Housing New Zealand Corporation: Maintenance of state housing

State housing is the largest publicly owned property portfolio in the country. In 2008, the portfolio had an estimated value of $15.2 billion. Ensuring that state housing stock is well-maintained is important for protecting the value of these properties. It is also important for the tenants who use them. Housing New Zealand Corporation (the Corporation) is the agency responsible for maintaining state housing.

The scope of our audit

We carried out a performance audit focusing on the effectiveness of the Corporation's systems and processes for maintaining state housing. Specifically, we examined how the Corporation plans for maintenance, manages maintenance work, and monitors and evaluates maintenance work. We did not assess the current condition of state housing.

Our findings

We found that the Corporation had comprehensive and effective processes and procedures for maintaining state housing properties. However, it did not have an adequate system that provided detailed information on the condition of its properties. As a result, it did not have a reliable basis for measuring and managing its overall workload.

The Corporation had identified this issue and was introducing a new Asset Management Framework. The Asset Management Framework was intended to:

• define a new property quality standard;
• measure the condition of all the Corporation's state housing properties against this standard;
• identify maintenance shortfalls and estimate costs to bring properties up to the standard;
• generate high-quality information for preparing prioritised business plans, budget bids, and targeted maintenance programmes; and
• replace existing benchmarks and systems with a realistic basis for measuring and reporting on the condition of the properties.

We made three recommendations about this Framework. These were for the Corporation to:

• record detailed and specific information about the condition of state housing properties that could be used in planning maintenance work;
• include tools for accurately measuring and costing the overall maintenance workload; and
• include systems to plan effective management of the overall maintenance workload.

The response to our findings and recommendations

The Corporation accepted all of our recommendations and is working towards having its new Asset Management Framework in place by July 2010.

The Corporation is finalising a property quality standard that will be used to guide property inspections and provide consistent, detailed information about the condition of state housing properties. The Corporation expects the standard to be approved by the end of the 2009/10 financial year.

A new property inspection survey has been developed to assess compliance against the new standard. This survey began in December 2009 and will eventually replace the current Property Maintenance Assessment System. Information from property inspections will be recorded in a database. An information technology and reporting solution to allow the survey data to be analysed and reported on is currently under development, with the first reports expected in May 2010. The Corporation told us that it will use this analysis to inform and plan the maintenance programme that will start from July 2010.

The Corporation told us that database information will provide it with an overall view of maintenance needs and associated costs. It will be able to use this information to prioritise and make decisions about the maintenance workload.

This work is important for the Corporation's ability to manage its maintenance workload effectively. Because of this, we will examine the Corporation's response in more detail once this work is complete and in use.