Federal Real Property: Corps of Engineers Needs to Improve the Reliability of Its Real Property Disposal Data
Published: 2008-05-09T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Unreliable real property data has been a long-standing problem for federal landholding agencies. Under the President's real property initiative, agencies are being held accountable for, among other things, improving accuracy of their real property inventory and disposing of unneeded property. The U.S. Army Corps of Engineers (Corps), the fourth largest landholding agency, uses the Real Estate Management Information System (REMIS) for recording its civil works inventory. GAO was asked to determine whether REMIS could provide reliable information on the Corps' civil works land disposals from fiscal years 1996 through 2006. GAO's work involved comparison analyses of REMIS disposal data and other Corps reported disposal data, reviews of Corps' real property policies and guidance, and interviews with Corps officials at headquarters, three divisions, four districts, and the Real Estate Systems National Center (RESNC), which manages REMIS.
section_title: What GAO Found
paragraphs: REMIS did not provide reliable information on the Corps' civil works land disposals from fiscal years 1996 through 2006, or on the land that the Corps owned as of September 30, 2006. Unreliable land disposal data impair the usefulness of REMIS as a record of current inventory and as a source of data that would be useful for budgeting purposes and the strategic management of landholdings. The following contributed to problems with data reliability: The Corps did not maintain internal controls over REMIS disposal data. Corps policy held district real estate officials accountable for the reliability of REMIS data, but in two of four districts GAO contacted the individual recording land disposal data was also checking the data against documentation such as titles and transfer forms. Dividing data entry and data checking responsibilities is an essential internal control activity. Corps policy also required division real estate staff to ensure the reliability of REMIS data recorded by their constituent districts, but the three divisions GAO contacted did not review REMIS disposal data. The design of the REMIS disposal module, a software application that captures disposal data that users enter, did not follow a best practice, commonly referred to as data normalization. Data normalization organizes data according to rules designed to minimize duplication and redundancies. By not following this best practice, users querying REMIS faced the problem of retrieving inconsistent data. For example, when RESNC officials queried REMIS for specific real property information by district, RESNC officials obtained results that differed from those obtained by district officials. Land disposal dates in REMIS were missing or sometimes represented the date when district real estate officials entered the land disposal rather than when the disposal occurred. The vast majority, or about 89 percent, of all disposal records within REMIS did not have disposal dates. When the records contained dates, large numbers of disposals (accounting for about 54,000 acres) in fiscal years 2005 and 2006 had occurred as early as 1955. Guidance for processing land disposals in REMIS was unclear. For example, guidance issued in 2004 did not indicate whether some types of disposals, such as transfers to other federal agencies, required a disposal date. New disposal guidance issued in 2007 was also unclear because RESNC, which revised the guidance, did not revise the data entry screens in REMIS. As a result, the guidance and the data entry screens were inconsistent. While the guidance called for entering a disposal date, the REMIS data entry screens did not clearly indicate whether or where users should enter the date. RESNC provided limited REMIS training; 3 of 32 districts that use REMIS received introductory training in 2006 and 2007. RESNC plans to train the New England District and at least one other district in 2008. RESNC also sponsored conferences to update systems administrators and other users on key changes to REMIS, but conference presenters discussed aspects of REMIS that some attendees, including real estate officials from 2 of the districts GAO contacted, considered too advanced--especially for those who had never received introductory training.

section_title: Letter
paragraphs: The U.S. Army Corps of Engineers (Corps), an agency in the Department  of Defense (DOD), provides the nation with engineering services such as  planning, designing, building, and operating water resources projects. It  has a large and diverse portfolio of civil works real property—which  includes about 7.7 million acres of land—whose replacement value,  estimated at $217 billion, ranks the Corps as the fourth-largest federal  landholding agency. Civil works real property includes hundreds of locks  and dams, reservoirs, levees, hydropower facilities, jetties, as well as  millions of acres of land used for flood control, recreation, and other  purposes.
The federal government has long recognized the need for agencies to track  the federal property under their control. In 1983, Executive Order 12411  required federal agencies, including the Corps, to maintain inventories of  their federal property. The Corps implemented this order and, in 1992,  replaced its existing system with its current Real Estate Management  Information System (REMIS). REMIS is a database for recording and  updating the Corps’ inventory of real property, maintaining historical  records, helping decision makers develop future disposal projections, and  determining the total amount of civil works land the Corps currently owns,  among other things. In 2003, the Corps established its Real Estate Systems  National Center (RESNC) to manage its real estate automated information  systems, including REMIS.
In 2003, we designated federal real property management as a high-risk  area for the federal government because federal agencies have faced  pervasive problems with unreliable real property data, excess and  underutilized real property, deteriorating facilities, and costly leased  space. In response to our designation of federal real property  management as a high-risk area, the administration initiated several efforts  intended to improve the efficiency and effectiveness of the federal  government’s real property management. In 2004, for example, the  President issued Executive Order 13327, which established the Federal  Real Property Asset Management Initiative, or real property initiative. The  initiative is being used to hold agencies accountable for, among other  things, improving the accuracy of their real property inventory and  disposing of unneeded property. According to this initiative, maintaining  underused or unneeded federal property is costly to the government, not  only because agencies may incur operating and maintenance costs, but  also because they incur opportunity costs for failing to sell or exchange  underused or unneeded properties for more appropriate uses. Under  Executive Order 13327, the Office of Budget and Management (OMB) was  given the responsibility to, among other things, review agencies’ efforts to  implement this order. The executive order also established the interagency  Federal Real Property Council (Federal Council) to support reform. In  December 2004, the Federal Council published 10 guiding principles,  which form the strategic objectives for improving real property  management. The guiding principles include accurately inventorying and  describing all assets, as well as disposing of unneeded assets. In addition,  the Federal Council identified 24 data elements—including data on  disposal—that federal agencies must report annually for inclusion in the  governmentwide real property inventory database, called the Federal Real  Property Profile. The Federal Council and federal agencies will use current  and historical disposal data to help track and measure federal agencies’  progress toward strategically managing federal real property and to  estimate the costs of future disposals.
Through these efforts, agencies have, among other things, established  asset management plans, standardized data reporting, adopted  performance measures, and improved the accuracy of their real property  data. Having accurate, reliable real property data is important for agencies  to cost effectively manage the properties that they need and to identify  unneeded properties that they can dispose of and avoid unnecessary costs  to the government. Based on efforts and plans by the Corps to enhance the  accuracy of its real property profile, OMB approved REMIS as a complete  inventory and accurate profile of the Corps’ real property holdings in  compliance with the Federal Council’s guidance. Although OMB relies on  the quality assurance and quality control processes performed by  individual agencies for such approvals, it also relies on agency Inspectors  General, agency financial statements, and our reviews to establish the  validity of the data. According to the Corps, REMIS has not been fully  validated.
Improving the reliability of federal real property data and expediting the  disposal of federally owned land that does not meet the needs of the  federal government are priorities of this subcommittee. Therefore, you  asked us to provide information about the reliability of the real property  data the Corps uses to account for its large portfolio. Specifically, our  objective was to determine whether the Corps’ real property database,  REMIS, could provide reliable information on the civil works land that the  Corps disposed of from fiscal year 1996 through fiscal year 2006, or on the  civil works land that the Corps owned as of September 30, 2006.
To address this objective, we reviewed documents that defined the Corps’  real property disposal process, electronic records, and rationale for  disposal decisions. These documents included the Corps’ real property  policies and guidance, REMIS user/training manual, Asset Management  Plan, and Three Year Timeline—an action plan for implementing the asset  management plan and demonstrating that the Corps is using real property  inventory data for decision making. To gain a more compete  understanding of the Corps’ real property disposal process and  management of this process, we contacted Corps headquarters officials  from the Offices of Real Estate, Corporate Information, and the Chief  Counsel. We also contacted RESNC officials and the contractor that  maintained REMIS and supported its users. We contacted 4 of the Corps’  32 district offices—Baltimore, Maryland; Fort Worth, Texas; Los Angeles,  California; and Omaha, Nebraska—which maintain REMIS databases from  which detailed information could be obtained. We selected these districts  because their land disposals accounted for about 82 percent of the acreage  that the Corps disposed of from fiscal year 1996 through fiscal year 2006,  according to REMIS data. We also contacted the three Corps divisions that  oversee these districts—North Atlantic, New York, New York;  Northwestern, Portland, Oregon; and Southwestern, Dallas, Texas. We  spoke with responsible district and division officials about the REMIS land  disposal process, including REMIS data entry, reviews, training, and  oversight, among other things. Additionally, we visited the Baltimore and  Los Angeles Districts because, according to Corps headquarters officials,  officials in these districts could provide insights into REMIS and its  accuracy. Specifically, the headquarters officials said that the officials in  the Baltimore District were very knowledgeable about the REMIS disposal  process while officials in the Los Angeles District had recently completed  an inventory of the district’s entire real property holdings.
We took several steps to assess the reliability of REMIS disposal data,  although we did not have direct access to REMIS. At our request, the  Corps queried data on land disposals from the REMIS database to provide  us data, including the numbers of land tract disposal records and of land  tract disposal dates by district. To assess the reliability of these data, we  performed electronic testing to identify missing data, dates outside the  time frame of our request, and duplicates. Because these data indicated  that most land disposals occurred during fiscal years 2005 and 2006, we  focused on these fiscal years and had three districts cross-check their land  tract disposal data against their real estate documentation. We also  conducted limited cross-checking of these data against disposal records at  the Baltimore District office. Based on this work, we found that the REMIS  land disposal data were not reliable because of inconsistencies among the  disposal data files that the Corps provided, a significant number of missing  disposal dates, and inaccurate current inventory data. Finally, we obtained  the Corps’ policies, procedures, and guidance for processing land  disposals in REMIS and compared them with standards for internal  control in the federal government, as well as other control guidance  related to control activities, environment, and training. We also spoke  with Corps officials about how they interpreted and implemented internal  controls with respect to REMIS.
We conducted this performance audit from December 2006 to May 2008 in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objective. We believe that the evidence  obtained provides a reasonable basis for our findings and conclusions  based on our audit objective. Further details about our objective, scope,  and methodology appear in appendix I.
subsections: section_title: Background
paragraphs: The Corps began using REMIS, the official real property inventory  database, in 1992. The Corps modified REMIS several times over the years  to track real estate matters such as revenues from sales of real property,  property locations by congressional district, and properties that are civil  works. About 1,000 REMIS users located in 32 of the 38 Corps districts  access the database through the Internet. District users are responsible  for collecting data from real estate documents and entering data into  REMIS.
The Corps established RESNC at its Mobile, Alabama, District office in  October 2003 to serve as the center for the Corps’ real estate automated  information systems, including REMIS. Among other things, RESNC  officials serve as real estate subject matter experts, issue guidance to  process land disposals in REMIS, train district users, and manage REMIS.  RESNC also oversees a contractor who performs maintenance on REMIS,  runs database queries, helps REMIS users through a hotline, and makes  numerous changes to REMIS. Although the contractor did not design the  previous REMIS disposal module (a software application that captures  data entered into REMIS by a user), it redesigned the REMIS disposal  module to automatically provide the Corps’ financial management system  with the amounts of disposed acreage, as well as to automate other tasks  when users completed the disposal process in REMIS. The Corps  implemented the redesigned module in October 2007.
Corps headquarters carries out the overall management of civil works real  property related to navigation, hydropower, recreation, and flood control  projects, among others. Figure 1 shows one of many dams owned by the  Corps.
Headquarters officials coordinate with eight civil works divisions and 38  districts around the country on matters that include developing future  funding requirements using real property data from REMIS. For example,  REMIS disposal data from past years are to allow Corps managers to  estimate future disposal costs. Besides the headquarters team, real estate  officials at each of the divisions oversee the civil works projects and  activities of their constituent districts. District real estate chiefs,  specialists, and systems administrators, among other district officials,  provide daily management of real property, including land acquisition for  new civil works projects, operations and maintenance of existing projects,  disposal of unneeded civil works land, and recording of data on land  acquisitions, disposals, and other actions.
Executive Order 13327 of February 2004 required federal landholding  agencies, including the Corps, to determine what they own, what they  need, and what it costs to manage their real property; develop and  implement asset management plans; and dispose of unneeded properties.  The executive order established the interagency Federal Council to  develop the guidance necessary to implement the order and serve as a  clearinghouse for best practices, among other things. The Federal Council  developed and published in December 2004 Guidance for Improved Asset  Management that identified, defined, and listed 23 data elements that  federal agencies must report to the General Services Administration (GSA)  for the annual Federal Real Property Profile. In August 2006, the Federal  Council added disposal as the 24th data element that federal agencies  must report for the annual profile beginning in fiscal year 2006. OMB, the  Federal Council, and agencies use disposal data to help track how much  property that the federal government has disposed of, measure the  government’s progress in disposing of its unneeded property, and estimate  the costs of future disposals.
The Federal Council guidance specifically requires the Corps and other  federal landholding agencies to report, among other things, disposal dates  based on the type of disposal; that is, land sales should record deed dates,  land transfers between federal agencies should record the dates of transfer  letters, and public benefit conveyances to nonfederal entities should  record the date of the assignment letter to the sponsoring agency and the  subsequent date of the deed’s transfer to the grantee. In addition, the  guidance requires the agencies to report the disposal date in the fiscal year  that the property exited the agency’s inventory. On the administration’s  agency scorecard for real property management—established in fiscal year  2004 to measure each agency’s progress toward implementing Executive  Order 13327—the Corps has achieved a “yellow” status, indicating that it  has made progress in strategically managing real property by taking the  following actions: designating a senior real property officer who is held  accountable for the effective management of the Corps’ real property;  developing an OMB-approved asset management plan; developing an  OMB-approved 3-year time line; establishing some asset management  performance measures; completing and maintaining an inventory and  profile of the Corps’ real property; and providing timely information for  inclusion into the annual Federal Real Property Profile.
section_title: The Corps’ Land Disposal Data from Fiscal Year 1996 through Fiscal Year 2006 Are Unreliable
paragraphs: REMIS did not provide reliable information on the Corps’ civil works land  disposals from fiscal year 1996 through fiscal year 2006, or on the land that  the Corps owned as of September 30, 2006, for several reasons. These  reasons include poorly maintained internal controls over REMIS disposal  data at various levels of the Corps’ organization, a database design that did  not follow a software engineering best practice, and land disposal dates  that did not accurately indicate when the disposal took place. In addition,  unclear guidance for processing land disposals in REMIS coupled with a  limited user-training program contributed to the unreliability of the  disposal data. These unreliable data impair the usefulness of REMIS as a  record of current inventory and as a source of data that would be useful to  Corps decision makers for budgeting and strategic land management  purposes.
subsections: section_title: Districts and Divisions Did Not Maintain Effective Internal Controls over REMIS Data
paragraphs: Real estate officials in districts and divisions did not maintain effective  internal controls over REMIS disposal data. Maintaining effective internal  controls throughout an organization is an ongoing effort that helps to  detect and prevent errors in data, such as real property data in REMIS. The  standards for internal control in the federal government provide the  overall framework for federal managers to establish and maintain effective  internal control. Internal control activities include assigning different  people to check data from those who record it—referred to as segregation  of duties—recording transactions in a timely manner, and reviewing the  data for reliability.
The Corps’ policy requires real estate officials to be accountable for the  reliability (i.e., accuracy, completeness, and timeliness) of REMIS data  related to land located in their districts. Officials in two districts, including  one district that made about 300 disposals accounting for over 34,000  acres of land during fiscal years 1996 through 2006, told us that the same  person who recorded land disposal data in REMIS was also the one who  checked that the data matched the real estate documentation, such as  deeds, titles, and transfer forms. Making one individual responsible for  both recording and checking data can contribute to errors. Corps officials  in a third district told us that they divided these responsibilities and  provided documentation of recent efforts to independently check the  REMIS disposal records against the real estate documentation.
In addition, some districts did not always record the disposal in REMIS in  a timely manner as the standards for internal control in the federal  government and the Corps’ policy require. For example, when we  compared REMIS disposal dates against the dates when the Deputy  Assistant Secretary of the Army approved the disposals, we found  instances in which districts recorded land disposals more than 2 years  after the disposal transaction had occurred. One district, for instance,  recorded the disposal of a 3-acre land parcel near York, Pennsylvania, in  March 2006. The disposal had occurred in February 2004—more than 2  years earlier. Another district recorded a land disposal in Georgia as  November 2005, but the disposal occurred 16 months earlier.
Although the Corps’ policy requires division officials to provide the  oversight necessary to ensure that their constituent districts recorded  reliable real property data, officials we contacted in all three divisions did  not perform activities that would ensure the reliability of REMIS disposal  data. The Northwestern Division, for example, experienced prolonged  staffing shortages that hindered it from reviewing any disposal records.  According to the division’s Acting Chief of Real Estate, a team consisting  of a Chief of Real Estate and four other real estate officials oversees the  real property activities of the division’s five constituent districts—Kansas  City, Omaha, Walla Walla, Portland, and Seattle. Specifically, the four real  estate officials oversee (1) acquisitions, (2) appraisals, (3) recruiting, and  (4) management and disposal activities, respectively. However, because  the management and disposal position remained vacant for nearly 2 years,  the division did not review any REMIS disposal data during that period.  Corps officials at headquarters confirmed in December 2007 that the  position remained vacant.
Officials in the North Atlantic Division also said they did not review any  REMIS disposal data from their five constituent districts (New England,  New York, Philadelphia, Baltimore, and Norfolk). They said that during  their annual visits to each of their districts, they reviewed real estate  documentation for completeness and compliance with applicable statutes,  but relied solely on verbal assurances from district officials that they had  accurately recorded all disposals in REMIS. In the view of North Atlantic  Division officials, Corps-wide organizational changes have affected their  reviewing practices. Specifically, the Corps’ strategic plan through 2012  called on the divisions to establish multiple district support teams to  provide technical assistance to the districts, such as quality control and  assurance activities. However, the North Atlantic Division was only  provided sufficient staff for one team. Instead of reviewing all district  disposal records for completeness and accuracy, as district officials once  did, they now review only some of the records. The officials acknowledged  that this change could affect the reliability of the disposal data, yet they  believed that the DOD Inspector General, the Army Audit Agency, or the  Corps headquarters auditors would identify and resolve any errors.
Officials in the Southwestern Division also visited their four constituent  districts (Little Rock, Tulsa, Fort Worth, and Galveston) each year to  review disposal records but did not review REMIS disposal data. As part of  their annual review, division officials requested that each district complete  a quality assurance questionnaire focusing on financial aspects,  compliance with statutes, and revenue collections, among other things.  The questionnaire included one question about whether officials  successfully completed civil works disposal activities but did not include a  question about the reliability of REMIS disposal data. Essentially, the  Southwestern Division relied on assurances from district officials that they  accurately entered all disposals in REMIS. Obtaining assurances does not  ensure REMIS data are reliable; other internal control activities are  necessary such as those identified in the standards for internal control in  the federal government. The Corps policy does little to highlight those  other control activities, however. Instead, the policy places oversight  responsibilities on the divisions without detailing the specific steps they  should take to ensure REMIS disposal data are reliable.
section_title: REMIS Disposal Module Did Not Follow a Best Practice That Protects Against Duplication and Redundancy
paragraphs: The REMIS disposal module—a software application that captures  disposal dates and other disposal information—did not follow a software  engineering best practice, commonly referred to as data normalization.  Data normalization is the process of organizing data in a database  according to rules designed to protect the data from duplication and  redundancy. Redundant data can create problems for databases, such as  REMIS. If users must enter disposal dates in one place, then users must  consistently enter disposal dates in all the other places where these dates  are stored within the database—a process prone to errors.
Land disposal dates could be entered in more than one place in REMIS, a  design artifact that neither RESNC nor the REMIS contractor could  explain. Because REMIS’s database design did not follow the best  practice, persons querying the database could potentially retrieve  inconsistent data given that disposal dates were not consistently entered  in all places. For example, RESNC officials queried REMIS for a  compilation of specific real property information, including data on  disposals, for all districts. However, the results RESNC officials obtained  differed from the results obtained separately by district officials, who later  called on RESNC officials to clarify the query RESNC used for retrieving  real property data in REMIS on their district. This situation illustrates one  of the problems users of the nonnormalized database faced. The design of  the REMIS disposal module, which allowed users to enter disposal dates  in multiple places, required users to know the location of disposal data  within the database and how to write the query that would produce the  desired result. In contrast, REMIS in normalized form would allow any  user to query the database for disposal information and obtain the same  result.
Although the REMIS contractor redesigned the REMIS disposal module to  automatically generate certain data, the redesigned disposal module  continues to capture disposal dates in two places within the database. We  discussed this matter with the Corps’ Chief Information Officer, who  concurred that REMIS, with respect to land disposal dates, was not in a  normalized form.
section_title: Land Disposal Dates Were Missing or Sometimes Did Not Represent When the Disposal Took Place
paragraphs: Land disposal dates in REMIS were unreliable, since the vast majority of  them were missing, and when disposal dates were present, they sometimes  represented the date when district real estate officials entered the land  disposal into REMIS rather than the date when the disposal took place.  Our analysis found that unreliable land disposal dates impair the  usefulness of REMIS as a historical record for researching past real estate  transactions, as a record of current inventory, and as a source of data for  developing baselines and trend data for budgeting and strategic  management of land disposals.
We found that the vast majority of disposal records in REMIS did not have  a disposal date. To determine the extent to which disposal dates were  available for use in our analyses, we requested from RESNC and the  REMIS contractor a report containing the total number of civil works land  records listed in REMIS as disposed, as well as the number of those  records that were missing disposal dates. The report showed that of the  about 30,700 disposal records in REMIS, 27,400 (89 percent) were missing  disposal dates. The contractor reviewed our preliminary findings and  agreed that the missing dates were troublesome.
Figure 2 summarizes our analysis of the REMIS data RESNC provided to  us that contained disposal dates. The data show a small number of civil  works land disposals in fiscal years 1996 through 2004 followed by a sharp  increase in the numbers of disposals in fiscal years 2005 and 2006.
The Corps’ real estate managers at headquarters could not explain the  reason for the large numbers of disposals in fiscal years 2005 and 2006,  which account for about 54,000 acres of land. However, officials we  contacted from two districts said that many of these disposals represented  corrections to the inventory rather than current disposals. Specifically, all  265 land disposals (totaling about 33,000 acres of land) that the Fort Worth  District entered into REMIS in fiscal year 2005 were disposals that had  occurred in 1975. The Fort Worth District also entered 29 land disposals  (totaling about 980 acres) in fiscal year 2006—almost all of which,  according to a district real estate official, had occurred from about 1955  through 2003. Similarly, in the Baltimore District, we compared data in  REMIS against the real estate documentation and found that at least 12 of  23 land disposals the district had entered in fiscal years 2005 and 2006  (totaling about 137 acres) had occurred in the 1980s.
Corps officials explained that these adjustments to the REMIS disposal  data were necessary to complete a process that began in 1992 when the  Corps implemented REMIS. According to district officials, they began  entering land acquisition information into REMIS from real estate  documentation for their active civil works projects—even if some of the  land associated with these projects had already been disposed of—and  planned to make record adjustments that would identify previously  disposed land tracts. The Corps chose this method to maintain consistency  with the real estate documentation and to help reconcile REMIS with the  Corps’ financial management system.
While we support consistency between REMIS and real estate  documentation, we are concerned that the Corps current inventory of land  tracts is not accurate, in part because the Corps lacks assurance that its  districts have updated REMIS to identify in its inventory all of the  disposed land tracts. Specifically, Corps officials told us that they did not  know whether all of the Corps’ 32 districts have (1) entered into REMIS all  of the land tracts from their active civil works projects and (2) made  record adjustments to identify, as disposed, in REMIS, all of the previously  disposed land tracts. In August 1994, the Corps gave the districts about a  year to enter, among other things, the land tracts data. Because the task  was substantial—covering all real estate documentation for many years— some districts utilized their entire real estate staff to enter real property  data into REMIS. Once the staff entered these data, the districts were to  begin identifying, as disposed, land tracts in REMIS that had previously  been disposed of. However, according to RESNC officials, the districts  have not made all of these changes. Moreover, the DOD Inspector General  reported in 2005 that districts were not entering new disposals of land  tracts into REMIS. In response, the Corps directed the districts to identify  disposals of land tracts that remained in REMIS and update the database  accordingly. As previously discussed, updating has continued.  Consequently, although the Corps is taking corrective action, its lack of  assurance that all of the disposed land tracts have been identified as such  in REMIS adds to the uncertainty regarding the accuracy of the Corps’  current inventory of land tracts within the database.
Recognizing that mistakes can occur when entering data into REMIS, the  Corps introduced a code in September 2006 that allows users to identify  administrative disposals and distinguish these disposals from actual  disposals. This code would be useful if, for example, a user had entered  the acreage of a land tract into REMIS by mistake and needed to dispose  of acreage without having the disposal reported to the Federal Real  Property Profile or any other disposal report. Hence, the new code is a  positive step toward improving the accuracy of REMIS data. However,  unless the Corps corrects past disposal records to reflect the date of the  actual disposal rather than the date of the record entry, REMIS will have  limited usefulness as a tool for the Corps to assess its progress in  disposing of land, consistent with the administration’s goals, as well as to  understand disposal trends. As it stands, decision makers using REMIS  data cannot distinguish between disposal dates that indicate when  disposals were entered into REMIS and dates of disposals that actually  occurred from fiscal year 1996 through fiscal year 2006.
Under the President’s Real Property Asset Management Initiative,  landholding agencies are accountable for meeting key milestones and  performance outcomes. Accurate data describing the Corps’ disposals are  essential to reporting its results, as well as the combined results of other  landholding agencies. For example, the administration has a  governmentwide goal for federal agencies, including the Corps, to dispose  of $9 billion in unneeded assets by 2009, for which federal agencies  reported disposing of about $4.5 billion since 2004. However, the Corps’  and the agencies’ progress toward the goal is unclear, because, as  explained previously, the Corps’ disposal data are not accurate, and the  reliability of disposal data in REMIS is unclear. Furthermore, deficiencies  in the Corps’ disposal data mean that the Corps lacks accurate baseline  and annual data for tracking and analyzing trends in disposals and  identifying opportunities to improve its performance. Finally, inaccurate  disposal data limit the accuracy of the Corps’ and the government’s  valuations of their real property assets, as well as the accuracy of any  financial reports that include these valuations.
Additionally, we found discrepancies in the land disposal data that the  Corps queried from REMIS and reported in its Three Year Timeline and  the Federal Real Property Profile in fiscal year 2006. The OMB-approved  Three Year Timeline of April 2007 highlighted, among other things, the  Corps’ progress in disposing of unneeded real property. The Three Year  Timeline is an action plan that established the schedule for achieving the  Corps’ real property goals identified in its Asset Management Plan and  analyzed the number of land disposals from 1996 through 2006 using  REMIS disposal data. The data from past disposals enabled the Corps’  decision makers to make disposal-budget estimates by calculating the  average cost per disposal. We found the following two key discrepancies:    First, according to the Three Year Timeline, the Corps disposed of 184  land tracts in fiscal year 2006 and continued a trend of elevated disposal  numbers. This information contradicted what Corps officials told us.  They said that little, if any, land is available for disposal because the Corps  reduced its landholdings years ago in response to several executive orders.  Another official who works in the office that manually tracks, verifies, and  reports all Corps disposals to the Deputy Assistant Secretary for the Army  told us that the Corps’ land disposal numbers were down from previous  years. Our analysis of REMIS data identified 153 land disposals in fiscal  year 2006, as shown in figure 2. Since both these land disposal numbers  were based on REMIS data, the numbers should have agreed; however,  they differed by 31, or about 20 percent. This discrepancy indicated a data  reliability problem and raised questions about the Corps’ disposal-budget  estimates. If the data overstated the actual number of disposals, then the  Corps underestimated the average cost per disposal. This could lead to  budgeting and staffing shortfalls in future years.
Second, the Corps submitted 84 land disposals to GSA for the fiscal year  2006 Federal Real Property Profile—a number much lower than presented  in the Three Year Timeline and in the data provided to us. This number,  however, did not accurately reflect how many disposals occurred. We  found that at least 8 of the 84 disposals, or about 10 percent, had occurred  in previous years and were erroneously entered into REMIS in fiscal year  2006 when the Corps adjusted inventory records. In addition, we learned  that the Corps did not include partial land tract disposals in its submission  for the profile. According to the REMIS contractor that assembled the  submission, partial land tract disposals—the disposal of a portion of a land  tract—were not included because conflicts would arise when the  submission contained both owned and disposed land tracts with the same  unique identifier numbers. To reconcile the differences among the 2006  Federal Real Property Profile, the Three Year Timeline, and the REMIS  data files provided to us, we obtained the REMIS data file that contained  the fiscal year 2006 partial land disposals. We identified 39 partial land  tract disposals that could account for some, but not all, of the differences  among the three data files.
Unreliable land disposal dates impaired—and continue to impair—the  usefulness of REMIS as an accurate (1) expression of the Corps’ current  inventory and (2) source of data for the Federal Real Property Profile. If  land disposal data in REMIS do not accurately reflect actual disposals, the  Corps risks overstating the amount of land it currently holds, which could  affect the land values reported in its annual financial statements and could  cause understatement of the amount of land it actually disposed of in any  year.
section_title: REMIS Disposal Guidance Was Unclear
paragraphs: Guidance for processing land disposals in REMIS—one round of guidance  issued in 2004, then updated in 2006, and further revised in 2007—was  unclear. In April 2004, RESNC issued guidance that provided step-by-step  instructions for processing land disposals in REMIS but did not require  users to enter disposal dates. Figure 3 shows the process for entering land  disposal data into REMIS in 2004.
Users entered data in three steps using the RD-70, the RD-82, and the RD- 80 data entry screens. First, users created a land disposal record using the  RD-70 screen and entered information identifying the land being disposed  of. Second, if the land disposal generated revenue, users accessed the RD- 82 screen to enter information about the disposal method and date, among  other things. The guidance required this information, and the Corps used  specially marked data fields to identify it as required. Third, users  completed the disposal record after entering additional information, such  as the amount of acreage being disposed of, in the RD-80 screen.
REMIS data entry screens use standard indicators to denote required data  fields—all capital letters for the data field name, an asterisk next to the  field name, or both. In figure 3, for example, the RD-82 screen uses both  capital letters and an asterisk to indicate that the disposal date is a  required data field. While the RD-70 screen had a field for the disposal  date, it was not a required field for this screen. The 2004 guidance  emphasized that users should enter data into the RD-82 screen if the  disposal generated revenue, but it was unclear whether users should also  enter the data in this screen for other types of disposals, such as transfers  to other federal agencies. While both the RD-70 and the RD-82 screens had  disposal date fields, only the RD-82 screen required the disposal date field.
RESNC officials updated the guidance in September 2006 after the Federal  Council decided that federal landholding agencies must report disposals.  However, the 2006 guidance did not emphasize the importance of using  specific disposal dates for different types of disposals. The updated  guidance reduced the land disposal process from three steps to two (users  entered data into the RD-70 and the RD-82 screens), eliminated the RD-80  screen after incorporating its functions into the RD-70 screen, and  required the RD-82 screen for all disposals. However, the guidance did not  clearly indicate which data entry screen—RD-70 or RD-82—completed the  process of recording a land disposal. While both screens included fields  for disposal dates, each continued to store data in a separate place within  REMIS—a practice that resulted in a nonnormalized database and the  associated problems we previously discussed. Having the disposal dates in  both the RD-70 and the RD-82 screens illustrates the lack of data  normalization.
RESNC issued a third round of guidance in August 2007 that described a  new REMIS disposal process. According to this guidance, users should  create a disposal record in the RD-70 screen (but not enter the disposal  date and quantity of land), continue to the RD-82 screen “if desired,” and  return to the RD-70 screen to enter the disposal date and the amount of  land disposed as the final step in the REMIS disposal process. Figure 4  shows the new process.
When RESNC issued the 2007 guidance, it did not update the REMIS data  entry screens to match the guidance—that is, it did not identify the  required data fields using the standard indicators. This inconsistency  between the new guidance and the REMIS screens created the following  two opportunities for users to be confused:    The 2007 guidance required users to enter disposal dates in the RD-70  screen, but the disposal date field in this screen lacked the standard  indicators used to identify a required data field. Recognizing that users  could be confused about whether they should enter the disposal date into  the RD-70 screen, RESNC officials said they are discussing ways to resolve  the confusion.
The 2007 guidance instructed REMIS users to enter data in the RD-82  screen, “if desired.” Although use of this screen was optional, it was the  only screen with a required data field for the disposal date, identified by  the standard indicators. According to officials in three of the four districts  we contacted, they used the RD- 82 screen to enter the disposal date.  Moreover, real estate officials in all four districts noted that the RD-82  screen is the only REMIS screen that requires the disposal date.  Conversely, RESNC officials told us that they believe that other REMIS  screens already collect the data captured by the RD-82 screen.  Consequently, RESNC officials are evaluating the need for the RD-82  screen.
Unclear guidance affects the reliability of disposal data because it could  lead to differences in how users process disposals in REMIS. Until the  Corps develops clear and consistent REMIS guidance and screens for  processing land disposals, the reliability of future disposal data could be at  risk.
section_title: Limited Training Provided to REMIS Users and Systems Administrators
paragraphs: Although RESNC officials view REMIS as a user-friendly database that  requires minimal training to use, we found data reliability issues indicating  that users may not be receiving the training necessary to enter disposal  data in a reliable manner. The standards for internal control in the federal  government state that federal managers should demonstrate a  commitment to the competence of their employees and provide employees  with the training they need to accomplish their assigned duties. According  to RESNC officials, REMIS users received introductory training when the  Corps implemented the database in 1992. In addition, RESNC officials  provided introductory training to 3 of 32 districts that use REMIS in 2006  and 2007. Specifically, they provided training to the Kansas City District in  2006 and to the Norfolk and Memphis Districts in 2007 upon requests from  those districts for their new staff. With limited instructors and funding,  RESNC plans to train the New England District and at least one other  district in 2008.
To its credit, RESNC has sponsored two informational conferences since  2005 for the districts’ systems administrators—those who maintain the  REMIS database for their respective districts—and other REMIS users. At  these conferences, presenters discussed technical changes to REMIS and  the business processes that some attendees considered too advanced—- particularly those who had not received introductory training, including  real estate officials in two districts we contacted. In response to feedback  from the 2007 conference, RESNC is planning to offer hands-on training at  the next conference in May 2008. Nonetheless, we found gaps in training  among REMIS users within the four districts we contacted. Specifically,    of the approximately 63 daily users of REMIS, about 24 have not received  introductory, hands-on training, while 39 have received the training; and   none of the daily REMIS users have received periodic refresher training.
The lack of introductory and periodic refresher training that includes  hand-on, computer-based training can hinder efforts to ensure that all  districts consistently process land disposals in REMIS. Introductory  training is particularly important for new employees, such as systems  administrators and other officials who enter information into the database,  because the disposal process in REMIS requires users to enter specific  data in multiple screens. Periodic refresher training is equally important  for experienced staff, especially because key aspects of the land disposal  process in REMIS have changed in recent years. We are encouraged that  the Corps is planning to expand the scope of training at its next  informational conference in May 2008.
section_title: Conclusions
paragraphs: Having accurate, reliable real property data is important for agencies to  cost effectively manage the properties they need and to identify unneeded  properties that they can dispose of and avoid unnecessary costs to the  government. The Corps, like other federal landholding agencies, must  determine what real property it owns, what it needs, and what it costs to  manage its real property, as well as develop and implement asset  management plans and dispose of unneeded property. To measure  progress toward the administration’s real property disposal goal, OMB and  the Federal Council are using disposal data to track how much property  federal agencies have disposed of and measure the government’s annual  progress toward disposing of its unneeded property.
However, land disposal data in the Corps’ real property database— REMIS—are unreliable. Specifically, REMIS does not provide reliable  information on the Corps’ civil works land disposals from fiscal year 1996  through fiscal year 2006, or on the land that the Corps owned as of  September 30, 2006. Problems contributing to unreliable REMIS land  disposal data included the lack of effective internal control, a database  design that did not follow a best practice and, therefore, resulted in error- prone data, poor data entry practices that led to missing disposal data and  inaccurate disposal dates, unclear guidance for processing land disposals  in REMIS, and limited introductory and refresher training in REMIS for all  users of the database, including new and experienced staff. In addition, 89  percent of all land disposal records in REMIS were missing disposal dates,  while many other land disposal dates were inaccurate. Although the Corps  is taking actions to address some data deficiencies, such as implementing  additional training in some areas, these actions provide little assurance  that REMIS disposal data are reliable. Unreliable land disposal data impair  the usefulness of REMIS as a record of current inventory, as a valid tool  for measuring progress toward the administration’s disposal goal, and as a  source of data that would be useful to Corps decision makers for  budgeting and strategic land management purposes.
section_title: Recommendations for Executive Action
paragraphs: To improve the reliability of REMIS land disposal data for determining  how much land the Corps currently owns and for budgeting and strategic  land management purposes, we recommend that the Secretary of Defense  direct the Commanding General and Chief of Engineers of the U.S. Army  Corps of Engineers to take the following five actions:  implement effective internal controls, including segregation of duties and  review, over the REMIS land disposal process by incorporating such  control into the Corps’ real estate policies at those districts and divisions  identified in this report and others, where appropriate; implement the data normalization best practice in the REMIS database  with respect to disposal dates;   correct the disposal records that were created in REMIS as part of the  efforts to adjust the inventory; issue clear guidance for entering land disposal dates in the REMIS land  disposal process; and    provide and require introductory and periodic refresher training that  covers how to correctly enter land disposal dates in REMIS.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DOD for review and comment. DOD  agreed with all five of our recommendations aimed at improving REMIS  land disposal data and outlined its planned actions to address the  recommendations. Specifically, DOD stated that the Corps is designing a  REMIS modernization program that, when implemented, is to have in  place internal controls, such as quality assurance and control processes,  segregation of duties, and inspection and review phases. In addition,  according to DOD, the Corps is planning to: (1) check the progress that  districts are making in updating historical disposal records; (2) issue  clearer guidance for entering disposal dates, as well as identifying the  required REMIS screens and data fields; and (3) provide annual REMIS  training to Corps districts. Further, DOD agreed with our recommendation  to normalize the database. To reduce the adverse affects of the current  database’s design problem, DOD said that guidance is to be updated, and  special emphasis is to be placed on this module during training. DOD  indicated that the Corps would study and implement methods to eliminate  the redundant and cumbersome data entry that causes the data  normalization problem. However, updating guidance and improving  training does not address the fundamental problem we found related to  data normalization issues because this approach continues to rely on  people consistently entering disposal dates. The key to solving the  database problem will be the Corps’ implementation of methods it  identifies to eliminate duplicate and redundant data entry. We reprinted  DOD’s comments in appendix II. The Corps also provided technical  comments, which we incorporated, as appropriate.
We are sending copies of this report to the Secretary of Defense, the  Commanding General and Chief of Engineers of the U.S. Army Corps of  Engineers, and interested congressional committees. We also will make  copies available to others upon request. In addition, the report will be  available at no charge on the GAO Web site at www.gao.gov.
If you have any questions about this report, please contact me at (202) 512- 2834 or at dornt@gao.gov. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this report.  Staff who made key contributions to this report are listed in appendix III.
section_title: Appendix I: Objective, Scope, and Methodology
paragraphs: Our objective was to determine whether the U.S. Army Corps of  Engineers’ (Corps) real property database—Real Estate Management  Information System (REMIS)—could provide reliable information on the  civil works land that the Corps disposed of from fiscal year 1996 through  fiscal year 2006, or on the civil works land the Corps owned as of  September 30, 2006.
To address this objective, we reviewed relevant federal laws and executive  orders related to the Corps’ disposal of landholdings, as well as its  applicable real property policies, guidance, and user/training manuals on  the processing of civil works land disposals in REMIS. We reviewed a  number of our previous reports on real property management, the  Department of Defense Inspector General’s work on the Corps’ real  property inventory, and technical papers on database normalization. We  also reviewed and analyzed the Corps’ Asset Management Plan and Three  Year Timeline—an action plan for implementing the asset management  plan and demonstrating the use of real property inventory data for  decision making—to determine the extent to which the Corps used REMIS  land disposal data. To gain a more complete understanding of the Corps’  disposal process and of REMIS from fiscal year 1996 through fiscal year  2006, we contacted Corps headquarters officials from the Offices of Real  Estate, Corporate Information, and the Chief Counsel; Corps field officials  from the Real Estate Systems National Center in Mobile, Alabama, which  manages REMIS; and officials of the contractor that maintained REMIS  and supported its users. Also, Corps headquarters and field officials  briefed us on the Corps’ land acquisition and disposal process, legal  authorities, applicable executive orders, disposal policies, Asset  Management Plan, Three Year Timeline, and the REMIS land disposal  process.
To gain a better understanding of the REMIS land disposal process, we  contacted 4 of the Corps’ 32 district offices—Baltimore, Maryland; Fort  Worth, Texas; Omaha, Nebraska; and Los Angeles, California—with  REMIS databases. We selected 3 of these 4 districts because their land  disposals accounted for about 82 percent of the acreage that the Corps  disposed of from fiscal year 1996 through fiscal year 2006, according to  REMIS data. We selected the fourth district—Los Angeles—because it had  recently completed an inventory of its entire real property holdings. We  also contacted three Corps divisions—North Atlantic, New York, New  York; Northwestern, Portland, Oregon; and Southwestern, Dallas, Texas— that oversee these districts. In each of these districts, we contacted key  district officials responsible for real property management and REMIS. We  also contacted the key officials who were responsible for oversight of real  property management and of REMIS in these four districts. Additionally,  we visited the Baltimore and Los Angeles Districts because, according to  Corps headquarters officials, the officials in these districts could provide  insights into REMIS and its accuracy. Specifically, the headquarters  officials said that the officials in the Baltimore District were very  knowledgeable about the REMIS disposal process and that, as noted,  officials in the Los Angeles District had recently completed an inventory of  the district’s entire real property holdings. At each location, we observed  the REMIS disposal process and reviewed the supporting documentation  and guidance.
To further address our objective, although we did not have direct access to  REMIS, we took several steps to assess the reliability of REMIS disposal  data. We contacted the REMIS contractor to gain a good understanding of  the REMIS database, the disposal data that it stores, the manner districts  input data into the database, and the districts’ ability to query the REMIS  database. We requested and obtained from the Corps’ contractor data files  of (1) REMIS land tract disposals from fiscal year 1996 through fiscal year  2006, (2) the Corps’ fiscal year 2006 Federal Real Property Profile  submission for land disposals, (3) land disposals used for the Three Year  Timeline for 1996 through 2006, and (4) each district’s current real  property holdings in REMIS. These data identified individual land tract  disposals for each district, including specific information about each  disposal, such as the real property identification number for each tract,  date of disposal, acreage, and type of disposal, among other things. To  assess the reliability of these REMIS data, we performed electronic testing  to identify missing data, dates outside the time frame of our request, and  duplicates. We obtained and reviewed the queries that the contractor used  to generate the data that we requested. We focused part of our assessment  on land disposals that occurred during fiscal years 2005 and 2006—the  years, when according to the data, the bulk of land disposals occurred— and specifically focused on the land disposal dates. We compared the land  disposal data files to identify inconsistencies among the disposals. At the  district level, we had the Baltimore, Fort Worth, and Omaha Districts  determine whether our REMIS land tract disposal data files for these  districts were accurate. Similarly, we had the Baltimore and Los Angeles  Districts determine whether our REMIS file for their districts’ real  property holdings were accurate. Based on this work, we found that the  REMIS land disposal data were not reliable because of inconsistencies  among the disposal data files we analyzed, a significant number of missing  disposal dates, and inaccurate current inventory data.
In addition, we assessed the Corps’ internal controls over the recording of  land disposals in REMIS. We obtained the applicable Corps policies,  procedures, and guidance and compared them with standards for internal  control in the federal government and other control guidance related to  control activities, environment, and training. We also had follow-up  discussions with Corps officials about how internal controls are  interpreted and implemented. In assessing the adequacy of internal  controls, we used the criteria in GAO’s Standards for Internal Control in  the Federal Government, GAO/AIMD-00-21.3.1, November 1999. These  standards, issued pursuant to the requirements of the Federal Managers’  Financial Integrity Act of 1982 (FMFIA), provided the overall framework  for establishing and maintaining internal control in the federal  government. Also pursuant to FMFIA, the Office of Management and  Budget issued Circular A-123, revised December 21, 2004, to provide the  specific requirements for assessing the reporting on internal controls.  Internal control standards and the definition of internal control in Circular  A-123 are based on GAO’s Standards for Internal Control in the Federal  Government.
section_title: Appendix II: Comments from the Department of Defense
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Gerald P. Barnes (Assistant  Director),  Lindsay M. Bach, Cherry M. Clipper, Melinda L. Cordero,  Elizabeth R. Eisenstadt, Colin Fallon, Kathleen A. Gilhooly, H. Brandon  Haller, Vondalee R. Hunt, Chris Martin, Steve Martinez, and Joshua H.  Ormond made key contributions to this report.