GSA Fleet Would Face Reduced Revenues and Need Legislative Authority to Donate Cars

If GSA were required to donate 1 to 5 percent of its compact sedans to  YouthBuild USA (112 to 559 cars), its annual sales revenue would be  reduced by an estimated $600,000 to $3 million. However, GSA would need additional new statutory authority to allow it to  increase its leasing rates for the purpose of recovering costs associated  with donating cars. Currently, to support its  Fleet operations, GSA relies on the proceeds of its auction of used vehicles  and the income it receives from the rates it charges agencies that lease  vehicles from it. GSA Would Need Statutory Authority to Donate Vehicles Directly to YouthBuild USA

In order for GSA to donate cars from its Fleet program directly to  YouthBuild USA, it would need new statutory authority to deviate from the  existing process for disposing of surplus federal property. Available Research Suggests That Car Access Leads to Jobs and Other Benefits

Taken as a whole, the seven studies we reviewed consistently indicated  that owning a car or having access to one increases the likelihood that low- income individuals (such as rural Youthbuild participants) get a job (see  app. Differences  between the populations in these studies and rural Youthbuild participants  did not allow us to use the studies’ results to identify the degree to which  participants in YouthBuild USA’s LICO program would benefit from having  a car. For example, a  car likely allows a person to search for a job over a wider geographic area,  expanding the number of employment opportunities and the chances he or  she will find a job. However, determining the  extent that Youthbuild participants would benefit from such a program is  not possible because of limitations in the methodologies of these studies,  differences between individuals served by these programs compared with  YouthBuild USA, and differences in the designs of the existing programs  and the YouthBuild USA proposal. Objectives, Scope, and Methodology

The objectives of this report were to (1) assess the effect of donating 1 to 5  percent of selected General Services Administration (GSA) used cars on  GSA’s fleet vehicle sales operations, (2) describe what studies have shown  with respect to the benefits that car ownership or access may hold for low- income individuals, and (3) describe what studies of selected Low Income  Car Ownership (LICO) programs and experiences of these programs have  shown with respect to the benefits of participant car ownership. To assess the role of car ownership in  facilitating employment. The study did not control for urban and rural  areas.
Why GAO Did This Study

To assist youth who live in high poverty rural areas obtain and retain jobs, YouthBuild USA, a national nonprofit organization, has proposed providing donated used cars to selected low-income youth in rural communities. YouthBuild USA's proposed program hinges on receiving donations of used cars from the federal government's General Services Administration (GSA). This report discusses (1) the effect of donating 1 to 5 percent of selected GSA used cars on GSA's fleet vehicle sales operations, (2) what studies have shown with respect to the benefits that car ownership or access may hold for low-income individuals, and (3) what studies of selected low income car ownership programs and experiences of these programs have shown with respect to the benefits of participant car ownership. In conducting this study, GAO examined auction data from GSA, reviewed academic studies on the benefits of car access in gaining employment, and interviewed officials of six existing low income car ownership programs.

What GAO Found

If GSA annually donated 1 to 5 percent of the compact sedans available for auction from its Fleet program (112 to 559 cars), its annual sales revenue would be reduced by $600,000 to $3 million. To donate cars directly to YouthBuild USA, GSA would need new statutory authority to deviate from the existing process for disposing of surplus federal property. If it were given this authority, GSA would likely first seek appropriations to recover the loss in sales revenue from the donations but would also consider increasing its leasing rates for compact sedans. However, GSA would also require new legislative authority to increase its rates for this purpose because the current statute governing its Fleet program does not allow it to pass on these costs to the agencies that lease vehicles from it. The seven studies GAO reviewed consistently found that owning a car or having access to one increases the likelihood that low-income individuals (such as rural Youthbuild participants) find a job. One reason for this is that a car allows a person to search for a job over a wider geographic area. Differences between the populations in these studies and rural Youthbuild participants did not allow GAO to use this research to identify the degree to which participants in YouthBuild USA's proposed program would benefit from having a car. Six studies of low income car ownership programs and the experiences of those operating the programs indicated that participants got and retained jobs, earned higher wages, and spent more time with their families as a result of owning a car. However, it is difficult to project the results of these studies to rural Youthbuild participants because of limitations in the methodologies of the studies, differences between individuals served by the programs and YouthBuild USA, and differences in the designs of the existing programs and the YouthBuild USA proposal.