GSA: New system will check funding shortfalls

A new information management system at the General Services Administration's Public Buildings Service (PBS) should guard against a repeat of a reported shortfall of $847 million in a pool funded by rents that agencies pay to GSA. But the fund may still feel the effects of the shortfall for several

A new information management system at the General Services Administration's Public Buildings Service (PBS) should guard against a repeat of a reported shortfall of $847 million in a pool funded by rents that agencies pay to GSA. But the fund may still feel the effects of the shortfall for several years, according to a General Accounting Office report issued this month.

Construction, maintenance and operating costs for all federal buildings owned or managed by GSA are paid from the Federal Buildings Fund (FBF). The fund receives income from rent that agencies pay, and Congress sets annual limits on how much of the fund can be spent and for what purposes. GSA forecasts how much income the fund will have, and the FBF budget decisions are based on those forecasts.

With the old database of building administration and management information, GAO found that the PBS, which administers the FBF, did not have a complete record of all of the fund's transactions and cited "lack of supporting documentation necessary to verify forecast information and assumptions" as one of the main problems leading to the estimation shortfall.

PBS is installing the System for Tracking and Administering Real Property (STAR) to replace the old database. PBS shut down the database in March, but STAR "is still in the implementation phase," said Jan Ziegler, assistant regional administrator for the mid-Atlantic region in Philadelphia, where the system is based. GSA still must enter much of the data as it is gathered because the agency has little historical data to base the system on, she said.

GSA plans to add an automated forecasting module into the system, but more data must be gathered to develop a model for the module to work, Ziegler said. "Right now, we're still in the shake-out-the-bugs phase," she said.

PBS reported the original $847 million figure of expected overestimation of rental revenue for fiscal 1996 and 1997 to Congress in January 1997. That number changed in July 1997 to $1.04 billion to include a potential 1998 overestimation. It changed again— after an inspection of the books after the close of fiscal 1997— to $634.4 million for 1996 and 1997, with a projected 1998 overestimation of $28.3 million. GAO also found overestimations in 1994 and 1995.

Working with consultants hired by PBS, the GSA inspector general and an internal GSA review team, GAO also found that GSA did not document policies or clear responsibility for the estimation process but that PBS had already assigned responsibility. The report cited "lack of documented policy and procedures for the estimating process; unclear lines of responsibility and accountability for revenue estimates below the level of the PBS commissioner; and use of national averages, rather than project-specific data, to forecast occupancy schedules and rental rates."

To solve these issues, in July 1997 PBS renamed the comptroller office as the Office of Financial and Information Systems. That office is "responsible for ensuring proper accounting and measuring of the financial performance of PBS and the Federal Buildings Fund; ensuring that PBS has information technology systems capable of providing PBS [with] the information necessary to measure service and financial performance; and the overall management, coordination and tracking of administrative requirements for PBS, central office," according to PBS.

In addition, PBS followed a GAO recommendation to establish an acceptable margin of error for its rental revenue estimates, setting the margin at 2 percent. GSA is still developing a process to resolve any differences from that margin in the future.

GAO also expressed concern that the funding problem could affect the FBF beyond fiscal 1998, contrary to PBS and Office of Management and Budget findings.

In fiscal 1997 and 1998 PBS had taken several steps to deal with the overestimation, including not using about $680.5 million budgeted by Congress and deferring planned expenditures until later years.

The delay in construction and modernization projects stemming from the need to hold back budgeted money to correct the overestimation could result in price changes and increased costs in the future, the report concluded.

The report pointed out a comment by a GSA official during an April 24, 1997, congressional hearing. The official said that without additional appropriations, "GSA will operate below prudent funding levels for building operations and repair and alterations for FY '98."

It also noted a 1993 report written by the U.S. Advisory Commission on Intergovernmental Relations that found "deferring maintenance can result in poor-quality facilities, reduced public safety, higher subsequent repair cost and poor service to the public."

However, GAO did not offer a solution for how to keep the funding shuffle from affecting future maintenance and construction.

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