Federal Managers' Financial Integrity Act Report

February 25, 1998

The President
The White House
Washington, DC 20500

Dear Mr. President:

I am pleased to report that the General Services Administration's (GSA's) management control and financial management systems, taken as a whole, provide reasonable assurance that the objectives of the Federal Managers' Financial Integrity Act (FMFIA), Section 2 and Section 4 are being achieved. The content of the enclosed FMFIA report is based on information provided by GSA's managers, as well as on advice provided by the agency's Management Control Oversight Council (MCOC). It is also based on the results of the audit of GSA's Financial Statements, which produced an unqualified opinion for the 10th consecutive year.

Steps have been taken by managers to implement corrective actions on five material weaknesses reported in previous years, and two material weaknesses and one nonconformance identified in fiscal year 1997. Management officials have evaluated their programs and have attested that their management controls comply with the Office of Management and Budget's (OMB) Circular A-123, Management Accountability and Control. The responsible systems managers and financial management officials have evaluated GSA's financial management systems in accordance with OMB Circular A-127, Financial Management Systems.

During fiscal year 1997, management control issues surfaced from a variety of sources. The MCOC, under the chairmanship of the Deputy Administrator, examined these issues and corrective actions were developed and implementation began immediately. The Inspector General, in his role as an advisory member of the MCOC, continues to provide useful, constructive suggestions for improving the agency's management control and financial management policies and practices.

The plans and actions to correct our seven material weaknesses and one nonconformance are addressed in the enclosure to this letter. I consider none of the weaknesses reported as critical to the performance of the agency's missions.

Respectfully,

David J. Barram
Administrator

Enclosure

Contents

ENCLOSURE A - Statistical Summary of Performance
ENCLOSURE B - Schedule of Corrective Actions, Material Control Weaknesses
ENCLOSURE C - Schedule of Corrective Actions, Material Nonconformances
ENCLOSURE D - Summary of Other Issues

ENCLOSURE A - Statistical Summary of Performance

Section 2, Internal Control Systems

Section 4, Financial Management Systems

ENCLOSURE B - Schedule of Corrective Actions, Material Control Weaknesses

Section 2, Material Weaknesses Summary

Material Weakness: Inadequate Timely Access to PBS Business and Program Related Information

This material weakness is caused by the lack of timely, accessible business and related data and outdated and outmoded processing methods in the PBS Information System. Among other problems this deficiency has contributed to the substantial revenue shortfall currently facing the Federal Buildings Fund. The completion of corrective actions is validated and supported by documentation prepared by program officials.
At the completion of all action items, a management control review or other detailed review will be performed to ensure that the actions taken are producing the intended positive results.
Pace of Corrective Action:

· Year Identified: 1988
· Current Correction Date: 06/98
· Responsible Program Office: Public Buildings Service, Chief Information Officer

Material Weakness: Programmatic Weaknesses in the Child Care Program

Several program weaknesses have been identified in the Child Care Program involving staffing, governance, controls over criminal background checks, licensing and financing. GSA is in noncompliance with Public Law 101-647 that requires criminal history background checks for all child care employees in Federal facilities. Additionally, some centers were operating in GSA-controlled space without proper licensing agreements.
At the completion of all action items, a management control review or other detailed review will be performed to ensure that the actions taken are producing the intended positive results.
Pace of Corrective Action:

· Year Identified: 1995
· Current Correction Date: 12/97
· Responsible Program Office: Public Buildings Service,
Office of Workplace Initiatives

Material Weakness: GSA/Federal Protective Service (FPS) Control Centers

A study conducted of GSA's control centers disclosed significant risks related to the GSA/FPS control centers. The study indicated that due to budgetary and personnel constraints accumulating over more than a decade, the control centers have been degraded to a point at which various systems are functioning, but raise risk and liability concerns in the ability to provide an acceptable, efficient, and effective FPS level of performance to preserve life and property. The initial plan was to upgrade all regional control centers with state-of-the-art equipment; however, to gain economies of scale, the project has been redirected to consolidate some control centers into mega-centers and establish regional dispatch centers.
At the completion of all action items, a management control review or other detailed review will be performed to ensure that the actions taken are producing the intended positive results.

Pace of Corrective Action:

· Year Identified: 1995
· Current Correction Date: 03/99
· Responsible Program Office: Public Buildings Service, Federal Protective Service

Material Weakness: Level of Federal Protective Police Officers (FPPO's)

A material weakness exists in the Law Enforcement Program which relates to the level of Federal Protective Police Officers (FPPO's). As of September 1995, the current level of FPPO's was 401. This figure does not meet the requirements of Section 10 of the general provisions of Public Law 100-440, which states, "The Administrator of the General Services is authorized and directed to hire up to and maintain an annual average of not less than 1,000 (full time equivalent) positions for Federal Protective Police Officers." GSA continues to review the FPPO's to assure a satisfactory level of officers.
GSA has developed a resource allocation model to specifically identify and establish the proper level of FPPO's. Initial results indicate a need for an FPPO force of less than 1,000, but higher than the current on-board levels. The 1,000-FPPO requirement was repealed in the fiscal year 1998 appropriations act. We are working to increase the number of FPPO's, so that we reach the level that we believe best supports the Federal Government and our mission.
At the completion of all action items, a management control review or other detailed review will be performed to ensure that the actions taken are producing the intended positive results.

Pace of Corrective Action:

· Year Identified: 1995
· Current Correction Date: 09/98
· Responsible Program Office: Public Buildings Service, Federal Protective Service

Material Weakness: Multiple Award Schedule (MAS) Program

Federal agencies collectively acquire goods and services valued at approximately $5 billion annually through MAS contracts. The MAS Program has several problems which were identified by agency management and cited in General Accounting Office (GAO) and GSA Office of Inspector General (OIG) audits. First, the information which GSA receives from vendors to evaluate prices offered to the Government is not always accurate, current and complete. Second, heavy workload in the MAS program may adversely affect the ability of contracting officers to award the most favorable prices for the Government. Third, agencies which use the MAS program may not always comply with applicable ordering procedures.
In previous years, this material weakness was reported as a high risk area, because the solutions necessitated involvement of the Office of Management and Budget and, perhaps, the Congress. Also, the Federal Acquisition Streamlining Act significantly altered the conduct of Federal Procurement. Implementation of this new law continues to be evaluated as to the effect on the MAS program.
At the completion of all action items, a management control review or other detailed review will be performed to ensure that the actions taken are producing the intended positive results.

Pace of Corrective Action:

· Year Identified: 1992
· Current Correction Date: 08/99
· Responsible Program Office: Office of Governmentwide Policy, Office of Acquisition Policy

Material Weakness: Inappropriate Controls Imposed On The Information Technology Fund

As a result of inappropriate controls imposed, the Information Technology Fund cannot operate in a manner most advantageous to its customers and the American taxpayers. GSA is continually evaluating the availability and demand for new products and services, especially in the Information Technology (IT) arena. Business is growing as a result of customer demand and business innovation. Ironically, most of the increase in demand is usually from clients who do not pay timely or electronically. These clients often take 90 days or more to reimburse GSA for goods and services obtained through vendors that must be paid in accordance with the Prompt Pay Act. OMB Circular A-34, section 11.2.d.1.B states: "Revolving funds [such as the IT Fund], operate on a reimbursable basis when working capital (undisbursed cash) is available. Otherwise, advance payments must accompany orders. Revolving funds may not disburse into a negative cash position in anticipation of Federal or non-Federal reimbursements." This guidance has been in effect only since 1995.

An example of this control problem is indicated by the recent dramatic increase in business in the Federal Technology Service's FAST Program. The FAST Program has grown from a local program in Kansas City to a nationwide program with revenues of over $500 million in the past two years. The primary customer with 85 percent of the purchases is Defense. Defense is not on Treasury's Online Payment and Collection (OPAC) System. Defense does not pay GSA in a timely manner. During fiscal year 1997, delinquencies ran as high as 58 percent for the FAST Program alone. This has caused the IT Fund to approach a negative cash balance, even causing a cessation of FAST sales to DOD. This costs the taxpayers.
Without changes to the OMB guidance, all Franchise Funds, not only the IT Fund, can come under the same restrictions. A true measure in determining a fund's financial position must be more than just its cash position; it must include its valid accounts receivable. OMB's guidance needs to be modified to fit business reality.

Pace of Corrective Action:

· Year Identified: 1997
· Current Correction Date: 01/98
· Responsible Program Office: Federal Technology Service
Procurement Services Center

Material Weakness: PBS Rent Revenue Shortage

Actual Federal Buildings Fund (FBF) rent revenues for fiscal years 1996 and 1997 will be $680.5 million less than the amount needed to fund spending authorities provided by the Congress. GSA has taken the actions necessary to ensure that we will operate within available revenue for these fiscal years. In the fiscal year 1998 President's Budget, GSA requested the Congress score $680.5 million from fiscal year 1998 income that will be used to accomplish spending authorities approved in prior years. Immediate action was taken to identify and correct the weakness in revenue projection methodologies and procedures. As a result, GSA notified the Congress in July of its revised income estimates for fiscal years 1997 and 1998. GSA continues to work to improve its income projection and collection systems and is streamlining both these processes and the lines of accountability for them.

At the completion of all action items, a management control review or other detailed review will be performed to ensure that the actions taken are producing the intended positive results.

Pace of Corrective Action:

· Year Identified: 1997
· Current Correction Date: 1999
· Responsible Program Office: Public Buildings Service, Office of the Controller

ENCLOSURE C - Schedule of Corrective Actions, Material Nonconformances

As required by the FMFIA, GSA evaluates its financial management systems each year in accordance with the principles, standards, and related requirements prescribed by the Comptroller General and implemented through the Office of Management and Budget's (OMB) Circular No. A-127, Financial Management Systems.
Based on all review work performed in 1997, except for one area of material nonconformance identified with respect to OMB Circulars No. A-127 and A-130 requirements, GSA's financial management systems substantially comply with Federal financial management systems requirements.
The material nonconformance cited above relates to certain general support system security control weaknesses that were identified by GSA's independent financial statement auditors, Arthur Andersen LLP, during their annual audit of GSA's financial statements. These weaknesses could have potentially impacted the integrity of several Federal Supply Service financial management application systems. However, GSA has other internal controls in place that mitigate the risk that a material misstatement may occur and not be detected by GSA employees.

Material Nonconformance: Automated Information Systems Security Controls

During 1997, the responsibility for the general support system for three GSA automated information systems was transferred to a commercial data center. Subsequently, these three systems were discovered to be potentially at risk with respect to unauthorized access and the various possible consequences thereof. Although additional followup work concluded that there were mitigating controls and that no adverse consequences occurred to GSA from this condition, corrective actions are still needed to ensure better compliance with OMB Circular No. A-130, Automated Information Systems Security Control Requirements.
Pace of Corrective Action:

· Year Identified: 1997
· Current Correction Date: 02/99
· Responsible Program Office: Federal Supply Service,
Office of the Chief Information Officer

ENCLOSURE D - Summary of Other Issues

Identified below are two issues that surfaced during fiscal year 1997 which merit disclosure in this year's FMFIA report. However, because both issues are currently unresolved, GSA's Management Control Oversight Council did not have sufficient information at this time to determine whether these issues constituted a material weakness for FMFIA reporting purposes.

GSA Expenses to Ready the Suitland, Maryland Federal Building No. 2 for Temporary Occupancy

The Office of Inspector General (OIG) concluded in a final audit report that renovation work in the Suitland Federal Building No. 2 exceeded the prospectus threshold, a violation of the prospectus requirements of the Public Buildings Act and the Anti-Deficiency Act. The OIG report is currently being addressed through GSA's formal audit follow up system.

Use of Funds to Pay for Initial Space Alterations at the U.S. Bankruptcy Court, Columbus, Ohio

The OIG reported a potential law violation in a final report regarding the use of funds to pay for initial space alterations at the U.S. Bankruptcy Court, Columbus, Ohio. In the report, the OIG states that contrary to a Comptroller General opinion, GSA authorized the use of rental funds (Budget Activity 53), instead of using repair and alteration funds (Budget Activity 54), to pay for initial space alterations. The OIG is of the opinion that the improper use of Budget Activity 53 may also have resulted in an Anti-Deficiency Act violation. The OIG is awaiting a decision from GSA's Office of General Counsel regarding this matter.

Supplemental Information

Inspector General's Semiannual Reports to the Congress

Executive Summary for the Period October 1, 1996-
March 31, 1997

GSA is now operating in a new, competitive environment. Its principal source of funding has switched from direct appropriations to reimbursable accounts and fee-based services. It is also adapting to downsizing and the various streamlining and reform initiatives; all are aimed at doing things better, cheaper, faster, and with fewer people. To help GSA management operate in this environment the OIG has focused its efforts on providing better, more timely, and more valuable assistance to Agency managers by introducing and expanding new forms of service. We have greatly expanded our consulting services and our participation on Agency improvement task forces. These services have been added while we continue to offer our more traditional services including program evaluations, contract and financial auditing, and internal controls reviews.

Consulting Services

Our consulting services are provided to management based on their requests, and are designed to be quick responses to specific program concerns. Since we began to offer consulting services, GSA managers have responded with about 70 requests for assistance. This period, for example, we provided the Office of Information Technology with a workload assessment for future operations resulting from significant downsizing and the loss of several key technical officials. We also assisted the Federal Protective Service in developing a cost allocation system to more accurately bill Federal customers. Additionally, the Office of Management Services requested our assistance to improve the delivery of various GSA administrative services.

We assisted Agency task forces by providing advice on appropriate management controls for various reinvention efforts, and by offering possible solutions on several complex financial issues. We currently have over 30 OIG representatives on various Agency task forces. As examples, we are assisting the Chief Financial Officer with the redesign of the Agency's core financial management system, and a new system designed to allocate overhead using activity-based costing. We are also assisting the Federal Supply Service with the design of management controls over the new credit card system for fleet management, and the Public Buildings Service with developing improved mechanisms for rent forecasting and collections.

We also issued two significant advisory evaluations. In our first advisory report we provided the GSA National Customer Service Center with the results of our best-practices review and benchmarking of how private sector shipping companies provided quality services and resolved shipping discrepancies. The second report involved GSA efforts to better identify ways to reduce its general management and administrative expenses as a way of improving efficiency and cost-effectiveness. We reported that many GSA organizations were identifying ways of reducing costs and that further audit work was unwarranted. We also called to management's attention that prior GSA overhead study teams had made recommendations for improvement which, if acted upon, could provide opportunities for cost reduction.

Program/Operational Reviews

During this period, we conducted comprehensive program reviews and made recommendations for improvement in several of GSA's major programs and activities. In response to a request from the Chief Financial Officer, we reviewed the general management of and controls for the Federal Government's three major credit cards: the travel card, the general-use charge card, and the telephone card. Our auditors also made recommendations to improve the timely resolution of the Federal Telecommunications System's (FTS2000) price adjustments process, and made recommendations to improve access to and operations of the Federal telecommuting centers. We also issued a Governmentwide report on the civilian agencies' aircraft management programs. The Federal Government owns or operates over 1,500 civilian aircraft at total operating costs exceeding $1 billion annually. Our work involved coordinating 10 Federal OIGs in their reviews of their agencies' aircraft safety, maintenance, and management programs.

Procurement Integrity

An important part of our work effort is to provide support to Agency contracting officers and to protect the integrity of GSA procurement programs and operations by detecting and preventing fraud, waste, and abuse. This period, several private sector contractors agreed to pay over $3 million to resolve potential civil liability under the False Claims Act. The contractors provided a wide array of products and services such as office furniture, pay telephones, lawn and garden equipment, hand tools, and electrical supplies. The violations included overcharges, false claims, violations of the Trade Agreements Act, failure to provide price reductions, false certifications of pricing data, and product safety violations. In addition, an office furniture supplier made a final payment of over $2.3 million (total settlement of $5.2 million) to cover overcharges to Federal customers on 15 Multiple Award Schedule contracts.

We also completed an internal audit in the procurement area in which we reviewed the Agency's procedures for identifying poorly-performing Government contractors and for referring poor performers for debarment consideration. We participated in a joint investigation with the Federal Bureau of Investigation, the Department of Transportation, and the Defense Criminal Investigative Service, which uncovered over $1 million in stolen Government property including TVs, VCRs, chain saws, clothing and hand tools. Other investigations resulted in civil recoveries, convictions, and/or suspensions and debarments in cases involving mail fraud, false claims, and bribery in connection with a variety of products and services.

Summary of Results

The OIG made almost $66 million in financial recommendations to better use Government funds, and in other program costs savings; made 231 referrals for criminal prosecution, civil litigation, and administrative actions; reviewed 133 legislative and regulatory actions; and received 2,159 Hotline calls and letters. This period, we achieved savings from management decisions on financial recommendations, civil settlements, and investigative recoveries totaling over $225 million.

Emerging Issues and Concerns

We also report this period on emerging issues and concerns. During the last 6 months two issues developed that are of significant concern for the OIG and for the Agency. The first involves the proper resolution of disputes between an OIG and an agency when the OIG has questioned the authorities under which the agency head has taken action. The specific issue centers on a disagreement between the Inspector General and the Agency arising out of OIG concerns that the Administrator may have exceeded his authority in compromising debt in a credit transaction related to the disposal of surplus real property. The OIG has requested independent opinions from the Attorney General and the General Accounting Office (GAO). The second issue involves the recently highly publicized GSA disclosure that its forecast of rent revenue for Fiscal Year (FY) 1996 and FY 1997 exceeded actual rent income by over $680 million and that it therefore could not fund all the projects authorized by Congress.

Customer Feedback

We are continuing with our internal organizational changes to enhance our ability to provide the services and products GSA needs to help meet its mission and to improve its overall management and performance. We are working hard to increase productivity and shorten delivery time frames for our services. The entire staff has worked to reduce overhead and administrative costs. In addition, we increased the solicitation of feedback from our customers on the quality of our reports and services. Satisfaction ratings have substantially improved since our initial survey last year.

Executive Summary for the Period April 1, 1997-September 30, 1997

During this period, we expanded our efforts to provide professional assistance through enhanced consulting services, advisory reports, active participation on Agency task forces, and the use of alert reports designed to quickly inform management of potentially serious deficiencies or other concerns prior to completion of all analytical work and formal report issuance. These services have been added while we continue to offer our more traditional services including program evaluations, contract and financial auditing, and internal controls reviews.

Consulting Services

At the request of Agency management, we expanded our consulting services role to cover a range of GSA activities cutting across all GSA components. We helped a Public Buildings Service (PBS) component develop a cost allocation system for protection billing rates; analyzed stock procurement practices and declining sales in a GSA commodity center; benchmarked private sector and other Government practices for replacing and utilizing light trucks; and helped research best management practices for managing information technology infrastructure, budget issues, and project initiatives. We also issued several advisory reports informing managers of opportunities for operational improvements.

We continued our participation on Agency task forces by providing advice on appropriate management controls. Agency management has requested our assistance in task forces looking at GSA's rent revenue forecasting system, in addition to looking at ways to better educate employees about effectively managing building assets, and to better manage emergency readiness initiatives.

We also issued two significant advisory evaluations. In our first advisory report we provided GSA contract managers with information on the most efficient ways to procure, use, and control wireless communication services. We concluded that GSA could achieve significant savings and better program management if it went from multiple vendors to a single vendor and if it developed multiple rate plans for different levels of use. The second report involved a review of GSA's Fleet Management System's cost per mile performance measure. We reported that this performance measure was an acceptable measure for reporting performance under the Government Performance and Results Act because it did include all the various fleet operating cost components.

Program/Operational Reviews

The OIG also continued its efforts to conduct large-scale reviews of major programs and operations throughout GSA's various components. For example, in our review of security and law enforcement in Federal buildings, we reported that safety and protection of Federal employees and property is potentially being compromised because regional criminal investigation activities are operating autonomously, with no program accountability or measurable performance standards. Consequently, we made recommendations for improvements in the accountability, performance measurement, training, and information sharing practices for the Federal Protective Service. Other program reviews resulted in recommendations for improving the administration and accountability of GSA's Fast Track Award program; reducing inventory costs, improving quantity demand projections, and improving the overall management of more than 7,600 commonly used items in GSA inventories; and improving controls over the States' administration of the Personal Property Donation program. In addition, we made recommendations to improve the overall management of GSA's program designed to quickly and efficiently procure off-the-shelf computer products and services.

Our operational reviews reported that several GSA initiatives were largely successful in meeting their planned objectives. For example, GSA developed a pilot contract program to quickly meet the demand for skilled craftsmen such as electricians, carpenters, mechanics, and plumbers. We found that the pilot contract fulfilled its primary purpose of providing skilled workers to serve the needs of GSA's customers, projects were completed in a timely manner, the procurement system was operating efficiently, and Agency customers were pleased with the overall quality and timeliness of requested services. We also found that GSA's energy retrofit program for Federal buildings has exceeded its expectations in that energy use has been reduced by 20 percent and that the project is paying for itself. GSA is also taking appropriate action to help its customers reduce long distance telephone charges.

Procurement Integrity

An important part of our work effort is to provide support to Agency contracting officers and to protect the integrity of GSA procurement programs and operations by detecting and preventing fraud, waste, and abuse. This period, several private sector contractors agreed to pay over $6.7 million to resolve potential civil liability under the False Claims Act. These contractors provided a wide array of products and services such as office equipment and furniture, identification cards, and automated data processing (ADP) equipment. The violations included misrepresentation of commercial discount practices and violations of the Trade Agreements Act. In addition, our efforts resulted in the conviction of several GSA contractors involved with the theft of Government property, false certifications, and the fraudulent use of a Government credit card. However, our relationships with private industry are not always adversarial. A recent investigation conducted by the OIG in partnership with a major tool manufacturer disclosed a GSA employee stole over $240,000 of the manufacturer's tools from a GSA distribution center and sold the tools on the "black market" for less than the production cost of the tool. Both the Government and the manufacturer were victims of this crime and worked jointly to protect the integrity of GSA's commercial item acquisition program and the manufacturer's product value

Summary of Results

The OIG made almost $55 million in financial recommendations to better use Government funds, and in other program costs savings; made 192 referrals for criminal prosecution, civil litigation, and administrative actions; reviewed 268 legislative and regulatory actions; and received 1,755 Hotline calls and letters. This period, we achieved savings from management decisions on financial recommendations, civil settlements, and investigative recoveries totaling over $65 million.

Emerging Issues and Concerns

We continue our practice of highlighting emerging issues and matters of particular concern.

The primary ongoing issue involves GSA's previous disclosure that its forecast of rent revenue for FY 1996 and FY 1997 exceeded actual rent income by over $680 million and that it therefore could not fund all the projects authorized by Congress. During this period, we reviewed the Agency's newly developed projection of an additional revenue gap for FY 1997 of $78.6 million. Based on our review, we believed the projection was understated by $28 million because it is based on overly optimistic assumptions of adjustments for bad debt expense and credit corrections. On July 2, 1997, the Agency did report the additional revenue gap to Congress as an adjustment of $100 million. We considered this disclosure to be more consistent with our review and therefore reasonable. The Agency established a task force on revenue forecasting to examine the rent revenue forecasting process and requested our participation. In addition, the OIG, at the Agency's request, has joined with the agency in a review of the accuracy of the data in the Agency's rent billing information system. We will continue to work with GSA in improving its rent billing system.

One new issue emerged this period that we believe warrants reporting here: concern for the proper application of management controls over program assets. We believe the current environment of reinventing Government, streamlining operations, declining staffs, shifting from a centralized to decentralized operations, and the increased emphasis on customer service, has heightened the importance of management adherence to the few remaining broad controls in place to protect Government assets. This is especially true in the procurement arena. In several ongoing reviews, we have identified problems stemming from a lack of proper controls or breakdowns in designed controls which could lead to fraud and waste in GSA's programs and operations. As a result, we plan to shift more audit resources to the review of management controls over the next year.
Two other previously reported matters remain of continuing concern: the curtailment of postaward audit authority and the elimination of pricing certifications in the Multiple Award Schedule (MAS) program, and issues relating to the Agency's authority to compromise debt (sale of the U.S. Custom House to the City of Boston).

Customer Feedback

We are continuing with our efforts to obtain customer feedback from our internal customers. We provide a Customer Satisfaction Survey form for customer use with each of our internal products. The feedback received to date has been very positive and will be used to help us improve the quality and timeliness of our internal products.

Copies of the semiannual reports may be obtained directly from GSA's Office of Inspector General.

Administrator's Semiannual Management Reports to the Congress

Executive Summary Combining the Semiannual Reports for Fiscal Year 1997

In accordance with the Inspector General Act Amendments of 1988, the Administrator of General Services reports directly to Congress on management decisions and final actions taken regarding audit recommendations issued by GSA's Office of Inspector General (OIG). The Administrator must also provide an explanation when final action has not been taken within one year of an audit's management decision date.

The Administrator's reports are statutorily required on a semiannual schedule for periods ending March 31 and September 30 of each fiscal year. The information below represents a compilation of summary statistics from the two reports issued for fiscal year 1997. Where appropriate to be consistent with this Annual Report presentation, six months totals have been combined to reflect full fiscal year performance.
For a fuller understanding of the statistics presented below, it should be known that the OIG identifies audit recommendations for cost avoidance as "funds to be put to better use" and distinguishes whether the funds have or do not have an impact on the agency's budget. Funds categorized as having budget impact involve the obligation process, and audit-related savings of this category may be available for reprogramming. Funds identified as having no budget impact do not involve obligated monies and, therefore, do not have a material effect on the agency's appropriated funds.

During the fiscal year ending September 30, 1997, management decisions were issued on 316 audit reports. Of this total, 197 audit reports represented $ 34,025,608 in disallowed costs and $ 246,789,158 in funds to be put to better use. The latter category is comprised of estimated and actual cost avoidance determined to have no impact on the agency's budget.

By the fiscal year's end, final action was achieved for 161 audits with management decisions identifying disallowed costs or funds to be put to better use. These audits represent the recovery of $ 24,737,884 and the implementation of $ 7,492,636 of actual cost avoidance determined to have no impact on the agency's budget.

As of March 31, 1997, 197 audit reports remained open without final action a year after management decision, with 89 of this total under formal administrative or judicial appeal. As of September 30, 1997, 171 audits remained open without final action a year after management decision, with 85 under appeal. The full reports for each semiannual period cite the reasons final actions were not yet taken on the open audits that were not under appeal.

Copies of the semiannual reports may be obtained directly from GSA's Office of Management and Workplace Programs.
U.S. General Services Administration
1800 F Street, NW
Washington, DC 20405

(202) 501-0705
http://www.gsa.gov

E-mail questions about this report to the Office of Communications

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