 Best Practice 1: Establish a complete set of performance measures According to performance measurement literature, a comprehensive set of performance measures provides information to enable policymakers and managers to assess each agency s workload, operating efficiency and effectiveness, and societal impacts. The Office of Management and Budget (OMB) requires County agencies to collect and report information relative to four types of performance measures: work output, efficiency, client benefit/effectiveness, and strategic outcome. 1 In a March 2005 report, the Office of the County Auditor evaluated the quality of the performance measurement and reporting systems of 64 County agencies. 2 Our analysis disclosed that 55 of 64 County agencies reviewed (86%) did not include all four types of measures in the budget, as defined in the operating budget instructions. 3 Beginning in Fiscal Year 2007, the Facilities Maintenance Division established a complete set of performance measures For Fiscal Year 2007, the Facilities Maintenance Division has proposed a set of performance measures that meets the OMB s requirements. Both the Maintenance and Administration/Operations sections have established measures that include work output, client benefit/effectiveness, and efficiency measures, as required by the OMB (See Exhibit 2). Exhibit 2 The Facilities Maintenance Division Established a Complete Set of Performance Measures for Fiscal Year 2007 Type of Measure Maintenance Section Administration/Operations Section Number of Facilities Maintained Number of DO or PD Transactions per Month by Service Work Output Number of Square Feet Maintained Number of DO or PD Transactions per Month by Commodity Number of Service Requisitions Processed Annually Number of Work Requests Processed/ Completed per Month by Warehouse Days Required to Complete a Maintenance Service Requisition from Receipt Average Number of Days to Issue Billing to Internal Clients Average Hours to Complete a Maintenance Average Number of Days to Process Invoices Client Benefit/ Request for PO or PD upon Receipt Customer Satisfaction Rating (%) Average Number of Days to Issue Service DO Effectiveness or PD upon Receipt of Request for Service/Materials Average Number of Days to Issue Commodities DO or PD upon Receipt of Request for Service/Materials Efficiency Cost per Square Foot to Maintain Buildings Average Turn Ratio Average Inventory Accuracy Source: Facilities Maintenance Division 1 Work output focuses on the quantity of service provided; efficiency measures the ratio of output per input; client benefit/effectiveness assesses the quality of the service from the clients perspective; and strategic outcome states the consequences of the program in a big picture sense. 2 Our 2005 assessment of 64 County agencies did not include the Facilities Maintenance Division. 3 For Fiscal Year 2007, the operating budget preparation manual states that agencies that provide internal support services may substitute a client benefit/effectiveness measure for the required outcome measure. 9

10 For the two previous fiscal years, however, the Facilities Maintenance Division s set of measures was missing work output, efficiency and strategic outcome measures. The Division s measures for Fiscal Year 2005 and Fiscal Year 2006 were identical; the Maintenance section was missing an efficiency measure while the Administration/ Operations section was missing work output and efficiency measures. The Maintenance section s set of measures included a strategic outcome measure but the Administration/ Operations section s measures did not. Beginning in Fiscal Year 2007 the Division will collect data for many measures for the first time Because many of the Fiscal Year 2007 measures are new, the Division lacks historical data to identify trends and assess performance across time. This data would be useful to alert policymakers and managers of issues or problems that should be addressed. For example, because the Administration/Operations section plans to begin collecting data on its timeliness in processing various transactions this year it cannot determine whether its performance has improved or declined over time. Similarly, the Maintenance section does not have comparable historical data on the cost per square foot to maintain buildings. This information would be useful to determine increases or decreases in overall maintenance costs over time. Best Practice 2: Collect and analyze unit cost data for each major service and activity Unit cost refers to the cost of producing an output or outcome. 4 unit cost data is important because it can be used to: Collecting and analyzing Compare an agency s performance to similar service providers, Predict how changes in the demand for services will affect an agency s budget, Assess how changes in operations could affect costs, Identify wasteful processes, and Estimate the impact of budget decisions In our March 2005 report, we found that 44 agencies (69%) did not report an efficiency measure, which is the ratio of output per input, as required by the Office of Management and Budget. It is important for County agencies to track unit costs for services to identify specific processes or operations that need to be improved and to determine the economy of County services. Without good unit cost data, the Board of County Commissioners and managers cannot ensure that County services are provided at the lowest cost to the taxpayer. 4 As defined by the Florida Legislature s Office of Program Policy Analysis and Government Accountability (OPPAGA) 10

11 The Facilities Maintenance Division has collected reliable unit cost data for overall maintenance and some major services for the current year In February 2006, the Facilities Maintenance Division collected the following unit cost data: (1) overall maintenance costs per square foot, (2) custodial costs per square foot, and (3) security costs per square foot. Division officials said that they use this unit cost data to forecast maintenance costs when preparing a subsequent year s budget for a newly constructed facility. Division staff multiplies the unit cost by the square footage of the new building to estimate overall maintenance costs for the new facility for the following year. The Division s methodology to calculate unit cost data appears to meet generally accepted government accounting principles. According to the Federal Accounting Standards Advisory Board, government agencies should report the full cost of outputs in general financial reports. If an output is measured in units, its unit cost should be calculated on a full-cost basis, meaning that it captures all direct and indirect costs attributed to the output. 5 Unit cost data calculated on a full-cost basis can be compared against other public and private sector entities providing the same service. Conversely, the comparison would not be valid if the unit cost is not calculated using full-cost basis. We concluded that the Division is using a full-cost basis in calculating its unit cost that meets best practice accounting principles. However, the Division lacks comparative unit cost information for security and custodial services to effectively assess cost-effectiveness We identified two primary limitations of the Division s unit cost data: First, the Division lacks historical unit cost data, limiting efforts to compare performance across time. Because the Division collected unit cost data for the first time in Fiscal Year 2006 it does not know the extent of increases in unit cost over time. Division officials told us it was impractical to calculate unit costs for previous fiscal years. However, the 2006 fiscal year data provides a useful baseline, allowing for comparison in subsequent years. Second, the Division lacks comparable data from a best practice organization. To compare its Fiscal Year 2006 unit cost data to an industry standard the Division used inflation-adjusted 2001 data available from a leading facilities maintenance organization, the Building Owners and Managers Association (BOMA) International. To calculate the industry standard, BOMA uses data from 595 buildings in the government sector. The BOMA data provides generally useful comparative information about participating agencies unit costs but has two major drawbacks: there is no assurance that reporting agencies use full-cost accounting in calculating their unit costs, and the BOMA data does not control for geographical differences in maintenance costs such as snow removal activities. A more meaningful analysis would be to compare the Division s performance to the performance of a best practice organization that calculates its unit costs using fullcost accounting and has similar maintenance operations. 5 This calculation does not include general indirect costs such as processing payroll. 11

12 The Division needs to obtain comparative unit cost data from a best practice organization By collecting unit cost data in Fiscal Year 2006 the Division has taken an important first step in assessing the cost-effectiveness of its operations. However, the Division should obtain more meaningful performance information to improve program oversight and management. We recommend that the Board of County Commissioners direct the County Administrator to take the following actions: Obtain comparable unit cost data from a best practice organization to assess the Division s cost-effectiveness. The Division should identify a similar organization that is considered to be an industry leader and then compare its unit costs for overall maintenance, security and janitorial services to this organization s unit costs. To enable a comparative analysis, the Division should ensure that the best practice organization calculates its unit costs on a full-cost basis. Best Practice 3: Collect and analyze internal operational data To effectively manage County programs and operations, managers need more data than what is reported in the annual budget. The data reported in the annual budget generally relates to an entity s overall performance rather than specific functions and activities. While the budget data is useful for accountability purposes, it provides limited information for managers to use in managing their programs on a daily basis and to quickly identify and correct operational problems. Our March 2005 report concluded that most County departments lacked a systematic approach to continually and consistently obtain critical internal operations data to adequately oversee and manage County operations. Although some departments collected and analyzed internal operations data on an ad hoc basis, which can be useful to track progress in correcting operational problems, managers need to systematically collect and analyze internal operations data in order to proactively rather than reactively address problems. The Facilities Maintenance Division collects and analyzes useful data for various major work processes but has incomplete information on deferred maintenance needs In Fiscal Year 2001, the Facilities Maintenance Division developed and implemented a new information system to track the status of maintenance work orders. This system, known as Facility Focus, provides managers with information that helps them to oversee and manage operations. For example, this system tracks the amount of time it takes to complete each work order by type and priority level, which is helpful in determining the timeliness of work processes and staff productivity. This system also tracks outstanding work orders by building manager, which can be used by management to identify who to contact to discuss reasons for delays in completing scheduled work. In addition, during the course of our review Division officials disclosed plans for obtaining additional information that would help them to more efficiently and effectively manage operations. 12

13 For example, the Division is in the process of using Facility Focus to obtain new data that will disaggregate the average hours to complete work orders by shop, supervisor, and building manager. Division officials expect this data will help to hold supervisory personnel more accountable for the productivity of their subordinates. While the Division systematically collects and analyzes useful operational data it has incomplete information on deferred maintenance needs. Deferred maintenance refers to the upkeep of buildings and equipment that is postponed from the organization s regular budget cycle due to lack of resources. Accumulated deferred maintenance primarily results from two causes: (1) routine maintenance that is not done due to limited or insufficient funding, and (2) major repair work on facilities or building components that have reached the end of their useful life that is intentionally not done. Further discussion of the importance of obtaining information on deferred maintenance needs can be found in Section 3, beginning on page 26 of this report. Best Practice 4: Contact outside sources, such as industry and other government agencies, to benchmark performance The Government Finance Officers Association recommends benchmarking as a method of obtaining information that can be used to guide program operations and to identify strategies to achieve better results. Benchmarking refers to performance comparisons of organizational business processes against an internal or external standard of recognized leaders. County managers should systematically and routinely compare policies, practices, and performance measures against those of high-performing organizations, other local governments and private industry that provide similar services. The County Auditor s March 2005 report concluded that only one-third of the divisions responding to our survey had compared the performance measures used by other public and private entities with their own. Contacting other government agencies and private industry could help managers to quickly and easily identify appropriate performance measures and to help them better manage operations. The Facilities Maintenance Division regularly contacts industry and other government agencies to benchmark performance, but should use the Facility Condition Index to more effectively evaluate building condition Facilities Maintenance Division managers provided us with evidence that they routinely contacted other government agencies and industry officials to benchmark performance. Two examples of the Division s benchmarking efforts are: In March 2002, Division officials contacted acknowledged federal government experts on pest control to help them modify the language and performance criteria for a new $60,000 pest control contract. According to Division officials, using new pest control techniques resulted in advantages such as improved air quality, reduced adverse environmental impacts, and fewer complaints from building 13

14 tenants who had previously had adverse physical reactions to the use of regular pesticide applications. In April 2006, Division officials made initial contact with their counterparts in other populous Florida counties (Hillsborough, Palm Beach and Pinellas) to gauge their interest in participating in a benchmarking forum. Among the performance measures they intend to compare are unit cost and staffing. Division officials could not estimate an expected completion date for this project. While these benchmarking efforts are productive, the Facilities Maintenance Division has not evaluated relative building condition using a commonly accepted industry benchmark, the Facility Condition Index. According to the Association of Higher Education Facilities Officers, the Facility Condition Index is a comparative indicator of the relative condition of facilities, which is expressed as a ratio of the cost of remedying maintenance deficiencies to the current replacement value. This calculation would provide a basis for determining annual reinvestment rate to prevent further accumulation of deferred maintenance deficiencies. The Facility Condition Index is a generally preferred method for evaluating building condition because it provides a quantitative measurement rather than the traditional descriptions of good and poor. As a result, the Facility Condition Index would provide a more credible figure on deferred maintenance costs for planning and budgetary purposes. Division officials told us that they cannot currently calculate the Facility Condition Index because they have not collected complete data on the amount of deferred maintenance that exists in County facilities and related replacement costs. For further discussion of the merits of obtaining information about deferred maintenance needs, please see Section 3, beginning on page 26 of this report. Best Practice 5: Establish a process to ensure performance data reliability According to the U.S. Government Accountability Office (GAO), performance data should be reasonably timely, complete and accurate to be useful for budget allocation and policymaking purposes. To ensure reliable performance data, government agencies should implement internal controls, such as establishing clear and unambiguous performance measure definitions, having front line and middle managers independently review performance data, and testing a sample of performance data at least quarterly. In our March 2005 report, we identified deficiencies with County agencies performance data verification processes that raised concerns about the reliability of performance data reported to the Board of County Commissioners. Specifically, we found that: 14 of 26 divisions reviewed (54%) did not have current written policies and procedures regarding data controls, Only two departments (Human Services and Environmental Protection) provided evidence of routinely conducting independent supervisory review to ensure performance data reliability, and 14

15 Only the Libraries Division had written policies and procedures that contained clear and unambiguous performance measure definitions The Facilities Maintenance Division previously reported inaccurate performance data For the past three fiscal years the Division reported inaccurate performance data. For example, Fiscal Year 2005 data for the measure days required to complete a service requisition, understated performance. Division officials attributed the inaccuracy to incorrectly using a Facility Focus report. In re-calculating the data the Division s actual performance was 37 days rather than the reported 45 days, or a difference of 18%. In addition, for the previous three fiscal years the Division reported erroneous data for the measure percentage of time facilities and equipment are available to users and occupants. Division officials acknowledged that the methodology used to calculate this data was flawed, thus the data was inaccurate. Due to this problem, Division officials told us they did not include this measure in the Fiscal Year 2007 set of measures. However, during our review, Division officials said they were taking steps to allow them to obtain reliable data for this measure in the future. The Facilities Maintenance Division made recent process changes to improve data accuracy To correct previous reporting errors for the measure days required to complete a service requisition, Division officials told us they made two specific changes to data collection processes. First, during the course of our review, Division officials said that responsibility for generating Facility Focus reports was given to a newly hired employee with strong technical skills. Second, they instituted independent supervisory review of performance data reported to the Office of Management and Budget (OMB). They believe these changes will help to improve data accuracy. In addition, to improve its data collection methodology for the measure percentage of time facilities and equipment are available to users and occupants, the Division plans to take two specific steps: developing a web-based application and hiring a CAD technician to properly document facility square footage. These improvements will enable the Division to obtain reliable data for this measure during Fiscal Year However, further actions are needed to ensure data reliability While recent process changes should correct some of the previous data accuracy problems, further actions are needed to ensure data reliability. We identified the following improvements to the Division s current data verification processes that should be made to ensure data reliability. Because the Administration/Operations Section s data is manually collected, it should develop and implement written policies and procedures regarding data controls. At a minimum, these procedures should include clear and unambiguous performance measure definitions and a process for testing a sample of performance data at least quarterly. Good measures definitions are imperative to 15

16 ensure consistency in collecting the data and sample testing is important to identify careless errors before reporting the data. In May 2006, Division officials told us they agreed it was important to establish written data control policies and procedures and they planned to develop them as soon as possible. Because many of the Division s Fiscal Year 2007 measures are new, and because of previous reporting errors, the Division should establish independent supervisory review of data reported to the OMB as well as for key internal operational data. The Division should have a front line or middle manager independently review data entry and a top level manager review data before it is submitted to OMB. As discussed previously, to correct reporting inaccuracies for the measure days required to complete a service requisition, the Division instituted independent supervisory review in Fiscal Year This same level of review should be done for all measures reported to the OMB and for key internal operational data. To improve performance data reliability, we recommend that the Board of County Commissioners direct the County Administrator to make additional improvements to the Facilities Maintenance Division s data verification processes, including: Developing and implementing written policies and procedures regarding data controls. These procedures should contain clear and unambiguous measure definitions, which are essential to ensure data is collected in a consistent manner. In addition, these procedures should establish a process for sample testing data that is submitted to the OMB as well as for key internal operational data. Routinely testing a sample of performance data is a quick and relatively easy method to identify and correct data accuracy problems. Establishing independent supervisory review of data reported to the OMB as well as key internal operational data. By having a front line or middle manager independently review data entry and a top level manager review data before it is submitted to the OMB, the Division can help to ensure data reliability. An independent supervisory review would lessen the likelihood for reporting inaccuracies because an additional review is a quick and relatively easy method to help detect errors. Best Practice 6: Use performance data to modify practices or change operational processes to achieve better results According to the U.S. Government Accountability Office (GAO), the benefit of collecting performance information is only fully realized when the information is actually used by managers to make decisions directed towards improving results. Managers can use performance information to identify operational problems and their causes, and to develop corrective actions; to effectively plan and prioritize workload and resources; and to identify more effective approaches to program implementation. In the March 2005 report, the County Auditor concluded that only 4 of 26 divisions had provided evidence of routinely and consistently using performance data to proactively make operational changes intended to improve results. 16

17 The Division routinely uses performance data to track the timeliness of various work processes Division managers receive weekly Facility Focus reports on how timely each work order is completed. Among the information provided on these reports is the number of work orders received, opened and closed during the week, with a breakdown by work order type and priority level. Using these reports Division managers can target outstanding priority work orders and seek immediate attention to get them completed. Division managers provided us with examples of untimely work orders whose completion was expedited as a result of this information. As previously discussed, during the course of our review Division officials disclosed plans to obtain additional information that would help them to better track timeliness. As of June 2006, the Division was in the process of developing data on the average hours to complete work orders by shop, supervisor and building manager. Division officials expect this data will help them hold supervisory personnel more accountable for the productivity of their subordinates. The Division should use new timeliness data to hold employees accountable for performance To further improve the Facilities Maintenance Division s accountability system we recommend that the Board of County Commissioners direct the County Administrator to take the following actions: During Fiscal Year 2007 the Division should use the new timeliness data to establish a system for holding employees accountable for individual productivity, including basing personnel decisions such as promotions and bonus payments on performance data. 17

18 Section 2: Assessment of the Facilities Maintenance Division s Performance To evaluate the Facilities Maintenance Division s performance, we analyzed quarterly performance data reported to the Office of Management and Budget (OMB) for the past several fiscal years. We also analyzed other relevant performance information provided to us by Division managers. Our assessment of the Division s performance was hindered by deficiencies with the Division s performance data. As discussed in Section 1, page 15, the Division previously reported inaccurate data for two measures: days required to complete a service requisition and percentage of time facilities and equipment available to users and occupants. During our review, Division officials corrected data collection errors and provided us with reliable data on days required to complete a maintenance service requisition. In addition, Division officials took steps to improve its methodology in collecting data for the measure percentage of time facilities and equipment available to users to enable reporting of reliable data in the future. To obtain reliable performance data needed to conduct our assessment, we worked with Division officials during the period of our fieldwork, April through June We were able to obtain reliable data for several measures, including: days required to complete a service requisition, average number of hours to complete maintenance requests, and cost per square foot to maintain buildings. We also analyzed data to calculate the Division s budget as a percentage of replacement costs of buildings maintained by the Division. Based on our data analysis, we concluded that: Beginning in Fiscal Year 2001, the Division made operational changes that resulted in performance improvements such as improved employee productivity; The Division substantially improved its timeliness in completing work orders from Fiscal Year 2001 to Fiscal Year 2003, performance levels appear to have leveled off in the past three fiscal years; The Division s overall maintenance cost per square foot of $5.31 is 17.2% higher than the industry average as reported by the Building Owners and Managers Association (BOMA) International, which Division officials say is largely attributable to cost increases due to implementation of the Living Wage Ordinance; and The Division s Fiscal Year 2006 repair and maintenance budget of $20.2 million falls within the industry recommended guideline of 2% to 4% of the replacement cost of maintained facilities, meaning the Division is adequately funded to properly maintain buildings. Operational improvements since 2001 Beginning in Fiscal Year 2001, Division managers took steps intended to improve performance. Described below are some of the more salient operational changes: 18

19 In Fiscal Year 2001, the Division implemented Facility Focus, a computerized maintenance management system that automates the maintenance work order process. Appendix A, on page 30, illustrates the major steps in the Facilities Maintenance Division s work order process. According to facilities maintenance literature, automated work order systems provide important information, such as managerial reports, that help managers improve operational efficiencies and reduce operating costs. Division managers told us that Facility Focus reports enabled them to more quickly identify incomplete or delayed work by shop, which allowed them to expedite completion of work orders. Prior to Facility Focus, Division managers relied on each shop to manually compile this information, which was a time-consuming and inefficient process that did not provide assurance of data reliability. Also in Fiscal Year 2001, the Division initiated efforts to provide more costeffective services through the development and implementation of a weekly maintenance schedule for each employee. A major component of this new scheduling system involves allotting a specific number of hours for each employee to complete a specific maintenance task. This feature meets the maintenance industry best practice of assigning maintenance tasks to appropriate technicians in a manner that maximizes each person s productivity. According to Division officials, this initiative established expectations for job timeliness, resulting in greater accountability and improved employee productivity. In Fiscal Year 2004, the Division established a five-year capital renewal plan for County-owned facilities that it maintains. This plan contains an asset replacement schedule for key building equipment, systems, and finishes that helps Division officials accurately forecast building needs and costs. The Government Finance Officers Association (GFOA) recommends that state and local governments prepare comprehensive multi-year capital plans to ensure effective management of capital assets. A capital plan identifies and prioritizes expected needs based on a community s strategic plan, establishes project scope and cost, details estimated funding sources, and projects future operating and maintenance costs. Division officials told us that the five-year capital renewal plan is a work in progress and that it did not contain a complete inventory of all County assets as of June For more information about the five-year capital plan see Section 3, page 26. Also in Fiscal Year 2004, the Division established a preventive maintenance program, which created preventive maintenance schedules and checklists as part of Facility Focus. Preventive maintenance refers to a schedule of planned maintenance activities designed to reduce equipment breakdowns and failures, including inspections, lubrication and calibrations of equipment. According to the Association of Higher Education Facilities Officers, preventive maintenance should be the guiding philosophy of an effective maintenance organization. Recent industry estimates are that an organization may save up to eight dollars for every dollar spent on preventive maintenance. In Fiscal Year 2002, the Division decentralized its maintenance structure from one central maintenance shop to five regional maintenance districts. Division officials said that this reorganization improved employee productivity because 19

20 maintenance technicians are now located in closer proximity to facilities they maintain. Timeliness in completing work To minimize costs and potential liabilities associated with building maintenance, it is essential that maintenance organizations address priority maintenance needs as quickly as possible. According to the Building Research Board of the National Research Council, a popular misconception is that postponing maintenance does not result in significant damage because building deterioration occurs over a long period of time. However, continuously delaying maintenance can lead to costly disruptions to business operations and serious health and safety consequences. Two commonly used measures to assess service timeliness are: average number of days to complete work orders, and average number of hours to complete maintenance requests. We analyzed data on these measures for the past five fiscal years to make conclusions about the Division s timeliness. Average number of days to complete work orders From Fiscal Year 2001 to Fiscal Year 2003, the Division substantially improved its performance in completing work orders but its performance levels have remained relatively constant since then. As shown in Exhibit 3 on the next page, the number of days to complete maintenance work orders steadily declined by 63%, from 70 in Fiscal Year 2001 to 26 in Fiscal Year However, except for a spike upward in Fiscal Year 2005 the number of days to complete work orders has not changed much since Fiscal Year Division officials attribute improvements in timeliness primarily to initiatives previously discussed on pages Specifically, the 2001 implementation of the Facilities Focus work order system and weekly maintenance schedules for each employee provided supervisory staff with better information than was previously available to hold employees accountable for untimely work completion. Division officials told us that following the implementation of Facilities Focus, they established timeliness expectations for completing work orders and emphasized to employees that they would be closely monitoring work statuses to determine reasons, and person responsible, for delays. Division data shows a 43% improvement in timeliness from Fiscal Year 2001 to Fiscal Year 2002, which is the first full year after implementation of these two initiatives. 6 Facilities Maintenance Division managers attributed Fiscal Year 2005 s upward spike to the closing of 650 outstanding work orders that were all more than 100 days old 20

21 Exhibit 3: Since Fiscal Year 2001, the Division made operational changes to reduce the number of days it takes to complete maintenance work Days Required to Complete a Maintenance Service Requisition from Receipt FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 Source: Facilities Maintenance Division 7 Fiscal Year 2006 may be the Division s best performance for the average number of days to complete a work order. Data available for the first three quarters of Fiscal Year 2006 shows that the Division is averaging 21 days to complete a work order. If the current trend continues through the fourth quarter, the Division will improve its previous best performance, 23 days in Fiscal Year 2004, by 8.7%. Average number of hours to complete maintenance requests Although the Division has collected data on the average number of hours to complete maintenance requests for the past six fiscal years, this measure has not been previously reported to the OMB. Division officials believe this measure provides another important measure of Division s timeliness because it captures only the time Division employees actually spend completing a maintenance work order. Supervisory personnel can compare actual hours worked on a preventive maintenance job with an industry standard or past internal experience to ensure that employees are completing work in a timely manner. In contrast, the measure average number of days to complete maintenance requests is influenced by factors outside the Division s control. From Fiscal Year 2001 to Fiscal Year 2006, there appears to be no discernable trend in the Division s performance for the average number of hours to complete maintenance requests. As shown in Exhibit 4 on the next page, the number of hours it takes Division employees to complete maintenance requests went from a high of 5.87 hours in Fiscal Year 2004 to a low of 4.23 hours in Fiscal Year Division officials believe performance will continue to improve in Fiscal Year 2007 due to a recent initiative to develop new management reports that will disaggregate the average hours to complete work orders by shop, supervisor, and building manager. Division officials expect this data will help to hold supervisory personnel more accountable for the productivity of their subordinates. 7 The Fiscal Year 2006 data provided by the Facilities Maintenance Division is through June 22,