Performance audit: Facility optimization could reward BWC with $2.5 million boost
Columbus – The Ohio Bureau of Workers’ Compensation (BWC) could realize a $2.5 million positive financial impact through facility optimization, according to a performance audit released today by Auditor of State Dave Yost.
The audit found the bureau could generate an additional $928,629 in revenue each year by increasing its lease rate at the William Green Building in Downtown Columbus to match the average market rate of $13.85 per rentable square foot (RSF). The BWC currently leases out space in the building to five state agencies and commissions at a substantially lower rate of $9.42 per RSF.
The BWC occupies 56.3 percent of the building at 312.3 RSF per employee – 62.3 RSF more than the industry benchmark of 250 RSF per employee. If the bureau right-sizes the space it occupies, it could lease out the freed-up space at the average market rate to gain another $746,266 in annual lease revenue.
“There’s no sense in paying for something you don’t use,” Auditor Yost said. “Better yet, the BWC has the potential for extra revenue by downsizing the amount of space allotted for each employee. That’s all the reason more to reevaluate how it uses its facilities.”
Auditors noted similar findings at 11 regional offices operated by the bureau under lease agreements, which cost nearly $5.2 million in fiscal year 2016. The BWC could save a net average of $770,361 per year by reducing its RSF at the offices by 33.8 percent to the industry standard. Doing so would incur a one-time moving cost for each facility, but the resulting savings would cover those expenses, likely in less than two years.
The audit identified additional savings at the BWC’s warehouse facility in Grove City, where its main file room and asset storage area are located. The bureau occupies 65.8 percent of the space in the two areas but paid $130,654 in lease and utility payments for the unused portions in FY 2016. The bureau could save that amount by realigning its warehouse space to efficiently meet its needs.
A full copy of the performance audit is available online.
The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,900 state and local government agencies. Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.