Federally Leased Vehicles: Agencies Should Strengthen Assessment Processes to Reduce Underutilized Vehicles
Released: 2016-01-14T00:00:00

Letter

Background

Agencies use vehicles in many ways, as vehicles support agency efforts to achieve various mission needs. These needs can be diverse, as demonstrated by the vehicle uses of the five agencies we selected for review: ferrying clients, conveying repair equipment, hauling explosive materials, and transporting employees, among others (see table 1.)

Agencies may own or lease the vehicles in their fleets and are responsible for managing their vehicles’ utilization in a manner that allows them to fulfill their missions and meet various federal requirements. For example, agencies determine the number and type of vehicles they need to own or lease and when a vehicle is no longer needed to achieve the agency’s mission. Statutes, executive orders, and policy initiatives direct federal agencies to, among other things, collect and analyze data on costs and eliminate non-essential vehicles from their fleets. For example, every year agencies provide an update on their progress in achieving the inventory goals determined by their Vehicle Allocation Methodology (VAM), such as the type and number of vehicles in their fleets. These updates are reviewed by GSA’s Office of Government-wide Policy (OGP), which provides feedback on agencies’ submissions.

Federal provisions on vehicle justifications and determining what makes a vehicle “utilized” are detailed in the Federal Property Management Regulations (FPMR). Specifically, the FPMR provide how agencies can define utilization criteria for the vehicles that they use. According to GSA’s OGP, the only requirement in the utilization portion of the regulations is for agencies to justify every full-time vehicle in their respective fleets, though the regulations do not specify how these justifications should be conducted. The FPMR recommend—but do not require—that the annual mileage minimum for passenger vehicles be 12,000 miles, and 10,000 miles for light trucks. However, according to GSA officials, mileage is not the only appropriate indicator of utilization for some vehicles’ missions. For example, GSA officials stated that it would be inappropriate to set a mileage expectation for an emergency responder vehicle or a vehicle that supports national security requirements because those vehicles are only needed in specific circumstances and may not accrue many miles. Thus, the FPMR state that the aforementioned mileage guidelines “may be employed by an agency… other utilization factors, such as days used, agency mission, and the relative costs of alternatives to a full time vehicle assignment, may be considered as justification where miles traveled guidelines are not met.” Therefore, according to GSA officials, agencies are allowed to define their own utilization criteria, which may include adopting the miles-traveled guidelines from the FPMR, using mileage minimums above or below the FPMR, or employing other metrics.

According to GSA officials, agencies may choose to define their selected utilization criteria in their internal policies, and vehicles meeting those criteria would be considered justified under the regulations. However, if a vehicle does not meet the utilization criteria specifically described in agency policy, the FPMR permit agencies to individually justify a vehicle using criteria the agency finds appropriate for that specific vehicle. The regulations do not specify the frequency with which the justifications (either as determined by agency policy or individually determined) must be conducted, updated, or reviewed. Agencies decide what vehicles are needed to help the agency meet their mission at any given point in time. While GSA provides guidance, the ultimate decision-making power lies with the agency leasing the vehicle.

Federal agencies can use GSA Fleet to acquire leased vehicles. According to GSA, under this arrangement an agency informs GSA Fleet what kind of vehicle is necessary for its mission. GSA Fleet fulfills the agency’s request by either purchasing a new vehicle (owned by GSA but leased to the agency), or providing a vehicle from GSA’s existing inventory (owned by GSA and previously leased to another agency). GSA Fleet’s primary mission is to provide the “best value” to its customers and the American people. GSA Fleet’s leasing rates are designed to recover all costs of its leasing program, but the exact cost of a lease depends on the type of vehicle and the number of miles traveled during the lease period, among other factors. For example, a conventionally fueled subcompact sedan has a 2015 fixed rate of $153 per month and mileage rate of $0.13 per mile traveled. GSA Fleet’s fixed rate is designed to cover fixed costs such as GSA Fleet staff and vehicle depreciation, whereas the mileage rate is designed to cover variable costs such as fuel and maintenance. Agencies are responsible for any costs associated with damage or excessive wear and tear over the course of the lease— typically 3-7 years for a passenger vehicle. We previously reported that, according to GSA officials and fleet managers from military and civilian fleets, GSA Fleet’s vehicle lease rates are typically lower than the commercial sector and provide a more economical choice for federal agencies.

GSA Fleet collects data on leased vehicles to assist with billing as well as help agencies manage their leased-vehicle fleets. GSA Fleet’s Fleet Management System (FMS) contains most of this data. The portal used by agencies to access the data in GSA’s FMS is called Drive-thru. Drive- thru offers a suite of applications, including tools to analyze crash data and report mileage. As Drive-thru is the primary portal through which customers can access GSA’s leasing data, some customers refer to the underlying database as Drive-thru as well. While Drive-thru is the name of the exterior-facing access portal rather than the database itself, we will refer to the database as Drive-thru for the purposes of this report to reflect the language commonly used by GSA’s leasing customers.

Drive-thru stores hundreds of data elements on each vehicle, including manufacturer-provided information such as make, model, and fuel efficiency; agency-reported data such as monthly mileage; and data obtained through fleet cards (charge cards) such as quantity and type of fuel purchased. Agencies can import information from Drive-thru into their own internal fleet management systems and, according to multiple agency officials, generally rely on GSA Fleet to ensure Drive-thru’s accuracy, as identifying and correcting erroneous data can be time consuming and difficult. However, agencies can change the data they receive from Drive-thru after data enter an agency’s internal fleet management system but before they are externally reported.

GSA’s OGP co-manages and co-funds a web-based reporting tool—the Federal Automotive Statistical Tool (FAST)—with the Department of Energy (DOE). FAST gathers data from federal agencies about their owned and leased vehicles to satisfy a variety of federal-reporting requirements, including the annual Federal Fleet Report. According to the Office of Management and Budget (OMB), it is the leasing agencies, not GSA or DOE, which are responsible for the accuracy of the data agencies report to FAST. As a result, while GSA’s OGP helps compile the information from FAST that populates the Federal Fleet Report, the accuracy of the Federal Fleet Report is dependent on the accuracy of the data that agencies report to FAST.

The Federal Fleet Report provides an overview of federal motor vehicle data, such as number of vehicles and related costs. A comparison of the reports from fiscal years 2012 through 2014 shows that the overall quantity of leased vehicles varies slightly from year to year, but the costs have consistently decreased. For example, in fiscal year 2013, federal agencies leased 183,989 vehicles at a cost of approximately $1.06 billion. In fiscal year 2014, federal agencies leased slightly more vehicles— 186,214—but the costs dropped to $1.03 billion, as shown in table 2. GSA officials explained that the cost reduction is attributable in part to agencies’ decisions to lease smaller, less expensive vehicles.

Although GSA collects and reports information on leased vehicles, GSA does not have responsibility for tracking how agencies use vehicles or identifying underutilized vehicles. Nevertheless, some of the services that GSA Fleet provides are related to utilization. For example, to help streamline customers’ vehicle leasing experiences, in 2014 GSA employed approximately 330 liaisons called Fleet Service Representatives (FSR). FSRs are expected to answer local customers’ questions about vehicle acquisition, provide assistance when vehicles need services, and help customers understand the various leasing terms and products offered by GSA Fleet. According to GSA Fleet, FSRs should discuss utilization with leasing customers at least annually as part of other business discussions.

GSA Data on Selected Leased Vehicles Are Generally Reliable

We found the data we reviewed in Drive-thru to be generally reliable as GSA has taken steps to ensure that the data are reasonable, although a few data elements have indications that those data could be more accurate. While GSA is not responsible for the accuracy of data in FAST, it has taken appropriate steps to ensure the data are reasonable.

GSA’s Efforts Support the Reliability of Selected Drive-thru Data

GSA is responsible for ensuring that the information that it is providing to customers in Drive-thru is reliable (i.e., both reasonable and accurate). It is important that data in Drive-thru are reliable because reports that are generated via Drive-thru represent a service that GSA is directly providing to customers to help them manage their fleets. Agencies also use Drive- thru when fulfilling federal fleet reporting requirements. For example, agencies can download a report about their leased vehicles from Drive- thru. The report then can be directly uploaded into FAST to meet annual reporting requirements on the leased fleet’s size and costs. Incorrect data in Drive-thru can therefore hinder agencies’ abilities to manage their leased fleets or could compromise the integrity of federal reports.

Reasonableness of Selected Drive-thru Data

A basic test of reliability is whether the data are reasonable. Using the guidance provided in three key sources, we developed an analytical framework for measuring the “reasonableness” of data, as there is currently no universally accepted standard for such a measurement. Each of these key sources discusses three topics, which we use as our standard for reasonableness of data: (1) electronic safeguards, such as error messages for out-of-range or inconsistent entries; (2) a review of data samples to ensure that key fields are non-duplicative and sensible; and (3) clear guidance to ensure consistent user interpretation of data entry rules.

Based on the data we reviewed, we found that GSA has taken appropriate steps to ensure the selected Drive-thru data are reasonable. Specifically, GSA uses electronic safeguards when data are entered into Drive-thru. For example, error messages appear if a user enters an odometer reading such as 12345, 99999, 00000, 654321 or a reading that differs 9,999 or more miles from the previous month’s entry. Similarly, GSA uses a validation program to catch vehicle identification number (VIN) entry errors. VIN barcodes are scanned into GSA’s system unless they must be manually entered due to barcode damage. For both scans and manual entries, software validates that the entered VIN meets the check digit calculation.

In addition, GSA verifies some data during reconciliations and other post- entry checks. For example, customer mileage entries are routinely monitored by GSA’s Loss Prevention Team (LPT) for abnormal inputs. If entries for a specific vehicle are consistently nonsensical, the LPT reviews the activity for signs of fraud and, if likely fraudulent, forwards to the appropriate Inspector General’s office for investigation. For entries that are consistently nonsensical but are not likely fraudulent, the LPT notifies the designated FSR for follow-up with the customer. The FSR is then tasked with emphasizing to the customer the importance of entering valid odometer readings in the future.

Lastly, GSA reported that it provides guidance on how to enter vehicle- related information into Drive-thru to the people who are responsible for entering different types of data. Generally, information about the vehicle itself is the responsibility of GSA or its agents (such as contractors— known as “marshallers”—who enter manufacturer-provided data at the time GSA receives the vehicle). GSA provides a handbook to marshallers that explains how the marshallers should use the software that collects information and transmits it to GSA’s system. Similarly, GSA provides a Drive-thru guide to customers that explains how customers should enter certain types of information into Drive-thru; however, GSA does not provide instructions regarding how customers should inform GSA if their contact information will change. The lack of such guidance may have been a contributing factor in the inaccuracies we found in the customer contact data, as discussed in the next section on indications of accuracy in Drive-thru data; however, according to GSA officials, planned changes to GSA’s customer ID protocols will remove the need for such guidance in the future.

Indications of Accuracy in Selected Drive-thru Data

A second test of data reliability is accuracy; however, we tested for indications of accuracy in the data, as verifying the data accuracy itself would have required extensive examination of individual vehicles, which was beyond the scope of this review. We performed tests on a selection of nearly two dozen Drive-thru data elements from May 2015 for selected vehicles and determined that there are numerous indications of accuracy associated with the data we reviewed. For example:

Almost 100 percent of 9 vehicle inventory fields, including make, manufacturer name, fuel type, VIN, and model year, have no missing data. One vehicle was missing the manufacturer name.

Three entries indicated the presence of a luxury manufacturer entry (all for Audi), an error rate of less than one hundredth of one percent. .07 percent of records for sedan fuel tank sizes exceeded 20 gallons. Although sedan fuel tank sizes vary and can change from year to year, few midsize sedans have 20 gallon tanks. Therefore, fuel tanks larger than 20 gallons might indicate a data error.

Despite the overall indications that the selected Drive-thru data are accurate, there are three areas where we found indications that the data may be less accurate than the other information we studied: fuel type coding, odometer entries, and customer contact data. According to federal internal controls standards, data collection applications—including electronic safeguards such as logic and edit checks—should ensure that all inputs are correct in order to facilitate accountability and effective stewardship of government resources.

First, we found that while most fuel-type-coding data appear to be accurate, gas stations coded pumps incorrectly in at least some cases from January through April 2015, and possibly in as high as 46 percent of cases. For example, drivers of vehicles with E-85 fuel types were reported to have purchased compressed natural gas or biodiesel. We were not able to determine the precise number of instances where fuel had been miscoded; however, because some vehicles use more than one type of fuel—for example, “flex fuel” vehicles can operate on either regular gasoline or an alternative fuel known as E-85, which is a blend of gasoline and ethanol. Given the data available, we were not able to determine which fuel the user actually selected and were thus unable to determine which purchases were coded incorrectly by the gas station. The high end of the error range (46 percent) would mean that each uncertainty was resolved as a fuel-pump-coding error by the gas station, an error that GSA officials said was extremely improbable. These officials noted that they believed the actual error rate was substantially lower. However, GSA officials agreed that pump miscodings compromise data accuracy and noted that GSA has worked with fueling station owners and relevant associations to reduce fuel pump miscodings. However, GSA officials stated their ability to affect change is highly limited, as the miscodings occur at the point of sale and there is no incentive for the fueling stations to correct the miscodings.

In addition to fuel type miscodings, we found that 3 percent of monthly odometer entries in May 2015 were lower than the previous month’s odometer reading. An odometer reading that decreases from one month to the next indicates that there was an error at some point in time—either the previous month’s entry was too high, or the current month’s entry is too low. Monthly odometer readings are supplied by agencies as part of the billing process, and odometer errors result in temporary billing errors as agencies pay additional fees based on mileage. GSA officials stated that they cannot be certain of a vehicle’s odometer reading until the vehicle is returned to them at the end of the leasing period and that they typically depend on the leasing agency to correctly report the odometer readings. According to GSA officials, as part of the monthly odometer- data collection process GSA’s system warns users that they may have entered incorrect data if the reported odometer reading is 9,999 miles greater than or less than the previous month’s odometer reading. Users would then be able to correct the data before submitting it to GSA.

GSA officials stated that they chose the 9,999 mile warning point because they did not want the system to generate cautionary messages to customers when there was a valid reason for the mileage difference. The officials explained that there are legitimate reasons why the previous month’s odometer reading might be higher than the current month’s reading. For example, if the agency relied on GSA to estimate mileage in the previous month and the estimate was too high, the agency’s correction in the current month could result in a lower odometer reading. GSA officials said that they did not want the system to incorrectly flag these instances, and that they have no plans to evaluate the current safeguard. However, using such a large mileage difference to trigger a warning means that GSA may be unlikely to catch the majority of errors. We found 52 cases where the mileage difference was 9,999 miles or greater, but more than 4,800 cases where the previous month’s odometer reading exceeded the current month’s reading. We also found that the average monthly odometer difference for our selected vehicle data is 564 miles per month, with 95 percent of vehicles driving less than 2,482 miles per month, as shown in table 3.

Although the resulting billing errors can be resolved the following month and the overall error rate is low, resolutions take time and resources for both GSA and the customer. Evaluating the current warning and adjusting it accordingly could help improve the accuracy of the data and therefore help reduce these costs, and GSA officials stated that changing the existing safeguard would not be costly. Further, GSA’s edit check for odometer readings is not consistent with federal internal control standards that call for agencies to pursue data accuracy when possible and cost- effective.

Lastly, we found that customer contact data, such as the name and e-mail of the individual whom GSA should contact for vehicle-related services, is not always correct. As mentioned previously, GSA’s customer-leasing guide does not provide guidance regarding how customers should proceed if the vehicle’s point of contact will change. In addition, according to GSA officials, the customer ID number—which is how customers sign in to Drive-thru—is associated with the customer’s fleet, not the customer points of contact themselves. As a result, customer contact data are updated manually by FSRs after FSRs detect a problem, such as a returned e-mail after the previous point of contact leaves the agency. Several FSRs stated that the manual updates are time-consuming. Moreover, one FSR we interviewed stated that the current process relies on the initiative of FSRs to ensure accuracy. Without accurate customer contact data, it is more difficult for FSRs to communicate with agencies about vehicles, including whether certain vehicles are still needed. Two FSRs stated that turnover in customer agency fleet management is high. Such turnover exacerbates the difficulty associated with maintaining the accuracy of these data. According to GSA officials, planned changes to Drive-thru in 2016 will resolve this issue, as customer IDs will no longer be assigned to a fleet. Rather, each customer will have that individual’s own individual user account, profile, and password. In addition, the customer ID will be the individual customer’s e-mail address instead of a number, a step that GSA officials anticipate will resolve the difficulties associated with updating the user contact information.

GSA Takes Steps to Ensure the Reasonableness of FAST Vehicle Data

GSA is not responsible for the accuracy of data reported to FAST, a data collection system that GSA co-manages with DOE. Rather, OMB’s Circular A-11 provides that agencies are responsible for reviewing and correcting fleet data prior to submitting them through FAST. However, GSA’s OGP has a role in ensuring the reasonableness of FAST data as a partner in the FAST management team. In this role, GSA focuses on data relevant to fleet management, such as overall inventory, cost, and utilization metrics. We found that GSA’s OGP has taken appropriate steps to ensure the fleet management data reported to FAST are reasonable. Specifically, (1) GSA is aware of the electronic safeguards built into FAST for fleet management data; (2) GSA examines some of the data after it is submitted by agencies and flags entries for correction; and (3) GSA provides guidance to agencies on how to properly enter information into FAST.

According to GSA, it shares responsibility with DOE for implementing and managing electronic safeguards for FAST. GSA and DOE collaborate to implement logic checks, which both parties use to determine the reasonableness of the data. We also found that GSA has a process for reviewing data after they are entered by an agency. If, for example, a significant increase in a specific type of fuel use is not matched by a similar increase in inventory, mileage, or cost, then GSA flags the data for verification with the agency. While it is not known how often GSA finds entries that it recommends for agency review, GSA reported that during both the 2013 and 2014 FAST reporting cycles, a few agencies experienced difficulties that required GSA to help resolve data issues (for example, re-opening FAST after the close of the data call). Lastly, we found that GSA provides guidance to agencies on how to properly enter information into FAST in a variety of formats, including (1) written instructions to users, (2) written instructions to administrators, (3) presentations at quarterly meetings, (4) one-on-one sessions with individual agencies upon request, (5) online demonstrations, and (5) official guidance in the form of Federal Management Regulation (FMR) bulletins.

GSA’s Role Focuses on Providing Guidance and Advice to Agencies on Identifying and Reducing Underutilized Vehicles

GSA has a limited role in identifying and reducing underutilized leased vehicles, as agencies are responsible for managing their vehicle fleets. GSA is not responsible for monitoring agencies’ vehicle utilization policies. Rather, according to GSA officials, GSA focuses on providing guidance and advice to federal agencies on utilization by (1) developing written guidance and reviewing agencies’ Vehicle Allocation Methodology (VAM) update submissions and (2) holding conversations with federal agencies’ fleet managers about vehicle utilization at least annually.

GSA’s OGP provides written guidance in the form of bulletins to federal agencies to implement legislation, executive orders, and other directives, but agencies are not legally required to follow this guidance. For example, in May 2011, a Presidential Memo (implementing a 2009 Executive Order) required GSA to develop and distribute VAM guidance to federal agencies for determining their optimum fleet inventory. In response, GSA provided such guidance to agencies in August 2011. Specifically, the guidance directed agencies to survey the utilization of vehicles each year, but agencies were not required to follow the guidance and some agencies chose to continue using their existing processes even though those processes differed from the GSA guidance. For example, some agencies’ fleet managers (including those from NASA, according to NASA officials, and those from the U.S. Navy, according to GSA officials) believed that the processes they already had in place fulfilled the intention of the guidance. In addition to providing written guidance, GSA has voluntarily reviewed utilization information covered in agencies’ VAM update submissions and has sometimes made broad recommendations to agencies based on those reviews. For example, in the 2014 VAM review, GSA recommended that all executive federal agencies establish and document specific vehicle utilization criteria for motor vehicle justification, that the criteria be reviewed at least annually, and that action be taken when underutilized vehicles are identified.

GSA officials told us that another aspect of the agency’s role in identifying and reducing underutilized leased vehicles is to provide advice to federal agencies’ fleet managers at least annually through conversations about utilization. According to GSA officials, this advisory role is intended to help the federal government save money by providing agencies with support needed to make wise business decisions. In addition, GSA officials explained that during conversations with fleet managers, FSRs might discuss the agency’s overall fleet size, vehicle replacement options, or may suggest that a larger vehicle is no longer needed when a smaller one will suffice. For example, one NASA fleet manager told us that his FSR coordinated the exchange of two larger vehicles in his fleet for two smaller vehicles for the purposes of downsizing and reducing fuel consumption.

To improve our understanding of these utilization conversations and to examine their usefulness, we sent a non-generalizable survey to 68 fleet managers for our five selected federal fleets. While the responses are not representative of either the experiences among our five selected agencies or the federal fleet as a whole, they do provide insight into activities that are otherwise undocumented. Fifty one fleet managers responded, with the majority of them (41) reporting either having decision- making authority or collaborating with their supervisor to make decisions about vehicle acquisition and disposal. Of the 41 respondents with a role in the vehicle’s acquisition and disposal decision-making process, 27 responded that their FSR has communicated with them about leased- vehicle utilization based on mileage. The majority of those decision- makers—25 of the 27—said that these communications were moderately to extremely useful in helping them to manage their leased-vehicle utilization based on mileage. However, 18 of the 51 overall respondents (including 14 of the 41 respondents with an acquisition and disposal decision-making role) said that they had never discussed utilization based on mileage with their FSR.

GSA’s management told us that it believes these conversations are occurring, but may not include the word “utilization,” a situation that could explain, in part, why some of our survey respondents reported never having discussed utilization with their FSR. According to GSA officials, the expectation is inherent to the role of the FSR and is made clear to them through training. However, we found indications that not all FSRs are discussing utilization with agency fleet managers. GSA’s management does not have a mechanism to help ensure that these conversations are occurring as expected. As a result, GSA may not be able to identify opportunities for FSRs to better assist agencies in identifying and managing their underutilized leased vehicles. Establishing such a mechanism would be consistent with federal internal control standards, which state that agencies should have reasonable assurance that employees are carrying out their duties and that feedback is provided in the event that expectations are not met.

While GSA generally focuses on providing guidance and advice, it has regulatory authority to repossess federal agencies’ leased vehicles in some instances, including cases where agencies cannot produce justification for the vehicle. Specifically, the FPMR state that if GSA requests justification for a vehicle, agencies must provide it. If the agency does not provide justification for that leased vehicle, GSA may withdraw the vehicle from further agency use. GSA officials told us that it does not exercise this authority because it would be a significant cost and time burden for GSA to review these justifications.

Some Agencies’ Processes Do Not Always Facilitate the Identification and Removal of Underutilized Leased Vehicles, Which May Hinder Cost Savings

Some of the agencies we reviewed could not determine if vehicles met utilization criteria, could not provide justifications for vehicles, or kept vehicles that had been determined were not needed. In total, we identified shortcomings in agency processes that affected leased vehicles with an annual cost of approximately $8.7 million.

Agencies Use a Variety of Utilization Criteria, and Two Agencies That Could Not Determine if Some Vehicles Met These Criteria in Fiscal Year 2014 Have Taken Steps to Address the Issues

While the FPMR provide general mileage guidelines that can be used as criteria for vehicle utilization—12,000 miles per year for passenger vehicles and 10,000 miles per year for light trucks—it also authorizes agencies to develop their own criteria to determine vehicle utilization where miles-traveled guidelines are not appropriate. GSA officials stated most vehicles will not meet these guidelines and that agencies are expected to adopt criteria that reflect the vehicles’ mission. The agencies in our review used a wide variety of utilization criteria, as shown in table 4.

One of the five agencies—BIA—uses the FPMR mileage guidelines as its criteria. Three other agencies—Air Force, NPS, and VHA—use the FPMR mileage guidelines for some (but not all) vehicles. NASA does not use the FPMR guidelines as criteria; NASA uses miles-traveled criteria that are lower than the FPMR guidelines. Analyzing the appropriateness of each utilization criteria was beyond the scope of this report. According to GSA officials, all utilization criteria—including mileage criteria below FPMR guidelines—are allowed under the FPMR. While three of our five selected agencies use mileage criteria below FPMR guidelines for at least some vehicles, they are not the only agencies doing so. For example, in fiscal year 2013, the Inspector General (IG) for the Department of Energy (DOE) found one DOE facility used 2,460 miles per year, an average of 205 miles per month, as its utilization criteria.

Agencies provided a variety of explanations for the utilization criteria they selected:

Air Force officials stated their vehicles serve very diverse mission needs. In order to ensure they have the right vehicle for each mission need, they developed a software algorithm with over 2,600 criteria that are not all utilization-based. Some criteria include the cost of alternatives and the criticality of a vehicle’s contribution to the mission.

According to BIA officials, the FPMR’s miles-traveled guidelines are appropriate utilization criteria for their fleet because their vehicles typically travel long distances across remote areas to meet their mission.

NPS officials stated they used the FPMR’s miles-traveled guidelines as criteria for leased vehicles because the criteria provide the right metrics to meet department needs.

VHA uses the FPMR’s miles-traveled guidelines as well as other miles-traveled metrics and days per month as utilization criteria, which an official said reflects the agency mission of delivering health care. Vehicles only need to meet one criterion to be considered utilized.

NASA uses miles-traveled utilization criteria that are lower than the FPMR miles-traveled guidelines. NASA policy requires each NASA center to set utilization criteria at 25 percent of the average miles traveled for each vehicle type at their center (see app. II for a list of NASA utilization measurements by center). NASA officials stated they believe this approach is an acceptable business practice, which the agency has used for more than 20 years.

We found 71 percent of the vehicles we selected from the five agencies met these agency-defined criteria, as shown in table 4.

For two agencies—NASA and VHA—we found that the agencies’ processes for managing utilization data did not always facilitate the identification of underutilized leased vehicles, although both agencies have taken steps to rectify the identified issues. Specifically, we found:

NASA did not apply its utilization criteria to 41 vehicles at its Armstrong Flight Research Center because, according to NASA officials, the center’s transportation officer retired in 2013 and the replacement did not apply utilization criteria in fiscal year 2014. Without utilization criteria, the center could not determine which vehicles from this center were utilized in fiscal year 2014. The agency paid approximately $137,000 for these vehicles in fiscal year 2014. According to NASA officials, the center’s transportation officer conducted a utilization analysis for these vehicles in fiscal year 2015 and the center will continue to follow NASA policy in the future.

VHA did not safeguard vehicle utilization data at one VHA medical center, as a new employee deleted vehicle utilization data from 2008- 2014. This prevented the agency from presently determining whether 343 vehicles had met the utilization criteria in fiscal year 2014. The agency paid more than $1.1 million to GSA in fiscal year 2014 for these vehicles. A VHA official said the agency was previously unaware vehicle utilization data from that medical center had been deleted from the Fleet Management Information System (FMIS) and have counseled the employee responsible regarding the error to ensure that the data are retained in the future.

Four Agencies in Our Review Could Not Determine If They Justified Some Vehicles, but Two Have Plans to Address the Identified Issues

If vehicles do not meet utilization criteria defined in agency policy, the FPMR provides that agencies must justify vehicles in another manner. The FPMR do not specify how agencies should conduct these justifications or how the justifications should be documented. While the FPMR state that agencies may be required to provide written justification, the regulations do not require agencies to clearly document the justifications before a request to provide such documentation is made. Federal internal control standards state that all transactions and significant events need to be clearly documented and that the documentation should be readily available for examination.

Four of the five agencies in our review could not readily provide justifications for vehicles that had not met utilization criteria defined in agency policy. Cumulatively, these agencies spent approximately $5.8 million in fiscal year 2014 on vehicles where individual justifications could not be located in a timely manner, as shown in table 5 below. Without readily available documentation, the agencies could not determine whether they had justified these vehicles, and whether any of these vehicles should be eliminated from agency fleets.

Air Force officials could not readily provide the justifications for 413 vehicles that did not meet the utilization criteria in its software algorithm. The agency paid $1.5 million to GSA in fiscal year 2014 for these vehicles. According to officials, vehicles that do not meet the utilization criteria in the Air Force’s algorithm are subject to the agency’s justification process, the results of which are stored in the agency FMIS. However, we found that the Air Force’s FMIS does not include information on all agency vehicles. Agency officials said justifications for these 413 vehicles are not stored in the Air Force’s FMIS and would be difficult to locate because these vehicles are used by the Air National Guard, which has its own justification process. However, Air Force is administratively responsible for these vehicles, according to agency officials.

BIA officials could not readily provide the justifications for 282 vehicles that did not meet utilization criteria. The agency paid $1.2 million to GSA in fiscal year 2014 for these vehicles. According to these officials, justifications are documented via e-mail, and it would be very challenging to search e-mail for these records as there was no universal format. Moreover, BIA officials said some of the justifications were reviewed by a fleet manager who left the agency, and they were unsure how to retrieve records from that individual’s e-mail account. Interior officials stated they will replace BIA’s e-mail process with a standardized form accessible through Interior’s FMIS in fiscal year 2016.

NASA was able to provide the justifications for all of its vehicles where it applied utilization criteria and the criteria were not met. NASA policy requires NASA centers to use Vehicle Utilization Review Boards (VURB) to approve or deny justifications for vehicles that do not meet utilization criteria. All vehicles that are reviewed by VURBs have an individual justification form, and all VURBs submit a summary document of their reviews to headquarters officials.

NPS officials could not readily provide justifications for 645 vehicles because those justifications were not stored within the agency’s FMIS. The agency paid $2.5 million to GSA in fiscal year 2014 for these vehicles. While NPS designed its justification forms to be stored within Interior’s FMIS, we found none of these forms had been uploaded to the system. In order for NPS officials to determine which of its vehicles had been justified, they would need to locate these 645 forms, which officials said were stored in field offices. Interior officials told us they were unsure why some of NPS’ forms were not stored in the agency’s FMIS but they plan to upload the forms to the system.

VHA was unable to locate justifications for 181 vehicles for which it had data indicating that the vehicle had not met VHA’s utilization criteria. The agency paid $0.6 million to GSA in fiscal year 2014 for these vehicles. According to VHA officials, justifications are stored with local fleet managers and are not readily accessible to headquarters officials. Agency officials said that the justification system was developed to assist local fleet managers and that previously, it was not necessary for headquarters to access these records.

The finding that four of the selected agencies’ processes did not allow them to consistently determine which of their vehicles are justified is consistent with the findings of other agencies that have examined their vehicle fleets. For example, in 2014 the Inspector General (IG) for the Department of Homeland Security (DHS) reported that DHS could not determine whether or not certain vehicles that did not meet the agency’s utilization criteria were justified. The IG estimated DHS’s cost to operate these vehicles in fiscal year 2012 was between $35.3 and $48.6 million. As a result of our review, two of the selected agencies—BIA and NPS— have plans to modify their systems accordingly to provide accessible justification documentation. Without readily available justification documentation, agencies are limited in their ability to exercise oversight over vehicle retention decisions, including how many vehicles—if any— should be eliminated.

Further, the FPMR do not specifically require that agencies document all of their justifications in writing or store the justifications in a readily accessible location. Federal internal control standards on record keeping and management call for the accurate and timely recording of transactions, such as justification decisions and call for the documentation to be readily available for examination. We found that without such readily available documentation, four of the five selected agencies in our review could not determine whether they had justified some of their vehicles and whether any of those vehicles should be eliminated from agency fleets. According to GSA officials, the agency has not reviewed the FPMR to determine if the regulations should be amended to be more specific about vehicle justification documentation, and they have no plans to do so. As a result, GSA may be missing an opportunity to help ensure that agencies are appropriately justifying all vehicles in their fleet and determining if their leased-vehicle fleets contain vehicles that should be eliminated.

Three Agencies in Our Review Kept Vehicles They Identified as Unjustified

In addition to the vehicles where agencies could not locate justifications in a timely manner, three agencies kept vehicles that did not pass their justification process. The FPMR do not require agencies to take any action for unjustified vehicles, which are vehicles that neither meet the agency’s utilization criteria nor pass the justification process. However, federal internal control standards call for agencies to be accountable for stewardship of government resources. All five selected agencies have established approaches to address unjustified vehicles, which can include placing them into a shared pool, transferring them to a new mission, rotating them with higher-mileage vehicles, or eliminating them from their fleet. All five selected agencies took actions to reduce vehicles that did not meet utilization criteria or pass the justification process; yet three agencies cumulatively retained over 500 such vehicles, paying GSA $1.7 million for these vehicles in fiscal year 2014. See table 6.

Specifically, we found that:

NPS retained 109 vehicles that did not meet agency-defined utilization criteria and did not pass the agency’s justification process. The agency paid GSA $0.4 million in fiscal year 2014 for these vehicles.

VHA retained 393 vehicles that did not meet agency-defined utilization criteria and did not pass the agency’s justification process. The agency paid $1.3 million to GSA in fiscal year 2014 for these vehicles. VHA policy does not require justification for all vehicles that do not meet utilization criteria. As a result, these 393 vehicles were never subject to a justification process even though they did not meet utilization criteria. VA officials said that returning vehicles to GSA would not lead to cost savings because GSA will continue to charge the agency for the vehicle until a new lessee is found. GSA officials said that only in cases where a large number of vehicles are prematurely returned at once does GSA continue to charge the leasing agency for the vehicles. VA officials stated that they do not believe that this policy is applied consistently.

NASA retained one vehicle that did not meet agency-defined utilization criteria in fiscal year 2014 and did not pass the agency’s justification process. NASA officials explained that the vehicle was incrementally removed from service in fiscal year 2015 to ensure that mission requirements would not be negatively impacted. NASA has since returned its unjustified vehicle to GSA.

While these findings are not generalizable, they are consistent with several findings from agency inspectors general that have reported agencies keeping vehicles even though they did not meet agency’s utilization criteria or pass the agency’s justification process. For example, in 2013 the DOE IG found one DOE component retained 234 vehicles— 21 percent of the component’s fleet—even though the vehicles did not meet utilization criteria and users had not submitted justification for their retention. Similarly, in 2015 the DHS IG found that the Federal Protective Service had not properly justified administrative vehicles and spare law enforcement vehicles in its fleet, valued at more than $1 million fiscal year 2014.

Internal controls call for agencies to be accountable stewards of government resources. However, agency processes do not always require that every vehicle undergo a justification review or that vehicles are removed if they do not pass a justification review. Agency processes that do not facilitate the removal of underutilized vehicles hinder agencies’ abilities to maintain efficient vehicle fleets. Without processes to ensure that underutilized vehicles are consistently removed, agencies may be foregoing opportunities to reduce the costs associated with their fleets. The cost savings achieved by eliminating unjustified vehicles may be less than the cost paid to GSA because agencies may need to spend resources on alternative means to accomplish the work performed by these vehicles. For example, while an agency would save the monthly cost of leasing an eliminated vehicle, another vehicle in the agency’s fleet may need to travel more miles if it performs functions previously performed by the eliminated vehicle. This may increase leasing costs for the remaining vehicle. Nonetheless, by not taking corrective action, agencies could be spending millions of dollars on vehicles that may not be needed.

Conclusions

Given the approximately $1 billion dollars that are spent annually on leased federal vehicles and the government-wide emphasis on good fleet management, it is critical for agencies to have reliable data and sound management practices. While GSA has taken a number of positive steps to assist agencies in managing their fleets, there are more actions it can take. For example, GSA’s current 9,999 odometer reading warning allows for large odometer discrepancies before warning users of a potential error, leading to potentially inaccurate odometer readings that can result in potentially inaccurate billing and additional staff time for subsequent correction. Evaluating the current warning and adjusting it accordingly could help improve data accuracy and therefore help reduce these costs.

Additionally, while customers report that utilization-related conversations with FSRs are helpful, GSA does not have a mechanism to know the extent to which these conversations are taking place as expected. As a result, GSA may be missing a potential opportunity to help agencies ensure that their leased fleet is the optimum size.

Furthermore, while the FPMR provide some guidance to federal agencies on how to justify vehicle utilization, they do not require agencies to have clearly-documented justifications available for examination or to have any mechanism for ensuring that these justifications take place. We found shortcomings for almost all of the agencies in our review in these areas. Additionally, findings from Inspectors General have identified similar concerns at other agencies, indicating that a lack of readily available justifications may extend beyond the agencies covered under this review. GSA has not examined these regulations. As a result, GSA may be missing an opportunity to help ensure that agencies are appropriately justifying all vehicles in their fleet and determining if their leased vehicle fleet contains vehicles that should be eliminated.

In the absence of an FPMR requirement, federal internal control standards can help agencies use their authority to be responsible stewards of government resources. However, because some agencies’ processes do not consistently facilitate the identification of underutilized vehicles, these agencies may not know which vehicles should be eliminated. Specifically, without readily accessible written justification, agencies are limited in their ability to exercise oversight over key vehicle retention decisions for vehicles that cost millions of dollars annually. Additionally, some agencies have not eliminated or reassigned vehicles that did not meet utilization criteria or pass a justification review. By not taking corrective action, agencies could be spending millions of dollars on vehicles that may not be needed.

Recommendations for Executive Action

To help improve the accuracy of Drive-thru data to allow agencies to better manage their leased-vehicle fleet data, we recommend that the Administrator of GSA evaluate the 9,999-mile/month electronic safeguard for Drive-thru odometer readings to determine if a lower threshold could improve the accuracy of customer data and adjust this safeguard accordingly.

To provide better assurance that Fleet Service Representatives (FSR) are having conversations with leasing customers about utilization in accordance with GSA expectations, we recommend that the Administrator of GSA develop a mechanism to help ensure that these conversations occur.

To help strengthen the leased-vehicle justification processes across federal agencies, we recommend that the Administrator of GSA examine the FPMR to determine if these regulations should be amended to require that vehicle justifications are clearly documented and readily available, and adjust them accordingly.

To improve the justification process, we recommend that the Secretary of the Department of Defense should direct the Secretary of the Air Force to modify the current process to ensure that each leased vehicle in the agency’s fleet meets the agency’s utilization criteria or has readily available justification documentation.

To improve their justification process, we recommend that the Secretary of the Department of Veterans Affairs should direct the Under Secretary for Health to modify the current process to ensure that each leased vehicle in the agency’s fleet meets the agency’s utilization criteria or has readily available justification documentation.

To facilitate the elimination of unnecessary vehicles, we recommend that the Secretary of the Department of the Interior should direct the NPS Director to take corrective action to address each leased vehicle that has not met the agency’s utilization criteria or passed the justification process. This corrective action could include (1) reassigning vehicles within the agency to ensure they are utilized or (2) returning vehicles to GSA.

To facilitate the elimination of unnecessary vehicles, we recommend that the Secretary of the Department of Veterans Affairs should direct the Under Secretary for Health to take corrective action to address each leased vehicle that has not met the agency’s utilization criteria or passed the justification process. This corrective action could include (1) reassigning vehicles within the agency to ensure they are utilized or (2) returning vehicles to GSA.

Agency Comments and Our Evaluation

We provided a draft of this report to GSA; to the Departments of Defense, Interior, and Veterans Affairs; and to NASA for review and comment. GSA and the Departments of Defense, Interior, and Veterans Affairs provided written comments in which they concurred with our recommendations. These comments are reproduced in appendixes III-VI. NASA provided no comments.

In written comments, GSA stated that it agreed with the three recommendations directed to it and is developing a comprehensive plan to address them.

In written comments, the Department of Defense (DOD) concurred with the recommendation directed to it and stated that it would publish a policy memorandum in the second quarter of fiscal year 2016 that will direct DOD fleet managers to ensure that each leased vehicle in the agency’s fleet meets agency utilization criteria or has readily-available justification documentation. If implemented as planned, this action should meet the intent of the recommendation.

In written comments, Interior concurred with the recommendation for NPS to take corrective action to address each leased vehicle that has not met the agency’s utilization criteria or successfully passed the utilization justification process and specified the actions that NPS, as well as BIA, are implementing or planning to enhance their leased-vehicle programs. For example, Interior stated that NPS is implementing actions to ensure vehicle justifications reside in the Department’s Financial and Business Management System and plans to review the current guidelines to establish reliable and consistent utilization metrics. In addition, Interior stated that NPS plans to develop processes to ensure justifications are on file and rotate underutilized vehicles to locations to increase the efficiency and effectiveness of its fleet. If implemented as planned, these actions should meet the intent of the recommendation. Interior also stated that BIA is establishing an electronic document repository to ensure accessibility of fleet management documents, transitioning to standard fleet-utilization forms, and conducting a leased-vehicle miles-driven utilization analysis to determine an annual mileage minimum requirement.

In written comments, VA concurred with the two recommendations directed to it and specified the actions it has taken or plans to take to address them. Related to the recommendation to modify their current process to ensure that each leased vehicle in the agency’s fleet meets the agency’s utilization criteria or has readily-available justification documentation, VA stated in its letter that VHA agrees that GSA-leased vehicles should either be used frequently enough to achieve the agency’s utilization criteria or have readily-available justification documentation. VA stated that, subsequent to our review, VHA’s fleet program took action to ensure local fleet management programs correct deficient documentation on vehicles identified in our review that did not meet the agency’s utilization criteria. Specifically, VA stated that VHA’s fleet program requested Veterans Integrated Service Networks to solicit local fleets to justify any vehicles that had insufficient justifying documentation during our review. In addition, to help ensure that local fleet management programs are complying with current documentation requirements and to improve oversight of the programs, VA stated that the Office of Capital Asset Management Engineering and Support would issue written reminders to local fleet programs and monitor and audit utilization reports. VA included a target completion date of January 2017. If implemented as planned, these actions should meet the intent of the recommendation.

Related to the recommendation to take corrective action to address each leased vehicle that has not met the agency’s utilization criteria or passed the justification process, VA concurred and stated that this corrective action could include reassigning vehicles within the agency to ensure they are utilized or returning the vehicles to GSA. VA stated that VHA would take corrective action and included a target completion date of January 2017. If implemented as planned, these actions should meet the intent of the recommendation.

While VA agreed with our recommendations to address underutilized vehicles, it disagreed with our conclusion that 14 percent of VHA’s leased fleet is “unneeded, costing taxpayers an unnecessary $3 million.” Based on our analysis of VA data, our report found that VHA paid $3 million in fiscal year 2014 for leased vehicles that did not meet utilization criteria and did not have readily available justifications. These vehicles accounted for 14 percent of the selected vehicles in VHA’s leased fleet. We did not state that these vehicles were unneeded. We did state, however, that without justifications or corrective actions, agencies could be spending money on vehicles that may not be needed.

As discussed above, VA described actions taken subsequent to our review to address some of the issues we identified, and also reported in its written comments that the most recent data show that less than 1 percent of VHA’s total current leased vehicle fleet may not be fully utilized. This number reflects two differences from our calculation. First, in general comments on the draft report, VA stated that there are now 381 vehicles for which it cannot determine if the vehicle met utilization criteria, if the vehicle had a justification, or if VA is aware that the vehicle did not meet utilization criteria or have a justification. Based on our analysis, we found 917 such vehicles among VHA’s selected leased vehicle fleet in fiscal year 2014, a difference of 536 vehicles. As described in the report, we analyzed fiscal year 2014 data for five selected agencies because it was the latest completed fiscal year at the time of our review. We agree that the actions taken subsequent to our review, as well as VHA’s planned actions, should address the issues we identified and should meet the intent of the recommendations. However, we have not reviewed the documentation nor verified the data on which VA’s new percentage is based. Second, VA’s new percent is the percentage of all of VHA’s leased vehicle fleet, not the percentage of selected leased vehicles that were part of our review. For the five agencies in our review, all of our percentages were calculated as a percentage of the number of leased vehicles that were selected for review, not of the agency’s entire leased vehicle fleet. As discussed in more detail in the report, we did this to consistently exclude vehicles such as tactical or law-enforcement vehicles. Thus, we continue to believe that our conclusion is valid.

GSA, Interior, and VA also provided technical comments, which we incorporated as appropriate.

We are sending copies of this report to interested congressional committees, the Administrators of GSA and NASA, and the Secretaries of the Departments of Defense, Interior, and Veterans Affairs. In addition, this report will be available for no charge on GAO’s website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at 202-512-2834 or rectanusl@gao.gov. Contact points for our Office of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix VII.

Appendix I: Objectives, Scope, and Methodology

We conducted a review of the utilization of GSA’s leased vehicles. This report assesses: (1) the extent to which GSA data on leased vehicles are reliable, (2) GSA’s role in identifying and reducing underutilized leased vehicles, and (3) the extent to which the assessment processes used by selected federal agencies facilitate the identification and removal of underutilized leased vehicles, and any cost savings that could be achieved by reducing any underutilized vehicles.

To determine the extent to which GSA’s data for leased vehicles are reliable, we examined the reasonableness of data contained in GSA’s internal fleet management database (Drive-thru) and the Federal Automotive Statistical Tool (FAST), a web-based reporting tool co- sponsored by GSA and the Department of Energy. For the purposes of this review, reliability is defined by two key components: reasonableness and indications of accuracy. We also tested a selection of Drive-thru data (reflecting approximately 162,000 vehicles) for indications of accuracy.

GSA is responsible for the reasonableness of data in Drive-thru and FAST. We used three key sources to develop a standard for reasonableness, as there is currently no single federal criterion for a measurement of reasonableness. The three key sources included (1) prior GAO work that provided guidance on how to assess the reliability of data; (2) OMB’s Circular A-123, which defines management’s responsibility for internal controls in the federal government; and (3) GAO’s Green Book, which provides standards for internal control in the federal government. The key practices surrounding the standard of measurement that we developed for reasonableness are: electronic safeguards, such as error messages for out of range entries or inconsistent entries; the extent to which GSA reviews data samples to ensure that key data fields are non-duplicative and sensible; and the clarity of the guidance that GSA provided to ensure consistent user interpretation of data entry rules.

As agencies are responsible for the accuracy of data in FAST, not GSA, we only examined Drive-thru for indications of accuracy. We focused on approximately two dozen data elements contained in the Fuel Use Report and the Inventory Report as these related most to costs associated with utilization and federal fleet reporting. To this end, we requested data from GSA for all GSA-leased vehicles that were continuously leased by the same agency from January 1, 2015, through May 21, 2015. We requested continually leased vehicles because we anticipated making month-to-month data comparisons. However, this historical comparison was not feasible as GSA does not store some historical data in its Fleet Management Information System database, which provides information to Drive-thru. Therefore, the inventory data pulled from GSA’s database were a “snapshot” of the federal fleet as of May 21, 2015, although the fuel data reflected the months of January-April 2015. Once the data were obtained, we conducted a variety of logic checks to locate any anomalies that might provide insight into the extent which GSA ensures the accuracy of Drive-thru data. For example, one of the logic checks we performed on these data included counting vehicles and determining whether at least one purchased fuel type over a 4-month time period failed to match the vehicle’s fuel type (accounting for vehicles that could potentially use more than one fuel type). This logic check was performed to determine how often, if at all, fuel was erroneously coded at the fuel pump.

For objectives 2 and 3, we judgmentally selected five federal vehicle fleets from five federal agencies, including the U.S. Air Force (Air Force); U.S. Department of the Interior’s National Park Service and Bureau of Indian Affairs; National Aeronautics and Space Administration; and U.S. Department of Veterans Affairs’ Veterans Health Administration. We made our selection based on the following criteria: (1) varying fleet sizes, but none smaller than 1,000 vehicles; (2) a combination of military and civilian fleets; (3) a combination of fleets with mileage-based utilization levels above and below federal mileage-based utilization guidelines; (4) fleets that had not been audited by an organization other than GAO within the last 3 years; and (5) other considerations such as use of telematics and adoption of utilization criteria other than the mileage guidelines in GSA regulations. We selected these fleets, which according to GSA in 2014 ranged in size from 1,574 to 13,954 vehicles to broadly discuss the experiences and practices across a section of the federal fleet. These results are not generalizable to their overarching agencies or other federal agencies.

To determine what GSA’s role is in identifying and reducing underutilized leased vehicles, we reviewed and analyzed relevant federal laws, regulations, executive orders, and GSA guidance to federal agencies for preparing VAM submissions. We described GSA’s role based on the responsibilities delineated in those documents. We also interviewed GSA officials, including Fleet Service Representatives (FSR) to better understand the role they play when working with federal agency fleet managers to identify underutilized leased vehicles. To corroborate information that GSA officials told us about FSRs speaking with their agency fleet managers at least once a year to assist in identifying underutilized leased vehicles and to determine any value that fleet managers assign to these conversations, we administered a non- generalizable, mixed-method questionnaire to 68 federal agency fleet managers. To ensure that our questions were meaningful and that we received accurate survey data, we pre-tested our survey with four representatives from four of our selected agencies. Using GSA’s Drive- thru data, we selected fleet managers for our five selected federal agencies who were responsible for at least 20 GSA leased vehicles. Through interviews with agency officials and FSRs, we learned that the contact information in Drive-thru was not sufficiently reliable for our purposes. Specifically, two of four FSRs that we spoke with and officials from two selected agencies reported that Drive-thru does not contain reliable contact information for individuals who would have conversations with FSRs. These officials reported that some of the contacts in Drive-thru were actually end-users, such as contractors. In other cases, the contact information was outdated. To address this, we requested that the selected federal agencies provide us with lists of current fleet managers within their agencies, and we matched those names to the list of fleet managers from the Drive-thru data. Agencies that were unable to provide independent lists of fleet managers verified which individuals from the Drive-thru data were in the fleet manager’s role at their agency and would be the appropriate individuals with whom to discuss utilization. This matching and verification process brought the survey selection pool to 114 fleet managers, yielding a reasonable number of contacts for BIA, NASA, and NPS—given their respective fleet sizes. However, our matching and verification process resulted in four fleet managers for Air Force and 80 for VHA. Since other fleet managers on Air Force’s list of current fleet managers met our survey pool parameters, we took a random sample of 16 fleet managers to add to the four we identified during the matching and verification process. Also, to avoid over- representing VHA, we randomly chose one fleet manager from 19 Veterans Affairs’ regions. We sent the survey to a total of 69 fleet managers as follows:

12 at BIA;

12 at NPS;

6 at NASA;

20 at Air Force ; and

19 at VHA.

However, during the survey period, Air Force informed us that one of the selected fleet managers’ roles no longer included responsibilities for GSA-leased vehicles. Therefore, the total number of selected fleet managers in the survey pool totaled 68. Fifty one of the 68 fleet managers completed our survey, yielding a 75 percent response rate. As noted in our report, findings from this survey effort are not generalizable.

To determine the extent to which the assessment processes used by selected federal agencies facilitate the identification and removal of underutilized leased vehicles, we reviewed and analyzed: pertinent federal laws and regulations; GSA guidance that described the VAM process; and internal policies and procedures that the selected federal agencies use to identify underutilized vehicles in five fleets, such as fleet handbooks; and interviewed officials from GSA and the five federal agencies about the agencies’ responsibilities in identifying underutilized leased vehicles. We then compared these processes to federal internal control standards related to record keeping and management as well as stewardship of government resources, as described in the 1999 Green Book.

To calculate the costs of the vehicles involved in these processes, we conducted a multi-step analytical process. First, we asked GSA to provide data on passenger vehicles and light trucks that were continuously leased from GSA during fiscal year 2014 (i.e., from October 1, 2013-September 30 2014, inclusive) for the five selected federal fleets. Table 7 shows how we defined passenger vehicles and light trucks for the purposes of this review.

We focused on vehicles that GSA leased on a continuous basis (i.e., to a single agency) for at least fiscal year 2014 so that the agencies were fully accountable for the selected vehicles’ mileage over the entire fiscal year 2014 time period. We scoped our work to include light trucks and passenger vehicles because they comprise the majority of GSA’s continuously leased fleet at 65 percent and 27 percent, respectively. We also asked GSA to exclude tactical, law-enforcement and emergency- responder vehicles from the selected vehicle population, as well as vehicles located outside of the continental U.S. We made these exclusions because, according to GSA officials, some agencies did not want law enforcement data, for example, released outside of GSA because it could be considered sensitive. In addition, we needed to develop a manageable, selected population given the time resources needed to investigate each vehicle.

After receiving the data from GSA, we conducted various analytical tests to develop a dataset that was free from detectable errors. For example, we examined data on current and previous monthly odometer readings. We then determined which vehicles in the dataset had a current monthly odometer reading that was lower than the previous month’s odometer reading. This allowed us to determine which vehicles likely had errors associated with their end-of-fiscal year mileage—allowing us to remove them from the population of analysis. We also analyzed over 15,500 fiscal year 2014 vehicle records from the five agencies that we reviewed. In total, selected vehicles from these agencies accounted for about 8 percent of the federally leased fleet, although the findings associated with this selection are not generalizable.

Next, we determined which selected passenger vehicles and light trucks at each agency did not meet the miles-traveled guidelines in the Federal Property Management Regulations in fiscal year 2014 (12,000 miles and 10,000 miles, respectively). We then sent a list of the selected vehicles that had not met the miles-traveled guidelines to each agency and requested that they group the vehicles into one of the categories described below and depicted in figure 1:

Group 2: No longer leased by the agency as of May 21, 2015;

Group 4: Met a mileage-based utilization criteria defined by the

Group 5: Met a non-mileage-based utilization criteria defined by the

Group 6: Had a written justification in lieu of meeting the utilization criteria that the agency defined;

Group 8: Was repurposed, given additional tasks, or reassigned within the agency during fiscal year 2015; and

Group 9: Was retained beyond May 21, 2015, despite not meeting agency-defined utilization criteria, possessing a written justification for retention, or being given other tasks.

We also asked agencies to identify vehicles that they could not categorize and reasons why—such as vehicles’ lacking readily auditable documentation, including information on whether the vehicle met the agency-defined utilization criteria in fiscal year 2014 (Group 3) and written justification for retaining vehicles that did not meet the agency-defined utilization criteria (Group 7). As these two groups—and vehicles in Group 9—stem from insufficient agency processes to identify and remove leased vehicles, we focused on determining the costs associated with the vehicles in these groups.

Agencies were responsible for categorizing each of the vehicles that GAO provided to them. We provided the agencies with each vehicle’s license plate number, VIN number, make, model, and other identifying information to assist in this process. We did not verify whether agencies categorized vehicles correctly, as some of the information necessary for these categorizations was contained within agency systems and records (for example, if the vehicle met an agency-defined criteria or if the vehicle was repurposed). However, to evaluate the overall reliability of agencies’ vehicle justification, we selected a small sample of vehicles from each agency and then requested written justifications from each of those agencies that reported that they had written justifications for vehicles. We removed vehicles from the selected population if agencies reported that the vehicle should have been excluded from the review (for example, vehicles that agencies reported were law enforcement vehicles but not labeled as such in GSA’s system). We also removed vehicles if the VIN number that the agency provided did not match the VIN from the original information that GSA provided and vehicles that agencies categorized in more than one group, among other data-cleaning efforts.

We determined the cost paid to GSA for each vehicle in each of the 9 groups using data from GSA. For each vehicle, we summed the following: the vehicle’s fiscal year 2014 mileage rate multiplied by the total number of miles the vehicle traveled in fiscal year 2014; per-mile costs for additional equipment multiplied by the total number of miles the vehicle traveled in fiscal year2014; the fixed monthly mileage rate for additional equipment multiplied by 12 (for the 12 months of the fiscal year); and any flat monthly rate charges multiplied by 12 (for the 12 months of the fiscal year).

These costs represent the amount an agency paid to GSA for each vehicle in fiscal year 2014. However, these costs do not include other costs incurred by the leasing agency, such as the salaries of their fleet managers or the costs to garage the vehicles. Also, we did not have information on the opportunity costs of alternatives to replacing these leased vehicles. For example, if a vehicle is removed from an agency’s fleet and another vehicle is used more frequently as a result, the agency would still pay for miles traveled or trips made by the other mode of transportation. Therefore, the costs associated with the groups are annual costs paid to GSA, and an undetermined percentage of these costs would reflect actual cost savings if vehicles were removed.

We conducted this performance audit from February 2015 to January 2016 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: NASA Utilization Criteria by Vehicle Type and Center in Fiscal Year 2014

According to NASA policy, each NASA center should conduct an annual review of fleet utilization during the third quarter of each fiscal year. The review first identifies vehicles that fail to meet the minimum utilization goals, also called the “utilization target point.” The target point is calculated by multiplying the average usage by 25 percent (0.25) for each vehicle type, such as sedans/station wagons, ambulances, intercity busses, and trucks with a gross vehicle weight of less than 12,500 pounds. In fiscal year 2014, sedans and trucks less than 12,500 pounds were required to meet the mileage target points shown in table 9 at their respective centers: According to NASA policy, individual vehicles within each vehicle type whose range falls below the utilization target point will be added to the “utilization target list”. Programs, missions or departments with vehicles on the target list are required to submit a new justification form for each individual vehicle on the list for center review and retention approval. These justifications are then evaluated during the annual review process, with possible outcomes including reassignment within the center, exchanging the vehicle for a different type of vehicle that better suits the mission, or returning the vehicle to GSA.

Appendix III: Comments from the General Services Administration

Appendix IV: Comments from the Department of Defense

Appendix V: Comments from the Department of the Interior

Appendix VI: Comments from the Department of Veterans Affairs

Appendix VII: GAO Contacts and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, John W. Shumann (Assistant Director), Melissa Bodeau, Jennifer Clayborne, Monika Jansen, Davis Judson, Terence Lam, Malika Rice, Jerome Sandau, Alison Snyder, Michelle Weathers, Crystal Wesco, and Elizabeth Wood made key contributions to this report.