U.S. Government Printing Office:

Materials Management Service's Charges for Handling Paper and Materials

GGD-88-108: Published: Aug 8, 1988. Publicly Released: Aug 8, 1988.

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In response to a congressional request, GAO examined the operations of the Government Printing Office's (GPO) Materials Management Service (MMS), to determine: (1) the propriety of the Service's handling charges from the standpoint of generally accepted accounting principles; (2) whether the charges were equitable to the level of service provided; (3) whether the cost centers were adequate to properly determine and allocate costs; and (4) ways to reduce operating expenses.

GAO found that: (1) the number of cost centers was adequate to record and accumulate costs; (2) the Service properly and accurately assigned direct costs to the centers; (3) the Service did not properly and accurately assign some allocated costs under the engineering service charges and building expense accounts; (4) the Service did not always allocate building space assignments according to the centers' actual occupancy and square footage; (5) GPO last reviewed space allocation rates in 1965; (6) although the Service levied a 35-percent handling charge on all customers buying paper and materials from inventory and a 6-percent handling charge on direct shipments, it levied no charges for other items; and (7) GPO could not provide specific data to support these rates.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The basis of cost allocations has been reviewed. Adjustments have been made to engineering services and buildings expense accounts (square footage charges and allocations).

    Recommendation: The Public Printer, GPO, should direct the Office of the Comptroller to review all allocation bases used to distribute costs to MMS cost centers. During this review, the basis for allocating costs in the engineering services and the buildings expense accounts should receive special attention.

    Agency Affected: Government Publishing Office

  2. Status: Closed - Implemented

    Comments: Handling charges were reviewed and the 6 percent handling charge was reduced to 5 percent.

    Recommendation: The Public Printer, GPO, should direct the Office of the Comptroller to evaluate the validity of the present handling charges for issues from inventory and direct shipments of paper and materials from vendors, make any necessary adjustments, and make such evaluations on a periodic basis.

    Agency Affected: Government Publishing Office

  3. Status: Closed - Implemented

    Comments: Handling charges are now being applied consistently to all users of MMS services.

    Recommendation: The Public Printer, GPO, should direct the Office of the Comptroller to develop handling charges applicable to recovery of costs of MMS services provided to users of procurement services not now subject to a handling charge.

    Agency Affected: Government Publishing Office

 

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