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Federal agencies report $3.8 billion in real property savings under memorandum

foil.seal.gaoThe Government Accountability Office released a report on Monday that found that federal agencies reported $3.8 billion in real property cost savings in response to a presidential memorandum issued in 2010.

In June 2010, President Obama directed federal agencies to reach $3 billion in real property cost savings by the end of 2012 using a number of methods, including energy efficiency improvements, space consolidation efforts and the disposal of excess properties.

Of the $3.8 billion in reported savings, space management savings—or savings resulting from consolidations or elimination of leases that were not cost effective—accounted for approximately 70 percent of savings reported by the General Services Administration, Department of Agriculture, Department of Energy, Homeland Security, Department of Justice and Department of State.

The GAO found, however, that the presidential memorandum and guidance issued by the Office of Management and Budget were not clear on the kind of savings that could be reported because the term was not clearly defined.

Two agencies reported a year of avoided operations and maintenance savings for the year of the disposal, while three other agencies reported up to three years of savings, depending on when disposals occurred over the three years.

The report also found that the Department of State and DHS did not deduct costs associated with disposal savings, while the DOE deducted costs for some of its savings but not disposals carried out by its Office of Environmental Management. GSA reported savings from a property exchange but retained ownership of the site this year, after the 2012 deadline, and the USDA reported savings from office closures that occurred in 2013.

“Establishing clearer standards for identifying and reporting savings would improve the reliability and transparency of the reporting of cost savings and help decision-makers better understand the potential savings of future initiatives to improve federal real-property management,” the GAO said.

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