Fast Facts

The federal government owns $1 trillion in personal property, such as furniture and vehicles. Agencies can sell these items and use the proceeds to buy similar items. The General Services Administration makes the rules for these federal agency transactions, buys and sells vehicles for other agencies to use, and carries out its own transactions.

We found that GSA officials who buy vehicles and Army officials who buy helicopters did this often and understood the rules. VA officials, however, did not. We recommended that GSA clarify the rules for selling property so that agencies have opportunities to be better stewards of personal property.

Example of high-value personal property items

A picture of Army helicopters

A picture of Army helicopters

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Highlights

What GAO Found

According to data compiled by the General Services Administration's Office of Government-wide Policy (GSA OGP), 27 agencies executed exchange/sale transactions, governed by statute and GSA regulations, to exchange (trade-in) or sell personal property from fiscal year 2013 through fiscal year 2017. The 27 agencies reported transactions totaling about $3.1 billion. Vehicle sales accounted for $2.6 billion (about 84 percent) of that total.

Examples of High-Value “Personal Property” Items

Examples of High-Value “Personal Property” Items

GAO found that GSA officials who procure vehicles for federal agencies and Army officials who purchase helicopters appeared to understand the exchange/sale process and used it frequently. However, Department of Veterans Affairs (VA) officials expressed confusion about key aspects of the authority. For example, officials were unclear about how to sell property; this lack of clarity led to missed opportunities to use sale proceeds for replacing property. GSA OGP officials who guide agencies on the use of the authority acknowledged that the exchange/sale regulations can be confusing but GSA's plan to amend them is at least 2 years away. Because GSA does not plan to address this confusion in the near term through other means such as bulletins or outreach, agencies' misunderstanding of the authority could lead to additional missed opportunities to be effective stewards of government funds.

Regarding monitoring of exchange and sale activities, GAO found that the Army monitored activities consistent with its policy. However, GSA and VA performed limited monitoring because:

GSA had not clarified its responsibilities or defined the scope of its authority for monitoring internal GSA exchanges and sales, and

VA did not have a detailed policy for monitoring and had not communicated information about monitoring to pertinent employees.

Until GSA clarifies its responsibilities and the scope of its authority and VA revises its policy with pertinent details and communicates this information to staff members, neither agency will be positioned to sufficiently monitor exchange/sale activities.

Why GAO Did This Study

According to the U.S. Treasury, the government owns about $1.3 trillion in “personal property” such as computers, furniture, and vehicles. Federal law authorizes agencies to exchange or sell personal property and retain the allowances or proceeds for replacing similar needed property. These are called “exchange/sale” transactions. GSA is responsible for issuing exchange/sale regulations and guiding agencies on the use of the authority.

GAO was asked to review agencies' use of the exchange/sale authority. This report (1) describes what is known about personal property exchange/sale transactions from fiscal year 2013 through fiscal year 2017 and (2) examines selected agencies' experiences using the exchange/sale authority and monitoring such activities. GAO analyzed multi-year data compiled by GSA OGP and found the data to be sufficiently reliable. GAO selected three agencies—GSA, the Army, and VA—based on the type, quantity, and value of personal property exchanged and sold; reviewed agencies' personal property policies; examined agencies' monitoring of exchange/sale activities; and interviewed their officials about personal property management.

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Recommendations

GAO is recommending that GSA OGP address agency confusion about the exchange/sale authority and that GSA clarify its responsibilities and the scope of its authority. GAO is also recommending VA revise its policy to address monitoring and communicate the revision to staff. Both agencies agreed with the recommendations.

Recommendations for Executive Action

Agency Affected Recommendation Status
General Services Administration The GSA's Associate Administrator for the Office of Government-wide Policy should take action to address specific areas of federal agency confusion with the exchange/sale authority, areas such as the process for selling property, reporting data, and distinguishing the exchange/sale process from the disposal process. Such actions could include issuing bulletins or conducting expanded outreach and, as necessary, issuing regulations. (Recommendation 1)
Closed - Implemented
The federal government owns more than a trillion dollars of personal property, such as medical equipment, computers, aircraft, and vehicles. Over time, these types of property may no longer adequately perform the task for which they were used. Federal law gives agencies exchange/sale authority that allows them to exchange (trade-in) or sell such property and retain the exchange allowance or sale proceeds for replacing similar needed property. The General Services Administration (GSA) is responsible for issuing exchange/sale regulations and guiding agencies on the use of the authority. In 2018, GAO reported that GSA regulations set forth several conditions for using the exchange/sale authority. However, the three selected agencies in GAO's review had different levels of understanding about the authority. For example, Veterans Affairs officials expressed confusion about key aspects of the exchange/sale authority-such as the process for selling property and reporting data. Air Force and Navy officials said they did not always understand the difference between the exchange/sale process and the disposal process. Federal internal control standards state that management should externally communicate the necessary quality information to achieve the entity's objectives. GSA officials who guide agencies on the use of the authority acknowledge that the exchange/sale regulations can be confusing, that the regulations are misunderstood by agencies, and that aspects of the authority need to be clarified. Until GSA takes action to address confusion, agencies may continue to misunderstand the authority and they may not take full advantage of the authority, thereby missing opportunities to be more effective stewards of government property and replenish property more efficiently. Therefore, GAO recommended that GSA take action to address specific areas of federal agency confusion with the exchange/sale authority, such as the process for selling property, reporting data, and distinguishing the exchange/sale process from the disposal process. Such actions could include issuing bulletins or conducting expanded outreach and, as necessary, issuing regulations. In 2019, GAO confirmed that GSA had taken several actions to clarify confusion. For instance, GSA held a series of outreach meetings with several federal agencies (i.e., Veterans Affairs, among other agencies) to discuss key aspects and answer questions about the exchange/sale process and data reporting. GSA also posted additional information on its website, such as frequently asked questions, to help clarify what is meant by exchange/sale transactions and what agencies need to do to comply with annual data reporting requirements. Lastly, GSA began the process of issuing amended regulations in June 2019 that could give agencies additional flexibilities in using the exchange/sale process. By taking these actions, GSA is in a better position to help ensure that agencies effectively use their exchange/sale authority to be good stewards of government property by efficiently replenishing property more efficiently.
General Services Administration The Administrator of General Services should take steps to improve agency-wide monitoring of exchange/sale activities within GSA by specifying the Office of Administrative Services' responsibilities and by defining the scope of its authority. (Recommendation 2)
Closed - Implemented
According to the U.S. Treasury, the government owns about $1.3 trillion in "personal property" such as computers and vehicles. Federal law authorizes agencies to exchange or sell personal property and retain the allowance or proceeds for replacing similar needed property. These are called "exchange/sale" transactions. Agencies are responsible for managing their own personal property, including monitoring their exchange/sale activities. Federal internal control standards call on managers to establish and operate monitoring activities to monitor the internal control system and evaluate the results. In November 2018, GAO reported that the General Services Administration's (GSA's) Office of Administrative Services (OAS)-the office responsible for performing personal-property management functions internal to the agency-did not monitor its internal exchange/sale activities. GSA OAS officials said they had not monitored these activities because senior management did not prioritize personal property, including exchange/sale transactions. Specifically, management neither clarified GSA OAS's responsibilities nor defined the scope of its authority for monitoring exchange/sale activities. According to GSA OAS officials, they were drafting a standard operating procedure that was expected to provide additional clarification for monitoring and conducting exchange/sale activities within GSA. However, these officials referred to this procedure as a work-in-progress and were uncertain when it would be finalized. In the absence of clear responsibilities and scope of its authority, GSA OAS may not be able to monitor exchange/sale activities or provide clear information and direction to other offices within GSA. Therefore, GAO recommended that GSA should take steps to improve agency-wide monitoring of exchange/sale activities within the agency by specifying the Office of Administrative Services' responsibilities and by defining the scope of its authority. In 2020, GAO confirmed that GSA had taken steps to improve agency-wide monitoring of exchange/sale activities. For example, according to GSA officials, the Chief Administrative Services Officer-acting as the Administrator's designee for agency-wide personal property matters-led an agency-wide effort to coordinate on the management of internal personal property, including GSA OAS's responsibilities and scope of authority related to exchange/sale activities. This effort culminated in revising policy and procedures for managing GSA's internal personal property program. Specifically, GSA issued an updated standard operating procedure, which was formally approved within the agency on July 25, 2019, that describes the role of OAS as having jurisdiction over all internal agency exchange/sale transactions, program oversight, and annual agency reporting, including GSA Fleet transactions. The procedure also describes OAS's responsibilities, such as submitting annual exchange/sale transaction reports at the end of each calendar year. We also confirmed that GSA Fleet and other offices are following the procedure by submitting exchange/sale data to OAS for monitoring from 2018 through 2020. By taking these steps to monitor exchange/sale activities and provide clear information and direction to other internal offices, GSA will have greater understanding of which offices are using the exchange/sale authority.
Department of Veterans Affairs The VA's Deputy Assistant Secretary of Acquisition and Logistics, in collaboration with the Veterans Health Administration's Office of Procurement and Logistics, should revise VA's policy to include details on the exchange/sale authority, particularly those related to monitoring by Regional Offices and use of the authority for medical centers, and establish time frames with milestones for communicating such information. (Recommendation 3)
Open
As of February 2021, VA's Office of Acquisition and Logistics, in conjunction with Veterans Health Administration's Procurement and Logistics Office, had updated two policy notices to include details on the exchange/sale authority and to collect data on exchange/sale usage within the agency as a basis for reviewing progress and compliance with VA utilization officers, but had not clarified regional monitoring of medical centers. We will continue to monitor the status of VA's actions to address our recommendation.

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