GSA details audit problems

The General Services Administration’s fiscal 2005 audits capture about eight years of sins and miscalculations of funds that total more than $900 million, an official said in testimony at a congressional hearing June 7.

“The agency had to bite the bullet in one particular year,” Eugene Waszily, acting deputy inspector general of the GSA, told a House Government Reform subcommittee.

The auditors reviewing fiscal 2005 records could not verify some financial information in the statements from GSA, Waszily said. That came after 17 consecutive years of clean audits for GSA.

Signs of a potential problem surfaced in procurement audits conducted in 2004. Reviews found a small number of large procurements made for customer agencies that GSA’s acquisition employees lacked the authority to award, Waszily told the subcommittee. Further audits found additional improper awards, several that breached appropriations requirements, including the use of expired funds.

When identified and quantified, the misstated balances total more than $900 million, he said.

Kathleen Turco, GSA’s chief financial officer, said at the hearing that she cannot guarantee a clean audit for GSA in fiscal 2006 because the agency is trying to rectify errors in acquisition practices that were uncovered in 2003.

GSA’s new administrator, Lurita Doan, has made fence-mending one of her top four priorities, and this is an area in which her job will get tough. In an interview after the hearing, she said every customer is important to GSA, and she wants all GSA’s customers to return to the fold.

Rep. Todd Platts (R-Pa.), chairman of the subcommittee that oversees agencies’ management, finance and accountability, looked at this issue because he said GSA is at a critical juncture.

GSA has increased internal control requirements for financial management, and it has the added challenge of supervising the Office of Management and Budget’s Financial Management Line of Business. The agency is in the midst of a reorganization, and Doan joined as administrator less than a week ago.

“As GSA rebuilds its reputation, sound financial management must serve as the foundation,” Platts said.

Echoing defenses of GSA that have been voiced in the past, Waszily said agency employees were only trying to help agencies get products and services they needed, and they did not always take care to follow all the rules.

GSA erred by holding agencies’ yearly appropriations beyond the time the money was obligated by Congress for that purpose, Waszily said. The subsequent loss of the money hurt relations between GSA and agencies.

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