Poor Management of GSA's Self-Service Stores Leads to Needless Duplication and Potential for Fraud

PSAD-80-64: Published: Aug 28, 1980. Publicly Released: Sep 2, 1980.

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The Self-Service Store Program (SSS) was set up by the General Services Administration (GSA) to provide executive agencies with an efficient and economical supply system and, thereby, effect the consolidation of unnecessary agency stockrooms. GSA has had problems with the implementation of the program, and in l977 widespread fraud surfaced in the SSS system. The purpose of the SSS review was to assess the effectiveness of the program in fulfilling the intent of the Federal Property and Administrative Services Act, as amended.

GAO found that SSS does not competently support agencies' retail needs nor eliminate unnecessary agency stores and stockrooms. GSA lacks effectiveness in control over store inventories, management oversight of store operations, and control over shopping plates issued to Federal activities. In addition, it was found that GSA stores mispriced supplies, failed to order out-of-stock supplies, stocked defective supplies, and experienced security problems. Several Federal activities were found to be operating their own stores and stockrooms in the same building as GSA stores. It was also found that GSA has opened stores: (1) with the intent to serve Federal activities many miles from GSA stores; (2) with the intent to serve other agencies' retail outlets; and (3) based on overstated projected sales. GSA is considering reinstituting a service known as special order drop shipments, which GAO believes is an improper function of the stores and an attempt to increase sales. SSS fails to fulfill the intent of the Federal Property and Administrative Services Act, as amended. The GSA lack of adherence to its policies and procedures contributed to problems within the system. GSA must first improve the operations of its own retail outlets before it identifies and consolidates unnecessary agency stores and stockrooms.

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