General Services Administration

Congress has raised concerns about how the General Services Administration (GSA) estimated the funding needs for the rental-of-space account within the Federal Buildings Fund. In August 1997 and again in January 1998, GSA requested that it be allowed to reprogram $324 million from other Fund accounts into the rental-of-space account to cover its underestimation of expenses to be paid out of that account. GSA officials said that the reprogramming was necessary because of forecasting problems relating to lease expansion, lease cancellations, rent increases for existing leases, and the annualization of the fiscal year 1997 reprogramming. GSA has been changing its rent expenditure tracking and estimating process and has been developing a new computer program, known as Galaxy, to facilitate this process. This report discusses whether (1) the new Galaxy program included the elements needed for tracking actual rental expenditures and forecasting future rental-of-space funding requirements and (2) the additional steps that GSA's Public Buildings Service was taking to improve its budget process addressed the causes of its underestimation of the rental-of-space account.

GAO noted that: (1) Galaxy has seven basic components that appear capable of providing the data elements needed to track the actual expenditures made from the rental-of-space account and thus aid in forecasting the funding required for the rental-of-space account for budget purposes; (2) PBS has recognized that the success of the Galaxy program depends on the accuracy and maintenance of the data entered into Galaxy; (3) consequently, it has emphasized this issue in its training manual for Galaxy; (4) this manual states that all active leases and projects loaded into Galaxy must be validated; (5) the manual lists five steps that the analyst must follow to validate the information; (6) rent account analysts that GAO interviewed emphasized the need to maintain good communications among: (a) themselves, who maintain Galaxy; (b) the realty specialists, who maintain PBS' System for Tracking and Administering Real Property, the system from which the data in Galaxy were downloaded; and (c) customer agencies that provide information on their space needs; (7) GAO agrees that GSA and its customer agencies need to have good communications to ensure that GSA knows about any potential changes in inventory that a customer agency may plan in a given fiscal year, so that those changes are reflected in GSA's budget submission; (8) PBS has taken steps to improve: (a) how it calculates the rental-of-space estimate, such as using local market rental increases instead of national averages in calculating the rent increase estimates; and (b) the budgeting process in general, by establishing the Office of Financial and Information systems to oversee budget formulation, including estimating the rental-of-space account funding requirements; and (9) GAO believes that the actions PBS has identified to improve its budgeting process, if effectively implemented, address the causes it identified for its underestimation of the rental-of-space account.