The Kennedy Center Has Taken Steps to Implement Our Oversight, Fire Safety, and Capital Project Recommendations, but More Work Remains

Recently, we recommended that the Kennedy Center increase oversight of  its management of federal funds, ensure the fire safety of the center, and  better align its management of capital projects with best practices. 3). To increase  oversight of the Kennedy Center’s management of federal funds, we  recommended in April 2005 that the Kennedy Center work with an  independent federal government oversight organization, such as the  Smithsonian Institution OIG, for audits of the center’s use of federal  funds. Peer review of modeling studies is a common  industry practice outlined in fire code. The Kennedy Center has implemented our recommendation to obtain  a peer review of its fire-modeling study. The Kennedy Center has implemented our recommendation to manage  the storage of combustible materials. We found that the Family Theater was  completed on schedule and with limited cost growth. The Kennedy Center Will Not Complete All Planned Capital Renovations within CBP Budgets and Time Frames

The Kennedy Center’s 2005 CBP indicates that the center will need  additional budget resources to complete the federally funded projects  remaining in its CBP and that the terrace-level renovations will be deferred  until after the CBP ends in 2008. Specifically,  the Kennedy Center did not obtain a required deviation from the FAR, and  it authorized contractor work to begin on the Family Theater before  establishing the guaranteed maximum price of the project. However, the 2005 CBP shows that the center now  plans to defer most terrace-level renovations beyond the end of the CBP. Three factors limit the board’s oversight of federally  funded capital projects. However, several factors limit  the Kennedy Center Board of Trustees’ oversight for federally funded  capital projects. The Operations Committee has also met infrequently, and attendance at its  meetings has been low. 2. To strengthen the Kennedy Center Board of Trustees’ role in overseeing  federally funded capital projects and to improve the board’s ability to  carry out its responsibilities under the Kennedy Center Act, we  recommend that the Chairman and Trustees of the Board take the  following two actions:  Develop and implement procedures on how the board and its  Operations Committee are to carry out their duties under the  Kennedy Center Act and their responsibilities for overseeing federal  funds, including a clarification of the roles and responsibilities of the  Operations Committee;  Ensure that the board receives detailed, transparent, and timely  information on how federal funds for capital projects have been  budgeted and spent on capital projects, such as information on  original versus actual project budgets and schedules. Our  objectives were to determine (1) the progress the Kennedy Center has  made in implementing the recommendations in our April 2005 report, (2)  the status of capital projects and the planned spending of federal funds for  capital projects as indicated by the Kennedy Center’s most recent  comprehensive building plan, and (3) the Kennedy Center Board of  Trustees’ responsibilities for federally funded capital projects and the  extent to which the board fulfills these responsibilities. In addition, we discussed with  Kennedy Center management officials the time frame for implementation  and the federal guidance used for the development of its contract, financial,  and project management policies and procedures. GAO Comments

1.
Why GAO Did This Study

In April 2005, GAO recommended that the John F. Kennedy Center for the Performing Arts (Kennedy Center) increase oversight of its management of federal funds, better comply with fire code, and conform to project management best practices. GAO was asked to evaluate (1) the progress the Kennedy Center has made in implementing GAO's April 2005 recommendations, (2) the status of federally funded capital projects and the planned spending of federal funds for capital projects as indicated by the Kennedy Center's most recent comprehensive building plan, and (3) the Kennedy Center Board of Trustees' responsibilities for federally funded capital projects and the extent to which the board fulfills these responsibilities. To fulfill these objectives, GAO examined Kennedy Center documents, visited other arts organizations, and interviewed affected parties.

What GAO Found

The Kennedy Center has taken steps to implement GAO's oversight, fire safety, and capital project recommendations but more work remains. For example, to increase oversight of its management of federal funds, the Kennedy Center contracted with the Smithsonian Institution Office of the Inspector General for audits of federal funds used for capital projects. In addition, to better comply with fire safety code, the Kennedy Center has implemented GAO's recommendations to obtain a peer review of its fire-modeling study and manage the storage of combustible materials. As a result of the peer review, the center made changes to its fire-modeling study. Finally, to better align with project management best practices, the Kennedy Center has implemented GAO's recommendations to design and implement contract, financial, and project management policies and procedures and control cost and schedule changes in future projects. The Kennedy Center's 2005 comprehensive building plan (CBP)--or longterm renovation effort--shows that the center will not complete its capital renovations within the planned 2008 time frame and budgets. The estimated costs for the remaining CBP projects have increased from $48 million to $58 million since the 2004 CBP, and the center plans to defer most terrace-level renovations beyond 2008, the original completion date. The 2005 CBP shows that the Family Theater was completed on schedule in 2005 with limited cost growth. However, despite improved contracting practices, GAO found that the Kennedy Center did not fully comply with the Federal Acquisition Regulation (FAR) when it used an alternative contracting method. In addition, it increased the risk of cost overruns by authorizing Family Theater work to begin before establishing the contract's guaranteed maximum price. The Kennedy Center Board of Trustees has delegated to management most of its responsibilities for federally funded capital projects, which is a typical board action. However, GAO found that several factors limit the board's oversight of federally funded capital projects. The Kennedy Center Board of Trustees and its Operations Committee (1) lack procedures on how to carry out the board's responsibilities for federally funded projects (2) have experienced low attendance at meetings, and (3) lack information needed to evaluate the implementation of capital projects. In addition, the Operations Committee has met infrequently, which further limits oversight.