In 2003, the National Aeronautics and Space Administration (NASA) was authorized to demonstrate enhanced use leasing (EUL) at two centers, allowing the agency to retain the proceeds from leasing out underutilized real property and to accept in-kind consideration in lieu of cash for rent. NASA selected Ames Research Center and Kennedy Space Center for the demonstration program. The agency had requested that Congress extend this authority to additional NASA centers during formulation of the NASA Authorization Act of 2005. NASA's request was not granted. Instead, Section 710 of the NASA Authorization Act of 2005 (Public Law 109-155) directed GAO to review NASA's EUL program. We examined (1) the financial impact of the EUL authority on NASA and whether EUL revenue and other financial benefits would have been realized without the authority, (2) NASA's use of the authority and whether the arrangements made under the authority would have been made in the absence of the authority, and (3) what controls are in place to ensure accountability and transparency and to protect the government. The act also directed GAO to report back to the Congress by December 30, 2006. We presented our preliminary findings to Congress in December 2006. Because of Congress's interest in how NASA is implementing its EUL authority, we are enclosing the full briefing that supported that December presentation with this report, along with a summary of our findings and conclusions.
Recommendations for Executive Action
|National Aeronautics and Space Administration||Before NASA considers requesting that the Congress extend EUL authority to additional centers, the NASA Administrator should develop an agency wide EUL policy, based upon sound business practices and lessons learned from the demonstration centers, that establishes controls and processes to ensure accountability and protect the government's interests, including (1) criteria for determining that EUL represents the best economic value for the government, compared with other options, such as federal financing through appropriations or sale of the property; (2) measures of effectiveness for the EUL program, such as reductions in the square footage of underutilized property and in the dollar amount of deferred maintenance; and (3) accounting controls and processes to ensure accountability, such as an accounting system for tracking the value of in-kind consideration and an audit trail and documentation to readily support financial transactions.|
|National Aeronautics and Space Administration||If NASA receives expanded EUL authority, the agency should adopt mechanisms to keep the Congress fully informed of the agency's activity under EUL authority, including (1) identifying and quantifying the value of in-kind consideration arrangements and expenditures of EUL revenue in its annual EUL reports to the Congress, and (2)reporting the availability and use of EUL funds in the agency's operating plans.|