General Services Administration:

Overestimation of Federal Buildings Fund Rental Revenue Projections

T-GGD-98-69: Published: Mar 5, 1998. Publicly Released: Mar 5, 1998.

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Bernard L. Ungar
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Pursuant to a congressional request, GAO discussed the General Services Administration's (GSA) overestimation of its rental revenue projects for the Federal Buildings Fund (FBF) in fiscal years (FY) 1996, 1997, and 1998, and the actions it is taking to improve its future revenue projections.

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.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: GSA has informed GAO in writing that it has implemented a 2-percent margin of error and developed a process for exploring and resolving variances from the 2 percent.

    Recommendation: The Commissioner, Public Buildings Service, should establish an acceptable margin of error for its rental estimates, as well as a process for exploring and resolving causes of variances outside the margin adopted.

    Agency Affected: General Services Administration: Public Buildings Service


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