Overview
The Authority did not ensure that it received all maintenance reports that MGM Springfield was required to provide under the MSA. During the audit period, the Authority did not request or receive any annual schedules of maintenance contracts and warranties or quarterly facility maintenance reports and schedules. Without the required annual and quarterly reporting, the Authority cannot effectively monitor scheduled preventive maintenance and warranties.
Beginning in December 2018, MGM Springfield began providing weekly reports to the Authority that the Authority believes contain sufficient information to comply with the MSA. They detail each week’s administrative, financial, and operating activities. The section regarding operations includes details of the maintenance activities performed by MGM Springfield to ensure that the MMC is maintained “in the condition received,” as required by the MSA. However, the reports do not constitute the required annual and quarterly reporting.
Authoritative Guidance
Section 16.2.3 of the MSA states that the Authority’s contract administrator “shall be responsible for the monitoring and assessment of the quality of services provided by the Manager [MGM Springfield] and contract compliance by the Manager.”
Section 2.2.12 requires MGM Springfield to provide the Authority with an annual schedule of maintenance contracts and warranties, quarterly reports of all facility maintenance performed during the preceding quarter, and reports of all facility maintenance scheduled for the following quarter, including “a list of breakdowns of all major pieces of installed and portable equipment for the quarter.”
Reasons for Issue
The Authority does not confirm that its contract administrator is familiar with and aware of all aspects of the contract, including all maintenance information. The Authority also has not established monitoring controls to ensure that it receives information required by its contract with MGM Springfield.
Recommendations
- The Authority should ensure that its contract administrator and MGM Springfield are aware of the contractual requirement that MGM Springfield provide the Authority with facility maintenance information.
- The Authority should establish monitoring controls to ensure that MGM Springfield provides it with all contractually required facility maintenance reports.
Auditee’s Response
The Authority asserts that the communication it has received from MGM Springfield is above and beyond contractual requirements and, as of October 27, 2020, a Quarterly and Annual reporting process has been implemented as suggested in Finding 2.
The Authority’s management team is in constant contact with MGM Springfield and receives detailed communication such as two weekly status calls and end of week activity reports, which have served to provide the Authority with helpful and timely information surrounding care and maintenance of the MassMutual Center. The Authority has provided the State Audit Team examples of this consistent coordination which satisfy contract requirements. This information provides critical updates on MassMutual Center maintenance, operations and activities across a wide array of disciplines including participation by the following Authority departments: Sales, Finance, Operations, Capital Projects, Public Safety, and Engineering & Maintenance.
The MGM Springfield staff provides an update of maintenance at the facility to the Authority on a weekly basis within the “Weekly Update” communications. These communications began being submitted to the Authority in December of 2018. This communication, in addition to weekly calls between the MGM Springfield and the Authority’s departments noted above, allowed for operations and maintenance information in excess of what was required according to contractual requirements. Maintenance updates are also included within the “MassMutual Center Board Report” submitted on a monthly basis to the Authority and provided to Board members.
The Authority is committed to the important public investments, including the MassMutual Center, under its custody. The Authority takes great pride in the physical condition and appearance of the MassMutual Center and how it reflects on the broader City of Springfield and the Pioneer Valley region of Western Massachusetts. Over just the past three fiscal years alone, the Authority has invested in numerous capital projects at the facility and employs or contracts for routine and emergency maintenance across all major building systems. Furthermore, the Executive Director, Deputy Director, Chief of Operations and Capital Projects and other key senior management personnel of the Authority have participated in detailed physical inspections of the MassMutual Center.
Auditor’s Reply
As noted above, Section 2.2.12 of the MSA requires MGM Springfield to provide the Authority with an annual schedule of maintenance contracts and warranties, quarterly reports of all facility maintenance performed during the preceding quarter, and reports of all facility maintenance scheduled for the following quarter, including “a list of breakdowns of all major pieces of installed and portable equipment for the quarter.” During our audit, we were not provided with any documentation to substantiate that MGM Springfield provided this information to the Authority in the manner prescribed by the contract; this fact is not disputed by the Authority.
In its response, the Authority asserts that although it did not receive the formal reports prescribed by the contract, “the communication it has received from MGM Springfield is above and beyond contractual requirements.” The Authority states,
[The Authority receives] two weekly status calls and end of week activity reports, which have served to provide the Authority with helpful and timely information surrounding care and maintenance of the MassMutual Center.
Although the Authority provided us with weekly activity reports noting all maintenance performed during the week, there was no documentation detailing the substance of the two weekly calls. Therefore, OSA cannot comment on the adequacy of this communication to meet the requirements of the MSA.
In his book Improving Convention Center Management Using Business Analytics and Key Performance Indicators: Focusing on Fundamentals, Myles T. McGrane notes that it is an industry best practice to provide a schedule of maintenance contracts and warranties and provide quarterly facility maintenance schedules that track performance for the current and prior quarters. Although MGM Springfield’s weekly updates include a “Facility Maintenance” section, they do not provide the Authority with the maintenance tracking information that may be necessary to ensure that all critical building maintenance is performed to prevent the consequences of building and system failures.
We commend the Authority for implementing the required quarterly and annual reporting in October 2020. This will provide further assurance that the facility is maintained “in the condition received, reasonable wear and tear excepted,” as required by the MSA.
| Date published: | February 16, 2021 |
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