Summary

The Federal Buildings Fund was established in 1972 to finance the General Services Administration's (GSA) acquisition and operations of government owned and leased buildings. Federal agencies occupying space in GSA controlled buildings pay standard level user charges based on comparable commercial rates, which are deposited in the Fund and then made available in annual appropriation acts to GSA for construction, leasing, and real property operations. GAO reviewed the Fund to determine the success it has had in meeting its primary objectives of: (1) providing sufficient funding for construction; and (2) making executive agencies more space conscious.

GAO found that, to date, the Fund has not accomplished its two primary objectives. It has not generated sufficient revenues for construction, and there is no evidence indicating that anticipated improvements in space utilization have occurred. GAO stated that the Fund has not generated sufficient revenues for construction because it has experienced a cash flow problem since its inception. The Fund was created without receiving any up-front funds, and then it was expected to reverse the effect of prior budgetary decisions to lease rather than construct needed space. Given enough time, the Fund may overcome the cash flow problems. Also, the outlook for the Fund providing increased revenues for construction has improved somewhat because of the refinements in the method used to compute rental rates. In regard to space utilization, there is no evidence indicating that there has been any appreciable improvement in space usage by tenant agencies or that cost savings have occurred because agencies must budget and pay for the space they occupy. GAO concluded that the imposition of a user charge has not brought about the substantial space reductions and cost savings that were anticipated when the Fund was established.