a

GAO

United States Government Accountability Office

Report to the Chairman, Subcommittee 

on Interior, Environment, and Related 

Agencies, Committee on Appropriations, 

House of Representatives

April 2005 KENNEDY CENTER

Stronger Oversight of 

Fire Safety Issues, 

Construction Projects, 

and Financial 

Management Needed

GAO-05-334
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-334 

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Mark L. 

Goldstein at (202) 512-2834 or 

goldsteinm@gao.gov. 

Highlights of GAO-05-334, a report to the

Chairman, Subcommittee on Interior,

Environment, and Related Agencies, 

Committee on Appropriations, House of

Representatives 

April 2005

KENNEDY CENTER

Stronger Oversight of Fire Safety Issues, 

Construction Projects, and Financial 

Management Needed 

Although the Kennedy Center has achieved its goal of renovating the Opera 

House, Concert Hall, and plaza-level public spaces, each of these projects 

exceeded budget estimates, some by substantial amounts. Project cost 

growth resulted from modifications made during the renovation process, 

due, in part, to the Kennedy Center’s lack of knowledge of the building’s site 

conditions. Modifications led to overtime charges paid to meet tight 

construction schedules. Also, the center may have paid higher costs than 

necessary by negotiating contract modification values after work was 

completed. A lack of comprehensive policies and procedures limited the 

Kennedy Center’s ability to adequately safeguard federal funds. 

Furthermore, our review of communication documents showed that 

Kennedy Center management did not always timely or accurately convey 

project cost growth and delays to its Board of Trustees or Congress. 

Cost over Initial Budgets for Selected Kennedy Center Projects 

The Kennedy Center has complied with disabled access requirements in 

renovated areas. However, GAO identified three areas where the center 

does not appear to meet fire safety code requirements: (1) the center has not 

taken steps to ensure that exit paths through the Grand Foyer, Hall of 

Nations, and Hall of States provide adequate protection from fire; (2) doors 

in critical areas do not provide adequate protection from fire; and (3) the 

Millennium Stages have exit deficiencies and lack sprinkler and smoke 

evacuation systems required by code. In addition, it does not appear that the 

center clearly informed the board or Congress of its decision not to install 

sprinklers or other fire suppression systems in the plaza-level public spaces. 

 

Given the ongoing project management issues GAO has identified, the 

Kennedy Center could benefit from considering best practices for project 

management. In February 2004, GAO identified components of a best 

practices framework that include (1) conducting comprehensive planning, 

(2) assessing risks, (3) comprehensively managing project finances, (4) 

establishing accountability for and oversight of federal resources, and (5) 

incorporating stakeholders’ interests. 

Since fiscal year 1995, the John F. 

Kennedy Center for the Performing 

Arts (Kennedy Center) has received

nearly $203 million in federal funds 

to complete capital projects and 

intends to request an additional $43 

million in appropriations through 

fiscal year 2008. The Kennedy 

Center’s Comprehensive Building 

Plan identifies these capital 

projects as necessary to renovate 

the center and meet or exceed 

relevant life safety and disabled 

access regulations. GAO was 

asked to examine (1) the progress 

the center has made in completing 

key capital projects within 

estimated costs, and how it 

communicated this progress; (2) 

the current status of the center 

regarding fire and life safety and 

disabled access requirements; and 

(3) what best practices could help 

the center improve planning and 

management of capital projects. 

What We Recommend

GAO recommends here and in April 

6, 2005, testimony that the Kennedy 

Center increase oversight, better 

comply with fire code, and conform 

to project management best 

practices. The Kennedy Center 

believes that it is in compliance 

with fire code, but agrees to seek 

third-party review. It agreed with 

our recommendation to improve 

oversight and management 

practices, but contended its 

financial controls were adequate. 
Page i GAO-05-334 Kennedy Center

Contents

Letter 1

Results in Brief 4

Background 7

Key Capital Projects Completed, but Costs Exceeded Budget 

Estimates and Were Not Timely or Accurately Reported 12

The Kennedy Center Does Not Appear to Meet Some Fire Safety 

Code Requirements but Exceeds Disabled Access 

Requirements 24

Several Best Practices Could Assist the Kennedy Center in 

Addressing Project Management Problems 32

Conclusions 39

Recommendations 40

Agency Comments and Our Evaluation 42

Appendixes

Appendix I: Scope and Methodology 44

Appendix II: Appropriations to the Kennedy Center for Capital Repairs

amd Alterations 47

Appendix III: Status of Previous GAO Recommendations to the Kennedy 

Center 48

Appendix IV: February GAO Management Letter Sent to The Kennedy 

Center 50

Appendix V: Comments from the John F. Kennedy Center for the 

Performing Arts 53

GAO Comments 65

Appendix VI: GAO Contacts and Staff Acknowledgments 70

GAO Contacts 70

Staff Acknowledgments 70

Table Table 1: Appropriations to the Kennedy Center for Capital Repairs 

and Alterations under the CBPs 47

Figures Figure 1: Diagram of the Kennedy Center’s Plaza-Level Public 

Spaces and Theaters 8

Figure 2: Kennedy Center Organizational Chart for Selected 

Positions and Offices 11

Figure 3: Scope of Key Kennedy Center Capital Projects 13
Contents

Page ii GAO-05-334 Kennedy Center

Figure 4: Budgets and Actual Costs for Selected Kennedy Center 

Capital Projects 14

Figure 5: Opera House Unforeseen Site Condition 17

Figure 6: Kennedy Center Communication Methods 22

Figure 7: Exit Routes from the Kennedy Center’s Major 

Theaters 25

Figure 8: Millennium Stage Located at the End of the Grand Foyer 

outside the Eisenhower Theater 28

Figure 9: Selected Disabled Access Improvements to the Kennedy 

Center Made as Part of the Comprehensive Building 

Plan 31

Figure 10: Best Practices for Managing Capital Projects 33

Abbreviations

ADA Americans with Disabilities Act

CBP Comprehensive Building Plan

GSA General Services Administration

JFMIP Joint Financial Management Improvement Program

NFPA 101 National Fire Prevention Association Life Safety Code 

OIG Office of the Inspector General

OMB Office of Management and Budget

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Page 1 GAO-05-334 Kennedy Center

United States Government Accountability Office

Washington, D.C. 20548

A

April 22, 2005 Letr

The Honorable Charles Taylor

Chairman, Subcommittee on Interior, Environment,

 and Related Agencies

Committee on Appropriations

House of Representatives

Dear Mr. Chairman:

The John F. Kennedy Center for the Performing Arts (Kennedy Center) 

opened in 1971 as a national cultural arts center and presidential memorial. 

Every year, millions of people visit the Kennedy Center to view the center 

and memorial or attend one of the center’s performances. Since at least 

1990, the Kennedy Center facility has needed substantial capital repairs. 

Officials from both the Kennedy Center and the National Park Service, 

which at that time shared responsibility for managing the Kennedy Center, 

acknowledged that the center had reached a seriously deteriorated state.

In 1994, Congress gave the Kennedy Center sole responsibility for 

managing the facility. As part of those responsibilities, Congress also 

required the Kennedy Center to develop, and annually update, a 

comprehensive building needs plan. In response, the Kennedy Center 

developed a Comprehensive Building Plan (CBP) in 1995 that included an 

assessment of the facility and identified the capital projects it believed 

were necessary to repair the center and bring it into compliance with 

current fire life safety and disabled access codes.1

 The plan consisted of a 

long-term capital repair and upgrade project that, among other things, 

envisioned the center’s meeting or exceeding relevant fire life safety 

regulations by 2008 and that addressed disabled access needs. To 

implement its CBP, the Kennedy Center has received almost $203 million2

in federal funds from fiscal years 1995 through 2005 for capital repairs and 

1

The National Fire Prevention Association Life Safety Code deals with life safety from fire 

and like emergencies. The code covers construction, protection, and occupancy features to 

minimize danger to life from fires, smoke, fumes, or panic before buildings are vacated. The 

Americans with Disabilities Act prohibits discrimination on the basis of disability in 

employment, services rendered by state and local governments, places of public 

accommodation, transportation, and telecommunications services. 

2

This amount is comprised of a $35.3 million beginning balance, which is the value of 

transfers from the National Park Service and the Smithsonian Institution, and 

approximately $167.6 million in federal appropriations.
Page 2 GAO-05-334 Kennedy Center

alterations, and Kennedy Center officials said that additional 

appropriations totaling $43 million through fiscal year 2008 are needed to 

complete the planned projects. 

For more than a decade, we have identified shortcomings in, and made 

recommendations to improve, the Kennedy Center’s construction, 

planning, and management processes. In the 1990s, we reported that the 

Kennedy Center did not have sufficient staff capability to effectively 

manage its capital improvement plans.3

 In 2003, we reported that the 

Kennedy Center needed to strengthen the management and oversight of 

large construction projects, such as the garage expansion and renovation 

project.4

 In 2004, we reported that the Kennedy Center had implemented 

most of the projects in its CBP but would likely not complete its plan by 

2008, given the number and size of the renovation projects that remained to 

be done, anticipated future appropriations, and the likelihood that project 

budgets may increase as designs are completed (see app. I).5

To assist the subcommittee in its oversight role and in making future 

funding decisions, you asked that we discuss in this report (1) the progress 

the Kennedy Center has made in completing key capital projects within 

estimated costs, and how it communicated information about this progress 

to its Board of Trustees and Congress; (2) the center’s current status 

regarding fire life safety and disabled access requirements; and (3) what 

best practices, if any, could help the center improve its capital projects 

planning and management process. We also included information on the 

Kennedy Center’s federal appropriations for capital repairs and alterations 

in appendix II and the status of the center’s implementation of previous 

GAO recommendations in appendix III.

To determine the Kennedy Center’s progress in completing key projects, we 

reviewed the center’s audited financial statements and a selection of the 

invoices found in project, contracting, and finance files for five of the 

3

GAO, Kennedy Center: Information on the Capital Improvement Program, 

GAO/GGD-93-46 (Washington, D.C.: Feb. 9, 1993) and Kennedy Center: Information on 

Facility Management Capability, GAO/GGD-98-56 (Washington, D.C.: Mar. 25, 1998).

4

GAO, Kennedy Center: Improvements Needed to Strengthen the Management and 

Oversight of the Construction Process, GAO-03-823 (Washington, D.C.: Sept. 5, 2003).

5

GAO, Kennedy Center: More Information on Project Status and Budgets Needed to 

Understand the Impact of Future Funding Decisions, GAO-04-933 (Washington, D.C.: Sept. 

15, 2004).
Page 3 GAO-05-334 Kennedy Center

largest projects—the renovation of the Concert Hall, Opera House, 

Eisenhower Theater, and plaza-level public spaces and the installation of a 

new fire alarm system—to the extent that they existed. These projects 

represent the three largest theaters at the Kennedy Center, the largest 

public spaces, and the most expensive fire life safety improvements 

completed to date. We also reviewed federal authorization and 

appropriation laws; the Public Buildings Act, as amended, and 

implementing regulations; the John F. Kennedy Center Act, as amended; the 

Americans with Disabilities Act, as amended; and the Economy Act. To 

determine how the Kennedy Center communicates with stakeholders, we 

reviewed minutes from the Board of Trustees’ meetings, minutes and 

agendas of the board’s Operations Subcommittee meetings, the CBPs 

published since 1995, annual center budget justifications to Congress since 

1995, and testimonies before Congress over this same time period. To 

assess the center’s compliance with fire life safety and disabled access 

requirements, our staff of licensed professional engineers toured the site, 

and we contracted with an independent expert to assess the Kennedy 

Center’s compliance with applicable fire life safety code and disabled 

access requirements.6

 For the purposes of our analysis of the Kennedy 

Center’s fire life safety code compliance, we took the center’s ongoing and 

planned fire life safety upgrades into consideration when identifying 

deficiencies, and we did not identify deficiencies for cases where upgrades 

or improvements were planned. To identify best practices for project 

management, we synthesized information from our previous work on best 

practices in capital project management7

 with other independent sources. 

During our review, we interviewed numerous Kennedy Center senior 

managers and officials in the Project Management, Contracts, Finance, and 

President’s Offices and officials from the Smithsonian Institution’s 

(Smithsonian) Office of the Inspector General (OIG), the General Services 

Administration’s (GSA) National Capital Region, and the office of the 

District of Columbia (D.C.) Fire Marshal. We also determined that the data 

used in this report were sufficiently reliable for the purpose of our review. 

We conducted our review from August 2004 to March 2005 in accordance 

with generally accepted government auditing standards.

6

UNICCO Government Services, Inc., Life Safety, Fire Alarm System and ADA Assessment 

of the John F. Kennedy Center For The Performing Arts (Centreville, VA: 2005).

7

GAO, Intercity Passenger Rail: Amtrak’s Management of Northeast Corridor 

Improvements Demonstrates Need for Applying Best Practices, GAO-04-94 (Washington, 

D.C.: Feb. 27, 2004).
Page 4 GAO-05-334 Kennedy Center

Results in Brief Although the Kennedy Center has achieved its goal of renovating the Opera 

House, Concert Hall, and its plaza-level public spaces, and installed a 

buildingwide fire alarm system, each of these projects exceeded its budget 

estimates by amounts ranging from 13 to 50 percent, and it does not appear 

that center officials always timely or accurately communicated the cost 

growth and delays to its Board of Trustees or Congress. Cost growth in 

these projects resulted from unanticipated modifications made during the 

renovation process and condensed schedules. Such modifications were 

necessary, in part, because the Kennedy Center lacked knowledge of the 

building’s site conditions. The project modifications, in turn, led to 

overtime charges paid to meet tight construction schedules. For example, 

the Kennedy Center paid $560,000 in overtime charges during the Opera 

House renovation to complete the work on schedule. The center also may 

have paid higher-than-necessary costs to contractors by routinely 

negotiating the value of project modifications after contractors had already 

completed the work. In addition, the absence of comprehensive policies 

and procedures across the project management, contracting, and finance 

departments has impeded effective project management and diminished 

the oversight of federal funds. Finally, our review of the communications 

documentation showed that the Kennedy Center management did not 

always timely or accurately communicate cost overruns and schedule 

changes to its Board of Trustees or Congress. For example, the Concert 

Hall renovation resulted in cost growth of $6.2 million, or 41 percent, over 

the original budget; however, Kennedy Center officials repeatedly testified 

before Congress, several years after renovations were complete, that the 

project was completed within budget estimates.

The Kennedy Center does not appear to meet some fire safety code 

requirements, but the center has complied with, and exceeded in some 

instances, disabled access requirements in renovated areas of the center. 

After requesting and obtaining funds from Congress to address fire code 

deficiencies, such as the need for fire suppression systems, the Kennedy 

Center decided against its plan to meet fire safety code requirements by 

installing sprinklers and smoke evacuation systems in the Grand Foyer, the 

Hall of States, and the Hall of Nations. The Kennedy Center reversed its 

decision to install these systems without having its decision independently 

reviewed or clearly informing its Board or Congress that it was not
Page 5 GAO-05-334 Kennedy Center

spending the funds as planned.8 To identify and mitigate fire protection 

issues concerning exit paths through the Grand Foyer, the Hall of States, 

and the Hall of Nations, the Kennedy Center commissioned and used the 

results of a fire-modeling study. The center has not implemented some of 

the study’s recommendations, nor did it seek peer review of the study even 

though the fire code provides for third-party validation and support for a 

study’s assumptions and conditions. Third-party validation is particularly 

important in this instance because the Kennedy Center’s fire safety 

decisions are not subject to external review. In addition, we identified two 

deficiencies, based on fire code, that are of immediate concern. First, the 

doors in critical areas, such as the fire pump room and the Fire Command 

Center, do not provide adequate separation from fire as outlined in the fire 

safety code. Second, fire-safety-related problems exist with the Millennium 

Stages. The stages located at the ends of the Grand Foyer could pose exit 

problems in the event of fire.9

 Furthermore, the Millennium Stages do not 

have sprinkler and smoke control systems as required by fire code. 

Officials from the Kennedy Center said that they believe that all fire safety 

code requirements are being met but agreed to add fire protective doors 

and document their key decisions. Due to the critical nature of fire safety 

issues, on February 4, 2005, we sent the Kennedy Center President a letter 

outlining the apparent code deficiencies (see app. IV). Regarding disabled 

access projects, we concluded that the Kennedy Center meets or exceeds 

the requirements outlined in the Americans with Disabilities Act10 (ADA) 

on the basis of our independent expert’s review. For example, disabled 

patrons can now access all tiers of the Concert Hall and Opera House, and 

ushers receive special training for assisting disabled patrons.

Given the ongoing management problems we have identified, the Kennedy 

Center could benefit from considering best practices for project 

management. In February 2004, we identified components of a best 

8

In accordance with fire code, the Kennedy Center conducted an egress and fire-modeling 

study to determine if occupants could safely exit the building in the event of a fire. The 

modeling study predicted that patrons would be able to escape the Kennedy Center safely in 

the event of a fire before conditions became untenable provided that the center took steps 

to minimize evacuation delays and limit storage of combustible materials. The study also 

recommended that the Kennedy Center install sprinklers in the Millennium Stages for added 

protection.

9

Fire code defines means of egress as a continuous and unobstructed way of travel from any 

point in a building to a public way consisting of three separate and distinct parts: (1) the exit 

access, (2) the exit, and (3) the exit discharge. 

1042 U.S.C. § 12101 et. seq. 
Page 6 GAO-05-334 Kennedy Center

practices framework. These components include (1) conducting 

comprehensive project planning, (2) assessing risks and identifying 

mitigation measures, (3) comprehensively managing project finances, (4) 

establishing accountability for and oversight of projects, and (5) 

incorporating stakeholders’ interests in planning and implementing 

projects. Comprehensive planning helps manage and control project 

implementation. Assessing risks and identifying mitigation measures assist 

in meeting project goals by recognizing and responding to problems early. 

Comprehensively managing project finances is important for estimating 

and controlling project costs. Establishing accountability for and oversight 

of projects better ensures the prudent use of resources, including federal 

resources. Incorporating diverse stakeholders’ interests helps facilitate 

projects’ successful implementation by ensuring a clear understanding of 

roles, responsibilities, and potential concerns. Related to these best 

practices, the Kennedy Center has begun to take steps to improve its 

project management approach, but additional improvements are needed. 

GAO recommends here and in testimony on April 6, 2005, that the 

Chairman of the Kennedy Center Board of Trustees (1) strengthen 

oversight of center management through the Board of Trustees and 

external entities, such as an Inspector General; (2) take steps to better 

comply with fire safety code and seek peer review of its use of modeling 

studies; and (3) better conform to best practices regarding stakeholder 

communications, financial management, and document retention.

We provided a draft of this report to the Kennedy Center for its review and 

comment. The Kennedy Center stated that it had made a number of 

significant management improvements in recent years and will continue to 

do so. The Kennedy Center further noted that the scope of our current 

work may not have reflected these changes. In conducting our work, we 

reviewed the details of recent management changes that the Kennedy 

Center has made, but we were unable to gauge the impact of some of these 

changes since they are relatively recent in nature or still in development. 

The Kennedy Center agreed with several of our recommendations, but 

disagreed with others. The Kennedy Center believes that it is in compliance 

with fire code, but agreed to seek third-party review of its approach to 

certain fire code deficiencies. The Kennedy Center agreed that it could 

improve its information about capital projects, its document retention 

practices, and its knowledge of site conditions at the center. However, the 

Kennedy Center disagreed that it needed to strengthen its financial controls 

in the way that we recommended. For example, the center believes that its 

information is up to date, and it plans to fully comply with the Economy 
Page 7 GAO-05-334 Kennedy Center

Act. We continue to believe the Kennedy Center needs to strengthen its 

financial management controls in order to improve the quality of its 

financial records and better safeguard federal funds. The Kennedy Center 

also provided technical comments that we incorporated in this report as 

appropriate.

Background The Kennedy Center opened in 1971 and is located on 17 acres along the 

Potomac River in Washington, D.C. The center houses four major theaters 

and several smaller theaters, five public halls or galleries, educational 

facilities, rehearsal spaces, offices, and meeting rooms in about 1.1 million 

square feet of space. The plaza level is the primary focus for patrons and 

tourists, including three main theaters, the Grand Foyer, the Hall of States, 

and the Hall of Nations. Access to other areas, such as the roof terrace 

level, is provided through the Grand Foyer, Hall of States, and Hall of 

Nations. Figure 1 provides a diagram of the Kennedy Center’s plaza level.
Page 8 GAO-05-334 Kennedy Center

Figure 1: Diagram of the Kennedy Center’s Plaza-Level Public Spaces and Theaters 
Page 9 GAO-05-334 Kennedy Center

In a 1972 agreement with the Department of the Interior, the Kennedy 

Center Board of Trustees11 retained responsibility for all performing arts 

activities at the Kennedy Center, but services not related to the performing 

arts were assumed by the National Park Service. Under this arrangement, 

the Kennedy Center facility incurred a backlog of capital repairs, in part, 

because responsibility for identifying and completing capital repairs and 

improvements at the center was unclear. Legislation was enacted in 1990 

that directed the National Park Service and the Board of Trustees to enter 

into a cooperative agreement clarifying responsibilities related to 

maintenance, repair, and alteration of the center, but the parties were 

unable to reach an agreement. In 1994, legislation was enacted that gave 

the Board of Trustees sole responsibility for carrying out capital 

improvements at the Kennedy Center. A purpose of the legislation was to 

provide autonomy for the overall management of the Kennedy Center, 

including better control over its capital projects, and to renovate the center. 

The legislation further required the Board of Trustees to develop and 

annually update a comprehensive building needs plan.12

In response to the 1994 legislation, the center published its first CBP in 

1995 describing the goals of the renovation, including addressing fire life 

safety and disabled access code deficiencies—such as installing sprinklers 

throughout the center, replacing inefficient building systems, and 

improving visitor services. The law the Kennedy Center follows regarding 

facility construction or alteration requires that it be in compliance with 

nationally recognized model building codes and other applicable nationally 

recognized fire safety codes to the maximum extent feasible.13 As in the 

case of federal agencies, the Kennedy Center is the authority having 

jurisdiction for making a final determination on whether the center is 

complying with fire safety code.14 The Kennedy Center policy on building 

codes states that, where feasible, it will comply with the International 

Building Code (2003), International Fire Code (2003), as well as selected 

provisions of the National Fire Prevention Association Life Safety Code 

(NFPA 101) (2003). In 1995, the Kennedy Center anticipated undertaking 

11The Kennedy Center Board of Trustees currently consists of 23 government positions, 

including congressional members, as well as 36 general trustees appointed by the President 

of the United States. Each general trustee serves a term of 6 years.

1220 U.S.C. § 76j(a)(1)(F).

1340 U.S.C. § 3312. 

14For purposes of certain laws, the Kennedy Center is treated as a federal agency. 
Page 10 GAO-05-334 Kennedy Center

critical fire life safety projects by the end of fiscal year 1999. However, to 

minimize disruption to performances, the Kennedy Center changed its 

approach to making capital improvements. Rather than undertaking 

broadscale projects that could disrupt the entire center, the Kennedy 

Center chose to renovate the center incrementally while keeping the rest of 

the center open and operating. For example, rather than installing a new 

sprinkler system for fire suppression throughout the entire center, which 

would have closed multiple theaters simultaneously, the center is installing 

sprinklers in each theater as it is renovated. Thus, only one theater is 

closed at a time. According to center officials, this approach minimizes the 

disruptions to ongoing operations in other areas of the Kennedy Center that 

could result in lost revenue. When the Opera House was renovated, for 

example, it was closed for almost a year, but performances continued in all 

of the other theaters.

The Kennedy Center is a bureau of the Smithsonian Institution. The John F. 

Kennedy Center Act Amendments of 1994, amended the Kennedy Center 

Act to designate the center as a “federal entity” for purposes of the 

Inspector General Act of 1978 (IG Act), as amended.15 The Kennedy Center 

Act states that only federally appropriated funds are subject to the 

requirements of a federal entity under the IG Act. The Kennedy Center Act 

authorizes the Smithsonian OIG to audit and investigate activities of the 

Kennedy Center involving federal appropriated funds, on a reimbursable 

basis, if requested by the Board of Trustees. To date, the Kennedy Center 

has not requested that the Smithsonian OIG conduct an audit or 

investigation of its activities. 

The Kennedy Center conducts capital projects primarily through three 

offices—Project Management, Contracts, and Finance. Figure 2 provides 

an organizational chart for these three offices within the Kennedy Center. 

The center receives federal appropriations annually for capital repair and 

restoration to implement its CBP and for the operations, maintenance, and 

security of the facility. In fiscal year 2005, the Kennedy Center received 

approximately $16.1 million in federal funds for capital improvement 

projects and $16.9 million for operations, maintenance, and security of the

1520 U.S.C. § 76l (d).
Page 11 GAO-05-334 Kennedy Center

facility.16 The Kennedy Center receives appropriated funds to support its 

CBP as a lump sum and not on an individual project-by-project basis. In 

addition, the Kennedy Center’s appropriated funds for capital projects 

remain available until expended. Federal appropriations represent less 

than one-half of the center’s total revenue. The Kennedy Center generates 

the majority of its revenues from performances at the center, contributions, 

and investments. Federal funds, not the Kennedy Center’s private funds, 

are used for capital improvements in the CBP. Federal appropriations are 

not used for performance-related expenses. The Kennedy Center’s total 

operating expenses in fiscal year 2003 were about $118 million. 

16The Kennedy Center’s appropriation for fiscal year 2005 is contained in the Consolidated 

Appropriations Act of 2005, Public Law 108-447, 118 Stat. 2809 (2004). Public Law 108-447 

appropriated to the Kennedy Center $16,334,000 for capital improvements and $17,152,000 

for operations and maintenance. There are two rescissions in the 2005 appropriations act 

that reduced the final amount provided to the Kennedy Center for capital improvements and 

operations and maintenance. The first is an across-the-board rescission of 0.594 percent for 

Interior and Other Related Agencies, which applied to the Kennedy Center. The second is an 

additional across-the-board rescission of 0.8 percent for most agencies, which also applied 

to the Kennedy Center.
Page 12 GAO-05-334 Kennedy Center

Figure 2: Kennedy Center Organizational Chart for Selected Positions and Offices

Key Capital Projects 

Completed, but Costs 

Exceeded Budget 

Estimates and Were 

Not Timely or 

Accurately Reported

The Kennedy Center has completed many renovation projects (see fig. 3), 

but each of the projects we reviewed exceeded its budget due to contract 

modifications that added work to projects. Many changes were necessary 

because the Kennedy Center did not have good knowledge of the building’s 

site conditions. Additionally, the absence of comprehensive policies and 

procedures has impeded effective management of federal funds. Finally, 

the information on cost growth and delays has not always been timely or 

accurately communicated to the Kennedy Center Board of Trustees or 

Congress.

Source: GAO analysis of Kennedy Center data.

President 

Accessibility Management Facilities Management Productions Office

Office

Project Management Finance Office

Office

Executive Vice 

President of 

Administration

Vice President 

of Education

Supports theater productions 

through stagehand labor and 

implements set construction 

and theater space 

adjustments for productions

Consults with Project 

Management Office to 

recommend implementation of 

accessibility improvements to 

facility, and manages patron 

accessibility issues

Plans and manages capital 

projects and related 

improvements

Manages operations, 

maintenance, security, and 

contracting

Records, tracks, and accounts 

for all public and private 

monies collected and 

expended, including funds 

used for capital projects

Contracts Office Facility Operations and 

Maintenance Office

Security, Fire, Life, and 

Occupational Safety Office

Negotiates, enters, and 

manages contractual 

procurement of products and 

services, including those 

related to capital projects, 

security, fire life safety, and 

facility operations and 

maintenance

Manages daily security of 

facility, grounds, traffic, fire 

and life safety, and is 

responsible for ensuring a 

safe environment for visitors, 

patrons, and employees

Manages the daily operations 

and maintenance of the 

facility and grounds, including 

minor emergency repair
Page 13 GAO-05-334 Kennedy Center

Figure 3: Scope of Key Kennedy Center Capital Projects

Concert Hall Renovation - completed 1997

Work encompassed comprehensive renovation with the goal of improving access for disabled persons. The auditorium aisles 

were widened and ramps were installed to provide access for the disabled. Renovation also included installation of a sprinkler 

system; architectural refurbishment of wall, floor, and ceiling finishes; and acoustical enhancements.

Opera House Renovation - completed 2003

Work involved complete rehabilitation with the goal of improving access for disabled persons. The seating and interior finishes

were replaced and fire life safety and disabled access issues were addressed. Dressing room areas were renovated in 

accordance with Americans with Disabilities Act Guidelines. The renovation also included installation of a sprinkler and fire 

alarm system; architectural refurbishment of wall, floor, and ceiling finishes; and repairs to plumbing, heating/cooling, power, 

and lighting systems.

Fire Alarm System Replacement - completed 2004

Work involved installation of a new fire alarm system throughout the facility. Components of the system include manual pull 

stations, smoke detectors, water flow switches, strobe notification devices, and speakers. The system connects to a central 

monitoring station where emergency personnel can determine the exact location of an alarm.

Public Space Modifications - completed 2004

Work in Grand Foyer, Hall of States, and Hall of Nations consisted of four phases: (1) installation of new wall finishes; (2) 

installation of new carpet; (3) installation of disabled access ramps to theater lobbies and public space seating; and (4) 

installation of assisted listening device desk, information desk, and information screens.

Eisenhower Theater Renovation - planned for 2007

A comprehensive renovation is being considered, including improvements to disabled access and fire life safety.

Project

Sources: Kennedy Center (data) and GAO (photos).
Page 14 GAO-05-334 Kennedy Center

The Kennedy Center Has 

Completed Many 

Renovations, but Contract 

Modifications Increased 

Project Costs 

The Kennedy Center has completed renovations to the Opera House, 

Concert Hall, and its plaza-level public spaces and installed a buildingwide 

fire alarm system, but the actual costs of the projects we reviewed 

exceeded the original budgeted costs. Specifically, costs exceeded budget 

estimates by about 41 percent for the Concert Hall renovation, 21 percent 

for the Opera House renovation, 50 percent for the fire alarm system 

renovation, and 13 percent for the plaza-level public space renovations (see 

fig. 4). These findings are consistent with our finding, reported in 2003, that 

the costs of the Kennedy Center’s garage expansion and site improvements 

projects greatly exceeded the estimates.17

Figure 4: Budgets and Actual Costs for Selected Kennedy Center Capital Projects

17GAO-03-823.

0

5

10

15

20

25

Eisenhower

Theater

renovation

Public space

modifications

Fire alarm

system

Opera House

renovation

Concert Hall

renovation

Source: GAO analysis of Kennedy Center data.

Millions of dollars

41%

increase

21%

increase

50%

increase

13%

increase

Planned

for 2007

Estimated budget

Actual cost
Page 15 GAO-05-334 Kennedy Center

Renovation projects like those undertaken by the Kennedy Center are 

difficult to complete due to associated challenges with refurbishing as 

opposed to new construction. For example, according to the Kennedy 

Center, renovation projects are susceptible to cost increases stemming 

from unexpected site conditions. This is consistent with our finding that a 

primary cause of cost growth in the projects we evaluated were contract 

modifications resulting from the Kennedy Center’s lack of knowledge of the 

building’s existing conditions. The Kennedy Center lacked knowledge of 

site conditions because (1) it does not have as-built drawings18 that show 

how building components were originally constructed and (2) schedule and 

building conditions at times limited the center’s ability to conduct detailed 

investigations during project design stages. According to a Kennedy Center 

official, given the nature of construction, installed work often differs from 

what is indicated on the original architectural plans, sometimes in 

significant ways. Without accurate drawings, designers could not ascertain 

certain current building conditions, and inaccuracies were inadvertently 

built into project plans and designs.

Architects and engineers additionally lacked sufficient access to the 

project sites during the design phase. According to Kennedy Center 

officials, because the Kennedy Center focused on maximizing its theaters’ 

operating time, designers were at times limited in their ability to survey the 

project site and document its condition. This type of exploration often 

requires the removal of some portion of the existing finishes to see what is 

behind them. Because invasive surveys were not completed, designers did 

not identify utilities and structural components shielded behind walls, 

floors, and ceilings. In cases where the unforeseen conditions affected 

construction, contract modifications were needed. Kennedy Center 

officials said that they did not allow exploratory design work in order to 

preserve the building’s aesthetics. Kennedy Center officials indicated that 

they are working to improve the design of future projects by using 

noninvasive exploratory methods, such as X-ray technology, to better 

ascertain site conditions.

According to the Kennedy Center, about $1 million of the Concert Hall’s 

contract modifications and $1.5 million of the Opera House’s contract 

modifications were the result of actual conditions that differed from those 

shown on design drawings. In the Opera House renovation, the Kennedy 

18As-built or record drawings show the work as it was actually installed, which is often 

different from how it was designed to be installed or built. 
Page 16 GAO-05-334 Kennedy Center

Center attributed the following unexpected site conditions to absent 

as-built drawings and resulting in contract modifications: (1) the ceiling 

crawl space was not as large as the drawings indicated, (2) steel 

reinforcement that was not shown on the drawings existed in the 

balconies, and (3) a large steel-reinforced concrete beam in the orchestra 

floor was not depicted on existing drawings. Figure 5 provides a 

description of the concrete beam and shows how it contributed to cost 

growth on the Opera House renovation project.
Page 17 GAO-05-334 Kennedy Center

Figure 5: Opera House Unforeseen Site Condition 

Source: GAO analysis of Kennedy Center data.

Redesign of plan 

needed - 

cost: $25,000

Final resolution - 

floor reconfigured 

and beam hidden 

behind chairs - 

cost: $210,000

Unexpected site 

condition - steel 

reinforced 

concrete beam 

in Opera House 

not shown in 

blueprints for 

original facility 

construction.

1

2

3
Page 18 GAO-05-334 Kennedy Center

In attempting to maintain its construction schedule while minimizing the 

impact on its performance schedules, the Kennedy Center incurred a 

considerable amount of overtime charges. Since the Kennedy Center relies 

on proceeds from ticket sales, programs, and contributions, center 

managers sought to limit the disruption to major performance venues, such 

as the Opera House and Concert Hall. In planning the Opera House 

renovation, for example, the Kennedy Center set a firm goal of completing 

work by December 2003 to ensure that the work would be completed in 

time to host the annual Kennedy Center Honors.19 Over $560,000 of the $4 

million cost growth for the Opera House renovation resulted from overtime 

pay to contractors completing the renovations.

The Kennedy Center also may have paid contractors more than necessary 

because it routinely negotiated the value of project modifications after 

contractors had already completed the work. For example, contractors 

performed about $2.2 million worth of work in the Concert Hall renovation 

and about $2.1 million worth of work in the Opera House rehabilitation 

without negotiating the value of the modifications with the Kennedy Center 

beforehand. Center officials said that this was necessary to maintain tight 

schedules. The practice of establishing cost after work has been completed 

is discouraged in federal contracting regulations. Our previous work has 

shown that contractors have limited incentive to control costs until firm 

prices are negotiated for contract changes, and the government does not 

have an opportunity to consider more efficient construction methods or 

management controls if work is completed before the price is established.20

Lack of Clearly Designed, 

Comprehensive Policies and 

Procedures Undermined 

Effective Project 

Management

While it was beyond the scope of this engagement to conduct a 

comprehensive financial review of the Kennedy Center’s procurement 

process, we found some deficiencies in procurement operations for capital 

improvement projects. During a review of a limited selection of the 

Kennedy Center’s capital expenditures, we found that the center did not 

maintain complete and accurate financial records, which could impact the 

safeguarding of federal funds. These deficiencies can be attributed, in part, 

to the center’s lack of a comprehensive set of documented policies and 

19Begun in 1978, the Kennedy Center Honors is an annual ceremony that recognizes artists 

with lifetime achievement awards. The ceremony also serves as a major fund-raising event.

20GAO, NASA Procurement: Challenges Remain in Implementing Improvement Reforms, 

GAO/NSIAD-94-179 (Washington, D.C.: Aug. 18, 1994).
Page 19 GAO-05-334 Kennedy Center

procedures to guide the various activities related to the acquisition of 

goods and services for its capital improvements program. As a result, the 

Kennedy Center may not be able to properly account for or report financial 

transactions to Congress and other interested parties.

According to the guidance for federal agencies21 contained in the Joint 

Financial Management Improvement Program’s (JFMIP) Framework for 

Federal Financial Management Systems and Office of Management and 

Budget (OMB) Circular No. A-127, Financial Management Systems, 

effective financial management depends on appropriate control of financial 

transactions and timely recording of financial information in a manner that 

satisfies multiple users. Requirements for internal controls over financial 

operations can be found in both OMB Circular No. A-123, Management 

Accountability and Control, and GAO’s Standards for Internal Controls 

in the Federal Government.

22 Federal agencies are required to establish 

financial controls; ensure that reliable and timely information is obtained 

and maintained; and produce accurate, consistent, and complete financial 

data to enable cost-effective mission achievement and risk mitigation. The 

Kennedy Center’s policy is to rely on contractor invoices to establish the 

dates the services were performed and make specific reference to the 

invoices in its receipt certifications. Because the center does not record the 

date or period that services were performed at the time of occurrence, it is 

unable to establish and maintain reliable up-to-date accounting records. 

This lack of real-time data hampers the center’s ability to prepare reliable 

quarterly financial reports regarding the status of funds and budget 

execution and to manage project costs. When status reports are required, 

construction costs could be recognized before invoices are received by 

recording an estimate of costs incurred on the basis of a percentage of 

completion of the projects that are in progress, or some other systematic 

process that approximates actual up-to-date costs.

OMB guidance and GAO standards for internal controls state that agencies 

need to properly document their transactions. The documentation should 

be clear and complete and show sufficient information to adequately 

account for the disbursement. During our review of a selection of 224 

21The Kennedy Center is an independent establishment of the executive branch of 

government as defined in OMB Circular A-127 and, as such, is subject to OMB guidance 

regarding financial management and internal controls.

22GAO, Standards for Internal Controls in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999).
Page 20 GAO-05-334 Kennedy Center

Kennedy Center capital expenditures—dating from September 2000 to 

September 2004—we found that 63 of the contractor invoices (28 percent) 

paid by the center did not contain enough detailed information to support 

their accuracy and validity. Furthermore, without current and accurate 

information to substantiate payments, the Kennedy Center may be 

hampered in its ability to detect erroneous or improper payments. For 

example, we found a duplicate payment that may have been prevented if 

the center had better information available.

Of the invoices that lacked sufficient detail, nearly all were related to 

services the Kennedy Center received from the U.S. Army Corps of 

Engineers (Corps). The center’s transactions with the Corps are governed 

by the Economy Act (31 U.S.C. §§ 1535 and 1536), which authorizes an 

agency acquiring goods or services from another agency to reimburse the 

performing agency only for its actual costs of providing the goods or 

services. The Kennedy Center did not have sufficient procedures in place to 

ensure that it was being charged for costs consistent with its Economy Act 

agreement. We found, for example, that invoices from the Corps generally 

identified separate total amounts for the agreed-upon services (as billed by 

the Corps’ contractors) and overhead and labor costs incurred by the 

Corps, but that the invoices did not provide any details regarding the basis 

for the claimed costs, such as overhead rates. We were unable to 

determine, from either the Corps invoices submitted to the Kennedy Center 

for reimbursement or the information accompanying them, whether the 

costs being claimed for work performed were for actual costs consistent 

with the Economy Act agreement. This lack of detail on invoices subjects 

the Kennedy Center to risk of paying the Corps amounts inconsistent with 

the Corps’ actual costs, as agreed to.

In response to a GAO recommendation,23 the Kennedy Center’s Project 

Management Office initiated the development of a policy and procedure 

manual that is currently in draft form. The manual begins the process of 

outlining roles and responsibilities for the project management staff and 

defining standard operating procedures for managing projects. However, 

the Kennedy Center has not completed this manual, nor has it formalized 

its contractual and financial management policies and procedures. This 

makes it difficult for people in the different Kennedy Center departments to 

understand their roles and requirements in the oversight of federal funds. 

In working to improve its management capabilities, the Kennedy Center 

23GAO-03-823.
Page 21 GAO-05-334 Kennedy Center

hired a Contracts Chief in March 2003 and is seeking an additional 

contracting officer. Also, in March 2004, the Kennedy Center hired a 

Director of Capital Projects to lead the Project Management Office.

The Kennedy Center Did 

Not Always Timely or 

Accurately Communicate 

Cost Growth and Schedule 

Delays to Its Board or 

Congress 

The Kennedy Center uses several communication methods, both internal 

and external to the organization, to convey information about its capital 

projects; however, we found that the center sometimes provided untimely 

or inaccurate information on projects. Figure 6 illustrates the main 

mechanisms the Kennedy Center uses to communicate information about 

project schedules, costs, and status to Congress, its Board of Trustees, and 

the public. The legislation that authorized the Board of Trustees to carry 

out capital improvement projects required the board to develop and 

annually update a CBP. However, the Kennedy Center has not consistently 

updated the CBP on an annual basis. The center provides budget 

justifications and receives federal funding annually for capital 

improvement projects based on its CBP, and testifies before various 

congressional committees when requested. According to the Kennedy 

Center, the center’s board oversees the President of the Kennedy Center on 

the overall management and direction of the center. Within the board, the 

Operations Subcommittee is responsible for ensuring the appropriate use 

of federal funds for capital projects and efficient management of the 

operations and maintenance of the center. In doing that, it reviews plans for 

capital expenditures identified in the CBP and receives status reports on 

projects as they are planned and implemented.
Page 22 GAO-05-334 Kennedy Center

Figure 6: Kennedy Center Communication Methods 

a

Members of Congress serve on both the Kennedy Center Board of Trustees and the Operations 

Subcommittee.

Our analysis of officially documented communication using these 

mechanisms showed certain inconsistencies in the information the 

Kennedy Center presented. For example, in its fiscal year 2001 budget 

request, which according to a Kennedy Center official was prepared in 

1999, the center management reported that it planned to obligate $23.3 

million for capital repairs. Operations Subcommittee meetings held over 

the course of fiscal year 2001 reported revised obligation amounts ranging 

between $41.6 and $44.4 million. The amount actually obligated was $36.4 

million. While planned obligations can change over time, the reasons for 

these differences are not clear because the Kennedy Center did not include 

sufficient project-level budget information in its budget justifications to 

Congress. Rather, as we reported in September 2004, projects are grouped 

into broad budget categories, which do not include budget information for 

specific projects.24 As a result, it is difficult to understand or have 

stakeholders hold the Kennedy Center accountable for true project costs 

and schedules, compare the data presented through the various 

communications mechanisms, or determine if funds were used as intended.

24GAO-04-933.

Public

Source: GAO analysis of Kennedy Center data.

Board of Trustees

Congressa

Operations 

Subcommittee to the 

Board of Trustees

Budget 

Justifications

Comprehensive 

Building Plan

Reports by Kennedy 

Center officials

Testimony given by 

Kennedy Center 

officials

Kennedy Center President 

and Staff

Written plan that 

details Kennedy 

Center's capital 

projects program
Page 23 GAO-05-334 Kennedy Center

The following examples illustrate untimely and inaccurate communication 

on the projects we reviewed:

• Concert Hall. Kennedy Center officials testified to Congress in 1999, 

2000, and 2001 that the Concert Hall rehabilitation—completed in 

1997—was “on time and on budget.” However, this was inconsistent 

with a September 1997 Operations Subcommittee Meeting status report, 

which states that the project experienced extraordinary interior design 

changes, all of which were unbudgeted and contributed to a cost 

increase of almost $1.2 million. Also, our analysis of Kennedy Center 

project documents shows that the project cost $6.2 million more than its 

initial budget of $15.1 million.

• Fire suppression sprinklers. The Fiscal Year 2005 Budget Justification 

and the 2004 CBP continue to emphasize that the Kennedy Center 

intends to install sprinkler systems throughout the entire facility. 

However, we determined as part of our review, and verified through 

interviews with Kennedy Center officials, that the center does not intend 

to install sprinklers in the large parts of the Kennedy 

Center—specifically, the Grand Foyer, the Hall of States, and the Hall of 

Nations.

• Fire alarm system. References to improving the building fire alarm 

system are included in Kennedy Center Budget Justifications for fiscal 

years 1995 through 2005. Language in these budget justifications refers 

to project phases, but start and completion dates change from year to 

year without explanation. For example, the completion date for the 

project was reported as being scheduled in fiscal year 2002 in the 

Kennedy Center’s Fiscal Year 2003 Budget Justification, but the center’s 

2005 Budget Justification listed the project as being scheduled for 

completion in fiscal year 2004.25 Reasons for the project’s delay were not 

evident in the records that we reviewed.

25Fire alarm system installation was substantially completed in February 2004.
Page 24 GAO-05-334 Kennedy Center

Due to Poor Record 

Retention, It is Impossible 

to Determine How Much the 

Building Plan Has Changed 

since 1995

According to a Kennedy Center official, the center does not have a formal 

records retention policy and did not retain complete project budget 

information previous to the 2002 CBP. CBP updates also do not provide 

historical data, such as budget information for past projects or how 

changes to those budgets affected the overall plan. Because the Kennedy 

Center lacks records, we could not determine how any cost and schedule 

changes affected the overall implementation of the 1995 CBP or if federal 

funds were used as originally anticipated. However, our finding that several 

of the major projects from that period went over their budget estimates 

suggests that funds must have been reallocated. Information on 

reallocations, reconciliation of estimates to actual spending, and other 

project-level accounting of federal funds is not routinely reported to the 

board or Congress. In addition, project records for the Concert Hall 

renovation were incomplete and the as-built drawings for the Kennedy 

Center were missing.

The Kennedy Center 

Does Not Appear to 

Meet Some Fire Safety 

Code Requirements but 

Exceeds Disabled 

Access Requirements

On the basis of an independent expert’s assessment, we determined that 

the Kennedy Center does not appear to meet some fire safety code 

requirements. After requesting and obtaining funds from Congress to meet 

fire code deficiencies, such as a lack of fire suppression sprinklers, as well 

as other needs, the Kennedy Center decided against its plan to meet fire 

safety code requirements and chose not to install sprinklers and smoke 

evacuation systems in the Grand Foyer, the Hall of States, and the Hall of 

Nations. The Kennedy Center reversed its decision to install these systems 

without having its decisions independently reviewed or clearly informing 

its board or Congress that it was not spending the funds as planned. 

According to our independent expert, the Kennedy Center has met or 

exceeded disabled access requirements as part of its renovation.

The Kennedy Center Does 

Not Appear to Comply with 

Fire Safety Code

While the Kennedy Center has worked to address fire life safety 

deficiencies, and improvements are ongoing, on the basis of an assessment 

performed by an independent expert that we hired, we found that the 

Kennedy Center does not appear to meet some fire life safety 

requirements.26 Over the past decade, several internal Kennedy Center 

reports have also identified other fire life safety deficiencies—such as exit 

26UNICCO Government Services, Inc., Life Safety, Fire Alarm System and ADA 

Assessment.
Page 25 GAO-05-334 Kennedy Center

paths that might not protect occupants from fire—in the Grand Foyer, the 

Hall of States, and the Hall of Nations (see fig. 7).

Figure 7: Exit Routes from the Kennedy Center’s Major Theaters 

NFPA 101 allows two approaches for dealing with fire safety issues: an 

entity can (1) adhere directly to the fire safety code (also called a 

prescriptive approach), such as installing sprinklers or smoke evacuation 

Entrance Plaza

Potomac River

Eisenhower 

Theater

Millennium Stage Millennium Stage

Opera 

House

Concert 

Hall

Grand Foyer

Main entrance Main entrance Main entrance

Stage area

Stage area Stage area Family Theater

Grand Foyer

Source: Kennedy Center.

Hall of Nations

Hall of States

Theater with no exits leading outside

Exit passageways lacking sprinkler and smoke evacuation systems

Exit points leading outside building

Backstage exits not readily available to the public

Public exits 
Page 26 GAO-05-334 Kennedy Center

systems, or (2) provide an alternative that allows people to exit the building 

safely in case of fire (also called a performance-based approach). The 

Kennedy Center chose the second approach and commissioned an egress 

and fire-modeling study in 2003 to address the exit issue, specifically as it 

pertained to the discharge of occupants from the facility.27 Due to the 

results of this study, the Kennedy Center did not implement its earlier plan 

of installing a fire suppression system and smoke evacuation system in the 

Grand Foyer, the Hall of States, and the Hall of Nations.

The modeling study indicates that, in the event of a fire, the time needed for 

evacuation would be less than the time it would take for these exit 

pathways to become untenable, provided certain steps are taken. These 

steps include (1) installing sprinklers at the Millennium Stages and (2) 

developing and implementing a program to manage the storage of scenery, 

props, and other combustible materials. With input from our independent 

expert, we concluded that the above steps have not been taken and thereby 

invalidate the study’s assumptions. Since the Kennedy Center does not 

meet the conditions upon which the study was based, it appears to fall 

short of providing the level of protection intended by the code. 

Furthermore, center stakeholders, such as the Board of Trustees, have not 

accepted and adopted the terms of the study as described in NFPA 101. The 

Kennedy Center has not documented these determinations, but center 

officials said that the key decisions would be documented at the end of the 

fire life safety improvements at the center.

We also identified two additional deficiencies, based on NFPA 101, that are 

of immediate concern. First, there are no fire-rated doors in some areas, 

such as the fire pump room and the Fire Command Center. These locations 

contain key emergency systems that would need protection in the event of 

a fire. Second, several fire-safety-related problems were evident with the 

Millennium Stages. The stages are located at the ends of the Grand Foyer, a 

configuration that poses an exit deficiency because it does not provide two 

different, marked exit routes for occupants (see fig. 8). Additionally, NFPA 

101 indicates that the stages must have a smoke control system that is 

integrated with a sprinkler system and smoke detectors over the stage area. 

These systems have not been installed.

27Ehrenkrantz Eckstut & Kuhn Architects, PC, Egress and Fire Modeling Study of the 

Grand Foyer, Hall of States, and Hall of Nations (Washington, D.C.: 2003).
Page 27 GAO-05-334 Kennedy Center

Officials from the Kennedy Center said that they believe that all fire safety 

code requirements are being met, but they agreed to make some changes. 

For example, the Kennedy Center said that it would install fire protective 

doors on the fire pump room and the Fire Command Center, and that it 

would document its key decisions once its Life Safety Improvement 

Program was completed.
Page 28 GAO-05-334 Kennedy Center

Figure 8: Millennium Stage Located at the End of the Grand Foyer outside the Eisenhower Theater 

Source: GAO photo.

The curtains along the side of the Millennium Stage obscure emergency exits when closed.
Page 29 GAO-05-334 Kennedy Center

The Kennedy Center Chose 

Not to Install Sprinklers 

throughout the Center, but It 

Did Not Consult with 

Independent Experts or 

Clearly Inform Key 

Stakeholders

After requesting the necessary funds from Congress to meet fire code 

deficiencies, the Kennedy Center decided not to install sprinklers and 

smoke evacuation systems in the plaza-level public spaces as initially 

planned on the basis of the findings of the modeling study. In an October 

2002 meeting with its trustees, the Kennedy Center reported that design 

and first stages of construction of the sprinkler and smoke evacuation 

systems would be completed in 2003. The Kennedy Center no longer plans 

to install sprinklers in the Grand Foyer, the Hall of Nations, and the Hall of 

States or at the Millennium Stages. Recent Kennedy Center documents 

continue to state that the funds will be spent to install sprinkler systems 

throughout the center.

Furthermore, in deciding not to install sprinklers and smoke evacuation 

systems in the plaza-level public spaces, the Kennedy Center did not 

consult any independent experts, such as the GSA’s Fire Protection 

Engineer for the National Capital Region, or any other recognized expert, 

about whether this was an appropriate choice. In contrast, NFPA 101 

provides for peer review of modeling studies of this nature. In addition, our 

independent expert and GSA officials also stated that prevailing 

professional practice is to seek external peer review of a modeling study of 

this nature. GSA officials said that other federal entities occasionally 

consult with them regarding how to approach difficult code issues, but that 

the Kennedy Center has not done so about this exit deficiency.

Peer review may be particularly important for the Kennedy Center for two 

reasons. First, the center lacks sufficient on-staff expertise to adequately 

interpret and evaluate this type of modeling study. The Kennedy Center 

official who is principally responsible for making fire life safety code 

compliance decisions said that he does not have formal training or 

certification in engineering or fire protection planning, and that he is not 

qualified to evaluate modeling studies. Second, the Kennedy Center’s fire 

safety decisions are not subject to external review. In contrast, GSA 

requires a registered fire protection engineer to be heavily involved in fire 

safety code compliance decisions for its federal properties, and its OIG has 

the authority to review GSA’s approach to fire safety issues and policies. A 

GSA Fire Protection Engineer said that its OIG has provided useful 

guidance on these issues. Specifically, a 1999 GSA OIG report concluded 

that the National Capital Region Safety, Environment, and Fire Protection 

Branch, generally has taken adequate measures to meet the mission and 

goals of its fire safety program, but the report made a recommendation for
Page 30 GAO-05-334 Kennedy Center

improving building fire safety assessments.28 As previously mentioned, the 

Smithsonian OIG has authority to conduct reviews at the Kennedy Center 

relating to the expenditure of federal funds, but the Kennedy Center has 

not requested assistance from the Smithsonian OIG or any other federal 

accountability office in gaining assurance that the center is taking prudent 

steps relating to fire safety decisions. Private sector entities are 

accountable to the local fire marshal’s assessment of their compliance with 

fire safety code. In addition, the Kennedy Center Act authorizes the Board 

of Trustees to utilize or employ the services of any agency or 

instrumentality of the federal government or the District of Columbia on a 

reimbursable basis. The Kennedy Center has not sought assistance, as 

authorized by law, from relevant federal or District of Columbia officials on 

fire safety code compliance.

The Kennedy Center Has 

Improved Disabled Access 

to Fully Renovated Theaters 

and Public Spaces

Our independent expert concluded that the Kennedy Center’s compliance 

with regulations outlined in ADA has generally met or exceeded the 

requirements of the act in the theaters and public spaces that have been 

renovated. The Kennedy Center has added numerous ramps, improved 

signage, and renovated several bathrooms and elevators to meet ADA 

requirements (see fig. 9). In an attempt to make the center as accessible as 

possible to disabled patrons, visitors, and employees, the Kennedy Center 

has made all levels of the renovated Concert Hall and Opera House 

accessible to wheelchairs.

Additionally, the Kennedy Center has hired and trained specialized 

personnel to assist patrons and visitors with disabilities. An Accessibility 

Manager position is staffed and the Kennedy Center provides special 

training to numerous “access” ushers, who help patrons navigate their way 

to their seats. In addition, the Kennedy Center’s Office of Accessibility 

provides details of its special access services over the telephone, and the 

center’s Web site provides access information and maps showing 

entrances, restrooms, and other services for the disabled.

28General Services Administration, National Capital Region Office of the Inspector General, 

Audit of National Capitol Region Fire Safety Program, Report Number: 

A995174/P/W/R99530 (Washington, D.C.: Sept. 10, 1999).
Page 31 GAO-05-334 Kennedy Center

Figure 9: Selected Disabled Access Improvements to the Kennedy Center Made as 

Part of the Comprehensive Building Plan

The areas that the Kennedy Center has not yet renovated have fewer ADA 

improvements. For example, the Eisenhower and Terrace Theaters have 

limited wheelchair access. The Kennedy Center plans to make additional 

ADA improvements centerwide as part of its CBP, but the Terrace Theater 

upgrades have been deferred until after fiscal year 2008.

Source: GAO photos.

ADA improvements at the Kennedy Center include the following (clockwise from top): disabled

access ramp in the Grand Foyer leading to the Opera House, disabled access ramp in 

passageway, ADA-compliant signage, and wheelchair lift.
Page 32 GAO-05-334 Kennedy Center

Several Best Practices 

Could Assist the 

Kennedy Center in 

Addressing Project 

Management Problems 

Given the ongoing problems we have identified at the Kennedy Center, 

successfully completing current and future projects within scope, cost, and 

schedule will be challenging. In February 2004, we identified components 

of a best practices framework to offer guidance for managing large-scale 

infrastructure projects.29 This framework includes comprehensive 

planning, risk assessment, comprehensive financial management, 

accountability and oversight, and stakeholder involvement. These best 

practices are shown in figure 10 and described after the figure. In addition 

to our framework, we reviewed past GAO recommendations to the 

Kennedy Center and project management best practices reported by the 

Construction Industry Institute for additional project management 

guidance.30 In recent years, the Kennedy Center has begun to take steps to 

implement some of these best practices and improve its project 

management.

29GAO-04-94. This best practices framework is applicable to the management of various 

types of projects and was largely based on GAO’s Executive Guide: Leading Practices for 

Capital Decision-Making, GAO/AIMD-99-32 (Washington, D.C.: December 1998).

30The Construction Industry Institute is a research institute for engineering and construction 

that is comprised of more than 90 member organizations, representing owners, contractors, 

and suppliers in both the public and private sectors. Construction Industry Institute, 

Implementation of CII Best Practices: Summaries and a Self-Assessment Guide (Austin: 

University of Texas, 2002).
Page 33 GAO-05-334 Kennedy Center

Figure 10: Best Practices for Managing Capital Projects

Conduct Comprehensive Project Planning—Comprehensive planning 

serves as a foundation for effectively managing capital projects. Such 

planning helps manage and control project implementation, cost, schedule, 

scope of work, and achievement of goals. As part of comprehensive project 

planning, a long-range capital plan documents the specific projects an 

organization intends to pursue, documents the resources it expects to use 

over the long term to implement those projects, and establishes priorities 

for implementation. The time spent on planning can help organizations and 

agencies avoid costs and delays. A project management plan is an 

important tool for comprehensive planning. It typically uses performance 

baselines for goals, costs, schedules, major milestones, and risks to manage 

and control a project’s implementation. Developing a project management 

plan focuses organizations on implementation issues early in the life of a 

Comprehensive

planning

Risk

assessment

Effective Project Management

Comprehensive

financial

management

Accountability

and oversight

Stakeholder

involvement

Sources: GAO; Nova Development, PhotoDisc, and Corel (photos).
Page 34 GAO-05-334 Kennedy Center

project. These plans are intended to be flexible and dynamic; during 

implementation, the plans are updated and otherwise revised to reflect 

changes in the project, such as changes in its cost, schedule, or scope of 

work. After a project has been implemented, its success can be measured 

by comparing its actual cost, schedule, and other outcomes with those that 

were planned. When project management plans are not developed or used, 

projects can encounter problems, such as cost overruns and schedule 

delays. In addition, the Construction Industry Institute has reported that 

preproject planning is a best practice that is essential to develop sufficient 

strategic information, decide how to commit resources, and maximize 

potential project success. 

The Kennedy Center’s CBP has served as the central plan to manage its 

capital projects and has included project descriptions and background on 

the improvements. Unlike the planning best practices, the Kennedy Center 

has not used its CBP as a tool to measure project success and progress by 

comparing actual costs and schedules with those planned. In commenting 

on our September 2004 report, Kennedy Center officials wrote that while 

the CBP serves as the primary management tool for capital project 

planning, it has not been the primary vehicle for communicating the 

center’s progress in implementing its renovation work. According to 

Kennedy Center officials, other internal planning documents serve to 

communicate progress, although we have previously reported that these 

other planning documents are limited in not including prioritization of 

projects or planned future projects. 

The Kennedy Center has taken steps to improve the information included 

in its CBP. In September 2004, we recommended that the Kennedy Center 

annually update its CBP as required by law, and in November 2004 the 

center published an update. According to Kennedy Center officials, the 

center now plans to annually update its CBP. Furthermore, as we 

recommended, the 2004 CBP includes some prioritization of ongoing 

projects and updated project budget information. 

• Assess Risks and Identify Mitigation Measures—Risk assessments 

allow project managers to identify and manage risks related to a 

project’s costs, schedules, and other aspects and to develop mitigation 

measures that can increase the likelihood of projects meeting 

established goals. Early recognition of problems allows for prompt 

intervention, which increases the likelihood that corrective action will 

get the project back on track before there is significant deviation from
Page 35 GAO-05-334 Kennedy Center

its goals.31 Assessing and mitigating risks reduces the probability of 

later encountering problems that can cause cost increases and 

schedule delays. Potential risks to projects include cost increases; 

funding reductions; schedule delays; and environmental, political, and 

legal issues. The Construction Industry Institute has noted that 

collecting information on project risks is a part of the preproject 

planning process. 

As previously discussed, the lack of as-built drawings has posed risks to 

Kennedy Center project costs and schedules, leading to the discovery 

of unexpected site conditions in the Opera House renovation that 

increased project costs. According to one Kennedy Center official, 

future projects will also face the risk of unexpected site conditions due 

to the absence of as-built drawings and a system to track all changes to 

the facility. 

In an attempt to reduce risk to the Kennedy Center, it has entered into a 

contract for theater renovation work that shifts much of the project’s 

risk to the contractor. Under this “construction manager at-risk” 

arrangement, a construction management contractor will be hired to 

participate in the design process and will then be responsible for hiring 

contractors to do the construction. The construction management 

contractor will be at risk from the standpoint of being responsible to 

the Kennedy Center for managing the construction according to the 

established cost, schedule, and scope. However, this method may not 

reduce costs because contractors will increase their price to cover the 

risk shifted to them.

• Comprehensively Manage Project Finances—Accurately estimating 

and controlling costs through comprehensive financial management 

helps to ensure efficient uses of funds. Estimating and controlling costs 

is important because the costs of capital projects can increase 

significantly. Best practices suggest that, to improve the accuracy of 

cost estimates, managing organizations should review and refine cost 

estimates as projects move closer to implementation. One tool for 

estimating and controlling costs is a project financial plan, which shows 

a project’s estimated funding needs, funding sources, and funding 

responsibilities. These plans enable project managers to compare actual 

costs with planned expenditures, identify deviations, and take actions to 

31GAO/AIMD-99-32.
Page 36 GAO-05-334 Kennedy Center

address potential problems. A financial plan can also help control a 

project’s costs after construction has begun by estimating the amount of 

funding needed to complete the project and the availability of that 

funding. This information helps an organization assess the impact of 

changes that can cause a project’s schedule to slip and costs to rise. 

Because a financial plan can demonstrate the need for funding at 

particular times and the impact of funding delays on the project’s costs 

and schedule, it can help an organization stay within cost estimates and 

keep their project on schedule as well as determine full funding needs. 

As previously discussed, we found instances where the Kennedy Center 

did not have sufficient information to support the accuracy and validity 

of invoice payments, which may hamper the center’s ability to detect 

erroneous or improper payments. Although challenges remain, the 

Kennedy Center has begun to take steps to improve its financial 

management of projects. As previously discussed, the Kennedy Center 

has developed a draft policies and procedures manual to guide the 

planning and execution of the construction process, but the manual is 

not comprehensive. It does not establish the minimum documentation 

requirements to support costs incurred. Also, as we recommended in 

September 2004, the 2004 update to the CBP includes updated budget 

information for current and future projects.

• Establish Accountability and Oversight for Prudent Use of Federal 

Resources—Best practices suggest that organizations be held 

accountable for adhering to planned budgets and schedules, achieving 

goals, and other project outcomes in order to ensure the prudent use of 

federal resources. By monitoring a project’s performance against cost, 

schedule, and technical performance goals, as well as establishing 

incentives to meet those goals, organizations can increase the likelihood 

of the project’s successful completion. Organizations can also hold 

project managers and other personnel accountable for the project’s 

results. Capital projects can also face external factors during 

implementation, such as reductions in funding from federal, state, or 

local jurisdictions or changes in economic conditions that might affect 

accountability decisions. In such circumstances, external factors can be 

recognized and isolated, so project managers are only held accountable 

for actions and events within their control. In addition, the Construction 

Industry Institute has reported on accountability best practices that 

include having a defined, effective, and accountable project leadership; 

developing lessons learned; and facilitating a shared sense of 

accountability among project team members. Related to accountability, 
Page 37 GAO-05-334 Kennedy Center

independent oversight of a project is a best practice designed to 

promote the prudent use of federal resources. Independent assessments 

help protect the federal investment in a project by reviewing the 

implementation of its plans, monitoring its construction, and reporting 

problems. 

While past staff vacancies and turnover have limited holding staff 

responsible for planning and managing projects accountable for project 

results, the Kennedy Center has begun to make improvements. In 

September 2003, we recommended the Kennedy Center work to 

address human capital deficiencies, and since that time the center has 

hired new staff, including a director of capital projects. In addition, the 

Kennedy Center’s draft policies and procedures delineates various 

project management office staff members’ responsibilities and duties, 

including those related to project development, communication, and 

adhering to planned costs and schedules. This includes describing the 

responsibilities of the Kennedy Center’s director of capital projects and 

project managers. 

Regarding oversight, the Kennedy Center has had limited external 

reviews for how it manages capital projects and maintains assurance 

for federal funds. Besides our reports on the Kennedy Center, the 

Department of the Interior’s OIG completed an audit related to parking 

garage improvements.32 As previously discussed, the Kennedy Center 

has been authorized to request the Smithsonian OIG to conduct audits 

related to the expenditure of federal funds on a reimbursable basis, 

which could include project management activities, but to date the 

center has made no such request. The Smithsonian Inspector General 

said that his office would respond to an audit request by the Kennedy 

Center and has conducted similar audit work for other external 

organizations. Although the IG Act does not require the Kennedy Center 

to establish an OIG, the center is required to report annually to 

Congress and OMB on its audit and investigative activities.33 We found 

32Department of the Interior, Office of the Inspector General, Costs Claimed for Equitable 

Adjustment By Rampart Waterblast, Inc., Under National Park Service Contract No. 

1443CX-3000-93-904, Report Number 98-E-217 (Washington, D.C.: January 1998). This 

audit resulted from a contract initiated by the National Park Service before responsibility 

for the Kennedy Center was transferred to the center. 

33See Inspector General Act of 1978, as amended, 5 U.S.C. § app. 3, section 8G, and 2004 List 

of Federal Entities, 70 Fed. Reg. 4157 (Jan. 28, 2005). 
Page 38 GAO-05-334 Kennedy Center

that the Kennedy Center has not complied with this requirement. 

Kennedy Center officials said that they were unaware of this 

requirement but plan to start complying with it this year.

The Kennedy Center has hired a public accounting firm to conduct 

yearly audits of the center’s finances, and these reviews include all 

areas of Kennedy Center finances, the majority of which are not federal 

appropriations. However, the financial statement audit does not include 

a review and assessment of internal controls or other oversight 

typically performed by an Inspector General. The Kennedy Center 

Board of Trustees relies on information from its audit committee, 

which is part of its board. Audit committees can play a very important 

role in enhancing audit activities for their boards and organizations. 

Such a committee is a required element of the governance structure of 

publicly owned companies and a best practice for other types of 

organizations. In the federal government, audit committees and 

advisory committees are intended to protect the public interest by 

promoting and facilitating effective accountability and financial 

management.34 This is accomplished by providing management with 

independent, objective, and experienced advice and counsel, including 

oversight of audit and internal control issues. In the case of the 

Kennedy Center, the audit committee could facilitate the process of 

formalizing financial management policies and procedures, including 

related internal controls, and preparing for the ongoing oversight of the 

center.

In addition, the Kennedy Center Act authorizes the Board of Trustees to 

utilize or employ the services of any agency or instrumentality of the 

federal government or the District of Columbia on a reimbursable basis. 

To date, the Kennedy Center has not contracted with GSA or the D.C. 

Fire Marshal to review the center’s fire policies.

• Incorporate the Interests of Diverse Stakeholders—Incorporating the 

interests of diverse stakeholders into a project can increase its chances 

of success. This is especially important during the planning stages, when 

considering stakeholders’ interests can help project managers identify 

34The audit committee of a publicly owned company plays a particularly important role in 

ensuring fair presentation and appropriate accountability in connection with financial 

reporting and related external audits and general oversight of an organization’s internal 

control. 
Page 39 GAO-05-334 Kennedy Center

needs and problems and develop action plans to address them. Best 

practices suggest frequent communication and involvement through 

means such as meetings and correspondence. These approaches allow 

stakeholders like local governments and others to convey their 

concerns and problems and work with project managers to address 

them. Related to stakeholder best practices, the Construction Industry 

Institute has suggested aligning staff within an organization to share the 

same set of objectives throughout a project’s life; partnering with other 

organizations; and team building to develop shared goals, 

interdependence, trust, and commitment and open communication, 

among other factors. 

Currently, the Kennedy Center has not established comprehensive 

policies and procedures to include all center stakeholders in project 

management. According to Kennedy Center officials, the role of 

stakeholders in completing projects has been uncoordinated and 

responsibilities are unclear. While challenges remain, the Kennedy 

Center’s drafting of a policy and procedures manual represents a 

positive step toward involving center stakeholders in project 

management. For example, the draft manual outlines and describes 

several center offices’ involvement in various phases of project 

planning and construction. 

Conclusions The Kennedy Center has made major capital improvements to the center 

since taking over management control in 1995, but inadequate management 

and oversight have at times undermined assurance over processes and 

programs for fire safety, construction, and financial management. Of 

immediate concern are questions about the Kennedy Center’s compliance 

with some fire safety codes. Taking steps to better address fire life safety 

issues can only heighten confidence of the Kennedy Center and Congress 

that visitors are enjoying world-class performances in a safe facility. 

Questions also remain about the management of construction costs and 

accounting procedures associated with recording and paying for the 

renovations. Overtime charges resulting, in part, from aggressive 

schedules, a lack of comprehensive information about the construction 

sites, and a practice of negotiating the value of contract changes after the 

completion of contract work, helped drive the cost of each project we 

reviewed over budget.

Although the Kennedy Center has taken steps to improve project 

management, key mechanisms to ensure accountability and sound 
Page 40 GAO-05-334 Kennedy Center

financial management practices in spending federal funds remain absent or 

only partially implemented. Specifically, without more detailed, 

transparent, and timely information on how funds have been budgeted and 

spent, the Kennedy Center Board of Trustees and Congress will lack timely 

and accurate information on projects and thus will lack reasonable 

assurance that the center is deploying its resources as intended. In 

addition, the Kennedy Center has never made use of any other federal 

accountability office—the Smithsonian OIG or another qualified entity—to 

review the management of programs employing federal funds. Establishing 

a continuing relationship with an OIG and a federal fire safety expert could 

help the center to minimize risks that future capital projects will encounter 

planning problems, budget overruns, or fire safety code deficiencies.

Recommendations In testimony on April 6, 2005, and in this report, GAO recommends the 

following:

1. The Chairman of the Kennedy Center Board of Trustees should 

exercise greater oversight of the center’s management through the 

board. The Kennedy Center should work with the Smithsonian OIG, or 

another independent federal government oversight organization, to 

provide strategic and annual audit plans for ongoing oversight of the 

center’s use of federal funds based on an analysis of risk, safety, and 

vulnerability to internal control weaknesses. These plans should also 

specify the audits to be provided on a reimbursable basis by the 

Smithsonian OIG or another independent federal government oversight 

organization.

2. To ensure the safety of the Kennedy Center, the Chairman of the Board 

of Trustees should direct the President of the Kennedy Center to do the 

following:

 a. The president should take steps to better comply with the fire safety

 code. At a minimum, these steps should include fully implementing

 the conditions of the modeling study, ensuring that doors in key

 areas provide adequate separation from fire, and addressing the 

 code deficiencies at the Millennium Stages.

 b. The president should promptly seek peer review by a knowledgeable 

 third-party of the egress and fire-modeling study used as a 

 substitute for prescriptive code solutions and implement any

 recommendations. Additionally, the president should consult with
Page 41 GAO-05-334 Kennedy Center

 recognized experts, such as GSA, to determine whether the Kennedy

 Center is fully adhering to prevailing professional practices regarding

 fire life issues.

3. To better align the Kennedy Center’s management of capital projects 

with best practices, the Chairman of the Board of Trustees should 

direct the President of the Kennedy Center to implement the following 

five recommendations:

 a. provide more timely and accurate information about capital projects

 by detailing their budget, scope, cost, and schedule and providing to

 stakeholders an annual reconciliation of the status of all planned,

 delayed, eliminated, and actual projects;

 b. take steps to control cost growth and schedule changes in future

 capital projects by setting more flexible schedules and improving its

 management of contract modifications;

 c. strengthen the Kennedy Center’s financial management controls by

 designing and implementing comprehensive contract, financial, and

 project management policies and procedures in accordance with

 prescribed federal guidance—these policies and procedures should

 ensure that

• the Project Management Office prepares inspection reports, or 

similar documents, when services are performed that include a 

description of the services performed and the date(s) or period of 

performance and use this information to verify the validity of 

contractors’ invoices;

• complete, up-to-date costs for construction and other services are 

recognized and used to prepare quarterly financial reports and 

manage project costs;

• reasonable efforts are made to match invoices with inspection 

reports and previously paid invoices to prevent or detect duplicate 

payments;

• contractors’ invoices meet minimum requirements and contain 

sufficient detailed information to clearly support the accuracy and 

validity of invoices; and
Page 42 GAO-05-334 Kennedy Center

• for Economy Act transactions, payments to other federal agencies 

are for actual costs consistent with the Economy Act agreement;

 d. establish and enforce a documents retention policy that allows for

 accountability of the Kennedy Center’s federal funds; and 

 e. have relevant Kennedy Center offices develop as-built drawings and

 better track future changes to the center.

Agency Comments and 

Our Evaluation

We provided a draft of this report to the Kennedy Center for its review and 

comment. The Kennedy Center stated that it had made a number of 

significant management improvements in recent years and will continue to 

do so. The Kennedy Center further noted that the scope of our current 

work may not have reflected these changes. In conducting our work, we 

reviewed the details of recent management changes that the Kennedy 

Center has made, but we were unable to gauge the impact of some of these 

changes since they are relatively recent in nature or still in development. 

The Kennedy Center agreed with several of our recommendations, but it 

disagreed with others. The Kennedy Center agrees that more oversight 

would be useful, but it is unsure what the best mechanism would be for 

providing such oversight. The Kennedy Center also believes that it is in 

compliance with fire code, but agreed to seek a third-party review of its 

approach to addressing certain fire code deficiencies. We continue to 

believe that the Kennedy Center needs to better comply with fire code by 

fully implementing the conditions of its fire-modeling study and addressing 

its fire door and Millennium Stage issues. The Kennedy Center agreed that 

it should improve its information about capital projects, its document 

retention practices, and its knowledge of site conditions at the center. 

However, it disagreed that it needed to strengthen its financial controls in 

some of the ways that we have recommended. For example, it believes that 

its information is up to date and plans to fully comply with the Economy 

Act. We carefully reviewed the Kennedy Center’s concerns, and we 

continue to believe the Kennedy Center needs to strengthen its financial 

management controls in order to improve the quality of its financial 

records and better safeguard federal funds. The Kennedy Center also 

provided technical comments that we incorporated in this report as 

appropriate. The Kennedy Center’s comment letter and our responses 

appear in appendix V.
Page 43 GAO-05-334 Kennedy Center

We will send copies to the appropriate congressional committees, the 

Chairman of the Kennedy Center Board of Trustees, and the President of 

the Kennedy Center. We will also make copies available to others on 

request. In addition, the report will be available at no charge on the GAO 

Web site at http://www.gao.gov.

If you or your staff has any questions, please contact me at (202) 512-2834 

or goldsteinm@gao.gov. See appendix VI for a list of the major contributors 

to this report. 

Sincerely yours, 

Mark L. Goldstein 

Director, Physical Infrastructure Issues
Page 44 GAO-05-334 Kennedy Center

Appendix I

Scope and Methodology ApApenednxidexiIs

To track the John F. Kennedy Center for the Performing Arts’ (Kennedy 

Center) progress in completing key projects, we analyzed the center’s 

audited financial statements and the invoices, contracting, finance, and 

additional project files for five major projects—the renovation of the 

Concert Hall, Opera House, and Eisenhower Theater; improvements to 

plaza-level public spaces; and the installation of a new fire alarm system—

to the extent that records existed.1 We chose these projects because they 

were among the most costly or important projects related to fire safety and 

disabled access improvements included in the Kennedy Center’s 

Comprehensive Building Plan (CBP).2

 Complete files were not available for 

the Concert Hall or Eisenhower Theater due to these projects’ construction 

taking place several years ago or being designated for future construction. 

In cases where we had incomplete data, we conducted follow-up meetings 

and requested additional information from Kennedy Center officials. On 

the basis of these exchanges, we obtained financial data that allowed us to 

establish budget estimates for each of the projects, and against which we 

could compare actual costs. 

To further verify status of the five major projects, we toured the Kennedy 

Center to visually examine the theaters, public spaces, and other fire safety 

and disabled access improvements. In the case of the Opera House and 

Concert Hall construction contracts, we obtained the original contract 

award documents and copied the records for each of the contract 

modifications (43 modifications were made during the Opera House 

renovation, and 58 modifications were made during the Concert Hall 

renovation). With this information, we were able to determine specific 

reasons for cost growth relative to these two projects. Thus, we determined 

that project status and cost data were sufficiently reliable for the purpose 

of our review.

We also reviewed federal authorization and appropriation laws; the Public 

Buildings Act, as amended, and implementing regulations; the John F. 

Kennedy Center Act, as amended; the Americans with Disabilities Act, as 

amended; the Economy Act; Kennedy Center budget justifications; the CBP 

and its various updates; our past work; and Kennedy Center depreciation 

1

The Concert Hall renovation was completed more than 7 years ago, and project records 

were not complete. Furthermore, the Eisenhower Theater has limited documentation since 

it is not planned for construction until 2007. 

2

All Kennedy Center capital projects were to incorporate life safety and disabled access 

improvements. 
Appendix I

Scope and Methodology

Page 45 GAO-05-334 Kennedy Center

schedules. Sources of these data included the Kennedy Center’s CBP 

(including updates), the Kennedy Center Finance Office, Kennedy Center’s 

audited financial statements, Kennedy Center Budget Justifications to 

Congress, Kennedy Center Operations Committee Meeting Agendas, and 

our past reports on the center. In developing our findings, we corroborated 

the capital program’s financial data through (1) a comparative analyses of 

the data resources, (2) resolving differences and conflicts in the data sets, 

and (3) discussing data interpretations with GAO and Kennedy Center 

officials. We also met with Kennedy Center officials from the Project 

Management, Contract, and Finance Offices to verify our findings related to 

the center’s financial management and contracts system. Thus, we 

determined that the Kennedy Center’s financial data were sufficiently 

reliable for the purpose of our review.

To evaluate the timeliness and accuracy of the Kennedy Center’s 

communications, we conducted a comprehensive review of records, 

including minutes from the Kennedy Center Board of Trustees’ meetings, 

minutes and agendas of the board’s Operations Subcommittee meetings, all 

editions of the CBP published since 1995, annual budget justifications to 

Congress since 1995, and center officials’ testimony before Congress since 

1995. In addition, we interviewed the Smithsonian Institution’s Office of the 

Inspector General (OIG) officials to verify what OIG oversight mechanisms 

currently exist for the Kennedy Center. 

To assess the Kennedy Center’s compliance with fire life safety and 

disabled access requirements, our licensed engineering staff conducted site 

visits, and we contracted an independent expert assessment of the center’s 

compliance with applicable fire safety code and disabled access 

requirements. We followed GAO internal controls for reviewing the expert’s 

qualifications to conduct the work, reviewing and finalizing the resulting 

contract, and verifying the expert’s independence. We accompanied the 

experts on tours of the Kennedy Center to examine fire safety and disabled 

access issues. Our independent experts and we reviewed the Kennedy 

Center’s Egress and Fire Modeling Study of the Grand Foyer, Hall of 

States, and Hall of Nations, but we did not conduct an analysis of the 

quality or accuracy of the study and its assumptions. For purposes of our 

analysis of the Kennedy Center’s fire life safety code compliance, we took 

the center’s ongoing and planned fire life safety upgrades into 

consideration when identifying deficiencies, and we did not identify 

deficiencies for cases where upgrades or improvements were planned. In 

addition to our expert’s work, we reviewed fire safety codes and 
Appendix I

Scope and Methodology

Page 46 GAO-05-334 Kennedy Center

interviewed officials from the General Services Administration (GSA) and 

the D.C. Fire Marshal on fire safety issues. 

To identify best practices for managing capital projects, we reviewed our 

previous work on best practices for project management.3

 We 

supplemented our best practices work with past GAO recommendations to 

the Kennedy Center—as well as best practices from the Construction 

Industry Institute. We determined that these best practices sources were 

pertinent based on our previous work on best practices and our past 

citations of the Construction Industry Institute related to effective project 

management.

We conducted our review from August 2004 to March 2005 in accordance 

with generally accepted government auditing standards.

3

GAO, Intercity Passenger Rail: Amtrak’s Management of Northeast Corridor 

Improvements Demonstrates Need for Applying Best Practices, GAO-04-94 (Washington, 

D.C.: Feb. 27, 2004).
Page 47 GAO-05-334 Kennedy Center

Appendix II

Appropriations to the Kennedy Center for 

Capital Repairs and Alterations ApendxiI

Table 1 lists the appropriations to the Kennedy Center for capital repairs 

and alterations under the CBPs.

Table 1: Appropriations to the Kennedy Center for Capital Repairs and Alterations 

under the CBPs

Source: GAO analysis of federal appropriations for capital projects.

a

In these years, the Kennedy Center’s appropriations for capital projects were reduced by rescissions 

to the budget authority for most government agencies and entities receiving appropriated funds.

b

In fiscal year 1997, the Kennedy Center received an additional $3.4 million for capital projects to 

address antiterrorism requirements.

Fiscal Year Amount appropriated

1995 $8,982,810a

1996 8,983,000

1997 12,400,000b

1998 9,000,000

1999 20,000,000

2000 19,924,000a

2001 19,956,000a

2002 19,000,000

2003 17,485,600a

2004 15,802,848a

2005 16,107,082a
Page 48 GAO-05-334 Kennedy Center

Appendix III

Status of Previous GAO Recommendations to 

the Kennedy Center ApendxiI

Recommendations from GAO-04-933 (September 2004)

• GAO recommendation: To help congressional decision makers oversee 

the capital projects at the Kennedy Center and make funding decisions, 

the President of the Kennedy Center, in conjunction with the Chairman 

of the Board of Trustees, should annually update the CBP, as required, 

and include (1) the prioritization of projects, (2) project status, and (3) 

updated budget information for planned and ongoing projects.

Response: The Kennedy Center agreed with the recommendation. The 

center indicated that annually updating and implementing the CBP 

could help guard against a recurrence of severe deterioration of the 

facility and should ultimately reduce public costs of operations and 

maintenance. While the CBP serves as the primary management tool for 

capital project planning, the Kennedy Center does not view it as the 

primary vehicle for understanding progress in implementing its 

renovation work. 

The Kennedy Center published a CBP update in November 2004. 

According to Kennedy Center officials, the center now plans to 

annually update the plan as required. Furthermore, the 2004 update of 

the plan includes prioritization of ongoing projects, project status, and 

updated project budget information. While it also lists projects 

completed since 2002, the 2004 CBP does not include budgets or 

expenditures for these or other past projects completed since 1995.

Recommendations from GAO-03-823 (September 2003)

• GAO recommendation: To help improve the Kennedy Center's ability to 

manage and oversee its construction program, the President of the 

Kennedy Center, in conjunction with the Chairman of the Board of 

Trustees, should develop comprehensive project management policies 

and procedures to guide the planning and execution of the construction 

process.

Response: The Kennedy Center generally agreed with the 

recommendation and indicated that it intended to update and 

strengthen its construction management policies. The Project 

Management Office has drafted a policy and procedure manual, which 

we received in December 2004. The manual outlines roles and 

responsibilities for project management staff and defines standard 

operating procedures for managing projects, such as estimating design 
Appendix III

Status of Previous GAO Recommendations to 

the Kennedy Center

Page 49 GAO-05-334 Kennedy Center

and construction costs. However, the policies and procedures remain in 

draft form, other groups involved in capital project management, such 

as the Contracts Office, have not published policies and procedures, 

and the Kennedy Center does not have key overarching policies, such 

as a document retention directive. 

• GAO recommendation: To help improve the Kennedy Center's ability to 

manage and oversee its construction program, the President of the 

Kennedy Center, in conjunction with the Chairman of the Board of 

Trustees, should ensure development and use of timely data to oversee 

construction projects and measure results.

Response: The Kennedy Center agreed to start pursuing monthly 

project management reports and detailed information at weekly 

progress meetings.

• GAO recommendation: To help improve the Kennedy Center's ability to 

manage and oversee its construction program, the President of the 

Kennedy Center, in conjunction with the Chairman of the Board of 

Trustees, should ensure that the needs for human capital expertise are 

met.

Response: The Kennedy Center generally agreed with the 

recommendation. Since the report was issued, the center has hired a 

Contracts Chief and a Director of Capital Projects to lead the Project 

Management Office.
Page 50 GAO-05-334 Kennedy Center

Appendix IV

February GAO Management Letter Sent to the 

Kennedy Center ApendxiIV

United States Government Accountability Office

Washington, DC 20548 

February 4, 2005 

Mr. Michael M. Kaiser 

President

John F. Kennedy Center 

 for the Performing Arts 

Dear Mr. Kaiser: 

As you know, we are currently reviewing the John F. Kennedy Center for the 

Performing Arts’ (Kennedy Center) Comprehensive Building Plans for the House 

Committee on Appropriations, Subcommittee on Interior and Related Agencies. We 

are writing this letter to confirm and elaborate on our January 28, 2005, telephone 

conversation, in which we raised several issues related to fire safety at the Kennedy 

Center. This letter represents an interim discussion of our concerns, which will be 

finalized and provided to you once we have completed our review. 

We have determined, based on our expert consultant’s assessment, that the Kennedy 

Center may not be meeting certain fire safety requirements. The law the Kennedy 

Center follows with regard to facility construction or alteration requires that the 

Kennedy Center be in compliance with nationally recognized model building codes 

and other applicable nationally recognized fire and life safety codes to the maximum 

extent feasible. (40 U.S.C. § 3312) The Kennedy Center policy on building codes 

states that, where feasible, it will comply with International Building Code, as well as 

selected provisions of the National Fire Protection Association Life Safety Code 

(NFPA 101). While conducting our review of the Kennedy Center’s Comprehensive 

Building Plans, we found that the Kennedy Center appears not to be complying with 

certain aspects of NFPA 101, including those portions of the code relating to exiting 

the building during a fire. 

Over the last decade, several Kennedy Center reports identified fire safety 

deficiencies in the Grand Foyer, Hall of States, and Hall of Nations, including that exit 

paths through these spaces may not protect occupants from fire. To address this exit 

deficiency, NFPA 101 allows two approaches – to adhere directly to the fire safety 

code (such as the installation of a sprinkler or smoke evacuation system) or to 

provide an alternative that offers equal or superior protection. The Kennedy Center 
Appendix IV

February GAO Management Letter Sent to 

the Kennedy Center

Page 51 GAO-05-334 Kennedy Center

Page 2

has chosen the second approach and used its 2003 egress and fire modeling study1

 as 

the basis for addressing the exit deficiency, specifically as it relates to the discharge 

of occupants from the facility. The study indicates that, in the event of a fire, the time 

needed for evacuation is less than the time it would take for these spaces to become 

untenable if certain steps, described below, are taken. Based on the results of this 

study, the Kennedy Center has reversed its earlier plan of installing a fire suppression 

system and smoke evacuation system in the Grand Foyer, Hall of States, and Hall of 

Nations. 

To ensure that the actual conditions in the Kennedy Center meet the assumptions 

used in the model, the Kennedy Center’s study recommends specific actions, some of 

which have not been taken. Specifically, we found no evidence of a policy or 

program to manage the storage of combustible materials, nor did we find sprinklers 

at the Millennium Stages as recommended in the study. As a result, the Kennedy 

Center does not meet the conditions upon which the study was based and, therefore, 

falls short of providing the level of protection intended by the code. 

Because the Kennedy Center is the authority having jurisdiction for life safety 

decisions at the facility, pursuant to NFPA 101, Chapter 5, management is responsible 

for determining and documenting that (1) the modeling study establishes equal or 

superior protection to the use of a fire suppression system and smoke evacuation 

system to address the exit discharge deficiency; and (2) the Kennedy Center 

stakeholders, such as the Board of Trustees, accept and adopt the terms of the study. 

The Kennedy Center has not documented that either of these determinations have 

been made. 

Moreover, our review found that the Kennedy Center has not specifically addressed 

the need for additional outside exits2

 or the installation of fire-protected exit 

passageways, as required by NFPA 101, Chapter 7. We also identified two additional 

deficiencies, based on NFPA 101, that are of immediate concern. First, there are no 

fire rated doors in critical areas, such as the exits from the upper assembly areas of 

the Concert Hall, the fire pump room, and the Fire Command Center. Second, several 

fire-safety related problems were evident with the Millennium Stages. The stages are 

located in dead ends of the Grand Foyer, a configuration that poses an egress 

deficiency.3

 Additionally, NFPA 101, Chapter 13, indicates that the stages must have a 

smoke control system that is integrated with a sprinkler system and smoke detectors 

over the stage area. These systems have not been installed.

Although we recognize that the Kennedy Center has discretion in complying with fire 

safety codes in that it is required to comply to the maximum extent feasible, it is our 

opinion that the seriousness of our findings and the life safety issues they raise 

require your immediate attention. Upon your receipt of this letter, we would be 

willing to answer any questions or provide further information to you and your staff. 

 

1

Ehrenkrantz Eckstut & Kuhn Architects, PC, Egress and Fire Modeling Study of the Grand Foyer, 

Hall of States, and Hall of Nations (Washington, D.C., 2003). 2

NFPA 101 requires that at least half of all exits discharge directly to outside areas. The Kennedy 

Center has less than half of its exits discharging directly to the outside. 3

NFPA 101 defines means of egress as a continuous and unobstructed way of travel from any point in a 

building to a public way consisting of three separate and distinct parts: (1) the exit access, (2) the exit, 

and (3) the exit discharge. 
Appendix IV

February GAO Management Letter Sent to 

the Kennedy Center

Page 52 GAO-05-334 Kennedy Center

Page 3

In the meantime, we are continuing our review of the Comprehensive Building Plans 

and related fire safety issues. We will include the issues raised in this letter, and any 

actions that you take to resolve them, along with other findings we present in our 

final report. 

If you have any questions, please contact me at (202) 512-2834 or at 

goldsteinm@gao.gov. 

Sincerely yours, 

Mark L. Goldstein 

Director, Physical Infrastructure Issues 

cc: Debbie Weatherly, Staff Assistant, House Committee on Appropriations, 

Subcommittee on Interior and Related Agencies 
Page 53 GAO-05-334 Kennedy Center

Appendix V

Comments from the John F. Kennedy Center 

for the Performing Arts ApendxiV

Note: GAO comments 

supplementing those in 

the report text appear 

at the end of this 

appendix.
Appendix V

Comments from the John F. Kennedy Center 

for the Performing Arts

Page 54 GAO-05-334 Kennedy Center

See comment 1.
Appendix V

Comments from the John F. Kennedy Center 

for the Performing Arts

Page 55 GAO-05-334 Kennedy Center

See comment 2.

See comment 3.
Appendix V

Comments from the John F. Kennedy Center 

for the Performing Arts

Page 56 GAO-05-334 Kennedy Center

See comment 4.
Appendix V

Comments from the John F. Kennedy Center 

for the Performing Arts

Page 57 GAO-05-334 Kennedy Center

See comment 5.

See comment 6.

See comment 7.

See comment 8.
Appendix V

Comments from the John F. Kennedy Center 

for the Performing Arts

Page 58 GAO-05-334 Kennedy Center

See comment 9.

See comment 10.

See comment 11.
Appendix V

Comments from the John F. Kennedy Center 

for the Performing Arts

Page 59 GAO-05-334 Kennedy Center

See comment 12.

See comment 13.

See comment 14.
Appendix V

Comments from the John F. Kennedy Center 

for the Performing Arts

Page 60 GAO-05-334 Kennedy Center

See comment 15.

See comment 16.

See comment 17.

See comment 18.
Appendix V

Comments from the John F. Kennedy Center 

for the Performing Arts

Page 61 GAO-05-334 Kennedy Center

See comment 20.

See comment 19.
Appendix V

Comments from the John F. Kennedy Center 

for the Performing Arts

Page 62 GAO-05-334 Kennedy Center

See comment 21.
Appendix V

Comments from the John F. Kennedy Center 

for the Performing Arts

Page 63 GAO-05-334 Kennedy Center

See comment 22.

See comment 23.
Appendix V

Comments from the John F. Kennedy Center 

for the Performing Arts

Page 64 GAO-05-334 Kennedy Center
Appendix V

Comments from the John F. Kennedy Center 

for the Performing Arts

Page 65 GAO-05-334 Kennedy Center

The following are GAO’s comments on the John F. Kennedy Center for the 

Performing Arts’ letter dated April 4, 2005.

GAO Comments 1. We found that the Kennedy Center has not fully implemented the 

conditions of its fire-modeling study. For example, it has not developed 

and implemented a program to manage the storage of scenery, props, 

and other combustible materials or installed sprinklers at the 

Millennium Stages, conditions on which the modeling study was based. 

Until these conditions are met, the study’s assumptions are invalid. Two 

additional areas of concern are (1) doors in critical areas do not 

provide adequate protection from fire and (2) the Millennium Stages 

have exit deficiencies. Specifically, the Kennedy Center’s decision to 

obscure the nearest external exits with curtains violates fire code. At 

the time of our review, none of these conditions and deficiencies was 

addressed in the Kennedy Center’s ongoing fire life safety upgrades.

2. Our independent experts were qualified to assess fire life safety code 

compliance. Our principal fire safety expert has a Ph.D. in a related 

field, is certified in industrial hygiene, and has conducted life safety 

surveys for all three branches of government, including the White 

House Communications Agency, the Architect of the Capitol, and the 

U.S. Supreme Court, among others. We were not asked to assess the 

quality or accuracy of the Kennedy Center’s fire-modeling study.

3. We do not believe the main point is one of voluntary upgrading to the 

current code as characterized by the Kennedy Center, but begins with 

the statutory requirement found at 40 U.S.C. § 3312. As recognized by 

the Kennedy Center, when it decided to renovate the facility to upgrade 

fire life safety systems to current code, it was bound by 40 U.S.C. § 

3312, which requires the Kennedy Center to be in compliance with 

nationally recognized fire and life safety codes to the maximum extent 

feasible. On the basis of our work, it appears that the Kennedy Center 

did not comply with selected provisions of the code it adopted. 

Although we recognize the Kennedy Center has discretion in complying 

with fire and life safety codes, and is the final authority on this, because 

the Kennedy Center’s actions on this matter involve the seriousness of 

fire and life safety issues, we believe that the Kennedy Center’s 

decisions should be reviewed by a knowledgeable third party, which 

the Kennedy Center has agreed to do. 
Appendix V

Comments from the John F. Kennedy Center 

for the Performing Arts

Page 66 GAO-05-334 Kennedy Center

4. We do not believe that the Kennedy Center followed a decision-making 

process that considered other options regarding its exit deficiency. 

Although the Kennedy Center installed sprinkler systems in its 

renovated theaters and created fire separations in certain areas, we 

found no evidence that the center seriously considered these types of 

prescriptive fire code solutions in deciding how to approach its exit 

deficiency. 

5. We support the Kennedy Center’s continuing fire life safety upgrades. 

However, we did not find any evidence that the Kennedy Center has a 

plan to develop and implement a program to manage the storage of 

scenery, props, and other combustible materials or installed sprinklers 

at the Millennium Stages, which were conditions of the fire-modeling 

study.

6. We removed references to the Society of Fire Protection Engineers 

survey from our report.

7. GSA fire protection officials told us that GSA’s philosophy is to do all 

that is possible to protect life and property, and that they do not 

support the performance models to avoid prescriptive solutions that 

could increase the protection of life and property. For example, GSA 

officials said that they take every possible step to protect life and 

property, and then do fire or smoke modeling to determine if those 

steps were sufficient. The Kennedy Center’s approach to fire modeling 

is not consistent with GSA’s philosophy.

8. We removed the reference to “dead end” from the report. However, the 

Millennium Stages continue to lack clear, marked exit paths and 

sprinklers that are required by fire code.

9. We support the Kennedy Center’s decision to seek independent review 

of its handling of the center’s performance-based design for the Grand 

Foyer, the Hall of States, the Hall of Nations, and the Millennium 

Stages. However, we encourage the Kennedy Center to implement our 

full recommendation to seek peer review of its entire approach to fire 

life safety in addition to the issues related to the fire-modeling study. 

Third-party validation is particularly important in this instance because 

the center’s fire safety decisions are not subject to external review.

10. We support the Kennedy Center’s intention to conduct a survey of all 

fire door assemblies so they can be repaired, replaced, or recertified 
Appendix V

Comments from the John F. Kennedy Center 

for the Performing Arts

Page 67 GAO-05-334 Kennedy Center

and relabeled because, in order to comply with fire code, the center 

must ensure that the doors in all key locations provide adequate 

protection from fire. 

11. Although the Kennedy Center has procedures for recording financial 

management transactions, we remain concerned that these procedures 

do not provide the comprehensive detailed guidance needed for its 

nonfinancial staff members to (1) clearly understand their roles and 

responsibilities and (2) properly and effectively execute their assigned 

duties in examining and verifying the accuracy and validity of 

underlying supporting information and approving contractor invoices 

for payment. We found that the center’s current financial accounting 

procedures consisted of one page of bullet points and a memorandum 

to its external auditors and did not include fundamental procedures, 

such as the center’s annual accrual process for year-end work-inprogress or minimum documentation requirements necessary before 

payments to vendors are made.

12. The Kennedy Center provides summarized financial information 

periodically to the Office of Management and Budget (OMB) and 

Congress pertaining to capital project obligations, but this financial 

information does not mention budget execution or status of funds. 

While information regarding obligations is important, so is information 

about costs incurred for work performed in the execution of 

construction contracts. We agree that the Kennedy Center should 

continue to monitor budget obligations on construction contracts; 

however, we believe the center should accrue expenses on 

construction projects—on at least a quarterly basis—to determine if 

such accruals are material to the center’s OMB reports. We continue to 

believe that, to the extent the Kennedy Center also periodically reports 

information on budget execution and status of the funds it received for 

capital projects, the center faces increased risk that such information 

reported would be in error at times other than at the end of the fiscal 

year. In addition, capital investments and key performance measures 

are usually expressed in terms of costs.

13. The Kennedy Center’s annual audited financial statements are prepared 

only once a year. Additionally, they do not provide a breakdown of cost 

or budget information by specific project. Consequently, we believe 

that these statements provide stakeholders too little information—too 

late—for effective oversight on construction projects.
Appendix V

Comments from the John F. Kennedy Center 

for the Performing Arts

Page 68 GAO-05-334 Kennedy Center

14. The Kennedy Center was unable to link specific Johnson Controls’ 

invoices to U.S. Army Corps of Engineers’ (Corps) invoices. 

Consequently, we continue to believe that the Kennedy Center did not 

have assurance that the Corps’ invoices to the center accurately 

reflected amounts billed by Johnson Controls, were free of error, and 

did not represent amounts previously paid. We found that 1 of 56 

invoices from the Corps was rejected by the Kennedy Center due to a 

lack of support. When that invoice was resubmitted by the Corps, it was 

for an amount 50 percent less than the amount originally invoiced. For 

the other 55 invoices from the Corps, the center paid the invoice 

without any supporting documentation attached.

15. We support the Kennedy Center’s plans to determine if the Corps’ billed 

costs represented its actual costs and make any necessary adjustments 

to comply with the Economy Act agreement during contract closeout. If 

the center completes the reconciliation, it can provide the objective 

evidence needed to support the Corps’ invoices and provide a strong 

basis for its conclusions on the accuracy and completeness of the 

invoices. However, the Kennedy Center may find it more cumbersome 

to reconcile Corps invoices received over the life of the project to 

supporting cost information at the end of the project than it would be if 

the reconciliation was done each month at the time invoices are 

received. 

16. We disagree. For the reasons previously stated and in the body of our 

report, we continue to believe that the center did not maintain 

complete and accurate financial records, which could impact the 

safeguarding of federal funds.

17. We reviewed these projects because they were the most recently 

completed major projects at the Kennedy Center. These projects were 

also among the most costly or important projects related to fire safety 

and disabled access improvements included in the Kennedy Center’s 

CBP.

18. We support the Kennedy Center’s progress toward establishing a 

policies and procedures manual. However, the policies manual for 

capital projects remains in draft, and the Kennedy Center has not 

formalized its contractual and financial management policies and 

procedures. A comprehensive set of policies and procedures for 

managing federal funds covering the Project Management, Contract, 

and Finance offices, and the interaction between them, would help 
Appendix V

Comments from the John F. Kennedy Center 

for the Performing Arts

Page 69 GAO-05-334 Kennedy Center

guide the various activities related to the acquisition of goods and 

services for the center’s capital improvements program.

19. The Kennedy Center’s tight schedules necessitated the overtime 

charges. However, Kennedy Center officials said that the overtime 

charges and all other cost growth for these projects were paid using 

federal appropriations, while the ticket revenue goes into the Kennedy 

Center’s trust funds.

20. It was not within the scope of our work to conduct a comprehensive 

procurement review that would be necessary to assess the full impact 

of how the Kennedy Center managed contract modifications. However, 

our previous work has shown that contractors have limited incentive to 

control costs until firm prices are negotiated for contract changes, and 

the government does not have an opportunity to consider more 

efficient construction methods or management controls if the work is 

completed before the price is established.

21. We do not suggest that existing drawings be ignored in favor of 

destructive investigation. However, when existing as-built drawings do 

not exist or are proven to be inaccurate, as the Kennedy Center has 

indicated, it may help reduce the risk of cost increase or schedule 

delays to investigate the actual site conditions, which is sometimes 

destructive to building finishes. As discussed with Kennedy Center 

staff, where destructive investigation is not feasible, the center should 

consider incorporating additional cost and schedule contingencies in 

its budget estimates to reflect the increased risk of unforeseen 

conditions being discovered during construction.

22. We continue to believe that the Kennedy Center did not always timely 

or accurately communicate with its board or Congress. For example, 

recent Kennedy Center documents continue to state that the center 

intends to install sprinkler systems throughout the entire facility, even 

though that is not the case.

23. We removed this example, regarding communication on delays related 

to the Opera House renovation, from our report.
Page 70 GAO-05-334 Kennedy Center

Appendix VI

GAO Contacts and Staff Acknowledgments ApendxiVI

GAO Contacts Mark L. Goldstein, (202) 512-2834

Susan A. Fleming, (202) 512-4431

Staff 

Acknowledgments

In addition to those named above, Michael Armes, Lindsay Bach, Chris 

Bonham, Matt Cail, Keith Cunningham, John Davis, George Depaoli, Tim 

Dinapoli, Terrell Dorn, Edda Emmanuelliperez, Colin Fallon, Brandon 

Haller, Jack Hufnagle, John Krump, Julie Phillips, Theresa Patrizio, Robert 

Preshlock, Susan Michal-Smith, and Carrie Wilks made key contributions 

to this report.

(543113)
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