General Services Administration

Overestimation of Federal Buildings Fund Rental Revenue Projections Gao ID: T-GGD-98-69 March 5, 1998

The General Services Administration (GSA) overestimated its rental revenue projections for the Federal Buildings Fund in fiscal years 1996-98 by more than $1 billion. GAO found that GSA had documentation supporting the dollar amounts it attributed to six of the seven reasons it reported for the $847 million overestimation that GSA identified in January 1997. In addition, GAO and others identified several weaknesses in GSA's rental revenue estimation process. GSA was aware of these problems and has taken steps to improve future rental revenue estimates. Furthermore, GSA recently reported that the actual budget impact of its rental revenue estimation to be $634.4 million for fiscal years 1996 and 1997, and reduced its fiscal years 1998 anticipated overestimation substantially.

GAO noted that: (1) GSA had documentation supporting the dollar amounts it attributed to six of the seven reasons it reported for the overestimation of rental revenue; (2) in addition, GAO and others identified several weaknesses in GSA's rental revenue estimation process; (3) GSA was aware of these problems and has taken corrective actions which GAO believes, if effectively implemented, should help improve future rental revenue estimates; and (4) further, GSA recently reported the actual budget impact of its rental revenue overestimation to be $634.4 million for FY 1996 and FY 1997, and reduced its FY anticipated overestimation substantially.

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