The Bureau of Building Repair manages its activities with job orders. Large job orders are typically created for maintenance and repair activities on a client-department basis. These job orders will contain activities that range from custodial services to elevator maintenance to remodeling and repair projects. Additionally, job orders are established on a project by project basis. Departmental job orders for routine maintenance and repair receive annual appropriations, which typically expire at the end of the fiscal year because the operational need and funding recurs on an annual basis. Project-oriented job orders receive continuing appropriations that do not expire until the project has been completed. At a more detailed level, job orders are comprised of "tags" which are work authorizations that include personnel and non-personnel cost estimates developed at the craft shop level.

Job orders correlate to projects in the City's FAMIS accounting system and budgetary control is maintained at the project level. Thus, the detailed budget contained within a job order should be linked to the project budgets specifically and the Bureau of Building Repair budget overall. The Office of Financial Management and Administration reports that, as of November 19, 2006, total appropriations for Bureau of Building Repair job orders were $22.1 million.

Despite the project/job order budget, not all appropriations within a job order will have a tag and be authorized for expenditure by client departments at the start of the fiscal year. For unscheduled maintenance and repair activities, tags are not developed until the need arises. In fact, Bureau of Building Repair management reports that many clients wait until late in the fiscal year to authorize work because of budget uncertainties.

Automated Tracking System

The Work Order Tracking System was developed in-house over 20 years ago to assist the Bureau of Building Repair in tracking and monitoring its job orders. The Work Order Tracking System reports that as of February 14, 2006, the Bureau of Building Repair had 199 active job orders with an unexpended balance of $9.1 million. The system utilizes estimates of authorized work to provide real-time information to Bureau of Building Repair managers and allows for monitoring estimated expenditures against budget. A policies and procedures manual for management and staff has not been developed for use of this system or for establishing, tracking and monitoring, and closing job orders in general.

System weaknesses are significant and include imprecise financial data. Labor rates, labor hours, and non-personnel transactions are manually input by a Bureau of Building Repair account clerk. Labor rates, estimated at the beginning of the year at the top step and inclusive of an estimated overhead rate, may be revised during the year. Further, non-personnel transactions are input from purchase orders which may ultimately vary from actual expenditures incurred. In fact, the Work Order Tracking System's project status report sent to departments upon request states: "These estimated amounts are used as a BBR (Bureau of Building Repair) cost management tool only, and are not to be compared to the quarterly billing statements issued by OFFMA (Office of Financial Management and Administration)." These issues are significant enough that the Department of Public Work's Office of Financial Management and Administration does not support the system. Nonetheless, the Bureau of Building Repair uses the Work Order Tracking System to track and monitor its job orders because it is the only system that can provide real-time information with respect to the Bureau of Building Repair's daily activities. However, the system does not provide the Bureau of Building Repair with a definitive understanding of job order status at the detail level or of its activities in general which is amplified by the findings discussed below.

Identified Budgetary Control Issues

Significant issues with respect to budgetary control over job orders have been identified by gaining an understanding of Bureau of Building Repair processes and systems and by reviewing open job orders. These issues include:

Exceeding Budgets

The Bureau of Building Repair may create tags for any given job order and obtain additional departmental authorization in excess of budgeted amounts. Work is planned and scheduled according to active tags, which is the level at which individual units and crafts are assigned work. Thus, the Bureau of Building Repair can and has committed to and incurred expenditures without obtaining budgetary authority and funding.

The Work Order Tracking System produces a report of job orders that either have been "over-allocated" (i.e. tags have been developed for more work than the budget allows), or have been over-expended. This report, queried on April 12, 2006, identified 66 job orders that had tags in excess of budgeted amounts by $2.4 million. Bureau of Building Repair staff reported that tags may be developed which exceed budget, especially late in the fiscal year, when it becomes clear that not all existing tags, such as those for custodial services, will be spent. The Budget Analyst noted six instances where the budget was over-committed and four instances where the projects were over-expended by amounts in excess of $100,000. However, many over-allocated job orders also had expenditures that exceeded budgeted amounts.

In total, 45 job orders exceeded budgeted amounts by a total of $1.6 million and six of these job orders had no budget at all, but $315,041 in expenditures. Because job orders are funded through work orders, exceeding budgeted amounts also means that the Bureau of Building Repair has not appropriately obtained funding authorization from the client for the over-expenditure. According to Bureau of Building Repair staff, Bureau of Building Repair attempts to reconcile any overspending during the year. However, $1.6 million at any given time is substantial.

Carry-Forward of Annual Projects

The Bureau of Building Repair reports that 88 projects with a total unexpended and unencumbered budgetary balance of $1,783,101 were carried forward from FY 2004-2005 to FY 2005-2006. Fifty-eight of these projects were designated by the Bureau of Building Repair as annual appropriations with a total unencumbered budgetary balance of $1,164,709. Of these 58 projects carried forward, 10 projects had a negative balance carried forward totaling $283,609. Projects with budgetary balances carried forward include the following:

The projects were designated as routine, annual appropriations and, yet, some carry-forwards were appropriated several years ago and never utilized. Both the Bureau of Building Repair and the Office of Financial Management and Administration report that these carry-forwards were reviewed and agreed upon by both the Bureau of Building Repair and client departments. Further, staff report that there is no protocol for use of carry-forwards. In theory, appropriations should have established tags or work commitments to be carried forward, but that does not appear to be current practice. Rather, available funds are accessed as the need arises. In fact, as of April 9, 2006, the remaining balance in projects carried forward according to a FAMIS report of active projects was $1,685,350. Less than $100,000 had been spent approximately nine months into the fiscal year. Most of these projects were established for on-going operational needs and, therefore, receive new funding every fiscal year. Thus, unexpended appropriations should not be carried forward or allowed to continue indefinitely or until a new use has been established.

Project Definition

As noted above, the Bureau of Building Repair uses job orders to manage its activities and job orders correlate to projects in FAMIS. These methods of classification, therefore, should separate disparate activities. Indeed, annual projects in FAMIS were to have an initial character of "I" in its coding structure, whereas continuing projects were to start with "J". Although some exceptions were noted, as a general rule, the Bureau of Building Repair has adhered to this protocol.

However, disparate activities, including those that should be budgeted annually and those that should be continuing projects, are combined within a single job order. In fact, a large client department job order likely contains almost all activities that the Bureau of Building Repair conducts: custodial services, stationary engineers and routine maintenance, contract elevator maintenance, remodeling and discretionary projects, and emergency repair projects. Because a significant portion of these activities are labor-intensive, and each craft or unit is managed separately, the groups compete for resources and can easily exceed budgeted amounts without management controls in place.

By way of example for all of these issues, the annual Police Department job order for FY 2004-2005 is detailed in the Table below.

Table 12.1

Police Department Annual Job Order Detail

FY 2004-2005 as of April 12, 2006

Source: Bureau of Building Repair

The prior year Police Department job order was reviewed in detail on the Work Order Tracking System. As noted in the table, the job order had a total of 528 tags as of April 12, 2006. Most of these tags were for annual or recurring activities, such labor associated with custodial work and stationary engineers, or for routine maintenance or minor repairs, such as activities associated with the lock shop or plumbing shop. However, larger continuing project work is also being charged to the project, including a significant project totaling approximately $72,000 for the Police Department's pistol range as well as various remodeling activities. Further, as noted above, the Bureau of Building Repair was unable to explain some unspecified charges in FY 2005-2006 that were not associated with any particular tag. Additionally, while this is a job order associated with FY 2004-2005, there were a few tags established in FY 2005-2006 and the Work Order Tracking System reports that open and active projects as of April 12, 2006 had a remaining unexpended balance of $113,781. At the same time, a new FY 2005-2006 job order was established for annual projects with a budget of $2.3 million.

Finally, as can be seen in the table above, three shops have exceeded their cumulative budgeted amounts. Indeed, as of April 12, 2006, while this job order had a total budget of $2,396,612, $2,287,390 had been expended and open and active job orders had a remaining unexpended balance of $113,781. Thus, at the end of the year, if no additional tags were created and all active projects were on budget, the total job order would have been over expended by $4,559. Significant under-expenditure in several areas, specifically custodial services and structural engineers, allowed the Bureau of Building Repair to allocate funding to other areas and over-allocate the job order in total. As can be seen in the Table, while the budget for this job order was $2,396,612, $2,589,917 has been allocated to specific activities. While this job order carried forward $152,413 into FY 2006-2007 and had a balance of $5,960 as of October 23, 2006, the annual Police Department job order established for FY 2005-2006 (IBRI18, Job Order 1418R) exceeded its budget as of October 23, 2006 by $126,960.

These issues obscure Bureau of Building Repair activities and make project tracking and monitoring difficult, which in turn prevents effective planning and resource allocation. The time spent on projects and project spending cannot be readily isolated and evaluated and problems cannot be readily identified and corrected.

Computerized Maintenance Management System

Bureau of Building Repair management has reported a need for a computerized maintenance management system to improve management of Bureau of Building Repair activities and because of the deficiencies found in the current Work Order Tracking System. According to Bureau of Building Repair management, an informal group was established in 2005 with representatives from four Department of Public Works bureaus, including the bureaus of Building Repair, Urban Forestry, Street Environmental Services, and Street and Sewer Repair, to identify common business process problems. From that working group, the Bureau of Building Repair conducted additional research with computerized maintenance management system vendors and other City departments to develop an understanding of the cost and resource needs for the request for proposal process, system installation, and on-going system maintenance. While the Bureau of Building Repair requested funding in the FY 2006-2007 budget, the computerized maintenance management system project has not gone forward due to other departmental priorities and budgetary constraints. The project is, however, in the Department's Computer Services Division Five Year Plan and the Office of Financial Management and Administration reports that the Department is looking to implement a computerized maintenance management system or other system solution in FY 2007-2008.

In the interim, the Office of Financial Management and Administration reports that several initiatives are under way to address Bureau of Building Repair job order management and control issues. These initiatives include a systems review of the Work Order Tracking System to identify any system enhancements that can be made to link the system to the Department's Financial and Personnel System and the City's FAMIS accounting system. Additionally, the Office of Financial Management and Administration is in the process of developing routine reports that will be automatically transmitted to project managers, including those at the Bureau of Building Repair, and client departments when project expenditures hit 80 percent of total budgeted funds. Other initiatives include increased training for Department staff in general and the Bureau of Building Repair in particular, a business process review of purchasing and procurement, and a possible increase in accounting staff assigned to the Bureau of Building Repair.

Conclusion

There are significant control weaknesses related to the Bureau of Building Repair's management of annual and continuing projects. While the Department has identified several initiatives to address these weaknesses, there is no time frame for implementation. Further, the Department has not included as one of its initiatives a review of job order management and control that would establish clear policies and procedures for appropriately establishing, tracking and monitoring, and closing job orders. In general, with the exception using estimates rather than real-time financial information, the Work Order Tracking System is configured to provide basic data and information necessary for project management and control. The weaknesses identified in this report are due in large part to weak manual processes and these have not been comprehensively addressed. These manual processes include areas such as the establishment of projects according to clear project definitions and appropriate closeout and year-end procedures, management authorization and review at periodic intervals and for select activities, and adequate reporting for both management and clients.

With respect to a computerized maintenance management system, the Department of Public Works must consider business processes department-wide, not just in the Bureau of Building Repair, and, as part of the new General Services Department, Department of Public Works should consider business processes and systems City-wide. Further, all vested interests such as accounting, administrative, information technology, and client departments must be included in the process from the beginning. Accordingly, a formal project structure should be established for a business process review and system needs assessment for the selection of a computerized maintenance management system or other system solution.

Recommendations

The Deputy Director of Finance and Administration, in conjunction with the Manager of the Bureau of Building Repair, should:

The Deputy Director of Operations, in conjunction with the Deputy Director of Finance and Administration, should:

Costs and Benefits

These recommendations include the review and refinement of business processes to increase controls over project management and, as such, existing resources should absorb any related costs. The Budget Analyst does not necessarily recommend the implementation of a computerized maintenance management system at least prior to conducting a business process review and, therefore, the costs of such a system are not included in this report. The benefits of these recommendations include increased controls over the $26.8 million that has been established in the Bureau of Building Repair's work order budget in FY 2006-2007 and the appropriate close out of over $1 million in annual projects that is carried forward from year to year.