April 11, 2018
FAA’s Management and Oversight Are Inadequate To Secure Timely and Cost-Efficient Agency-Leased Offices and Warehouses
What We Looked At
Since 2003, the Government Accountability Office (GAO) has identified Federal real property management as a high-risk area. In fiscal year 2017, the Federal Aviation Administration’s (FAA) independently acquired lease portfolio represented $104 million in annual rent, with office and warehouses comprising about three-quarters of that total. FAA’s office and warehouse leases represent a total potential value of $1.4 billion. Given GAO’s persistent high-risk designation of Federal property management and the sustained Governmentwide focus on reform in this area, as well as the magnitude of taxpayer dollars involved, our audit objective was to assess FAA’s management and oversight of its office and warehouse leases.
What We Found
FAA’s management and oversight are inadequate to secure timely and cost-effective Agency-leased offices and warehouses. In particular, FAA has not maintained accurate data on its leases or established effective policies and procedures to help ensure its office and warehouse leases are cost-effective. For example, 26 of the 50 leases in our sample contained data errors in FAA’s property management database, which it uses to oversee, manage, and report on its leases. FAA also lacks an effective strategic planning process for identifying and achieving improved lease efficiency through efforts such as consolidations, relocations, and rightsizing of space. Finally, FAA has not established sufficient controls to reconcile and validate the accuracy of all lease payments. These weaknesses have not only led to many questionable lease decisions but also create serious obstacles to achieving the Agency’s space utilization standard. By not using its leased space as efficiently as possible, FAA has missed cost savings opportunities. Overall, we project a total of $37.6 million in funds that could have been put to better use due to various weaknesses in the Agency’s management and oversight of FAA-leased offices and warehouses.
FAA concurred with our 12 recommendations to improve FAA’s management and oversight of its office and warehouse leases. Based on FAA’s response, we consider all 12 recommendations resolved and open pending completion of planned actions.