Audit Report 

OIG-04-039 (Interim Report) 

GENERAL MANAGEMENT: Management of the Treasury 

Building and Annex Repair and Restoration Program Needs to Be 

Strengthened 

August 9, 2004 

Office of 

Inspector General 

Department of the Treasury 
Contents 

Audit Report................................................................................................. 3 

TBARR Purpose and Funding ............................................................................. 4 

TBARR Program Chronology and Status.............................................................. 5 

Findings and Recommendations ......................................................................... 7 

 Inadequate Project Planning at Inception.................................................... 7 

 Recommendation .................................................................................... 9 

Cost Increases Due to Program and Design Changes ................................... 10 

 Recommendation .................................................................................... 12 

Cost Increases Due to Inefficient Employee Moves ..................................... 12 

 Recommendation .................................................................................... 14 

 Deficient Accounting Reconciliations ......................................................... 14 

 Recommendation... ................................................................................. 17 

Appendices

 Appendix 1: Objectives, Scope, and Methodology ...................................... 19 

 Appendix 2: TBARR Program Appropriations .............................................. 21 

 Appendix 3: Management Response ......................................................... 22 

 Appendix 4: Major Contributors To This Report.......................................... 31 

 Appendix 5: Report Distribution................................................................ 32 

Tables 

 Table 1 Unreconciled Differences—TBARR Program Fiscal Year 2003 

 Commitments, Obligations, and Expenditures ...................... 16 

 Table 2 TBARR Program Appropriations .............................................. 21 

Abbreviations

 A&E Architect and Engineering 

 ASM/CFO Assistant Secretary for Management and Chief Financial Officer 

 DO Departmental Offices 

 FY Fiscal Year 

Management of the TBARR Program Needs to Be Strengthened Page 1 

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Contents 

 GAO Government Accountability Office 

 GSA General Services Administration 

 H.R. House Report

 OFM Office of Financial Management

 OIG Office of Inspector General 

 OMB Office of Management and Budget 

 PDS Prospectus Development Study 

 P.L. Public Law 

 TBARR Treasury Building and Annex Repair and Restoration 

 Treasury Department of the Treasury 

Management of the TBARR Program Needs to Be Strengthened Page 2 

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OIG Audit Report

The Department of the Treasury 

Office of Inspector General 

 August 9, 2004 

 Jesus H. Delgado-Jenkins 

Acting Assistant Secretary for Management 

The purpose of this interim report is to convey our observations 

from our ongoing audit of the Treasury Building and Annex Repair

and Restoration (TBARR) Project. In brief, we found that (1) the 

TBARR Program was not adequately planned at its inception; (2) 

the original scope of the Main Treasury building renovation was 

amended numerous times resulting in delays and increased costs; 

(3) ineffective management of employee moves to and from “swing 

space” during construction resulted in further delays and 

unnecessary costs; and (4) the TBARR Project Office accounting 

records, reconciliations, and reports are deficient. We note, 

however, that since our audit began in February 2004, there has 

been increased involvement by the Department of the Treasury’s

(Treasury) senior leadership to address some of the past problems 

that caused delays and unnecessary costs. We are making 4 

recommendations in this report to further improve the management 

and accounting of the TBARR Program going forward, and to 

prevent similar deficiencies in the future. 

In the Office of Management’s July 22, 2004, written response to 

the OIG’s draft interim report, management agreed with the 

findings and recommendations in our report, and provided their 

corrective actions taken or planned to implement the 

recommendations. We believe the Office of Management’s 

planned actions are responsive to the intent of the 

recommendations. 

It should also be noted that while the Office of Management agreed 

with the findings and recommendations contained in the report, it 

provided us additional comments, which it believed, addressed 

some of the issues we identified in our report. The complete text 

Management of the TBARR Project Needs to Be Strengthened Page 3 

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of the Office of Management’s response including exhibits is 

provided as Appendix 3. 

At this time, we still plan to issue our final audit report within the 

8-month timeframe mandated by House Report (H.R.) 108-401. In

our final report, we will address: (1) compliance with applicable 

procurement laws and regulations, and the Architectural Barriers 

Act of 1968, as amended; (2) the scope, requirements, and cost 

reasonableness of the project, as well as the process for managing 

change orders to the original scope and design; and (3) the 

effectiveness, efficiency, and economy of contractor operations. 

However, it is important to note that the conditions discussed in 

this report, combined with the lack of complete and reliable TBARR 

Program records, have caused delays in our audit. Details on our 

objectives, scope and methodology are provided in Appendix 1. 

Pursuant to H.R. 108-401, we will be providing copies of this 

interim report to the Senate and House Committees on 

Appropriations. 

TBARR Program Purpose and Funding 

After a June 1996 roof fire resulted in major damage to the Main 

Treasury building, Treasury decided to modernize the building. The 

TBARR Program was established in August 1998 for the stated 

purpose to (1) repair and restore the Main Treasury building to 

correct the damage caused by the roof fire, (2) restore the historic 

fabric of the building, and (3) modernize the building and its 

systems to comply with current codes and standards. At the same 

time, the TBARR Program Office was established within the Office 

of Management to procure related services, oversee the design and 

construction activities, and coordinate employee moves during the 

construction. 

Starting with emergency funding received in Fiscal Year 1996 for 

the fire damage, Treasury has received funding each year since, in 

accordance with no-year and multi-year spending plans. Through 

Fiscal Year 2004, Congress appropriated a total of $225 million for 

the TBARR Program. The Fiscal Year 2004 appropriation prohibits 

Treasury from obligating $7 million of the $25 million until either 

(1) completion of our audit or (2) approval in writing by the House 

and Senate Committees on Appropriations. The details of TBARR 

Management of the TBARR Program Needs to Be Strengthened Page 4 

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annual appropriations and related rescissions are provided in 

Appendix 2. From Fiscal Years 1996 through 2003, Treasury 

expended $159.3 million for the TBARR Program. Expenditures 

during Fiscal Year 2004 totaled $3.1 million as of May 18, 2004. 

We were also provided with an FY 2004 TBARR 

Commitment/Obligation Report that reflects that $22.5 million has 

been recorded by the TBARR Project Office. 

To date, no TBARR funds have been budgeted for the complete

renovation the Treasury Annex building. We were told that TBARR 

funds were used for moving certain offices from the Main Treasury 

building to the Annex. But, we found no evidence that renovation 

needed for the Annex have taken place to date. 

An October 2001 contractor report estimated that $13.2 million 

would be needed for this purpose. Adjusted for inflation and 

including associated relocation and other costs, we were told that 

renovation of the Annex would require between $20 million to $25 

million. According to the TBARR Director, Treasury plans to ask 

for funds to renovate the Annex as part of its Fiscal Year 2006 

budget request. 

TBARR funds will be used for upgrades to the Main Treasury 

Building’s information technology infrastructure. These upgrades, 

estimated to cost $16 million, are managed through Treasury’s 

Office of the Chief Information Officer, not the TBARR Project

Office. 

TBARR Program Chronology and Status 

Between Fiscal Years 1996 and 1998, little work was 

accomplished because Treasury did not have experienced staff to 

manage and award contracts for the project. Early in 1998, 

Congress began to criticize Treasury for slow project progress. In 

an attempt to move the project along, Treasury hired two 

experienced General Service Administration (GSA) employees to 

serve as the TBARR Director and the Director for Project 

Management, respectively. Five months later, in December 1998, 

contracts were awarded for restoring, cleaning, and repairing the 

exterior façade, including replacement of all windows. The exterior 

Management of the TBARR Program Needs to Be Strengthened Page 5 

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and window replacement work was selected because it would 

show visible progress, could be readily separated from the rest of 

the program, represented a significant cost, and could be 

contracted for in a short period of time. 

Also in December 1998, Treasury awarded the Architect and 

Engineering (A&E) contract for studies and designs to renovate the 

interior of the Main Treasury building. In January 1999, Treasury 

awarded the Construction Management contract for the interior 

renovation. Construction began in August 1999 with the start of 

the replacement of the major utility infrastructure. 

The renovation design plan provided that the interior building 

renovation would be carried out in 4 phases and the building was 

divided into quadrants for that purpose. Renovation of all floors in 

each quadrant was to be substantially completed before work was 

to start in the next quadrant. To accomplish the renovation, the 

occupants of each quadrant had to be temporarily relocated. 

Treasury leased space outside of Main Treasury, referred to as

“swing space,” for these temporary moves. 

As TBARR proceeded, delays and increasing costs were incurred 

related to (1) program and design changes, (2) unforeseen 

conditions discovered during construction, and (3) employee 

moves. The projected TBARR costs increased from an estimated 

$152.1 million1 in Fiscal Year 1997 to an estimated $241.4 million

through Fiscal Year 2005, an increase of $89.3 million, or 59 

percent. Renovation of the four building quadrants was initially 

projected to be completed in December 2003. September 2005 is 

now the target date. Work is currently in Phase 3, which is 

expected to be completed in June 2004. Phase 4 is scheduled to 

start in July 2004, although some preparatory utility work has 

already begun. According to the TBARR Director, the scope of the 

TBARR Program has been scaled back and Phase 4 has been 

further subdivided due to the uncertainty of continued TBARR 

funding. 

Also impacting Phase 4 was the provision in H.R. 108-401 that 

1

 The original budget developed in Fiscal Year 1997 was $152.1, based on a project plan developed at that time. After 

cost studies, building condition assessments and more detail project planning continued, the budget was revised to 

$192.9 million in 1999. The TBARR Director considers the $192.9 million as the baseline budget for the project. 

Management of the TBARR Program Needs to Be Strengthened Page 6 

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$7 million could not be obligated until either our audit was 

completed or approval was given in writing by the Appropriations 

Committees. In this regard, the TBARR Director asserted that 

unless the $7 million is received by August 2004, Treasury will 

need to terminate the construction contract to avoid exceeding 

available funding. According to the TBARR Director, the entire 

Phase 4 quadrant of the building will remain uninhabitable in the 

interim. In this regard, the preparatory work already done for 

Phase 4 included removal of steam pipes and other work that 

effectively shut off heat to the quadrant until renovation is 

completed. 

The TBARR Director also stated that, if work is stopped, 

reconstituting the A&E and Construction Management team with 

their extensive project knowledge may not be possible. The 

remaining work would also have to be awarded as a new contract. 

The TBARR Director estimated that would delay the quadrant

renovation from the current anticipated start date in 

July 2004, to a start date in June 2005, and add $30 million to 

project costs. 

Findings and Recommendations 

Finding 1 Inadequate Project Planning at Inception 

In May 1998, before the TBARR Project Office was established, 

Treasury and GSA discussed the renovation project regarding the 

upgrades to the climate control, fire sprinklers, and electrical 

systems. Initially, Treasury requested the services of a GSA 

employee who was later hired as the TBARR Director to assist 

Treasury’s Procurement Division. Treasury also requested services 

from GSA’s design office to review the contract for the design of 

the exterior renovation of the building. GSA performed these

services for Treasury on a reimbursable basis. 

Treasury had contemplated using GSA to manage the renovation of

the Main Treasury building. Instead, a decision was made to hire 

two of GSA’s most experienced project executives to manage the 

project directly for Treasury by using outside contractors. When 

hired in mid-1998, the TBARR Director was directed to start the 

Management of the TBARR Program Needs to Be Strengthened Page 7 

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project by the end of the year. We were told and based on 

documentation provided to us that because of the urgency and 

mounting Congressional criticism, in September 1998, Treasury 

requested proposals for repairs to the interior and for interior A&E 

studies. 

If GSA had managed the project, among the services GSA would 

have provided would have been a Prospectus Development Study 

(PDS). According to GSA’s PDS Guide published in December 

1991, the PDS is a capital project scope and planning document 

which provides a design program, an implementation strategy, and 

a budget assessment. It is the primary means GSA uses to 

establish the scope and budget for major new construction and 

alteration projects it manages. Used as a planning document, a 

PDS clearly defines project requirements and, among other things, 

provides information for Congressional authorization. Once 

approved, the PDS provides the basis of the design Architect and 

Engineer’s scope of work. The PDS’s implementation strategy also 

offers initial management direction for the project’s execution. It

generally takes 6 months to complete the PDS, and costs 

approximately $100,000, according to the TBARR Director. 

It can be expected that during a multi-year project like TBARR, 

there will be changes in the top leadership of Treasury as the 

project progresses. In this regard, since the beginning of TBARR, 

there have been four Secretaries of the Treasury, four Deputy 

Secretaries, and four Assistant Secretaries for Management and 

Chief Financial Officer (ASM/CFO). There have also been lengthy 

periods when the Deputy Secretary’s position was vacant, and the 

ASM/CFO position was held by acting officials. Hence, sound 

project planning up front as provided by something like a PDS is 

essential to ensure continuity and accountability for such a large 

project. 

Had Treasury initially used a planning tool such as the PDS to 

manage the project, many issues that have “sprung up” resulting in 

significant increases to initial cost estimates and changes to the 

program schedule would likely have been identified sooner. More 

importantly, a planning tool like the PDS would have also provided 

the TBARR Project Office with a blueprint to manage the project. 

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Additional Management Comments. In the July 22, 2004, written 

response to the OIG’s draft interim report, the Acting Assistant 

Secretary for Management stated that management prepared plans 

for the repair and renovation of the building. Some of the plans

were necessarily brief so that repairs could begin on the fire 

damaged building as soon as possible, especially since 

approximately 20 percent of the building was rendered 

uninhabitable after the fire. These preliminary studies were 

provided to the Congressional Appropriations Committees on 

February 5, 1998, and were the basis of the approved TBARR

appropriations. Management’s position is that they developed an 

adequate initial program plan. Management also recognizes that 

the extent of the plan could have been broadened but concludes 

that using the GSA PDS process would not have significantly 

improved project insight resulting in large cost avoidances in the 

project to date. 

OIG Response. We did review the initial planning documents that 

the Office of Management prepared. Our concern was not so 

much who prepared the planning documents, but that they were 

not complete or timely. For example, contracts were awarded in 

August 1999, while studies were still in progress. Because of the 

magnitude of the project, we believe that the planning should have 

been complete before renovations began. In addition, the fact that 

more studies were done and the cost estimates increased from 

$152 million to $192 million within the first 2 years of the project 

indicates that more thorough studies should have been completed 

initially. 

Recommendation

1. In the event funding for additional renovations are authorized, 

the Assistant Secretary for Management and Chief Financial 

Officer should ensure that the renovation project is adequately 

planned in accordance with sound guidance, such as that used 

by GSA. Management should also ensure that the Office of 

Management and Budget and the Congress is fully informed of 

the scope and total estimated cost of the renovation, before

construction begins and as unanticipated changes occur. 

Management of the TBARR Program Needs to Be Strengthened Page 9 

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Management Response. Management agrees with the 

recommendation. For any future major or significant 

authorized renovation work, for example, a renovation of the 

Annex, management will use GSA’s guidelines or an 

equivalent. Management is developing a funding plan for 

engineering studies for repairs to the Annex Building. No 

decision has been made yet on the FY 2006 budget request. 

OIG Comment. The actions proposed by the Acting Assistant 

Secretary for Management satisfy the intent of our 

recommendation. 

Finding 2 Cost Increases Due to Program and Design Changes 

At the time of our audit, documentation for key decisions made 

throughout the life of the TBARR Program was not made available 

to us. Although requested, we were told that there were no 

written authorizations and approvals for many key decisions that 

extended the project completion date and added to its costs. 

Without this documentation, we are unable to validate that major 

program and design changes were adequately approved, 

authorized, and necessary. 

As a standard for internal control in the Federal Government, 

certain control activities must be in place to help ensure 

management’s directives are carried out. These activities include 

Proper Execution of Transactions and Events--transactions and 

other significant events should be authorized and executed only by 

persons acting within the scope of their authority. This is the 

principal means of assuring that only valid transactions to 

exchange, transfer, use, or commit resources and other events are 

initiated or entered into. Control activities should also include 

Appropriate Documentation of Transactions--all transactions and 

other significant events need to be clearly documented, and the 

documentation should be readily available for examination.2

Because the project was not well planned and other decisions 

made by management were not planned, numerous program

 

2 Internal Control Standards for the Federal Government, U.S. Government Accountability Office (GAO). 

Management of the TBARR Program Needs to Be Strengthened Page 10 

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changes occurred which increased the costs. For example, we 

were told that a decision was made that the building should be 

reconfigured to have more open space, with modular furniture and 

cubicles, rather than individually closed offices as provided in the 

initial design. This decision was made well after the original design 

had been developed. However, at the time of our audit, the 

TBARR Director was unable to provide written authorization for this 

change. That change cost approximately $4 million to $5 million.3

 

Subsequent to our review, we were provided with documentation 

(i.e. e-mails) demonstrating the decision for the open space 

concept and decision. While we believe that the decision for the 

open space concept was approved by a high-level official, we 

found no evidence regarding the costs and associated impact for 

the decision. 

Another example of a change to the original design plan was to add 

a deli, called the “Vault,” costing approximately $1.8 million. 

There was no was no written documentation supporting the 

approval by senior management for the deli and it was not in any 

previous plans. 

It should also be noted that there were other major changes 

involving matters of security in response to September 11, 2001, 

that increased program costs. Documentation supporting the

necessity for these security measures and approvals was more 

complete. 

Additional Management Comments. The Office of Management 

addressed two issues in its response with regard to the open space 

and the deli. With respect to the open space, the Office of 

Management provided us with documentation that spanned 51⁄2 

months (from July 16, 2001, to January 4, 2002). These 

documents included statements such as: “Open Plan 

Offices.doc.>> is what we think we heard from this morning’s 

meeting and tour with the Secretary” (e-mail dated July 16, 2001) 

and “I want to make sure that we solicit input from the staff and 

attempt to implement their suggestions so long as we do not dilute 

the Secretary’s vision and/or run up tens of thousands of dollars in 

cost over-runs due to delays” (e-mail dated August 31, 2001). 

 

3

 The estimated additional cost to the TBARR Program was provided by the TBARR Director. Although

asked for, we were not provided documentation supporting this amount. 

Management of the TBARR Program Needs to Be Strengthened Page 11 

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With respect to the deli, management believes there is 

documentation to support its decision to put in the deli. 

Specifically, management stated that the Deputy Assistant 

Secretary for Administration approved the change for the deli. As 

documentation of this approval, the Office of Management 

provided in its response a routing slip with the proposed layout, 

and contract modification. The routing slip included the name of 

the Deputy Assistant Secretary for Administration with “N/A” next 

to the name. 

OIG Comment. With regard to the open space, a fully informed 

decision cannot be made without all the information necessary to 

make it. Complete information would have included design 

changes as well as costs (both in terms of dollars and time). This 

cost information was absent from any documentation provided to 

us or the “decision maker.” With respect to the deli, we do not

believe that a routing slip with “N/A” next to the “decision 

maker’s” name evidences approval. 

Recommendation

1. The Assistant Secretary for Management and Chief Financial 

Officer should ensure that significant management decisions 

impacting scope, project schedule, and costs of the TBARR 

Program are approved and the approvals documented. 

Management Response. The Office of Management concurred 

with the recommendation and will ensure that approvals of 

significant management decisions impacting scope, project 

schedule, and costs in the TBARR project will be more clearly 

documented. 

OIG Comment. The actions proposed by the Office of 

Management satisfy the intent of our recommendation. 

Finding 3 Cost Increases Due to Inefficient Employee Moves 

Another major reason causing project delays and increased costs 

involved moving building occupants to and from “swing space” as 

renovation progressed. There were several instances of space 

Management of the TBARR Program Needs to Be Strengthened Page 12 

 (OIG 04-039) 
planning delays, as well as delays by occupants in vacating Main 

Treasury and re-occupying renovated spaces during Phases 1 and 2 

of the project. The Assistant Secretary for Management/Chief

Financial Officer (ASM/CFO) at the time approved a plan to move 

employees into “swing space” as the project progressed. 

However, the ASM/CFO was unable to gain support of the building 

occupants for the efficient movement of employees into the “swing 

space.” Instances were also cited where Program Offices jockeyed 

for what was perceived to be more desirable locations when moved 

back to Main Treasury, thereby causing additional delays. The 

ASM/CFO and TBARR Project Office was apparently unable to

effectively resolve these issues in a timely manner. Subsequently, 

we were told that the move delays cost approximately $1 million 

per month in additional lease/rental costs. According to the TBARR 

Director, total costs due to these delays in moving were between 

$15 million to $20 million. It should be noted, however, that the 

TBARR Project Office did not maintain auditable records supporting 

the extent of delays and impact to project costs. Therefore, we 

are unable to validate these costs. 

As previously discussed, since TBARR’s inception, there has been 

turnover in the senior leadership of Treasury. Until recently, we 

have found little evidence of top-level commitment or involvement 

in the TBARR Program. This was confirmed by the TBARR 

Director. Also, we were told that there was no senior official 

functioning as the project “champion” who could bring 

management focus on program schedules and budgets, therefore, 

the TBARR Director did not receive adequate support and made 

most decisions himself. 

Treasury recognized that there could be similar space issues and 

cost related impacts, as discussed above, for Phases 3 and 4. As 

a result, on March 24, 2004, the Deputy Secretary issued a 

memorandum to Treasury officials regarding the office moves 

associated with Phases 3 and 4 of the renovation. In the 

memorandum, the Deputy Secretary stressed the importance of 

meeting the timetable, and established a short deadline for 

addressing concerns with space arrangements. Furthermore, the 

memorandum noted that the Secretary has committed Treasury to 

a December 2005 deadline to complete the renovation. The 

Deputy Secretary’s involvement seems to have improved 

Management of the TBARR Program Needs to Be Strengthened Page 13 

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cooperation for the efficient movement of employees to “swing 

space.” 

Recommendation

1. The Assistant Secretary for Management and Chief Financial 

Officer should ensure that employee moves to and from 

“swing space” are accomplished expeditiously as outlined in 

the Deputy Secretary’s March 2004 memorandum. In this 

regard, the TBARR Director should be instructed to 

immediately notify the ASM/CFO of any slippages. 

Management Response. In accordance with the 

recommendation, the Office of Management stated that the 

TBARR Director is keeping the Assistant Secretary for 

Management apprised of any slippages in the TBARR

schedule. The TBARR Director, Assistant Secretary for 

Management and the Deputy Secretary continue to work 

together to resolve any issues or concerns impacting the 

TBARR project. 

OIG Comment. We believe the Office of Management’s 

current and planned actions are responsive to the intent of our

recommendation.

Finding 4 Deficient Accounting Reconciliations 

The TBARR Project Office did not timely identify, research, or 

correct differences and errors between its records and the official 

TBARR Program accounting records maintained by the Office of 

Financial Management (OFM). As a result, TBARR management 

does not have reliable information on the status of the project 

funds and discrepancies recorded on its records may not be 

detected and corrected in a timely manner. 

The Standards for Internal Control in the Federal Government, 

Accurate and Timely Recording of Transactions and Events, states 

that transactions should be promptly recorded to maintain their 

relevance and value to management in controlling operations and 

making decisions. This applies to the entire process or life cycle of 

Management of the TBARR Program Needs to Be Strengthened Page 14 

 (OIG 04-039) 
a transaction or event from the initiation and authorization through 

its final classification in summary records. In addition, control 

activities help to ensure that all transactions are completely and 

accurately recorded. 

The TBARR Project Office maintains unofficial accounting records, 

(cuff records) that it used to accumulate TBARR Program funding 

and obligations. Among other things, these records were used to 

report financial information regarding the TBARR Program to senior 

management and the Office of Management and Budget (OMB). 

When we asked about reconciliations between the cuff records and 

the official accounting records, we were initially told by the TBARR 

Project Office Management Analyst that reconciliations were 

completed through the end of Fiscal Year 2003. However, when 

we performed our independent review of the TBARR Project Office 

cuff records with OFM official records, we found differences. 

Also, we found that TBARR Project Office computer spreadsheets 

contained math errors. We brought this matter to the Management 

Analyst’s attention and she acknowledged the errors in the cuff

records and stated they would be corrected. 

After several subsequent inquiries, we ascertained that the FY 

2003 records had not been reconciled. The Management Analyst 

informed us that she scanned the OFM record and looked for 

certain items, in other words, the Management Analyst directed her

”verification” to the largest amounts. Differences between the 

TBARR Project Office records and OFM records may be valid. 

However, because the TBARR Project Office did not document 

specific explanations for the differences, we considered the TBARR 

records unsubstantiated. Without a documented reconciliation of 

the TBARR Project Office records, we cannot attest to the 

accuracy of the records. 

As a further illustration of the need for the TBARR Project Office to 

reconcile accounting information timely and properly, we compared 

TBARR obligated balances by object class shown in a report 

generated from its cuff records entitled FY 2003 

Commitment/Obligations Report with OFM’s Spending Document 

Detail Report for FY 2003. As shown in the following table, there 

Management of the TBARR Program Needs to Be Strengthened Page 15 

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were differences between the TBARR and OFM records for the 

various object classes. The differences totaled over $2 million. 

Table 1: Unreconciled Differences – TBARR Program Fiscal Year 

 2003 Commitments, Obligations, and Expenditures 

Object Class Per OFM Per TBARR 

Project Office

Unreconciled

Difference 

Personnel Compensation $1,111,109 $1,254,687 $143,578

Personnel Benefits 247,085 249,758 2,673

Benefits for Former Personnel 25,000 0 25,000

Travel & Transportation 0 1,035 1,035 

Transportation of Things 122 0 122 

Rent, Communication, & Utilities 2,253,600 2,689,602 436,002

Other Services 2,285,076 1,762,363 522,713

Supplies and Material 31,238 32,699 1,461

Equipment 2,438,487 1,370,867 1,067,620 

Lands and Structures 27,991,679.48 27,417,082.76 574,597

Total of Unreconciled Differences 2,774,801 

Source: OFM FY 2003 Spending Document Detail Report; TBARR Project Office FY 

2003 Commitment/Obligations Report

We also noted 6 instances where OFM recorded obligations totaling 

approximately $304,000 for one contract but the obligations were 

recorded for a different contract in the TBARR Project Office cuff 

records. The Management Analyst advised that these obligations 

were erroneously recorded in the TBARR cuff records.

We did not review the TBARR Project Office’s reconciliations prior 

to Fiscal Year 2003. According to the Management Analyst, the 

reconciliations were handled in the same manner as the one we 

reviewed. Subsequent to our review, we were told that the TBARR 

Project Office reconciled its records to OFM for Fiscal Year 2003. 

Additional Management Comments. In its response to our interim 

report, management provided us additional information suggesting 

it used reliable financial information. 

OIG Response. At the time of our audit, we found unexplained 

differences and errors with the TBARR Project Office’s financial 

records. In addition, we identified at least three Instances where 

the financial data in the cuff records was provided to the Office of 

Management of the TBARR Program Needs to Be Strengthened Page 16 

 (OIG 04-039) 
Management and Budget and senior Treasury officials. 

Furthermore, we did not see any indication that the official financial 

reporting from OFM records was the basis for all decision making. 

Since management received this interim draft report, and after the 

FY 2003 reconciliation was completed, management indicated that 

the amount remaining to be corrected was approximately $1,300. 

As a result, going forward with the newly instituted controls, we 

believe that the process for identifying differences by TBARR and 

OFM will be more timely and accurate. 

Recommendation

1. The Assistant Secretary for Management and Chief Financial 

Officer should instruct the TBARR Director to ensure that 

periodic and complete reconciliations between OFM 

accounting records and TBARR Project Office records from 

project inception and going forward are timely performed and 

reviewed by a supervisor. Identified differences should be 

researched and the appropriate adjustments made on a timely 

basis. In this regard, the Office of Financial Management 

should provide accounting assistance to the TBARR Project 

Office as necessary to ensure adequate reconciliations are 

accomplished. 

Management Response. The Office of Management accepts 

the recommendation. The Assistant Secretary has directed 

the TBARR Director to ensure that periodic and complete 

reconciliations take place between OFM and TBARR records. 

The reconciliations are now occurring monthly. In order to 

facilitate this ongoing reconciliation, effective July 26, 2004, 

an accountant has been detailed to the TBARR Project Office. 

 

OIG Comment. The actions planned by the Office of 

Management are responsive to the intent of our 

recommendation. 

* * * * * 

We appreciate the courtesies and cooperation provided to our staff 

during the audit. If you wish to discuss this report, you may 

contact me at (202) 927-5400 or Thomas Byrnes, Director, 

Management of the TBARR Program Needs to Be Strengthened Page 17 

 (OIG 04-039) 
Procurement Audits, at (202) 927-5904. Major contributors to this 

report are listed in Appendix 4. 

 /s/

Marla A. Freedman 

Assistant Inspector General for Audit 

Management of the TBARR Program Needs to Be Strengthened Page 18 

 (OIG 04-039) 
Appendix 1 

Objectives, Scope, and Methodology 

We are performing this audit of the TBARR Program pursuant to 

H.R. 108-401. In that report, we were directed to audit all 

Treasury Building renovation and restoration contracts since Fiscal 

Year 1998. The audit objectives include: (1) a review of 

compliance with all applicable procurement laws, rules, and 

regulations, and the Architectural Barriers Act of 1968, as 

amended; (2) a review of the scope, requirements, and cost 

reasonableness of the project, as well as the process for managing 

change orders to the original scope and design; and (3) a review of 

the effectiveness, efficiency, and economy of contractor 

operations. 

We began our audit fieldwork in February 2004 at Treasury’s 

Departmental Offices (DO) and work is still in progress to fully 

address the above objectives. As part of the fieldwork completed 

as of May 2004, which is the basis for this interim report, we 

toured the Main Treasury building and the “swing space” under

lease located at 1440 New York Avenue, N.W., Washington, D.C. 

We interviewed key Treasury DO personnel involved in the TBARR 

Program, including officials and staff with the TBARR Project 

Office, Curator’s Office, Procurement Services Division, Facilities 

Management Division, and OFM. We also interviewed a former DO 

Contracting Officer and contractor personnel. 

Further, at our request, the TBARR Project Office prepared a 

timeline of key events and management decisions affecting the 

TBARR Program design and schedule. We reviewed available 

internal correspondence, including e-mails, documenting the key 

events and management decisions on the timeline. That 

documentation was incomplete, and we brought this to 

management’s attention during periodic status meetings on the 

audit. As a result, more documentation was provided but there

were still key events and management decisions on the timeline 

that are undocumented. We also noted that the timeline did not 

reflect certain key events and management decisions, such as the 

decision to provide a deli that was not in the original design plan. 

We also reviewed external correspondence to OMB and the

Congress regarding the TBARR Program. Furthermore, we

reviewed “lessons learned” and other internal reports prepared by 

Management of the TBARR Program Needs to Be Strengthened Page 19 

 (OIG 04-039) 
Appendix 1 

Objectives, Scope, and Methodology 

the TBARR Project Office for the Deputy Secretary between 

February 2004 and May 2004. 

To assess the adequacy of the TBARR Project Office’s cuff records 

used to manage the project, we reviewed financial reports it 

maintained and reconcilations to Treasury’s official accounting 

records, principally for Fiscal Year 2003. We also obtained and 

reviewed relevant official accounting records from OFM. 

With respect to the first objective, we are currently reviewing the 

TBARR Program contract files using a compliance checklist we 

developed. The universe of contracts awarded since 1998 consists 

of 14 open and 8 closed contracts. We will review a sample of 

these contracts and provide the results of our work in our final 

report. 

With respect to our second objective, we have reviewed the 

original cost estimates, revised budgets, and building studies. 

Furthermore, we prepared summary spreadsheets of the 

modifications, amendments, and change orders for each contract 

issued since 1998 through March 2004 to capture the purpose and 

dollar/schedule impact of each modification, amendment and 

change order. As of March 2004, there were a total of 505 

modifications, amendments, and change orders for the 14 

contracts. We obtained and we are currently reviewing available 

documentation regarding program and design changes. The results 

of our review will be included in the final report. 

With respect to the third objective, we are currently developing a 

methodology to address the objective. The results of our review

will be included in the final report. 

We are conducting our audit, and prepared this interim report, in

accordance with generally accepted government auditing 

standards. 

Management of the TBARR Program Needs to Be Strengthened Page 20 

 (OIG 04-039) 
Appendix 2 

TBARR Program Appropriations 

The following table shows the annual appropriations authorized by 

the Congress for the TBARR Program, adjusted for rescissions.

Table 2: TBARR Program Appropriations 

Fiscal 

Year Description Amount 

1996 Appropriation (P.L. 103-329 $11,500,000 

1996 Appropriation (P.L. 104-52) 21,491,000 

1997 Appropriation (P.L. 104-208) 28,213,000 

1997 Transfer to USSS (P.L. 104-208) (9,754,659)

1998 Appropriation (P.L. 105-61) 10,484,000 

1999 Appropriation (P.L. 105-277) 27,000,000 

2000 Appropriation (P.L. 106-58) 23,000,000 

2000 Rescission (P.L. 106-113)1 (300,000) 

2001 Appropriation (P.L. 106-554) 31,000,000 

2001 Rescission (P.L. 106-554) (68,200) 

2002 Appropriation (P.L. 107-67) 28,932,000 

2003 Appropriation (P.L. 108-7) 28,932,000 

2003 Rescission (P.L. 108-7) (188,058) 

2004 Appropriation (P.L. 108-199) 2 25,000,000 

2004 Rescission (P.L. 108-199) (147,500) 

Totals $225,093,583 

Source: Nonexpenditure Transfer Authorizations, Standard Form 1151 and 

Department of Treasury’s Appropriations Warrants, FMS Form

6200. 

1 A rescission is the cancellation of budget authority previously provided by

Congress. 

2 Treasury is prohibited from obligating $7 million of the $25 million 

appropriation until (1) completion of our audit or (2) approval in writing by 

the House and Senate Committees on Appropriations.

Management of the TBARR Program Needs to Be Strengthened Page 21 

 (OIG 04-039) 
Appendix 3 

Management Response

Management of the TBARR Program Needs to Be Strengthened Page 22 

 (OIG 04-039) 
 Appendix 3 

 Management Response 

Introduction

This is the Office of Management’s response to the Office of the Inspector General’s 

Draft Interim Report entitled “General Management: Recent Efforts to Better Manage

the Treasury Building and Annex Repair and Restoration Program Need to Continue

and be Strengthened” dated June 21, 2004. This response will address the Report 

Findings individually. The response includes the actions we have taken or plan to take;

target dates for action, where applicable, and reasons for disagreements with the draft 

Report Findings or recommendation as required by Treasury Directive 40-01. 

The Office of Management, in general, accepts the recommendations made in the 

Report. However, this response will present the Office’s concerns about some of the 

items contained in the Report. Some general observations follow. Specific comments 

will be addressed in the response to each of the Findings. 

The Office of Management believes that the Treasury Building and Annex Repair and

Restoration (TBARR) contract procurement files are complete and accurate for all 

obligations for contract actions issued to the TBARR contractors, and are located in the 

TBARR procurement offices. In addition, unofficial financial “cuff” records are 

maintained for the entire program reflecting obligations and planned obligations for 

budget forecasting and control. These are now reconciled with the official Office of 

Financial Management (OFM) accounting records monthly, quarterly, and annually to

verify obligations and collect data on obligations for project costs generated outside the

TBARR program office. Other program files are filed by contract or subject matter and 

are located in the TBARR Project Management office file room and in the Director’s

office. 

Management is developing a funding plan for engineering studies for repairs to the 

Annex Building. No decision has been made yet on the FY 2006 budget request. 

Management took steps immediately following the June 1996 fire to secure alternate 

space for its displaced employees and to begin clean up and planning for repair and 

restoration of the main Treasury building. Initial funding to begin remediation from the 

fire was received through a reprogramming of funds in June 1996. By February 1998, 

TBARR had prepared preliminary documents that laid out a plan for the renovation of

the Treasury building. Construction began in December 1998, with a contract to repair 

the exterior façade of the building. Following extensive engineering studies and

designs in early 1999, interior construction began in August with replacement of the 

major air conditioning and electrical equipment utility infrastructure systems. TBARR 

continues to repair and renovate the building with Phase 3 on target for completion and 

re-occupancy in August 2004. Phase 4 construction has begun. The Report (page 6)

states that, “September 2005 is now the target date.” The Office of Management notes

that September 2005 is the date for beginning the reoccupancy of Phase 4 of the

renovation. The TBARR project is expected to be completed on December 31, 2005. 

 7:34 PM7/22/2004 1 

 Management of the TBARR Program Needs to Be Strengthened 

 (OIG-04-039) 
 Appendix 3 

 Management Response 

The Office of Management also notes that Phase 4 renovations began on time in July

2004. The delay in project start date and increased funding noted on page 9 of the 

Report only refers to a speculative contract shut down. 

The concerns related to TBARR planning, change orders, delays and accounting are 

addressed below. 

Finding 1: Inadequate Project Planning at Inception

This Finding presents some of the initial history associated with the TBARR 

program. The Finding compares Management’s program to the General Services 

Administration’s (GSA) process that involves the creation of a Prospectus

Development Study (PDS). The Report accurately states that the PDS provides an

outline of the project scope, implementation plan, and budget, and is used by GSA to

obtain Congressional authorization. 

Management did prepare plans for the repair and renovation of the building. Some

of these plans were necessarily brief so that repairs could begin on the fire damaged 

building as soon as possible, especially since approximately 20 percent of the 

building was rendered uninhabitable after the fire. These preliminary studies were

provided to the Congressional Appropriations Committees February 5, 1998, and 

were the basis of the approved TBARR appropriations. 

The Architecture and Engineering contract awarded in December 1998 for the 

interior construction provided for initial studies to develop an approved scope of

work based on engineering and architectural analysis, and a cost estimate for the 

project. This resulted in a revised budget estimate and final scope of work and 

project plan for developing the TBARR program. Additional funding of $40.8 

million was approved through the FY 2000 budget process. 

The additional funding of $ 40.8 million also was approved by the Treasury

Investment Review Board and the Assistant Secretary for Management and CFO. 

The $40.8 million was an increase to the previous funding plan estimate of $152.1

million made in 1998. These two funding estimates together created the TBARR 

base budget of $192.9 million. This funding plan was accepted by the Congressional 

Appropriations Committees during budget hearings for Fiscal Year 2000. The

preliminary plan, approved as part of the budget, addressed the essential elements 

required for accomplishing repairs and restoration of the building, upgrading its 

infrastructure, correction of building code deficiencies, and making the building 

comply with the requirements of the Architectural Barriers Act of 1968 (ABA). 

This budget is the definitive base budget for the TBARR program, based on building 

condition assessments (e.g., site visits and extensive building investigation studies) 

noted in the above paragraph. The budget also established a program to correct the 

building code and ABA deficiencies and modernize the aged and failing building

structure and infrastructure systems. 

 7:34 PM7/22/2004 2 

 Management of the TBARR Program Needs to Be Strengthened 

 (OIG-04-039) 
 Appendix 3 

 Management Response 

Management acknowledges that it did not develop a PDS as GSA may have done. 

However, Management also notes that a PDS was not required for the Treasury 

project or for other federal agencies seeking authorization for capital improvement

programs. The PDS is internal to the GSA project delivery process. Management

did develop an overall plan for the repair and renovation of the building. This plan 

addressed the same primary elements of a PDS and was presented to Congress on 

February 5, 1998. 

The Finding states that a planning tool such as the PDS would have avoided many

issues that have resulted in cost increases and schedule impacts. Many of the delays

and cost increases were caused by unforeseen conditions in the course of 

construction. Management took all reasonable actions to address the unforeseen 

conditions. In particular, investigative surveys and material testing were performed

as part of the design development process in 1999. Furthermore a contingency fund

was established to address what could be considered a reasonable level of anticipated 

unforeseen conditions. Unfortunately the extent of the actual unforeseen conditions

(primarily structural deterioration and hazardous material) surpassed Management’s 

planning level. Until demolition began in the construction phase of the project, the 

full extent of structural deficiencies and hazardous material could not be ascertained. 

Moreover, the need to renovate the building while it was occupied, the extent of 

hazardous materials in the building, and the advanced degree of deterioration found 

in parts of the building added to the complexity of the renovation project and would

not have been ameliorated by developing a PDS.

Management does not believe that the GSA-prescribed PDS process would have

avoided the following kinds of cost and schedule impacts resulting from program

redirection or additions: 

 Decision to employ an “open space” environment and employees reaction;

 Department of Homeland Security reorganization impact from late

December 2002 through early April 2003; 

• Security impacts of 9/11 , e.g., building security upgrades, new building 

access control system, and North Courtyard Building security upgrades; 

 IT technology advances; 

 Terrorist financing initiatives; 

 Significant turnover in senior leadership; and

 Many other program changes arising during a long term program spanning

multiple administrations. 

Management’s position is that it developed an adequate initial program plan. 

Management also recognizes that the extent of the plan could have been broadened

but concludes that using the GSA PDS process would not have significantly

improved project insight resulting in large cost avoidance in the project to date. In

addition, Management would like to note that it did not have the requisite skills 

among its employees for a project of this scale. Building renovation is not a core 

Treasury function. Management hired a TBARR Director and other staff to manage 

this project. 

7:34 PM7/22/2004 3 

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 (OIG-04-039) 
 Appendix 3 

 Management Response 

The need to renovate the building while it was occupied, the extent of hazardous 

materials in the building, and the advanced degree of deterioration found in parts of

the building added to the complexity of the renovation project and would not have 

been ameliorated by developing a PDS.

Management agrees with the recommendation for Finding 1 and will use GSA’s 

guidelines or an equivalent for any future major or significant authorized renovation 

work, for example, a renovation of the Annex. 

Finding 2: Cost Increases Due to Program and Design Changes 

The Finding states that there is a lack of written documentation of key decisions

including signed authorizations and approvals, particularly for the decisions that

extended the completion date. 

The Report acknowledges that there is enough documentation to determine that the 

decision to rebuild using an open office space plan was made by a high level official. 

Treasury has an active internal controls program that agrees with the internal control 

statements cited in the Report. Management believes that the TBARR project has 

followed these principles. The TBARR project was authorized and executed only by 

persons acting within the scope of their authority. The TBARR Program Director’s 

Position Description and TBARR Organization Approval document dated August 

21, 1998 and Functional Statement dated August 25, 1998, clearly granted broad 

authorization to implement the TBARR program to the TBARR Director. This 

authority includes the ability to approve and authorize the program work and 

expenditure of funds with which to accomplish its goals. 

These actions are documented (approved and authorized) through the procurement

process. The TBARR Director (or designated alternate) approved the procurement

requisitions which obligated funds and initiated the actions. Documentation to

support the reasons and costs are found in the official contract files for each action.

Major changes to project budgets were presented and approved through the budget 

process and the ASM’s approval of the budget. 

The program changes were required by many events. They included differing site 

conditions encountered as demolition began, for example, deteriorated building

conditions and hazardous material abatement. Other events impacting the TBARR 

project include responses to external events such as 9/11 and the creation of the 

Department of Homeland Security (DHS), international events (G7 and G8 

conferences), Administration initiatives that impact building occupancy, changing

Departmental focus (follow-up to the DHS divestiture and start-up of the Terrorist 

Financing and Intelligence organization) and changing technical standards in

information technology. 

7:34 PM7/22/2004 4 

 Management of the TBARR Program Needs to Be Strengthened 

 (OIG-04-039) 
 Appendix 3 

 Management Response 

A Departmental decision to close the cafeteria in the Annex and replace it with the

current facility in the Treasury building was made after the TBARR project began. 

The Deputy Assistant Secretary for Administration approved the change and the

TBARR Director authorized the change following an oral presentation on the 

café/deli. The TBARR office has the transmittal coversheet, proposed layout and

contract modification which did not persuade the Inspector General that the café/deli

was approved by senior management. 

 

Management agrees with the recommendation in Finding 2, and will ensure that 

approvals of significant management decisions impacting scope, project schedule, 

and costs in the TBARR project will be more clearly documented. 

However, Management would like to note that GSA, using the PDS process, also

faces a significant number of changes in project scope. The GSA Report entitled, 

‘Construction Excellence – Special Report’ dated December 1998, states that 

between 33 and 43 percent of the cost growth on major new construction and repair

and alteration projects results from customer changes after the design development

has been completed. GSA attributes the number of changes to the lack of mutual 

understanding and commitment which leads to the customer changing the scope as 

the project progresses. The GSA Special Report also states that many GSA projects 

experience cost overruns and time delays that can be attributed to design

deficiencies. The GSA Special Report suggests that many of these design

deficiencies can be attributed to the required construction document preparation and 

procurement guidelines. GSA predicts that about 23 percent of project cost growth

results from design deficiencies. Design deficiencies were increased in the TBARR 

case by the lack of access to the existing space granted to the design team during the 

project design development phase. Factors contributing to the lack of access center 

around the challenges of destructive testing and investigation in an occupied

building, potential health consequences of disturbing hazardous material such as 

asbestos and lead paint in occupied areas, interruption of important Treasury

business, and locating deteriorated building conditions in concealed areas requiring 

extensive demolition. GSA also predicts that they will experience an average of 29

percent cost growth due to “unforeseen conditions.” Finally, the GSA Special

Report finds that it experienced a 28 percent growth in management and cost control

which resulted in change orders. 

The FY 2002 TBARR budget increase of $40.8 million resulted from detailed design

investigations and studies which established the first fully developed, definitative 

base line budget for the TBARR project of $192.9 million. When this baseline is 

used for computation, the TBARR change order rate is 11 percent. Based on a base

budget of $192.9 million, TBARR project cost growth is approximately 25 percent. 

7:34 PM7/22/2004 5 

 Management of the TBARR Program Needs to Be Strengthened 

 (OIG-04-039) 
 Appendix 3 

 Management Response 

Finding 3: Cost Increases Due to Inefficient Employee Moves

The Finding states that another major reason for project delays and increased costs 

involved moving the building occupants to and from “swing space” as renovation 

progressed. 

Management agrees that space planning delays and delayed occupant moves 

contributed to project schedule delays and cost growth. However, the necessity of 

renovating the building while occupied increased the number and complexity of the 

moves required. Renovating an occupied building also necessitated moving some

groups multiple times while the work of the Treasury needed to continue. 

TBARR was responsible for minimizing the impact of its construction program on

the work of the Treasury, particularly the Departmental Offices. Various critical 

work activities including annual reports to various Congressional recipients, budget 

submissions to OMB and Congress, international conferences, and many others 

required coordination between the TBARR need to move employees so construction 

could proceed and the policy offices’ work. This caused delays as the program

occupancy schedules were often revised to accommodate the requirements of the

various policy offices. 

Following the attacks of September 11, 2001, Treasury faced increased demands on

its enforcement bureaus and offices responsible for terrorist financing and asset 

forfeiture, and was part of the largest reorganization of the federal government in

many years. The creation of DHS included moving most of Treasury’s enforcement 

bureaus to either DHS or the Department of Justice. 

This divesture created a massive workload for the Office of Management. The 

Management Office was responsible for ensuring the orderly transfer of personnel

including a large number of its own support staff. The Office of Management found

itself trying to do more work with substantially fewer resources. The Assistant 

Secretary for Management recognized an opportunity to modernize operations within

Management, streamlining processes to accommodate a reduced staff and improve 

efficiencies. The period from late December 2002 through April 2003 delayed 

TBARR’s work as Management worked though the changes, and determined a new 

mission focus. 

These changes impacted TBARR by changing the number and types of offices that 

would be housed in the building. The resulting rework of the space plans delayed 

the project several months while dealing with the changes to the occupancy plans for 

both swing space as well as final space assignments. This also affected leased 

facilities as Management developed a strategy for downsizing of leased space and restacking of occupants within the Treasury space inventory. 

In addition, Secretary O’Neill’s decision to house employees in open space created 

employee morale problems. Several petitions, signed by hundreds of DO staff 

members, implored the Secretary to reverse his decision. Secretary O’Neill believed 

that an open office plan encouraged collaboration, communication, and teamwork. 

7:34 PM7/22/2004 6 

 Management of the TBARR Program Needs to Be Strengthened 

 (OIG-04-039) 
 Appendix 3 

 Management Response 

 Management of the TBARR Program Needs to Be Strengthened 

 (OIG-04-039) 

The sentiments of the Treasury employees indicated a high level of expectation that

private offices were required to adequately conduct the demanding and sensitive 

affairs of the Treasury Department. In addition, employees expressed concern that 

the lack of private offices and small conference rooms would mean they would have

to actively seek out privacy when needed. While the Treasury employees’ petitions

were being addressed, TBARR was unable to complete space plans and build out, 

waiting for a resolution. The change to an open space plan necessitated extensive 

revisions to the office layouts which in turn required new layout approvals by all the 

impacted offices. The amount of employee dissatisfaction coupled with the need for 

their management to approve new open space layouts further delayed the project. 

Finally, there was a great deal of turnover in top management at the Department

during the course of the TBARR project. The effect was to leave TBARR without a

strong politically appointed advocate for much of the project. The TBARR Program

currently has strong advocates in Treasury’s Deputy Secretary and the Acting 

Assistant Secretary for Management and CFO. The Deputy Secretary’s

memorandum of March 24, 2004, cited in the Audit Report, has been very effective 

in resolving the space planning and occupancy issues in Phase 3 and working toward

achieving an approved Phase 4 plan. Briefings are regularly conducted for the ASM 

and DAS (Organization and Change Management) addressing all TBARR concerns,

including schedules and budget.

In accordance with the recommendation in Finding 3, the TBARR Director is 

keeping the Assistant Secretary for Management apprised of any slippages in the 

TBARR schedule. The TBARR Director, Assistant Secretary for Management and 

the Deputy Secretary continue to work together to resolve any issues or concerns

impacting the TBARR project.

Finding 4: Deficient Accounting Reconciliations

Finding 4 addresses the reconciliation of the records maintained in the TBARR 

Project Office to official accounting records maintained by OFM. The Report states 

that “TBARR management does not have reliable information on the status of the

project funds.” Management disagrees. The Assistant Secretary for Management

and TBARR Director rely on the official reporting from OFM to make operational 

decisions and to obligate program funds. The use of financial “cuff” records to

project program costs during a fiscal year is an accepted management practice. 

TBARR funds are not obligated without concurrence from OFM on the availability 

of funds. TBARR financial cuff records are used to ensure that projected program

costs are in line with the appropriation and to make budget estimates. 

OFM adheres to the Standards for Internal Control in Federal Government and 

records events and transactions accurately and timely. This is done from the 

initiation of the event, through its authorization, to its final classification in the 

official accounting records. 

7:34 PM7/22/2004 7 
 Appendix 3 

 Management Response 

The Report states that the TBARR cuff records were not reconciled. Since receiving 

the Interim Report, TBARR and OFM have focused efforts and increased attention to

reconcile their records. It is also important to note, that the TBARR staff reconciled 

verbally with OFM and focused this reconciliation on the largest dollar amounts. 

The TBARR Management Analyst also properly accounted for the data reported in

different fiscal years and knew how to interpret reports produced by Treasury’s 

accounting systems. Management acknowledges that this type of verbal, 

undocumented reconciliation is inadequate and has taken steps to conduct formal 

documented reconciliations on a monthly basis. 

The Report presents Table 1 as an example of unreconciled differences at the end of 

FY 2003. It is important to note that the Report acknowledges these differences may 

be valid. TBARR and OFM staffs are completing a reconciliation of the differences

between the program office and the financial management data. The differences are

due to budget projections vs. actual expenditures, timing issues, and data

inaccuracies. The amount remaining to be corrected is approximately $1,300. The

Offices expect to have resolved these differences (i.e., have a difference of $0) very

soon. (Documentation is available upon request.) Monthly reconciliations are being

performed monthly going forward. 

 

Finally, as the Report states, there were errors in the TBARR Project Office

spreadsheets. Management has taken steps to correct these formula errors and will 

make a diligent effort to ensure that these records are maintained more accurately. 

Moreover, Management believes its official records, maintained by OFM, are 

accurate. 

Management accepts the recommendation in Finding 4. The Assistant Secretary has 

directed the TBARR Director to ensure that periodic and complete reconciliations

take place between OFM and TBARR records. The reconciliations are now 

occurring monthly. In order to facilitate this ongoing reconciliation, effective July 

26, 2004 an accountant will be detailed to the TBARR Project Office. 

7:34 PM7/22/2004 8 

 Management of the TBARR Program Needs to Be Strengthened 

 (OIG-04-039) 
Appendix 4 

Major Contributors To This Report

Office of Inspector General, Office of Audit 

Thomas E. Byrnes, Director, Procurement Audits 

Delores V. Dabney, Audit Manager 

Leslye K. Burgess, Auditor-in-Charge 

Dwight Glenn, Auditor 

Gerald H. Kelly, Auditor 

Andrew J. Kirkpatrick, Program Analyst 

Michael Sinko, Referencer 

Management of the TBARR Program Needs to Be Strengthened Page 31 

 (OIG 04-039) 
Appendix 5 

Report Distribution 

The Department of the Treasury

Assistant Secretary for Management Assistant Secretary for 

Legislative Affairs 

Deputy Assistant Secretary Organization and Change Management 

Acting Chief Financial Officer 

Acting Deputy Assistant Secretary, Office of Financial Management 

Director, Office of Financial Management 

Director, Office of Accounting and Internal Control 

Office of Management and Budget

OIG Budget Examiner 

United States Congress

House Committee on Appropriations 

House Committee on Appropriations, Subcommittee on 

Transportation, Treasury and Independent Agencies 

Senate Committee on Appropriations 

Senate Committee on Appropriations, Subcommittee on 

Transportation, Treasury and General Government 

Management of the TBARR Program Needs to Be Strengthened Page 32 

 (OIG 04-039)