Federal Real Property: National Strategy and Better Data Needed to Improve Management of Excess and Underutilized Property
Released: 2012-06-20T00:00:00

Letter

Background

In 2010, federal agencies reported about 3.35 billion square feet of building space to the FRPP: 79 percent of the reported building space was federally owned, 17 percent was leased, and 4 percent was otherwise managed. The data indicated that the agencies used most of the space—about 64 percent—as offices, warehouses, housing, hospitals, and laboratories. The five agencies we reviewed—GSA, DOE, Interior, VA, and USDA—reported owning or leasing more than 866 million square feet of building space, or about 25 percent of the total reported square footage for all agencies.

Initially, FRPC defined 23 FRPP data elements to describe the federal government’s real property inventory. By 2008, FRPC had expanded the number of data elements included in the FRPP to 25. FRPC requires agencies to update their FRPP real property data annually. Each asset included in the database is assigned a unique identification number that allows for tracking of the asset to the unique data that describe it.

See appendix II for a list of the 25 FRPP data elements as defined in 2010.

FRPP data elements as performance measures: utilization, condition index, annual operating costs, and mission dependency. The definitions of these four data elements in 2010 can be found in table 1.

FRPC’s 2010 Guidance for Real Property Inventory Reporting provides specific guidelines on how to report a building as overutilized, underutilized, utilized, or not utilized based on the building’s use and the percentage of the building that is used (see table 2).

FRPC has been collecting FRPP data on federal government properties since 2005. We have reported that results-oriented organizations follow a number of sound data collection practices when gathering the information necessary to achieve their goals. For example, these organizations recognize that they must balance their ideal performance measurement systems against real world considerations, such as the cost and effort involved in gathering and analyzing data. These organizations also tie performance measures to specific goals and demonstrate the degree to which the desired results are achieved. Conversely, we have observed that organizations that seek to manage an excessive number of performance measures may risk creating a confusing excess of data that will obscure rather than clarify performance issues. Limiting the number of measures to the vital few not only keeps the focus of data collection where it belongs, it helps ensure that the costs involved in collecting and analyzing the data do not become prohibitive. Furthermore, results- oriented organizations report on the performance data they collect.

Following the implementation of the executive order and nationwide data collection efforts, we have reported that agencies continue to face challenges with managing excess and underutilized properties. For example, we have previously reported that the legal requirements agencies must adhere to, such as requirements for screening and environmental cleanup as well as requirements related to historical properties, present a challenge to consolidating federal properties. In addition, before GSA can dispose of a property that an agency no longer needs, it must offer the property to other federal agencies. If other federal agencies do not need the property, GSA must then make the property available to state and local governments as well as certain nonprofit organizations and institutions for public benefit uses such as homeless shelters, educational facilities, or fire and police training centers. According to agency officials, as a result of this lengthy process, excess or underutilized properties may remain in an agency’s possession for years. Furthermore, the costs of disposing of property can further hamper an agency’s efforts to address its excess and underutilized property problems. For example, properties that contain radiological contamination must be mitigated before they can be disposed. In addition, the interests of multiple—and often competing—stakeholders may not align with the most efficient use of government resources and complicate real property decisions.

Despite these challenges, both the previous and current administrations have implemented a number of cost savings initiatives associated with excess and underutilized property. In August 2005, the administration set a goal to reduce the size of the federal inventory by $15 billion by 2009. In June 2010, the President directed federal civilian agencies to achieve $3 billion in savings by the end of fiscal year 2012 through reducing annual operating costs, generating income through disposing of assets, using existing real property more effectively by consolidating existing space, expanding telework, and other space realignment efforts. Furthermore, on May 4, 2011, the administration proposed legislation— referred to as the Civilian Property Realignment Act (CPRA)—to establish a legislative framework for disposing of and consolidating real property, among other things. In September 2011, OMB projected that the proposal would save the government $4.1 billion over 10 years from sales proceeds, and that savings would also be achieved through decreased operating costs and efficiencies. However, the Congressional Budget Office (CBO) has concluded that CPRA would probably not result in a significant increase in proceeds from the sale of federal properties over the next 10 years.

Excess and Underutilized Property Data Are Inconsistent and Inaccurate because of Lack of Sound Data Collection Practices

FRPC has not followed sound data collection practices, and, as a result, FRPP data do not describe excess and underutilized properties consistently and accurately. Consistent with this, FRPP data did not always accurately describe the properties at the majority of sites we visited and often overstated the condition and annual operating costs, among other things.

FRPP Data Do Not Describe Excess and Underutilized Federal Real Properties Consistently and Accurately

Agency officials described ways in which key performance measures in the FRPP database are reported inconsistently or inaccurately. At 23 of the 26 sites that we visited, we found inconsistencies or inaccuracies related to the following performance measures described in the background: (1) utilization, (2) condition index, (3) annual operating costs, and (4) mission dependency. As a result of the discussions we had with agency officials about how FRPP data are reported, as well as the inconsistencies and inaccuracies described in the following sections, we question whether FRPP data provide an adequate tool for decision making or measuring performance, such as the cost savings initiatives put forth by OMB.

We found that the agencies we reviewed do not report property utilization consistently. FRPC guidance states that for offices, hospitals, and warehouses, utilization is the ratio of occupancy to current design capacity. Although USDA requires its agencies to follow FRPC guidance, USDA stated that FRPC has not established governmentwide definitions for occupancy or current design capacity. As a result, each agency within USDA has its own internal procedures for determining a building’s utilization level. Moreover, VA defines utilization differently from FRPC guidance, that is, the ratio of “ideal space” to existing space, which VA stated is different from occupancy. Despite the inconsistency of this method of defining utilization with FRPC guidance, VA officials reported that OMB staff approved of their method of reporting utilization.Furthermore, OMB acknowledged that it is standard practice for agencies to measure utilization tailored to the agencies’ specific needs and circumstances.

Among the 26 federal sites we visited, we found utilization data inconsistencies or inaccuracies for properties at 19 of these sites. For example, at one VA site, a building we toured was reported to have a utilization of 39 percent in 2010 FRPP data and 45 percent utilization in 2011 source data, even though local officials said this building has been fully occupied since 2008. See figure 1. Another building that we toured at the same site was reported to be 0 percent utilized in 2010 FRPP data and 59 percent utilized in 2011 agency source data.

However, all but one of the rooms in the building were vacant, and local officials said only 10 percent of the building was utilized.

In addition, at one USDA site we visited, we found two houses that have been empty since 2009; however, they were both reported to the FRPP as utilized for 2009 and 2010. See figure 2 to view images of these two USDA buildings. We also found problems with the utilization data at properties owned by the other three agencies included in our review.

As was the case with utilization, we found that agencies do not report the condition of their properties consistently. According to FRPC guidance, condition index is a general measure of the constructed asset’s condition and is calculated by using the ratio of repair needs to the plant replacement value (PRV). Needed repairs are determined by the amount of repairs necessary to ensure that a constructed asset is restored to a condition substantially equivalent to the originally intended and designed capacity, efficiency, or capability. However, we found that agencies do not always follow this guidance. For example, when agencies have determined that a property is not needed and will ultimately be disposed, they may assign no repair needs to that property even though the property may be in a state of significant disrepair. Doing so allows agencies to use their limited funds to maintain properties that they regularly use, but it can lead to condition index data that do not accurately reflect each property’s condition as set forth in FRPC guidance. Figure 3 is an example of how the condition index of a building with high repair needs can significantly change depending on whether agency officials choose to follow FRPC guidance or if they assign zero dollars in repair needs because repairs are not planned.

While it may be a good practice not to assign repair needs to dilapidated buildings that no longer support agencies in carrying out their mission, the fact that these buildings may report a perfect or near-perfect condition index provide decision makers with an inconsistent representation of the condition of buildings at a given site. We found examples at all five agencies we visited where a property in very poor condition received a higher condition index score than a property in good condition. Figure 4 demonstrates examples of this at an Interior site we visited.

We found condition index reporting inconsistencies and inaccuracies at 21 of 26 sites visited. The practice of assigning no repair needs to many excess and underutilized buildings because agencies have no intention of repairing them led to severely blighted buildings receiving excellent condition scores.received high condition index scores, even though they are in poor condition. Some of the problems with these buildings include asbestos, mold, collapsed walls or roofs, health concerns, radioactivity, deterioration, and flooding.

Although Some Progress Has Been Made, Federal Property Management Is Still Challenging and Efforts Lack a National Strategy

The federal government has taken some steps to address excess and underutilized property management problems by developing the FRPP database, among other things. However, cost savings efforts associated with excess and underutilized property over the years were discontinued and recent efforts may overstate potential savings. Although the federal agencies we reviewed have taken some actions to try to address excess and underutilized properties, long-standing challenges remain. As a result, a national strategy could help the federal government prioritize future management efforts.

Limited Progress Has Been Made in Managing Excess and Underutilized Federal Property, but the Extent of Cost Savings Is Not Clear

The federal government has made some progress in managing real property since we first added this issue to our high-risk series. In a 2007 review of federal real property, we found that the administration at that time made progress toward managing federal real property and addressing some long-standing problems. The 2004 executive order established FRPC to develop property management guidance and act as a clearinghouse for property management best practices. FRPC created the FRPP database and began data collection in December 2005. As part of a 2011 update to our high-risk series, we reported that the federal government has also taken steps to improve real property management, most notably by implementing some GSA data controls and requiring agencies to develop data validation plans.management as high risk, reliable tools for tracking property were generally unavailable. Consequently, we determined that the development of a database and the implementation of additional data quality controls were steps in the right direction. However, on the basis of our current work, it appears that data controls have not brought about widespread improvements with data consistency and accuracy as was anticipated. Nonetheless, we found that the FRPP can be used in a general sense to track assets. For example, during our site visits, agency officials were able to match assets with the real property unique Prior to designating property identification numbers assigned to them in the FRPP database and were able to locate even small, remote buildings using these numbers.

In addition to establishing FRPC, developing the FRPP, and implementing the executive order, the previous and current administrations have sought ways to generate cost savings associated with improving management of excess and underutilized properties. However, these efforts have not led to proven cost savings associated with the management of these properties.

Cost savings goals set by the previous administration were discontinued. In 2007, we reported that adding real property management to the President’s Management Agenda in 2004 increased its visibility as a key management challenge and focused greater attention on real property issues across the government. As part of this agenda, the previous administration set a goal of reducing the size of the federal real property inventory by 5 percent, or $15 billion, by the year 2015. OMB staff at the time reported that there was an interim goal to achieve $9 billion of the reductions by 2009. OMB staff recently told us that the current administration is no longer pursuing these goals. Furthermore, the senior real property officers of the five agencies we reviewed told us that they were never given specific disposal targets to reach as part of these prior disposal goals.

Cost savings associated with improved management of excess and underutilized properties as directed in the June 2010 presidential memorandum are unclear. OMB staff also said that while the goals of the previous administration are no longer being pursued, the current administration issued a memorandum that directed civilian agencies to achieve $3 billion in savings by fiscal year 2012 through better management of excess properties, among other things. According to the administration’s website, as of September 2011, approximately half of the cost savings had been achieved ($1.48 billion). Almost half of the total goal (about $1.4 billion) is targeted to the five agencies we reviewed. Officials from these agencies reported various cost savings measures such as selling real property, forgoing operations and maintenance costs from disposed properties, and reducing energy costs through sustainability efforts to achieve agency savings targets. As of the first quarter of fiscal year 2012, only two of the agencies we reviewed—GSA and USDA—were claiming any sales proceeds from the sale of federal real property: GSA reported $41.1 million in savings from sales proceeds and USDA reported approximately $5.6 million. Interior officials stated that individual sales with positive net proceeds are offset by those sales in which the cost of the disposal (i.e., as a result of environmental remediation and repair) is greater than any proceeds realized. Furthermore, DOE officials reported that the disposition costs of the properties they sold during the time frame of the memorandum were actually greater than the proceeds. As a result, DOE has reported a net loss of $128 million on property sales for this time period. VA also did not include asset sales as part of its savings plan.

Four of the five agencies told us that they believe they will reach their savings targets by the end of fiscal year 2012; however, whether they claim to reach those goals or not, the actual and estimated savings associated with excess and underutilized property management may be overstated. Furthermore, agencies were not required to develop cost savings that reflected a reduction in agency budgets. We found problems with cost savings estimates related to excess and underutilized property management from all five of the federal agencies we reviewed (see table 4).

OMB staff has not provided information to support projected cost savings if CPRA is enacted. In addition to the expected savings resulting from the June 2010 presidential memorandum, OMB staff reported that CPRA—the legislation the administration has proposed to address real property management obstacles—will result in $4.1 billion in savings within 10 years following enactment from sales proceeds as well as unspecified savings from operating costs and efficiencies. However, the CPRA projections may not reflect true cost savings. OMB staff did not provide a methodology, calculations, or any other basis for its stated projections. Furthermore, CBO concluded that CPRA would probably not result in a significant increase in proceeds from the sale of federal properties over the next 10 years. CBO noted that the Department of Defense holds about one-third of the excess properties. CPRA would have no effect on these properties, because the proposal only applies to civilian agencies. Furthermore, CBO estimated that implementing CPRA would cost $420 million over the 2012 through 2016 period to prepare properties for sale or transfer. The President’s fiscal year 2013 budget requested $17 million to implement CPRA (if it is enacted) and $40 million to establish an Asset Proceeds and Space Management Fund to facilitate the disposal process intended to reimburse agencies for some necessary costs associated with disposing of property. This amount is far short of the $420 million that CBO projected would be needed to prepare properties for sale or transfer within a 4-year period.

Federal Agencies Have Made Progress but Still Face Long-standing Challenges

Despite problems with data collection and national cost savings goals, we found that agencies have taken steps to address excess and underutilized properties in their portfolios. For example, all five agencies we reviewed have taken steps to use property more efficiently, as follows: Identifying underutilized assets to meet space needs. VA officials told us that they implemented a process to identify vacant and underutilized assets that they could use to meet space needs. In addition, VA officials stated that the department is planning to reuse currently utilized assets that will be available in the future. VA officials added that they have identified 36 sites that include 208 buildings and more than 600 acres that they can use to provide more than 4,100 units of homeless and other veteran housing.

Consolidating offices among and within agencies. USDA and Interior signed a memorandum of understanding in November 2006 that allows the agencies to colocate certain operations and use their buildings more efficiently. The memorandum of understanding enables the agencies to share equipment and space. In addition, USDA closed laboratories at four locations and consolidated operations with existing USDA sites. In its National Capital Region, USDA has consolidated five separate leased locations, totaling 363,482 square feet, into one location at Patriot’s Plaza in Washington, D.C. USDA reported that the consolidation into Patriot’s Plaza will result in annual rent savings of about $5.6 million. DOE officials also stated that the department encourages offices to consolidate operations when it is cost effective to do so. The department also increased the use of an office building at the Lawrence Livermore National Laboratory from 22 percent to 100 percent by changing its use from office space to a building that houses computers. Furthermore, VA consolidated its medical center campuses in Cleveland, Ohio, and engaged a number of private partners directly to reuse the unneeded sites, using its Enhanced Use Lease authority.

Reducing employee work space. To use space more efficiently, Interior reduced new space utilization per employee from 200 usable square feet per person to 180 usable square feet per person. This action decreased total new space by 10 percent in all areas including employee work space and conference space.

Using operations and maintenance charges to reduce operating costs and encourage efficient use of space. DOE officials reported that several sites servicing multiple programs or performing work for others have developed a space charge system whereby a site charges tenants for the operations and maintenance of the square footage they occupy on a square foot basis. This charge defrays operations and maintenance costs associated with the site and encourages tenants to minimize their own space use.

Transferring unneeded property to other entities. Interior officials have disposed of excess properties by transferring them to other organizations to use. For example, Interior officials reported that the department donated a freezer building and a laboratory building at the Woods Hole Science Center in Falmouth, Massachusetts to the Woods Hole Oceanographic Institution. The department also transferred buildings and land at a Corbin, Virginia site to the National Oceanic and Atmospheric Administration.

Creating alternate uses for unused assets. GSA found an alternate use for 400,000 square feet of a concrete slab that remained after demolishing an excess building. When needed, GSA leases the slab to the Federal Emergency Management Agency as outdoor storage space for electric generators and other heavy equipment and as a staging area for equipment during responses to disasters (see fig. 10).

Using telework and hoteling work arrangements.we reviewed require or allow employees to use alternate work arrangements such as teleworking or hoteling, when feasible, to more efficiently use space. For example, GSA instituted a pilot hoteling project at the Public Building Service headquarters in Washington, D.C., to reduce needed space.

Progress notwithstanding, agencies still face many of the same long- standing challenges we have described since we first designated real property management as a high-risk area.

Agency disposal costs can outweigh the financial benefits of property disposal. USDA officials reported that the costs of disposing of real property can outweigh savings that result from building demolition and that limited budgetary resources create a disincentive to property disposal. USDA determined that the total annual cost of maintaining 1,864 assets with annual operating costs less than $5,000 was $3 million. Conversely, USDA concluded that the disposal costs for these assets equals or exceeds their annual operating cost of $3 million. Thus, disposal of the assets would not result in immediate cost savings, and USDA has not demolished the assets. In addition, Interior officials reported that numerous National Park Service buildings acquired during the planning for a Delaware River dam that was never built are excess, as are many cabins and houses along the Appalachian Trail. Because Interior is not spending any operations and maintenance on these assets, disposing of them would not provide savings to the department. As a result, Interior has made a business decision to only fund a small percentage of these disposals at the Delaware River dam site.

Legal requirements—such as those related to preserving historical properties and the environment—can make the property disposal process lengthy according to agency officials. Meeting requirements associated with historical properties can delay or prevent disposal of excess buildings. The National Historic Preservation Act, as amended, requires agencies to manage historic properties under their control and jurisdiction and to consider the effects of their actions on historic preservation.dispose of a 15,200-square-foot building at Menlo Park, California that has been used as both a residence and a research building during its 83- year history. The building has been scheduled for demolition since 2001, but VA cannot demolish it because of a historical designation. In addition, in 2010, Interior canceled the disposal of a 95-square-foot stone property that we visited because it was found eligible for historic designation. The property is in poor condition and has not been used for many years, but Interior officials told us that they are now planning to stabilize and restore the structure (see fig. 11).

Conclusions

The federal government has made some progress in managing real property since it was first added to our high-risk series. The FRPC created the FRPP database to track federal property and the federal agencies we reviewed have taken some actions to address excess and underutilized property. Even with long-standing efforts to improve the management of excess and underutilized properties and save costs, federal agencies continue to face many of the same challenges that we have reported for over a decade. The problems still facing the federal government in this area highlight the need for a long-term, comprehensive national strategy to bring continuity to efforts to improve how the federal government manages its excess and underutilized real property and improve accountability for these efforts. Such a strategy could lay the framework for addressing the issue of inconsistent and inaccurate data on excess and underutilized federal properties. We continue to believe that consistent and accurate data on federal real property are necessary for the federal government to effectively manage real property. While the 2004 executive order charged the Administrator of GSA, in consultation with FRPC, to develop the data reporting standards for the FRPP database, the current standards have allowed agencies to submit data that are inconsistent and therefore not useful as a measure for comparing performance inside and outside the federal government. Also, the current definitions of certain data elements could perpetuate confusion on the nature of federal government properties. For example, the FRPP data element, PRV, is commonly referred to as an asset’s “value,” which can cause decision makers to make assumptions about the worth of the asset even though the PRV cannot be accurately used in this way. Moreover, many agencies do not have the resources to collect data at the asset level, and the information that is reported in order to meet requirements for asset-level data is likely conveying an inaccurate picture of excess and underutilized property. Furthermore, federal government agencies have vastly different uses for properties, and it may be challenging to collect certain kinds of property management data using a single database. This makes it difficult for decision makers to understand the scope of the problem and assess potential cost savings and revenue generation. Now that FRPC has had several years of experience with these data, it is in a better position to refine data collection requirements by identifying data that are suitable for comparison in a nationwide database. Following sound data collection practices could help FRPC to thoroughly evaluate and retool the FRPP so that it collects and provides data that are consistent and accurate to decision makers, even if this means collecting less data in the short term. GSA is uniquely positioned to lead this effort because of its charge to develop FRPP data reporting standards.

Recommendations for Executive Action

We are making two recommendations, one to the Director of OMB and one to the Administrator of GSA.

We recommend that the Director of OMB require the OMB Deputy Director for Management, as chair of FRPC, in collaboration and consultation with FRPC member agencies, to develop and publish a national strategy for managing federal excess and underutilized real property that includes, but is not limited to, the following characteristics: a statement of purpose, scope, and methodology; problem definition and risk assessment; goals, subordinate objectives, activities, and performance measures, including the milestones and time frames for achieving objectives; resources, investments, and risk management; organizational roles, responsibilities, and coordination; and integration and implementation plans.

We recommend that the Administrator of GSA, in collaboration and consultation with FRPC member agencies, develop and implement a plan to improve the FRPP, consistent with sound data collection practices, so that the data collected are sufficiently complete, accurate, and consistent. This plan should include, but not be limited to the following areas: ensuring that all data collection requirements are clearly defined and that data reported to the database are consistent from agency to agency; designating performance measures that are linked to clear performance goals and that are consistent with the requirements in the 2004 executive order (or seeking changes to the requirements in this order as necessary); collaborating effectively with the federal agencies that provide the data when determining data collection requirements and limiting the number of measures collected to those deemed essential, taking into account the cost and effort involved in collecting the data when determining data collection requirements; and developing reports on the data that are collected.

Agency Comments and our Evaluation

We provided a draft of this report to OMB, GSA, VA, USDA, DOE, and Interior for review and comment. OMB did not directly state whether it agreed or disagreed with our recommendations. OMB agreed that challenges remain in the management of the federal government's excess and underutilized properties; however, OMB raised concerns with some of the phrasing in our report and offered further context and clarification regarding the administration’s overall efforts on real property reform. OMB’s comments are contained in appendix III, along with our response. GSA agreed with our recommendation to improve the FRPP and described actions its officials are taking to implement it. GSA also partially agreed with our findings and offered some clarifications. GSA’s comments are contained in appendix IV along with our response. VA generally agreed with the overall message of our report, but disagreed with how we presented certain issues. VA’s comments are contained in appendix V along with our response. USDA provided clarifying comments which we incorporated, where appropriate. USDA’s comments are contained in appendix VI. DOE provided technical clarifications, which we incorporated where appropriate, but did not include as an appendix. Interior did not provide comments.

OMB stated that, because our conclusion regarding the accuracy of FRPP data is based on our sample of 26 site visits, further study is needed to determine whether the problems we found are systemic. However, as discussed in the report, our findings are primarily based on the issues we identified with FRPC’s data collection practices, which are the basis of the entire FRPP data collection process and are thus systemic. The 26 sites that we visited complement those findings and illustrate how poor data collection practices affect data submissions; however, they are not the only basis for our findings. Furthermore, OMB stated that the administration has a strategy for improving the management of federal real property that serves as an important foundation for the national strategy we recommend in this report. While the initiatives OMB described may represent individual, positive steps, we do not believe that they fully reflect the key characteristics of a cohesive national strategy. A national strategy would improve the likelihood that current initiatives to improve real property management will be sustained across future administrations. A more detailed discussion of our views on OMB’s comments can be found in appendix III.

GSA stated that our report correctly identifies many of the problems that hampered effective FRPP data collection in 2011. According to GSA, it has taken specific actions to begin addressing our recommendation, including modifying FRPC guidance to the agencies to clarify report definitions and proposing reforms of the collection process to FRPC consistent with our recommendation. GSA also offered a few clarifications on our findings. GSA stated that it was unclear whether the examples of inconsistencies we discuss in our report are systemic. As noted, our findings are primarily based on the problems we found with the overall data collection process. Thus, our recommendation to GSA involves adopting sound data collection practices. In addition, GSA stated that, because FRPP data is reported annually, property utilization and condition may change from the time that information is submitted. However, we took steps, including discussing the history of each property with local property managers, to ensure that any inconsistencies we found were not due to changes between the time data was reported and the time we visited the building. These steps and a more detailed discussion of our views on GSA’s comments can be found in appendix IV.

VA generally agreed with our findings and provided additional information on VA’s federal real property portfolio, their methods of reporting real property data, and efforts the department is taking to address its excess and underutilized properties. However, VA disagreed with some of our statements related, for example, to property utilization. A more detailed discussion of our views on VA’s comments can be found in appendix V. In addition, USDA provided comments and clarifications which we incorporated, where appropriate. For example, USDA clarified its previous statement regarding utilization reporting to emphasize that component agencies are directed to follow FRPC guidance, but acknowledged that this guidance was inconsistent. USDA also clarified a previous statement regarding problems faced by the agency when reporting FRPP data in 2011. USDA’s comments can be found in appendix VI.

We are sending copies of this report to the Director of OMB; the Administrator of GSA; and the Secretaries of Energy, Interior, Veterans Affairs, and Agriculture. Additional copies will be sent to interested congressional committees. We will also make copies available to others upon request, and the report is available at no charge on the GAO website at http://www.gao.gov.

If you have any questions about this report, please contact me at (202) 512-5731 or wised@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Major contributors to this report are listed in appendix VII.

Appendix I: Objectives, Scope, and Methodology

Our objectives were to determine to what extent (1) the Federal Real Property Profile (FRPP) database consistently and accurately describes the nature, use, and extent of excess and underutilized federal real property, and (2) progress is being made toward more effectively managing excess and underutilized federal real property. We identified five civilian real property-holding agencies for our review: the General Services Administration (GSA); the Departments of Energy (DOE), the Interior (Interior), and Veterans Affairs (VA); and the U.S. Department of Agriculture (USDA). We chose GSA, DOE, Interior, and VA because these were the four largest agencies in terms of total building square footage of all civilian real property agencies that are required to submit data under the executive order. On the basis of the data available, these five agencies report approximately two-thirds of the building square footage reported by civilian agencies. We did not consider agencies in the Department of Defense because we previously reported on the department’s excess facilities. We added USDA to our list of selected agencies because USDA reported more excess properties than any other civilian agency in 2009.

To determine to what extent the FRPP database described the nature, use, and extent of excess and underutilized federal real property, we obtained and analyzed FRPP data submissions and other real property data from the five selected agencies; interviewed real property officers at these agencies; visited sites where the agencies had reported excess or underutilized properties; interviewed Office of Management and Budget (OMB) staff; and reviewed FRPC guidance and other documents related to the agencies’ real property data and the FRPP database. We obtained the agencies’ FRPP data submissions for fiscal years 2008 through 2010. According to our conversations with agency officials, FRPP submissions can only be changed by the agency submitting the data. As a result, we believe that the FRPP submissions obtained from the agencies match the data contained in the FRPP database and are sufficiently reliable for the purpose of evaluating the consistency and accuracy of the FRPP database. In addition, for select data elements, we obtained real property data from the source databases that each agency uses to generate its annual FRPP submissions. We obtained source system data to get the actual percentage of utilization of each property as of the date when these data were extracted and provided to us in September or October of 2011. For the years of our FRPP data review (fiscal years 2008 through 2010), agencies were only required to report utilization using four categories: overutilized, utilized, underutilized, or not utilized. However, the FRPP guidance stated that agencies should maintain the actual percentage of utilization in their own systems for audit purposes.

We posed questions to senior real property officers at the five agencies about the collecting and reporting of real property data. To gather detailed examples of excess and underutilized properties and to learn about the processes by which data on such properties are collected and submitted to the FRPP database, we visited sites where the five agencies had reported excess or underutilized properties. We selected these sites using information from the agencies’ FRPP submissions. To narrow our scope, we chose only federally owned buildings for our visits. Using the most recent FRPP submissions we had at the time (fiscal year 2010), we selected a nonprobability sample of owned buildings for each agency that were listed as excess (on the status indicator data element) or underutilized (on the utilization data element), or both. Because VA did not classify any of their owned buildings as “excess,” we also selected VA buildings classified as “not utilized.”sample, observations made at these site visits do not support generalizations about other properties described in the FRPP database or Because this is a nonprobability about the characteristics or limitations of other agencies’ real property data. Rather, the observations made during the site visits provided specific, detailed examples of issues that were described in general terms by agency officials regarding the way FRPP data is collected and reported. We focused on sites clustered around four cities: Washington, D.C.; Dallas, Texas; Los Angeles, California; and Oak Ridge, Tennessee. This strategy afforded both geographic diversity and balance among our selected agencies while also accommodating time and resource constraints. In selecting sites and buildings in and around these four cities, we took into account the following factors:

We prioritized sites that had multiple excess and/or underutilized properties. This allowed us to see more properties in a limited amount of time.

We prioritized the selection of excess and/or underutilized properties that fell into one of the five types of real property uses required to submit utilization data in 2010—offices, warehouses, hospitals, laboratories, and housing. However, we also selected some buildings classified as “other,” particularly buildings that were large or that had high reported values.

We attempted to balance the numbers of excess and underutilized buildings we selected. (Some buildings were classified as both excess and underutilized since these classifications are made in different data elements in FRPP.)

We attempted to visit four or five sites from each of the five different However, most GSA sites consisted of only one building, agencies.so we selected more sites for GSA. In the end, we selected four sites from each of Interior and USDA, five from each of DOE and VA, and eight from GSA. In all, we selected 26 sites.

Whereas we selected sites based in large part on the numbers and kinds of buildings they had, the exact set of buildings we visited at each site depended on additional factors. At some sites, there were too many excess and underutilized properties to see them all. In those circumstances, we prioritized large buildings with high reported values and tried to see a number of different kinds of buildings (e.g., a mix of offices and warehouses). At several sites, local property officials identified other properties with issues related to excess and underutilized property that we toured and analyzed.

Prior to each site visit, we analyzed the FRPP data submissions for fiscal years 2008 through 2010 and agencies’ source system data we obtained in September or October 2011, and developed questions about the data submissions for local property managers. During our site visits, we interviewed local property managers and compared what we observed at each building with the FRPP data for that building. When not restricted by security concerns, we photographed the building. In addition to questions about individual properties, we questioned the local officials about the kind of data they collect on the properties and how they collect it.

To summarize inconsistencies and inaccuracies between our observations at the properties we visited and the FRPP data for those properties, we analyzed 2008 through 2010 FRPP data for all of the properties. As part of this review, we checked the reported utilization, condition index, value, and annual operating costs for each building for all three years. Four analysts, working together, evaluated these data both for inaccuracies (cases where the data clearly misrepresented the actual utilization, condition, value, or annual operating costs of a property) and for year-to-year inconsistencies (cases where reported values showed large year-to-year changes that did not correspond to observable changes in the property and that agency officials could not explain). Each of the 26 sites was counted as having a problem on a given data element if at least one inconsistency or inaccuracy was identified for that element.The four analysts discussed each case and arrived at a consensus as to whether a problem existed in each data element for each site.

To determine the progress being made toward more effective management of federal excess and underutilized real property, we asked the senior real property officers at each of our selected agencies to provide written responses to a standard list of questions. These questions addressed management issues related to excess and underutilized owned buildings, how FRPP data are reported, and progress the agency is making toward sales and utilization goals set by the OMB. We analyzed the written responses to our questions and reviewed supporting documentation provided by agency officials such as regulations, policies, and other documents. In addition to reviewing the written responses to our questions, we reviewed a number of our previous reports and pertinent reports by the Federal Real Property Council (FRPC), the Congressional Budget Office, and the Congressional Research Service. We also reviewed and analyzed federal laws relating to real property for the major real property-holding agencies.

Because OMB chairs FRPC and has set cost savings goals related to federal real excess and underutilized properties, we analyzed documents related to these goals—including the 2004 executive order, the June 2010 presidential memorandum on “Disposing of Unneeded Federal Real Estate,” and legislation proposed by the administration known as the Civilian Property Realignment Act (CPRA). We also interviewed knowledgeable OMB staff about agency-specific targets related to the June 2010 presidential memorandum, the methodology used to project potential cost savings if CPRA were to be enacted, and progress toward costs savings goals set by the previous administration.

We conducted this performance audit from May 2011 to June 2012 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 objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Appendix II: Federal Real Property Council Fiscal Year 2010 Inventory Data Elements and Descriptions

Data element number Data element name 1 2 3

Data element definition Real property type indicates the asset as land, building, or structure. Real property use indicates the asset’s predominant use as land, building, or structure. The legal interest indicator is used to identify a real property asset as being owned by the federal government, leased to the federal government (i.e., as lessee), or otherwise managed by the federal government. Otherwise managed properties are (1) owned by a state or foreign government that has granted rights for use to the federal government using an arrangement other than a lease, or (2) trust entities that hold titles to assets predominantly used as museums, yet may receive some federal funds to cover certain operational and maintenance costs. Status reflects the predominant physical and operational status of the asset. Buildings, structures, and land assets have one of the following attributes: Active. Currently assigned a mission by the reporting agency. Inactive. Not currently being used but may have a future need. Includes real property in a caretaker status (closed pending disposal; for example, facilities that are pending a Base Realignment and Closure action) and closed installations with no assigned current federal mission or function. Excess. Formally identified as having no further program use of the property by the landholding agency.

Disposed. Required for assets that have exited the federal portfolio of assets during the current reporting period.

Each asset owned or leased by the federal government (and those otherwise managed by museum trusts) has one of the following historical status attributes:

National Historic Landmark

National Register listed

National Register eligible

Noncontributing element of a National Historic Landmark or National Register listed district Evaluated, not historic Reporting agency refers to the federal government agency reporting the property to the FRPC inventory database. Using organization refers to the predominant federal government agency or other nonfederal government entity occupying the property. Size refers to the size of the real property asset according to appropriate units of measure. The unit of measure used for the three real property types is as follows: For land, the unit of measure is acreage and is designated as either rural acres or urban acres. For buildings, the unit of measure is area in square feet and is designated as gross square feet. For structures, the unit of measure includes the size (or quantity) and unit of measure, and can include square yards, linear feet, miles, and the numbers of specific types of structures.

Data element number Data element name 9 Utilization

Data element definition Utilization is defined as the state of having been made use of, that is, the rate of utilization. The utilization rate for each of the five building predominant use categories is defined as follows: office: ratio of occupancy to current design capacity, hospital: ratio of occupancy to current design capacity, warehouse: ratio of gross square feet occupied to current design capacity, laboratory: ratio of active units to current design capacity, and housing: percent of individual units that are occupied.

Value is defined as the cost of replacing the existing constructed asset at today’s standards and is also known as plant replacement value (PRV) or functional replacement value. Condition index is a general measure of the constructed asset’s condition at a specific point in time. The condition index is calculated as the ratio of repair needs to PRV. Repair needs are the amount necessary to ensure that a constructed asset is restored to a condition substantially equivalent to the originally intended and designed capacity, efficiency, or capability. Agencies will initially determine repair needs based on existing processes, with a future goal to further refine and standardize the definition. The condition index will be reported as a “percent condition” on a scale of zero to 100 percent. Mission dependency is the value an asset brings to the performance of the mission as determined by the governing agency: mission critical: without constructed asset or parcel of land, mission is compromised; mission dependent, not critical: does not fit into mission critical or not mission dependent categories; and not mission dependent: mission unaffected.

Annual operating costs consist of the following: recurring maintenance and repair costs, utilities, cleaning and janitorial costs, and roads and grounds expenses Main location refers to the street or delivery address for the asset or the latitude and longitude coordinates. Real property unique identifier is a code that is unique to a real property asset that will allow for linkages to other information systems. The real property unique identifier is assigned by the reporting agency and can contain up to 24 alpha-numeric digits. The city or town associated with the reported main location in which the land, building, or structure is located. The state or District of Columbia associated with the reported main location in which the land, building, or structure is located. The country associated with the reported main location in which the land, building, or structure is located. The county associated with the reported main location in which the land, building, or structure is located. The congressional district associated with the reported main location in which the land, building, or structure is located. The ZIP code associated with the reported main location in which the land, building, or structure is located.

Data element number Data element name 22

Data element definition Installation identifier. Land, buildings or other structures, or any combination of these. Examples of installations are a hydroelectric project, office building, warehouse building, border station, base, post, camp, or an unimproved site. Subinstallation identifier. Part of an installation identified by a different geographic location code than that of the headquarters installation. An installation must be separated into subinstallations and reported separately when the installation is located in more than one state or county. However, an agency may elect to separate an installation into subinstallations even if the installation is not located in more than one state or county. Restrictions are limitations on the use of real property and include environmental restrictions (cleanup-based restrictions, etc.), natural resource restrictions (endangered species, sensitive habitats, floodplains, etc.), cultural resource restrictions (archeological, historic, Native American resources, except those excluded by Executive Order 13007, Section 304 of the National Historical Preservation Act, etc.), developmental (improvements) restrictions, reversionary clauses from deed, zoning restrictions, easements, rights of way, mineral interests, water rights, air rights, other, not applicable Agencies are required to provide all assets that have exited the federal portfolio of assets during the reporting fiscal year. This will include, but is not limited to, sales, federal transfers, public benefit conveyances, demolitions, and lease terminations. Disposition data is reported only in the year the asset has exited the federal portfolio of assets. Agencies are required to provide status, reporting agency, real property unique identifier, disposition.

Agencies are also required to report disposition method (methods include public benefit conveyance, federal transfer, sale, demolition, lease termination, or other), disposition date, disposition value (the PRV for public benefit conveyances, federal transfers, demolitions, and other dispositions; the sales price for sales; and the government’s cost avoidance for lease terminations), net proceeds (the proceeds received as part of assets disposed through sales and termination of leases minus the disposal costs incurred by the agency), and recipient (the name of the federal agency or nonfederal recipient that received the property through public benefit conveyance or federal transfer).

Data element number Data element name 25 Sustainability

Data element definition Sustainability is reported for building assets, is optional reporting for structures, and is not reported for land and reflects whether or not an asset meets the sustainability criteria set forth in Section 2 (f) (ii) of Executive Order 13423. To be considered sustainable and report “yes,” the asset must meet the five Guiding Principles for High Performance and Sustainable Buildings or be third-party certified as sustainable by an American National Standards Institute (ANSI)-accredited institution: Yes. Asset has been evaluated and meets guidelines set forth in Section 2 (f) (ii) of Executive Order 13423.

No. Asset has been evaluated and does not meet guidelines set forth in Section 2 (f) (ii) of Executive Order 13423.

Not yet evaluated. Asset has not yet been evaluated on whether or not it meets guidelines set forth in Section 2 (f) (ii) of Executive Order 13423.

Not applicable. Guidelines set forth in Section 2 (f) (ii) of Executive Order 13423 do not apply to the asset. This includes assets that will be disposed of by the end of fiscal year 2015 and are no longer in use.

The legal interest element includes a lease maintenance indicator and a lease authority indicator, which are not reported for “owned” and “otherwise managed” properties. This report focuses on owned properties.

The status element includes an outgrant indicator identifying when the rights to the property have been conveyed or granted to another entity. For the purposes of this report, we did not evaluate or analyze information for the outgrant indicator.

Appendix III: Comments from the Office of Management and Budget

GAO Comments

1. OMB stated that the agency agreed with the report’s general conclusion that challenges remain in the management of excess and underutilized properties, but that significant progress has been made. While we stated that limited progress has been made, our draft and final report do not describe the progress as significant. 2. OMB stated that the agency is concerned with some phrasing in the report that may lead the reader to draw unintended conclusions regarding the appropriate next steps for improving the accuracy and consistency of the FRPP. OMB stated that based on its understanding of our report, our findings are based on the 26 site visits we conducted and further study is needed to determine whether the issues we found with the consistency and accuracy of FRPP data are systemic. OMB also asserts that despite our use of a non- probability sample, we make generalizations based on the sample in the report. As we discuss in the report and reiterated in discussions with OMB staff during the comment period, our findings are primarily based on the problems we found with FRPC’s data collection practices, which affect the entire data collection process. The work we did at 26 sample sites complement those findings and illustrate how poor data collection practices impact data submissions, but they are not the only basis for our conclusions. Furthermore, in its comments, OMB acknowledged that “it has been standard practice for each agency to measure certain data elements, such as utilization, through agency-specific means tailored to the agency’s individual needs and circumstances.” Therefore, it is unlikely, as OMB asserts, that further study could find consistent data on properties outside of our sample when OMB has acknowledged that the standards themselves are inconsistent for reporting data. For these reasons, we believe our recommendation remains valid that GSA, in consultation with FRPC, should first address the problems with data collection practices, which our methodology and findings showed were in fact systemic. In response to OMB’s comment, we clarified the report to emphasize the basis for our findings. 3. OMB commented that this report conflicts with previous testimonies and our 2011 update to GAO’s high-risk series which described prior improvements. This report acknowledges such prior progress but provides a more in-depth review of multiple agencies’ data collection practices than prior work. Furthermore, as our report describes, in December 2011, changes were made to the data collection requirements which led to further concerns by agencies about data accuracy. Our report findings are also consistent with a September 2011 GAO report that discussed the Department of Defense’s FRPP data. In that report we found that the Department of Defense’s reported FRPP utilization data consisted of multiple discrepancies between the reported utilization designations and actual building utilization, along with other FRPP submission inaccuracies. Therefore, this report is consistent with our prior conclusions that some progress has been made since 2003, which we have discussed in multiple GAO reports and testimonies. However, the report on the Department of Defense’s data and this report demonstrated significant problems in the data collection process. 4. We believe that our first recommendation—that OMB develop a national strategy—would assist in addressing the tension OMB describes between providing agencies with the flexibility to define data elements based on their agency-specific requirements and establishing governmentwide data elements that can be used to support aggregate analysis across the entire FRPP database. We will continue to engage OMB on the topic of real property management and we believe that this report outlines the next steps. As we recommend in this report, a critical step is for OMB to develop a national strategy for managing excess and underutilized properties. In the area of data collection, a national strategy could help identify management priorities for problems such as this and lay out the principles for weighing the cost of uniform data collection to the agencies with the benefit that would be obtained by aggregate analysis of uniform data. As we stated in the report, if certain data elements cannot be collected consistently, they may not be appropriate to include in a database that appears to be standard across the government. 5. We agree with OMB’s statement that the method of attributing cost savings to efforts made to improve property management could be further clarified so that the public has a clear understanding of how such savings are calculated. We believe that transparency and accountability are critical in the federal government’s service to the taxpayers and would support action taken by OMB to increase transparency in this regard. We did not make a specific recommendation regarding how cost savings, particularly cost savings associated with the June 2010 presidential memorandum, should be clarified. Our report assessed real property management issues related to excess and underutilized property and recommended a national strategy that could be used to guide efforts such as the June 2010 presidential memorandum. 6. OMB stated that the report’s characterization of the administration’s Civilian Property Realignment Act (CPRA) proposal could benefit from further clarity on savings goals and further context about our recent support for the proposal. Regarding savings goals, OMB stated that the administration’s $4.1 billion estimate of the potential proceeds from the Act’s implementation reflects an analysis of the potential proceeds that would result from the entire federal real property inventory, not just those currently identified as “excess.” We acknowledged in the report that these savings, according to OMB, would also come from reduced operating costs and efficiencies. We could not, however, analyze the basis for these savings because, as we discussed, OMB did not provide us with a methodology, calculations, or any basis for its stated projections. We requested this information from OMB multiple times over a period of eight months, and were only provided with a general description of the savings, similar to what OMB provided in its letter commenting on this report. Until we can evaluate the analysis OMB references, we will be unable to provide a more thorough assessment. Furthermore, our views on the effect that CPRA could have on problems we have found in federal real property management have not changed: that CPRA can be somewhat responsive to real property management challenges faced by the government. For example, CPRA proposes an independent board that would streamline the disposal process by selecting properties it considers appropriate for public benefit uses. This streamlined process could reduce disposal time and costs. 7. OMB stated that the administration has a strategy for improving the management of federal real property that serves as an important foundation for the national strategy we recommend in this report. OMB stated that several significant initiatives, including the June 2010 presidential memorandum on excess property and the recommendation for a civilian property realignment board, represent a comprehensive and carefully considered governmentwide strategy for addressing the government’s long-term real property challenges. While the efforts OMB describes represent a range of individual initiatives, we continue to believe that they lack the key characteristics of a cohesive national strategy. A national strategy would improve the likelihood that current initiatives to improve real property management will be sustained across future administrations. The desirable characteristics of a national strategy that we’ve identified—such as a clear purpose, scope, and methodology; problem definition and risk assessment; and identified resources, investments, and risk management—could serve to articulate a more sustained, long-term strategy to guide individual initiatives such as those described in OMB’s comments. For example, related to resources and investments, agencies often lack funding to prepare unneeded properties for disposal or to pursue demolition. A national strategy could address this issue directly and transparently so that the true costs of real property reform are evaluated more completely by decision makers.

Appendix IV: Comments from the General Services Administration

GAO Comments

1. GSA stated that it is unclear whether the examples of inconsistencies described in our report are systemic throughout the FRPP, or are occurring in specific agencies’ reporting of the data. As we discuss in the report, our findings are primarily based on the problems we found with FRPC’s data collection practices, which negatively impact the entire data collection process. The examples of inconsistencies and inaccuracies that we describe complement those findings and illustrate how poor data collection practices affect data submissions, but they are not the only basis for our conclusions. In fact, our recommendation to improve FRPP data collection involves the sound data collection practices that we believe should be put in place. GSA has agreed with this recommendation and has taken action to begin correcting the problems we identified. In response to GSA’s comments, we made some clarifications to the report’s discussion of the basis of our findings. 2. GSA stated that, because the FRPP is an annual report, property utilization may change from the time it is submitted in December. As we conducted site visits for this review, we took steps to ensure that any inconsistencies and inaccuracies we found were not due to a significant change in the building’s use from the time it was reported to the time we visited. First, we discussed the history of the building’s use with the local officials who manage the building to ensure that there was no recent change in the building’s utilization. Second, since 2011 FRPP data had not been reported at the time we began our site visits, we obtained utilization data from the agencies’ source systems (which are used to produce FRPP utilization data) so that we had recent utilization data (as of the fall of 2011) before we began our site visits in December 2011.

GSA also stated that the condition of the buildings may change or may not be updated annually. Related to this issue, we found that all five agencies did not always follow the guidance provided by the FRPC on how to calculate condition index. This led to severely blighted buildings receiving excellent condition scores, which could not be accounted for by reported changes in condition over a relatively short period of time. 3. GSA made a comment related to the computation formula for Condition Index. We have clarified this statement in the report.

Appendix V: Comments from the Department of Veterans Affairs

GAO Comments

1. VA stated that its complex model for calculating utilization is consistent with FRPC guidance because the guidance allows for flexibility on how agencies determine a key component of utilization (current design capacity) and that OMB agreed with their approach. However, rather than exercising flexibility in its use of current design capacity, VA used a different definition of utilization than the definition outlined in FRPC guidance. FRPC guidance defines utilization as the ratio of occupancy to current design capacity; however, VA defines utilization as the ratio of ideal space to existing space. While we acknowledge in our report that VA received OMB approval for reporting utilization differently, this method of reporting utilization is still inconsistent with the definition of utilization in FRPC guidance. Utilization is a performance measure and the 2004 executive order stated that performance measures shall be designed to allow comparing the agencies’ performance against industry and other public sector agencies. The inconsistencies we found from VA and other agencies in reporting utilization makes comparing utilization among agencies impossible. 2. VA also stated that “identifying underutilizations is much better than ignoring the fact that the building may not be properly sized to deliver services to Veterans.” We did not suggest that VA should ignore any aspect of its buildings that is problematic. We continue to believe that VA’s method of calculating utilization has led to some buildings being continuously designated as underutilized even when local officials, who know the buildings best, have told us that the buildings have been fully occupied. 3. VA stated that the reasons for the inaccuracies that we found in utilization at two VA buildings were due to the use of these buildings as “swing space,” meaning that utilization changes frequently based on need for space. In its comments, VA indicated that since FRPP data are reported annually, the designation of this space at the time of reporting changed from the time that we visited the sites. However, as we conducted our site visits for this review, we took steps to ensure that any inconsistencies we found were not due to a significant change in the building’s use from the time it was reported to the time we visited. First, we discussed the history of the building’s use since 2008 with the local officials who manage the building to ensure that there was no recent change in the building’s utilization. Second, since 2011 FRPP data had not been reported at the time we began our site visits, we obtained utilization data from the agencies’ source systems (which are used to produce FRPP utilization data) so that we had recent utilization data (as of the fall of 2011). The data we obtained from VA were current as of October 2011 and our visit took place in December 2011. Based on VA’s comments, we clarified this information in our report to show that we accounted for the time between 2010 FRPP reporting and our visit in December 2011. Based on our visits to the buildings and our discussions about the history of the buildings’ use with the VA officials who manage them, we do not believe that VA’s explanation accounts for the inconsistencies we found in utilization as detailed below:

Local VA officials who manage the buildings told us that the first building VA discussed in its comments is used for accounting and payroll purposes and that it was always fully occupied during the period of our review (dating back to 2008). However, the building was reported to the FRPP as underutilized during each of these years. In fact, just two months prior to our visit, VA’s October 2011 source data showed a utilization of 45 percent for this building even though it was fully occupied.

Local VA officials who manage the second building VA discussed in its comments told us that the building was mostly unoccupied because they had recently acquired it from the Department of Defense and that multiple improvements had to be made before it could be occupied by staff. Based on this, the local officials told us that it could not have been utilized at 59 percent in October 2011 as VA source data indicated. 4. VA made a comment related to individually metered buildings. We clarified VA’s statement in the report so that it is consistent with these comments. 5. In reference to our findings on problems with cost savings associated with the June 2010 presidential memorandum, VA stated that it disagreed with findings in a previous GAO report (GAO-12-305) that we referenced. In its comments on GAO-12-305, VA officials did not concur with certain parts of the report related to decreasing energy costs and improving non-recurring maintenance contracting. However, we did not reference the previous GAO report on these matters. Rather, we referenced that report’s discussion on savings associated with reducing leased space through telework. VA confirmed the problems that the previous GAO team found with the savings associated with the telework program in its comments on GAO-12-305, stating that the “telework program is still in its infancy and actual real property savings requires reducing space that is currently leased. These reductions in leased space may not be fully realized in 2012.” As a result, VA stated it its comments on GAO-12- 305 that the telework initiative was removed from the description of savings in its fiscal year 2013 budget. This is consistent with what we describe in this report. Therefore, VA’s restatement of its disagreement with findings in GAO-12-305 has no bearing on this report.

Appendix VI: Comments from the U.S. Department of Agriculture

Appendix VII: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, David Sausville, Assistant Director; Amy Abramowitz; Russell Burnett; Kathleen Gilhooly; Raymond Griffith; Amy Higgins; Amber Keyser; Michael Mgebroff; John Mingus Jr.; Joshua Ormond; Amy Rosewarne; Minette Richardson; Sandra Sokol; and Elizabeth Wood made key contributions to this report.