GAO-19-57: Federal Real Property Asset Management

As the Foundational Thinking miniseries nears an end, this installment highlights the US Government Accountability Office (GAO) report GAO-19-57: Federal Real Property Asset Management – Agencies Could Benefit from Additional Information on Leading Practices. This report was written in response to a US Congressional inquiry. Leaders were concerned that the federal government spends billions of dollars annually to operate and maintain its real property portfolio, yet there remained no clear way to evaluate performance nor measure the benefits from the activities that manage this portfolio. The Congressional inquiry specifically asked GAO to evaluate if use of ISO 55000 could help achieve these ends.

GAO's approach to evaluating this sought to answer three questions:

• What are the key characteristics of an effective asset management framework?
• What are the challenges to implementing an asset management framework? and
• Does government-wide asset management guidance and information reflect standards and key characteristics of an effective asset management framework?

The report's answers to these questions were as follows:

What are the key characteristics of an effective asset management framework?

In response to the first question, GAO identify the following six key characteristics of effective asset management:

1. Establishing formal policies and plans,
2. Maximizing an asset portfolio’s value,
3. Maintaining leadership support,
4. Using quality data,
5. Promoting collaborative organizational culture, and
6. Evaluating and improving asset management practices.

GAO’s development and evaluation of these key asset management characteristics included a review of several US federal agencies who have maturing asset management programs. These agencies were the US Army Corps of Engineers, US Park Service, US Coast Guard, US Forest Service, NASA, the US Government Services Administration.

What are the challenges to implementing an asset management framework?

GAO answered the second question based on its research and observations gained evaluating progress implementing asset management at the agencies listed above. GAO found the two most common challenges to implementing an effective asset management framework were related to the organization’s culture and capacity. 

Cultural challenges were related to resistance to internal collaboration and information sharing across different departments and divisions. Quoting from the GAO report: 

“an effective [asset management] framework requires enterprise-wide policies to manage assets and that changing the organizational culture from one in which departments or division are use to working independently to one that promotes interdepartmental coordination and information sharing can be challenging.”

The report made many observations related to this type of cultural change. As an example, one of the experts GAO interviewed stated: “When asset management implementation fails, it is often because asset management staff and senior management are not aligned.”  This example highlighted a culture that supported department/division achievement over organizational success. GAO summarizes its findings on culture by referencing an audit report from New Zealand titled Asset Management for Public Entities: Learning from Local Government Examples (2010) that concluded: “for asset management to be successful, it has to become part of the organization’s culture”.

The second common challenge to implementing an effective asset management framework recognized in the GAO report was related to organizational capacity. In the context used, capacity involves a combination of skills, knowledge of management practices, asset data, and resources. The GAO report provided several insights that point to the need for agencies to invest in the development of asset management competencies for inhouse personnel. 

The benefit of doing so is to equip the agency with know-how to develop effective asset management strategies and plans. This leads to the realization that to be effective in asset management, one needs to first know what effective asset management is. This recognizes that a Federal agency could manage assets well, while at the same time not be effective in asset management.

Does government-wide asset management guidance and information reflect standards and key characteristics of an effective asset management framework?

The last question the report addressed whether government-wide asset management guidance and information reflect standards and key characteristics of an effective asset management framework. On this point, GAO determined that current government-wide guidance was lacking.  GAO’s conclusion was:

“While OMB [Office of Management and Budget] has issued government-wide requirements and guidance to federal agencies related to asset management, this guidance does not present a comprehensive approach to asset management because it does not fully align with standards and key characteristics.”

The report goes on to detail many lacking elements of an effective asset management framework in Federal policy. It then provides examples and suggestions for improvement. 

Report's Recommendation and Outcomes

GAO’s single recommendation in the report was as follows:

“The Director of OMB should take steps to improve existing information on federal asset management to reflect leading practices such as those described in ISO 55000 and the key characteristics we identified and make it readily available to federal agencies. These steps could include updating asset management guidance and developing a clearinghouse of information on asset management practices and successful agency experiences.”

In response to the report OMB "stated that they do not currently have plans to compile this information" and that they "did not plan to update their guidance". Although, this does not mean the report was not influential. GAO-19-57 responded to a Congressional inquiry to determine if ISO 55000 standards were applicable and appropriate for federal real property asset management. GAO’s position, communicated in the report, was that ISO 55000 is recommended for this purpose.

The intention behind GAO’s recommendation was to help federal agencies develop needed asset management competencies that would lead to improved asset management capabilities and culture. GAO viewed use of ISO 55000 as a best practice to “help federal agencies optimize limited funding and make decisions to better target their policy goals and objectives”. Thankfully, independent of OMB, many Federal agencies have elected to implement GAO's recommendation to use ISO 55000 to improve their asset management competencies and capabilities.  

Written by: James J. Dempsey | August 8, 2023

#assetleadership #assetmanagement #investmentstrategy #riskmanagement #enterpriseriskmanagement #iso55000 #iso55001 #facilitymanagement

Helpful Links:

GAO-19-57: Federal Real Property Management – Agencies Could Benefit from Additional Information on Leading Practices https://www.gao.gov/products/gao-19-57

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