Audit reveals inefficiency, errors how Virginia maintains its state buildings
VENN
RICHMOND, Va. (WRIC) -- The organization that maintains dozens of Virginia's government buildings was found to be behind on over 1,500 projects, unpaid on orders more than a decade old and with overall poor or inaccurate record-keeping on repairs it performed. State auditors believe that creating governing policies would help address these issues -- but the organization disagreed with most of their recommendations.
The Office of the State Inspector General (OSIG) performed an audit on the Virginia Department of General Services' (DGS) Facilities Maintenance (FM) Division, which maintains 73 state facilities in and around Capitol Square in Richmond.
Examples of such facilities include the Monroe Building, Main Street Centre and the Patrick Henry Building. In total, the facilities that FM maintains house about 75 state agencies.
According to the OSIG, this audit was conducted with the goal of evaluating the effectiveness of how FM tracks and handles the maintenance of these buildings, from preventive maintenance to unscheduled repairs.
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State auditors specifically investigated FM's activities from July 1, 2023 to June 30, 3034.
Overall, the OSIG found multiple insufficiencies throughout FM -- some of which state auditors said pose significant risks if left unaddressed.
Over 1,500 work orders were incomplete and overdue
Following an analysis of FM's internal system, the OSIG found that a total of 1,649 preventative maintenance orders were overdue.
Preventative maintenance is work done on things like HVAC systems, lights, boilers, sprinklers and more to ensure they are functioning properly. Keeping up with such assets on a monthly, quarterly or annual basis -- with the timeframe depending on the type of asset -- can help prevent the need for more substantial, costly repairs.
If FM cannot complete preventative maintenance on an asset on its typical schedule for whatever reason, it can delay the work in its internal system.
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OSIG took a random sample of 70 work orders dated between July 1 and Dec 31, 2023, and found that all of them had been deferred in such a way at least once. One order had been deferred four times.
Additionally, nearly 3 out of 4 of the examined work orders were for assets with previous deferrals -- meaning an order for maintenance of that asset had been deferred before. Each of those same assets also had past tickets that had never been completed or closed out.
"Work orders for assets being deferred multiple times could lead to increased maintenance costs for the asset," the OSIG said. "As maintenance issues compound over time, what may have initially required routine or minor repairs can escalate into larger structural problems, increasing both labor and material costs."
FM remains unpaid on completed work as old as 2011
The OSIG found that FM was not following up on payments for completed work, instead allowing several invoices to remain unpaid -- some for over a decade.
State auditors examined 14 randomly selected special work orders that were closed during the audit period.
In the case of six of those orders, there was no evidence that FM had ever been paid for its services -- in fact, FM had not even sent out invoices to collect such payments, which totalled $27,306.
The OSIG then pulled an aging report of all special work payments owed to FM at the time of the audit. This report contained 10 projects that were completed and/or invoiced between 2011 and 2019, but FM had never collected payment. These unpaid projects totalled $88,585.
State auditors noted that some of these payments "could be uncollectible in some instances based on the age of the invoice."
Poor or inaccurate record-keeping across the board
Throughout its report, the OSIG noted several issues with recordkeeping within FM. In many cases, records of FM's work were found to be inaccurate or incomplete.
For example, state auditors looked into FM's "unscheduled repair requests" -- that is, repair work that is unexpected. This can be a minimal issue, like hanging a whiteboard or changing a lightbulb, or a significant problem, like a malfunctioning elevator or HVAC system.
The OSIG created a statistical sample of 368 unscheduled repair requests completed during the audit period, which it reviewed for potential issues. Of those 368 requests, 25 had one or more of the following discrepancies:
- Work order was not completed within three days (18 out of 25, or 72%)
- Work order was not marked "completed" within FM's system (10 out of 25, or 40%)
- Work hours charged to the order were "not reasonable" (8 out of 25, or 32%)
- Technician's work hours were not charged at all (7 out of 25 times, or 28%)
- The issue being worked on was a repeat issue (2 out of 25 times, or 8%)
Based on this sample, the OSIG predicted that as many as 821 of FM's 8,554 total unscheduled repair requests (9.6%) likely have similar issues.
State auditors found some of the same kinds of inaccuracies when reviewing records of preventative maintenance completed during the audit period.
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Similarly, the OSIG created a statistical sample, which consisted of 379 completed work orders. Of those 379 orders, 47 had one or more of the following discrepancies:
- Work order was not marked "completed" within FM's system (45 out of 47, or 96%)
- Work order could not be confirmed as completed due to the request being closed rather than deferred by a manager (45 out of 47, or 96%)
- Technician's work hours were not charged at all (17 out of 47, or 36%)
- Technician's charged work hours were "significantly less or greater than the expected/set time" (17 out of 47, or 36%)
- Work orders were closed before a technician marked it as complete (8 out of 47, or 17%)
Based on this sample, the OSIG predicted that as many as 1,427 of FM's 9,583 preventative maintenance work orders (14.9%) likely have similar issues.
State auditors added that they found evidence that, in at least one instance, a technician was paid for work they may not have completed. That technician had charged their time prior to even starting a work order. Then, their supervisor closed said order and approved the technician's timesheet without checking.
The OSIG followed up and learned that this supervisor was "just going into [FM's system] and closing work orders, at the end of the day, without confirming that the work was completed."
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"If the supervisor closes out the work order without confirming that it was completed by the technician, then no one is able to confirm that the work order was actually done/completed," the OSIG said. "This creates deficiencies in operations and administration and could lead to preventative maintenance not actually being performed."
In two other areas, state auditors found that FM's record-keeping was not adequate. The first of those is warranty information.
According to the OSIG, records of warranties and their expiration dates are kept in a "decentralized manner," with a lack of a standard process for how to store and retrieve them.
"In some cases, warranty documents were stored in physical files or dispersed among different digital locations [multiple systems] without clear version control or access protocols," the OSIG said. "Due to this disorganized storage method, there is a high likelihood of important warranty records being misplaced or not readily accessible when required. This disjointed approach significantly impairs the FM’s ability to proactively manage warranties for all assets that are owned by the Commonwealth of Virginia."
Secondly, state auditors found that FM did not have an effective way to keep track of repeat issues in Virginia's state buildings. This means that, should a problem come up over and over again, FM would potentially miss the pattern.
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"Though repeat work orders do not appear to be frequent, this lack of tracking and monitoring of repeat issues exposes the Commonwealth to escalating risks and costs," the OSIG said. "Without proper documentation and a system for monitoring recurring problems, FM is unable to assess the long-term impact and if the issue is potentially more significant than initially reported by the customer."
Overall lack of policies, which staff called 'unnecessary'
The OSIG learned that FM lacked policies or procedures in a variety of areas across the division.
FM was found to lack policies governing areas like preventative maintenance, special work orders, unscheduled maintenance, elevator maintenance, custodial maintenance and storeroom management -- among others.
State auditors did identify some areas that had policies. However, all existing policies were outdated, with some having been without updates for 12 years.
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"Per discussion with FM personnel, the reasons policies did not exist or had not been updated, included relying on institutional knowledge, relying on 'on the job training' and not recognizing the significance or necessity of having a policy," the OSIG said.
In many cases, state auditors believed that the implementation of such guiding principles could have prevented the issues revealed in this report.
For example, regarding the unpaid special work orders mentioned previously, the OSIG found that FM did not have a process in place to ensure that invoices are sent out and ultimately paid.
FM also did not have policies governing unscheduled work orders and preventative maintenance orders.
State auditors found there was no oversight on how unscheduled work was performed or recorded. They also learned that FM lacked policies for verifying whether or not preventative maintenance work was completed.
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The OSIG spoke with FM staff members for further insight as to why the division lacks policies. Their answers included:
- "Having policies is not necessary."
- "The tenant will let us know if it [maintenance work] is not done."
- "[Employees are] relying on institutional knowledge."
- "[Management is] trusting employees will complete the job."
"The lack of adequate policies and procedures within a business process allows the opportunity for errors to take place with employees, the inability for employees to follow the process that has been determined by management and for employees not to be made aware of policies that could potentially impact a business process/organization," OSIG said.
Most of OSIG's recommendations were disagreed with
The OSIG made several recommendations on how DGS and FM can improve its facilities management processes to reduce the risks noted in its audit report.
Each set of recommendations was tailored to a particular finding, of which there were seven. According to the report, DGS said it agreed with state auditors' findings in all seven cases.
However, DGS stated that it disagreed with the recommendations made in 5 out of 7 cases.
According to the report, DGS agreed that it should create procedures for its preventative maintenance orders and that it should create administrative policies that dictate how repairs should be "executed, documented, approved and monitored."
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However, DGS did not agree that it should create policies on invoices and payments, create policies on unscheduled work orders, create a process to verify if work has been completed, create a centralized way to store warranty information or create a process to track repeat work orders.
In all cases, the DGS responded that it would "review" how it handles these things at present and make changes "to best fit its business needs."
The OSIG attached a letter it received from the director of the DGS, Banci Tewolde, in response to the audit.
"I am in receipt of the recent performance audit of the Department of General Services' Facilities Maintenance which highlighted technical issues that the Department must address," Tewolde wrote. "The report finds the Department's physical completion of maintenance work orders and special orders are being properly done, thus keeping the Department's buildings safe and in working order. The Department appreciates the time and effort invested in this process, as it provides valuable insights for improvement."
The OSIG noted that the DGS had not provided a plan of correction as of the time of the audit's release.
