.,
U.S. General Services Administration
Administrator's Semiannual
Management Report
to the Congress
Report No. 53
April 1, 2015 to
September 30, 2015
U.S. General Services Administration
Denise Turner Roth
Administrator
Office of Administrative Services
Cynthia A. Metzler
Chief Administrative Services Officer
GAO/IG Audit Response Division
Leroy Ford
Director
October 2015
This report is in the public domain. Authorization to reproduce it in whole or in part is granted.
While permission to reprint this publication is not necessary, the citation should be: U.S.
General Services Administration, Office of Administrative Services, GAO/IG Audit Response
Division, Administrator's Semiannual Management Report to the Congress, No. 53,
Washington, DC 20405.
To obtain copies of this report,
Write to: U.S. General Services Administration, Office of Administrative Services, GAO/IG
Audit Response Division, 1800 F Street, NW Washington, DC 20405
E-mail your request to: leroy.ford@gsa.gov
Call in your request: (202) 501-4786
Obtain a copy of this report on the Agency's Web site at: Semiannual Report to the Congress
Contents
Synopsis of Audit Activity 4
Overview 5
Organization of Audit Follow-up Program 6
Agency Audit Follow-up Program 6
Agency Audit Follow-up Official 6
The Chief Administrative Services Officer 6
Heads of Services and Staff Offices and Regional Administrators 6
Audits with Disallowed Costs 7
Audits with Better Use Funds 8
Internal Audits 9
Audits under Appeal/Litigation 10
Contract Audits 11
Glossary of Terms 18
Appendix 20
Synopsis of Audit Activity
In accordance with the Inspector General Act of 1988, as amended, the Administrator is
required to report directly to the Congress on management decisions and final actions
taken on audit recommendations made by the Office of Inspector General (OIG) of the
General Services Administration (GSA). This report covers the semiannual management
reporting period of April 1, 2015, through September 30, 2015.
The report provides a summary of:
- Cases where final action has not been taken on audits one year after the date of the
management decision.
- Implementation of the recommendations by GSA management contained in audit
reports issued by the OIG.
At the commencement of this semiannual management reporting period, there were audit
reports with disallowed costs, audits with better use funds, and audits with both disallowed
cost and better use funds. At the beginning of the reporting period, a total of 195 audit
reports were pending final action containing financial recommendations totaling
$3,219,926,440. There were 168 contract audits with financial recommendations
totaling $3,219,739,546 and 27 internal audits with financial recommendations totaling
$186,894.
During the reporting period, management decisions were made on 44 audit reports
concerning nationwide GSA programs and operations.
Of the 44 audits, 32 of these audits found $17,022,355 in pre-award, post-award contracts
and internal program spending that was incorrectly charged to the Government (known as
disallowed costs). Of the 44 audits, 30 audits recommended that $1,033,291,001 could
be used more efficiently (known as funds to be put to better use) if management took action
to implement and complete the OIG recommendations. This information is disclosed in
Appendix A of this report.
During the six-month period, GSA was able to successfully take final action on a total of 90
audits. These audits represent the recovery of $41,343,226 in Government funds and the
identification of $1,125,246,707 in potential future savings.
As of September 30, 2015, 145 audit reports remained open. There are several audits
involving claims under appeal or litigation during this reporting period.
Overview
This report, submitted pursuant to the Inspector General Act of 1978, as amended,
presents management's perspective on audit resolution and follow-up activity at GSA for
the period beginning April 1, 2015, through September 30, 2015. This is the agency's
53rd report to the Congress since the implementation of the Act (Public Law 100-504). The
data in the report indicates that GSA's audit follow-up efforts continue to play a significant
role in the effective management of the agency's operations and the accomplishment of its
mission which results in better use of Taxpayer's dollars.
U.S. General Services Administration Organization
GSA is organized around two major business functions represented by the Federal
Acquisition Service and the Public Buildings Service. In addition, GSA houses the Office
of Government-wide Policy, the Office of Citizen Services and Innovative Technologies,
and a number of Staff Offices that provide support to the other GSA organizations. There
are 11 regions in the GSA structure.
The Administrator of GSA directs the execution of all GSA functions. Members of his office,
as well as Regional Administrators and Heads of Services and Staff Offices, advise and
make recommendations on policy or operational issues of national scope. They are also
responsible for execution of programs and services within their service, region or staff
office, under the leadership of the Administrator.
Organization of Audit Follow-Up Program
GSA has effective systems in place for keeping track of audit recommendations. In
addition, GSA senior management is committed to ensuring that appropriate corrective
action is taken. Agency managers have the responsibility to act upon the auditor's
recommendations, with the audit resolution process being supervised by the agency audit
follow-up official. A description of the responsibilities of GSA officials involved in the
audit follow-up process is set forth below:
Agency Audit Follow-up Official
The Deputy Administrator is the Agency Audit Follow-up Official responsible for audit
follow-up activity. As such, she/he has overall responsibility for ensuring the
adequacy of the agency's follow-up system, monitoring the resolution of audit
recommendations, and ensuring the prompt implementation of corrective actions.
She/he also makes final decisions to resolve differences between agency management
and the OIG.
The Chief Administrative Services Officer (CASO)
The CASO provides direction and oversight to the officials in the Office of Administrative
Services (OAS) who manage the GSA's Audit Resolution and Follow-up System. Their
responsibilities include:
- Acting as the liaison with the Government Accountability Office (GAO) for the
coordination of GAO audits in progress within GSA and for preparation of responses and
reports for the signature of the Administrator on GAO recommendations as required by
law;
- Ensuring timely resolution and implementation of internal and external audit
recommendations made by the GAO and the OIG;
- Overseeing the collection and proper accounting of monetary amounts determined
due to the Government as the result of audit-related claims;
- Analyzing GSA's programs, upon request from the Administrator, particularly as
related to past or present audit recommendations; and,
- Maintaining an automated report control system for both internal and external audits
that provides an accurate means for tracking and documenting actions taken in
implementing audit recommendations.
Heads of Services and Staff Offices and Regional Administrators
Heads of Services and Staff Offices and Regional Administrators, to whom audit
recommendations pertain, have primary responsibility for resolving and implementing
recommendations promptly. Their responsibilities include:
- Ensuring controls are implemented to provide timely, accurate, and complete
responses to audit reports;
- Developing, advocating, and documenting agency positions on audit
recommendations;
- Preparing responses for GAO draft reports and transmittals for final GAO reports in
coordination with OAS;
- Providing comments on audit decision papers prepared by the OIG to ensure that
management's position on unresolved audit recommendations is properly stated.
Audits with Disallowed Costs
Final action for the six-month period
Ending SEPTEMBER 30, 2015
A. Audit reports for which final action had
not been taken by the commencement of
the reporting period.
B. Audit reports on which GSA/OIG
management decisions were made during
the reporting period.
Number of Audit
Reports
195
44
Disallowed
Costs
$145,227,274
$17,022,355
C. Audit reports on which final action was
taken during the reporting period.
(i) ) the dollar value of disallowed costs
- collections $11,150,318
- offset $19,967,177
- property in lieu of cash
................................... $0
- surplus $3,817,606
- other ......................... $35,187
(ii) the dollar value of disallowed costs
that were written off by management.
90
$41,343,226
$34,970,288
$6,372,938
D. Audit reports for which no final action
has been taken by the end of the reporting
period.
145
$120,906,403
Audits with Better Use Funds
Final action for the six-month
Ending SEPTEMBER 30, 2015
A. Audit reports for which final
action had not been taken by the
commencement of the reporting
period.
B. Audit reports on which
management decisions were
made during the reporting period.
Number of Audit
Reports
195
30
No budget Impact
(Actual and Estimated)
$3,074,699,166
$1,033,291,001
Budget
Impact
$0
$0
C. Audit reports on which final
90
$1,125,246,707
$0
action was taken during the
reporting period.
(i) the actual dollar value of
25,990,638
$0
recommendations that were
actually completed.
(ii) the actual dollar value of
0
$0
recommendations that
management has subsequently
concluded should not or could not
be implemented or completed.
(iii) the actual dollar value of
6,225,926
$0
recommendations that
management has subsequently
concluded should not or could not
be determined (calculated).
(iv) the estimated dollar value of
1,105,481,995
$0
''funds to be put to better use'' as
agreed to by GSA management
and the OIG.
D. Audit reports for which no final
145
$2,196,421,133
$0
action has been taken by the end of
the reporting period.
Internal Audits
Audits with Management Decisions made prior to October 1, 2014, but
with Final Action not taken as of September 30, 2015
REPORT NUMBER
TITLE OF REPORT
DATE OF
REPORT
MANAGEMENT DECISION
AMOUNTS
REASON FOR NO
FINAL ACTION
PROJECTED
COMPLETION
DATE
Disallowed
Costs
Better Use
Funds
A110100Q9P12009
Audit of Management
Controls Within the
Network Services
Division Pacific Rim
Region, Federal
Acquisition Service
05/30/2012
$0
$0
Audit is in the
implementation
stage.
11/30/2015
A120001PFR13007
Audit of GSA's
Controls over the
National Capital
Region's
Reimbursable Work
Authorizations
09/11/2013
$0
$0
Audit is in the
Implementation
Stage.
02/26/2016
A110217PRR14004
Procurement Errors,
Financial Losses, and
Deficient Contract
Administration
Demonstrate
Ineffective
Management of the
Ronald Reagan
Building and
International Trade
Center
06/17/2014
$186,894
$0
Audit is in the
Implementation
Stage.
11/30/2015
Audits under Appeal/Litigation
REPORT NUMBER
NAME OF CONTRACTOR
DATE OF
REPORT
MANAGEMENT DECISION
AMOUNTS
Disallowed
Costs
Better Use
Funds
A130034P4X13032
Caddell Construction Co., Inc.
03/28/2013
$0
$5,001,544
A130093P4X14045
Amthor Steel, Inc.
06/26/2014
$0
$2,065,356
A130094P5X14060
Clayton B. Obersheimer, Inc.
09/16/2014
$0
$3,417,748
A130092P4X14065
Mascaro Construction Company, L.P.
09/30/2014
$0
$8,443,064
A140144P4X15033
Integrity Management Consulting,
Inc.
04/30/2015
$ 30,958
$0
Contract Audits
Audits with Management Decisions made prior to October 1, 2014,
but with Final Action not taken as of September 30, 2015
REPORT NUMBER
NAME OF
CONTRACTOR
DATE
OF
REPORT
MANAGEMENT DECISION
AMOUNTS
REASON FOR
NO
FINAL ACTION
Disallowed
Costs
Better Use
Funds
A100075Q7X11022
Cort Business Services
Corporation
01/27/2011
$0
$1,575,000
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A110063QAX11053
IntelliDyne, LLC
05/16/2011
$3,948,160
$0
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A100140Q5X11070
Veterans Imaging Products,
Inc.
07/07/2011
$3,893
$496,000
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A110088Q3X11079
Global Protection USA, Inc.
07/28/2011
$29,337
$0
In the Process of
Collection - GSA is
in the process of
collecting funds
owed the
government from
the contractor
A100119Q6X11081
Noble Sales Co., Inc.
08/03/2011
$0
$0
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A110180P9X11084
RTKL Associates, Inc.
08/15/2011
$0
$412,057
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
Contract Audits
Audits with Management Decisions made prior to October 1, 2014,
but with Final Action not taken as of September 30, 2015
REPORT NUMBER
NAME OF
CONTRACTOR
DATE
OF
REPORT
MANAGEMENT DECISION
AMOUNTS
REASON FOR
NO
FINAL ACTION
Disallowed
Costs
Better Use
Funds
A110067Q2X11092
Clifton Gunderson, LLP
09/09/2011
$1,374
$1,196,561
Price/Settlement
Negotiated -
Negotiations have
been completed
between
Contracting Officer
and contractor
A110174Q4X11097
Protective Products
Enterprises
09/15/2011
$63,992
$0
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A110176Q4X12010
Fontaine Trailer Company,
Incorporated
12/07/2011
$0
$4,648,519
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A110186Q7X12018
BRSI, L.P.
01/23/2012
$0
$7,425,000
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A120021Q3X12023
Presidio Networked
Solutions, Inc.
03/02/2012
$31,878
$2,427,935
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A110169Q3X12048
Oce' North America, Inc.
06/29/2012
$225,180
$0
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A120136P4X12053
Lenex Steel Company
07/17/2012
$0
$834,067
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
Contract Audits
Audits with Management Decisions made prior to October 1, 2014,
but with Final Action not taken as of September 30, 2015
REPORT NUMBER
NAME OF
CONTRACTOR
DATE
OF
REPORT
MANAGEMENT DECISION
AMOUNTS
REASON FOR
NO
FINAL ACTION
Disallowed
Costs
Better Use
Funds
A110209Q6X12057
Propper International Sales,
Inc.
08/15/2012
$2,063,375
$0
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A120083P9X12059
M.A. Mortenson Company
08/21/2012
$0
$2,814,148
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A120148P9X13003
Siemens Industries, Inc.
10/17/2012
$0
$0
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A090140Q6X10081
Systems Research and
Applications Corporation
08/24/2010
$392,685
$0
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A120071Q2X13002
ICF Z-Tech, Inc.
10/16/2012
$14,580
$166,639
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A120155Q3X13007
Avion Solutions, Inc.
11/21/2012
$0
$4,523,340
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A110147Q6X13010
Xerox Corporation
12/06/2012
$0
$8,511,087
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
Contract Audits
Audits with Management Decisions made prior to October 1, 2014,
but with Final Action not taken as of September 30, 2015
REPORT NUMBER
NAME OF
CONTRACTOR
DATE
OF
REPORT
MANAGEMENT DECISION
AMOUNTS
REASON FOR
NO
FINAL ACTION
Disallowed
Costs
Better Use
Funds
A120165P4X13019
Skanska USA Building, Inc.
01/30/2013
$0
$82,475
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A120150Q3X13018
Grant Thornton LLP
01/24/2013
$3,848
$8,200,000
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A120147Q2X13028
Harris Corporation, RF
Communications Division
03/20/2013
$33,486
$30,946,880
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A120178Q3X13026
VT Aepco, Inc.
03/05/2013
$76,352
$38,059,421
Unresolved -
Agreement has not
been reached
between OIG and
Contracting Officer
on the Decision
Record
A120109Q7X13030
ICF Macro, Inc.
03/21/2013
$0
$11,456,930
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A120095Q7X13024
Military Personnel Services
Corporation
02/28/2013
$87,379
$16,083,715
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A120127Q4X13033
General Dynamics
Information Technology,
Inc.
03/29/2013
$147,371
$48,528,780
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
Contract Audits
Audits with Management Decisions made prior to October 1, 2014,
but with Final Action not taken as of September 30, 2015
REPORT NUMBER
NAME OF
CONTRACTOR
DATE
OF
REPORT
MANAGEMENT DECISION
AMOUNTS
REASON FOR
NO
FINAL ACTION
Disallowed
Costs
Better Use
Funds
A120162Q5X13036
Kforce Government
Solutions, Inc.
04/17/2013
$147,666
$11,000,000
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A130034P4X13032
Caddell Construction Co.,
Inc.
03/28/2013
$0
$5,001,544
Litigation in
Process - The
contractor has
appealed the
Contracting
Officer's decision
and the audit is
now in the litigation
process
A130047P4X13040
Skanska USA Building, Inc.
05/13/2013
$0
$1,189,218
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A100160Q7X13042
i2, Incorporated
05/28/2013
$2,064,798
$0
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A120113Q2X13046
MSC Industrial Direct Co.
06/03/2013
$2,278
$55,064,975
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A120175Q3X13041
STG Inc.
05/22/2013
$0
$0
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
Contract Audits
Audits with Management Decisions made prior to October 1, 2014,
but with Final Action not taken as of September 30, 2015
REPORT NUMBER
NAME OF
CONTRACTOR
DATE
OF
REPORT
MANAGEMENT DECISION
AMOUNTS
REASON FOR
NO
FINAL ACTION
Disallowed
Costs
Better Use
Funds
A130069Q7X13051
L-3 Communications Vertex
Aerospace, LLC
06/28/2013
$248,423
$24,112,597
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A120152Q6X13054
Herman Miller, Inc.
07/11/2013
$175,056
$20,574,360
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A120134Q6X13059
International Business
Machines Corporation
07/31/2013
$0
$482,854,052
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A130099P4X14011
HCBeck, Ltd.
03/24/2014
$0
$1,689,965
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A130071Q5X14018
Industries for the Blind, Inc.
01/31/2014
$306,596
$6,900,000
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A130085Q3X13063
Bart & Associates, Inc.
09/06/2013
$130,030
$48,373,190
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A130048Q6X14023
Intirion Corporation
03/12/2014
$569,834
$0
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
Contract Audits
Audits with Management Decisions made prior to October 1, 2014,
but with Final Action not taken as of September 30, 2015
REPORT NUMBER
NAME OF
CONTRACTOR
DATE
OF
REPORT
MANAGEMENT DECISION
AMOUNTS
REASON FOR
NO
FINAL ACTION
Disallowed
Costs
Better Use
Funds
A140106P4X14022
Skanska USA Building, Inc.
03/06/2014
$0
$1,499,696
In Negotiation -
Negotiations are
proceeding
between
Contracting Officer
and contractor
A130093P4X14045
Amthor Steel, Inc.
06/26/2014
$0
$2,065,356
Litigation in
Process - The
contractor has
appealed the
Contracting
Officer's decision
and the audit is
now in the litigation
process
A130094P5X14060
Clayton B. Obersheimer,
Inc.
09/16/2014
$0
$3,417,748
Litigation in
Process - The
contractor has
appealed the
Contracting
Officer's decision
and the audit is
now in the litigation
process
A130092P4X14065
Mascaro Construction
Company, L.P.
09/30/2014
$0
$8,443,064
Litigation in
Process - The
contractor has
appealed the
Contracting
Officer's decision
and the audit is
now in the litigation
process
Glossary of Terms
The following definitions, based on the Inspector General Act Amendment of 1988,
apply to terms used in this Semiannual Management Report:
Questioned Costs. Costs questioned by the OIG as a result of:
� an alleged violation of a provision of a law, regulation, contract, grant, cooperative
agreement, or other agreement or document governing the expenditure of funds;
� a finding that, at the time of an audit, such cost is not supported by adequate
documentation;
� a finding that the expenditure of funds for the intended purpose is unnecessary or
unreasonable.
Disallowed Cost. Questioned costs that GSA management in a management decision
sustained or agreed should not be charged to the Government.
Recommendation that Funds be Put to Better Use. A recommendation by the OIG
that funds could be used more efficiently if management took action to implement and
complete the recommendations, including:
� reductions in outlays;
� de-obligation of funds from programs or operations;
� withdrawal of interest subsidy costs on loans or loan guarantees, insurance or
bonds;
� costs not incurred by implementing recommended improvements related to the
operations of the establishment, a contractor or grantee;
� avoidance of unnecessary expenditures noted in pre-award reviews of contract or
grant agreements;
� any other savings that are identified specifically.
Management Decision. The evaluation by management of the findings and
recommendations included in an audit report and the issuance of a final decision by
management and concurrence by the OIG concerning its response to such findings and
recommendations, including planned corrective actions to remedy weaknesses
identified in the report.
Final Action. The completions of all actions that GSA management
concluded in i ts management decision were necessary with respect to the
findings and recommendations included in the audit report. In the event that GSA
management concluded no action was necessary, final action occurred when the
management decision was made.
Management Actions - Questioned Costs. The following is a list of the different
management actions used by GSA management to resolve questioned costs in an
audit report.
� Audit reports on which management decisions were made during the period:
Data pertaining to the number of audit reports on which management decisions were
made during the period and the associated amount of disallowed costs was furnished
by the OIG.
� Write-offs: For the purposes of this report, write-offs are interpreted to
represent the difference between the disallowed cost and the amount successfully
recovered.
Management Actions - Better Use Funds. The following is a list of the different
management actions used by GSA management to resolve the "better use" of funds in
an audit report.
� Better Use Funds: The figure represents amounts cited as "cost avoidance" and
"funds to be put to better use," as agreed to by GSA management and the OIG. Prior
to April 1990, no funds were identified by the OIG specifically as "funds to be put to
better use," and no management decisions were issued based on the consideration of
"better use" of funds.
� Budget Impact Funds: Funds identified as "budget impact" involve the obligation
process. Audit-related savings of these funds, depending on the particular fund
involved, may be available for reprogramming.
� No Budget Impact Funds: Funds identified as "no budget impact" are composed
of estimated and actual amounts, and do not involve obligated monies, and, therefore,
cannot be construed as having a material effect on GSA''s appropriated funds.
� Audit reports on which management decisions were made during the period:
Data pertaining to the number of audit reports on which management decisions were
made during the period and the associated dollar amounts agreed to by management
were furnished by the OIG.
� Value of recommendations that management concluded should not or could not
be calculable: Management was unable to determine the award amounts and "better
use funds" implemented since the amount is included in the overall award to the prime
contractor and savings could not be determined.
Appendix
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www.gsa.gov