1 THE VALUE OF THE VALUE FOR MONEY AUDIT FACILITIES MANAGEMENT

2 SCOPE OF THE AUDIT First value-for-money audit of university sector following expansion of powers of Auditor General of Ontario in 2005 Objective: to assess whether selected universities had adequate policies, procedures and systems to manage and maintain academic and administrative facilities cost effectively Three universities (Carleton, Guelph, McMaster) selected for site visits/detailed review Remaining 15 universities and Ontario College of Art and Design surveyed by questionnaire Since 2001 all universities fund and use a common capital asset management system

3 SCOPE OF THE AUDIT Areas of focus: Facilities Renewal/Deferred Maintenance Utilization of Facilities Information for controlling costs Monitoring Performance and Quality Purchasing Policies and Procedures- no findings/recommendations VFM Audit did not cover construction of new facilities/building retrofits

4 MANAGING THE PROCESS Very important to establish one university contact point for AG audit team Very important to orient Auditor General to complexity of universities; more similar to municipalities than schools which they had audited Maintain contact; touch base often Beware of scope creep

5 Recommendation 1 Renewal of Facilities Maintain the asset management system Periodically verify accuracy of capital renewal models Periodically re-inspect facility condition Periodic independent review Maintain and update information in database MTCU should work with universities to develop plan to reduce deferred maintenance Recognition of magnitude of the problem Has resulted in additional one time funding

6 Recommendation 2 Renewal of Facilities Implement formal project ranking procedures to prioritize renewal projects Understanding that there is not nearly enough funding to do what is required. Tactical vs. strategic Must be able to demonstrate due diligence in prioritizing projects Standard risk assessment principles (e.g. Curie newsletter 1993) Other considerations (e.g. new VFA module)

7 Recommendation 3 Utilization of Facilities To minimize space needs and associated facility costs, universities should: have adequate systems to analyse and report on utilization and capacity of space set utilization objectives to be achieved over 3 to 5-year timeline Charge for space ???

8 Recommendation 4 Information for Controlling Costs To help manage facility costs, universities should implement systems and procedures to provide information to: take into account facility costs when making decisions and planning perform internal and external cost comparisons to identify good and poor practices

9 Recommendation 5 Monitoring Performance and Quality Control To help ensure that they receive value for money they spend, universities should: establish service level objectives implement supervisory inspections of staff and contractor work use survey results and complaint information to help evaluate performance

10 OUTCOMES Independent verification of Universities case regarding deferred maintenance backlog - estimated at $1.6 billion in 2006 Validation of overall good stewardship of our facilities Significant increase in one-time funding to universities for campus renewal ($335 million for 2007/8 and 2008/9 compared to $26.7 annually)

11 OUTCOMES Objective confirmation of need for more effective use of existing space/link to deferred maintenance in some cases Identification of facilities/space as a valuable resource Built credibility within government regarding need to invest in facilities/infrastructure

12 RISKS Failure to develop processes to maximize space utilization Government ongoing funding for campus renewal does not materialize Implementation of AGO recommendations dependent on resources Universities miss opportunity to effect change

13 NEXT STEPS Public Accounts Committee Possible audit follow up in 2009