GAO and Inspector General Reports: A Review of Recent Audits Ivan Graff, P.E., CFM, PMP, CCP, LEED AP

Focus on Recent Engagements with the GAO High Risk List 2015: Managing Federal Real Property Report : Improve the Homeless Assistance Program Report : Focus Needed to Manage Warehouse Portfolio Report : Improve Disposition Planning Report : Better Data to Facilitate Property Disposal May 5, 2015FIMS / Real Estate Training2

High Risk List 2015: Managing Real Property May 5, 2015FIMS / Real Estate Training3  Issues – 1. Holding excess and underutilized property 2. Relying on costly leases 3. Securing real property 4. Reporting inaccurate data:  Space Reductions  Utilization Assessments  Structure Records  Cost Savings Claims Our 12 Year Anniversary (2003 – 2015)

More Useful Information to Providers Could Improve the Homeless Assistance Program May 5, 2015FIMS / Real Estate Training4  Background:  McKinney-Vento Homeless Assistance Act (1987)  Providers have struggled to locate, acquire property  GAO’s Big Questions  How do agencies identify and transfer property?  What could change to improve the process?  GAO Findings and Recommendations  Of 40,000 evaluations, 122 transferred  Just 81 remain active  Recommendation: Limit the scope of assets reportable to HUD GAO Properties Transferred (3/2014)

Strategic Focus Needed to Help Manage Vast and Diverse Warehouse Portfolio May 5, 2015FIMS / Real Estate Training5  Background:  Concern over their utilization, especially leased ones  Engagement involved GSA, DOI, and DOE only  GAO’s Big Questions  What do agencies know about their warehouses?  What acquisition, management and disposition challenges do agencies face?  GAO Recommendations to GSA  Make utilization and status determinations transparent.  Develop a long-term warehouse strategy  Recommend efficient and effective practices GAO ,081 Warehouses, 89.5M square feet

Better Prioritization and Life Cycle Cost Analysis would Improve Disposition Planning May 5, 2015FIMS / Real Estate Training6  Background:  Deputy Secretary Program Decision Memorandum (2006)  EM does not accept assets without identifying funding  GAO’s Big Questions  Has EM accepted any transfer requests since 2006?  How does EM address such assets in its prioritization?  GAO Recommendations to EM  Integrate NNSA facilities in its plans and consider:  The risks they pose  Their lifecycle costs GAO assets in need of funds for transfer

Better Data and a More Proactive Approach Needed to Facilitate Property Disposal 7  Background:  Senator L. Alexander (R-TN) requested audit; began 3/2014  Nagging issues: complete and timely data; consistency across databases; public engagement; reuse where possible  GAO’s Recommendations  Ensure data accurately indicates status and major milestones for facilities in need of, undergoing, or that completed D&D  Clarify roles, responsibilities, and procedures for identifying and transferring assets appropriate for economic development  What OAPM has done so far -  Memorandum on Notifications of Available Property Under 10 CFR 770 ( 03/10/15 )  Discussions with EM on its FIMS status data needs GAO ,000 disposals 21 transfers by sale May 5, 2015FIMS / Real Estate Training

Focus on U. S. Department of Energy Inspector General Audits and Reports: Management of Unneeded Real Estate OAS-L Management of High-Risk Excess Facilities IG-0931 Argonne Nat’l Laboratory Infrastructure Projects OAS-M May 5, 2015FIMS / Real Estate Training8

Management of Unneeded Real Estate May 5, 2015FIMS / Real Estate Training9  What bothered the IG:  Cost avoidance claims in the Real Property Cost Savings and Innovation Plan associated with Yucca Mountain.  Variances suspected between FIMS and site data.  What the IG found:  In 2012, the Department disposed of just 13.5% of the building area comprised by its 994 excess assets.  Minor variances between FIMS and site data due to the age of the data.  A number of NNSA assets in poor condition awaiting D&D.  What the IG suggested (no recommendations) :  Updating FIMS data more frequently than once a year.

Management of High-Risk Excess Facilities May 5, 2015FIMS / Real Estate Training10  What bothered the IG:  Six years following their identification for transfer for D&D, 234 out of 292 assets remained unaddressed.  Several assets posed significant safety and health risks.  What the IG found:  EM did not have a transfer schedule.  An additional 140 assets seem appropriate for transfer.  What the IG recommended :  Compiling information on DOE excess contaminated facilitates useful to policy makers.  Prioritizing the disposition of all excess contaminated facilities based on risk.

Argonne National Laboratory Infrastructure Projects May 5, 2015FIMS / Real Estate Training11  What bothered the IG:  Infrastructure modernization remains on the IG watch list.  Between FY 2010 & 2013, ANL spent $127M on 243 GPPs including IGPPs.  What the IG found:  Four of 10 IGPPs seemed to benefit a single program.  What the IG recommended to MA :  Review IGPP related direction in DOE O430.1B, Attch. 6  Determine if the four projects seem like legitimate IGPPs.

About Institutional General Plant Projects (and about general plant projects too!) May 5, 2015FIMS / Real Estate Training12

Statutory Basis for Plant Projects May 5, 2015FIMS / Real Estate Training13  Authority derived from 50 USC 2741, 2743, 2746, &  Equates “ minor construction ” and “ general plant projects. ”  Sets a $10M ceiling for minor construction, including up to $1M for design.  Seemingly only applies to activities authorized under the National Defense Authorization Act (NDAA).  As a matter of policy, DOE has:  Extended the authority to authorities not granted under NDAA (i.e., non-defense).  Exempted non-defense applications of the authority from reporting to Congress.

Institutional General Plant Projects (IGPPs) 14  Source: DOE O430.1B, Attachment 6.  New construction and betterment projects of a general institutional nature  Identified in the Ten Year Site Plan and approved by the LPSO  Identified in the Integrated Facilities and Infrastructure Crosscut Budget  Each IGPP must achieve all of the following criteria:  Benefits multiple cost objectives.  Serves general-purpose site wide needs.  Directly benefits more than one program.  Provides beneficial cost impact on site’s operations.  Replaces or upgrades a core utility, land or facility.  Improves productivity or efficiency in a core utility, land or facility.  Enables world-class science and technology.  Provides a complete and usable facility. May 5, 2015FIMS / Real Estate Training

IGPP Administration Requirements May 5, 2015FIMS / Real Estate Training15  The DOE field/area office manager must personally certify that —  the project is not part of an incremental segment such that the total would exceed the current authorized ceiling  The contractor chief financial officer or comptroller must certify that —  Indirect funds will not be utilized for IGPP at the expense of maintenance or any other essential facilities program.  The overall indirect budget will not increase to fund IGPP.

May 5, 2015FIMS / Real Estate Training16 Questions? Ivan “IG” Graff ( 202) Argonne’s white fallow deer