	Background

Federal agencies, including the judiciary, that operate in facilities under  the control and custody of GSA are required to pay rent for the space they  occupy. Rent payments, which by law must approximate commercial  rates, are deposited into the FBF, which is a revolving fund that GSA uses  to provide a range of real property services, including maintenance,  repairs, and alterations, to space occupied by federal agencies. The judiciary’s rent payments represent roughly 15  percent of all rent payments made into FBF, making it one of the two  largest contributors. Increases in Square Footage and Operating and Security Costs have Driven Increases in the Judiciary’s Rent Bill from Fiscal Years 2000 through 2005

The federal judiciary’s rental obligations for federally owned and leased  space have steadily risen from $780 million to $990 million, or 27 percent  from fiscal years 2000 through 2005, after controlling for inflation using the  Gross Domestic Product price index. During this period, the judiciary had  a net increase in the amount of space it occupies, from 33.6 million to 39.8  million rentable square feet, which is a 19 percent increase nationwide. However, increases in operating costs (driven  by increases in energy costs) and security costs grew disproportionately  higher than the percentage of net space added, thus contributing to the  overall increase in rent (see figure 2). Much of the judiciary’s recent growth in net square footage was caused by  the construction of new courthouses. The  judiciary’s courthouse construction effort may continue. We found that neither the judiciary nor GSA had routinely and  comprehensively analyzed the factors influencing the rent increases. Judiciary Faces a Number of Challenges but Could Take Actions to Better Manage Its Future Rent Payments

The federal judiciary faces several challenges to managing its rent costs  including costly new construction requirements, a lack of incentives for  efficient space use, and a lack of space allocation criteria for appeals and  senior district judges. First, modern courthouses require structural and  architectural elements that make them among the most costly types of  federal space to construct. Chief among these elements are the three  separate circulation patterns for judges, prisoners, and the public that the  U.S. The judiciary has initiated a rent validation effort, but it does not address  the lack of incentives for efficient space use at the circuit and district  levels. An example of the  inefficiencies that may result is in the Eastern District of Virginia, where  the judiciary paid about $272,000 in 2005 to rent 4,600 square feet of office  space for an appeals judge in McLean, Virginia, in addition to paying for  4,300 square feet of chamber space originally designated for that judge in  the Albert V. Bryan U.S. According to AOUSC, the judiciary has subsequently pursued alternative  uses for this chamber space. Assigning space to appeals courts and senior district judges poses  challenges due to a lack of criteria, which can lead to variation and  inefficiencies and, thus, higher rent.
Why GAO Did This Study

The judiciary pays over $900 million in rent annually to GSA for court-related space, representing a growing proportion of the judiciary's budget. The judiciary's rent payments are deposited into GSA's Federal Buildings Fund (FBF), a revolving fund used to finance GSA's real property services, including the construction and repair of federal facilities under GSA control. In December 2004, the judiciary requested a $483 million dollar permanent, annual rent exemption which GSA denied, saying that it undermined the intent of FBF and that GSA was unlikely to obtain appropriations to replace lost FBF income. GAO reviewed (1) recent trends in the judiciary's rent and space occupied and (2) challenges that the judiciary faces in managing its rent costs.

What GAO Found

The federal judiciary's rental obligations to GSA for courthouses have increased from $780 million to $990 million or 27 percent from fiscal years 2000 through 2005, after controlling for inflation--primarily due to a simultaneous net increase in space from 33.6 million to 39.8 million rentable square feet, a 19 percent increase nationwide. Much of the net increase in space was the result of new courthouses that the judiciary has taken occupancy of since 2000. According to the Administrative Office of the U.S. Courts (AOUSC), the judiciary's workload has grown substantially and the number of court staff has doubled since 1985. Shell rent (the building with basic infrastructure) increased proportionately with square footage growth, but operational (utilities and general maintenance) and security costs grew disproportionately higher than square footage due to external factors, such as increasing energy costs and security requirements. Neither GSA nor the judiciary had routinely and comprehensively analyzed the factors causing rent increases, making it more difficult for the judiciary to manage increases. The federal judiciary faces several challenges to managing its rental obligations, including costly new construction requirements, a lack of incentives for efficient space use, and a lack of space allocation criteria for appeals and senior judges. First, building enhancements, such as three separate circulation patterns for judges, prisoners, and the public, and structural and architectural elements make courthouses among the most expensive federal facilities to construct in GSA's inventory, often leading to higher rent payments. Second, the judiciary has begun a rent validation effort intended to monitor GSA rent charges, but it does not address the lack of incentives for efficient space management at the circuit and district levels. An example of the inefficiencies that may result is in the Eastern District of Virginia, where the judiciary paid about $272,000 in 2005 to rent space for an appeals judge in McLean, Virginia, in addition to paying for space designated for that judge in a nearby federal courthouse that the judiciary later used for alternative purposes. Finally, the lack of criteria for assigning courtrooms for appeals and senior judges can contribute to inefficiencies in the amount of space provided, which can result in higher rent payments.