A national audit of Department of National Defence and Canadian Armed Forces facilities has revealed that chronic underspending on maintenance and repair of the properties has resulted in their deterioration.
Past audits examined the real property portfolio and the state of real property management within the DND/CAF were between 1999 and 2012, according to the report. But in this most recent assessment, auditors found: “Despite some improvement shown in the most recent assessment, the results suggest that over the three periods covered, there has been an overall decline in the condition and suitability of municipal works from a ‘fair’ rating to a ‘low fair’ rating.”
“The condition and suitability of municipal works were noted to be in poorer condition than other types of real property,” according to the report. “…This report noted that 61 percent of municipal works were over 50 years of age and that there was a continuing deterioration of the condition and suitability of the real property portfolio.”
This mismanagement could, according to the report, increases the risks of issues, such us, sewer backups, power outages and other services disruptions in the bases. They could also threaten the health and welfare of military personnel, staff and people working in and around the bases.
Real property held by the military in primarily concentrated through 32 defence establishments across the country. Operations of these facilities and infrastructures require the supply of municipal services since to some extent they may be compared to small communities.
In larger installations, the DND/CAF operates its own municipal works systems and may provide these services to the surrounding community.
The DND/CAF’s real estate portfolio consists of 37,000 assets with a real property replacement cost of $26 billion. These assets are made of land, building, military-specific operational works and municipal works.
For the fiscal year 2014-2015, real property life cycle program expenditures totaled $1.96 billion.
The audit found that the portfolio has “experienced chronic underinvestment since the 1990s” leading to maintenance, repairs and recapitalization targets being missed.
“This has resulted in a decline in the condition of the portfolio that increases the risk of service disruptions,” the report said.
The audit also found there was a limited focus on life cycle asset management for municipal work. This impacted the long-term planning for preventative maintenance and capitalizations.
The DND also failed to consider the future demands of municipal services.
The Department’s limited focus on life cycle asset management for municipal works has affected longer-term planning for preventive maintenance and recapitalization. At the same time, development planning within the department has not fully considered future demands on municipal services.
The report also said officials did not have adequate information about the actual state of the properties. This meant the department was not fully aware of things that needed to be repaired or replaced.
Defence officials estimated there would be a cumulative $1.1-billion backlog in terms of maintenance and repairs by 2018, according to a report from the Canadian Press.
A Strategic Asset Management Plan is expected to be completed in the fourth quarter of FY 2016/17.
The plan will review the asset groupings in terms of physical, functional, operational and financial performance and help enhance the planning process of life cycle requirements for municipal works.