All of the agencies in our review determined their reported savings by  identifying activities that were under way or planned at the time the June   In particular, the requirements of the  2010 memorandum was issued.memorandum and subsequent guidance issued by OMB specified that  agencies were to report savings from ongoing and planned activities. Agencies Lacked Clear Standards for Reporting Reliable and Transparent Cost Savings

		Guidance Was Unclear on the Types of Savings that Could be Reported, and Agencies Reported Savings Differently

The guidance OMB provided to agencies for implementing the  requirements of the June 2010 memorandum was unclear and lacked  reporting standards. Although some agency officials in our review told us that the guidance  was not clear on what could be considered a savings, all of the agencies  in our review reported savings from cost avoidance measures, as  previously discussed. For disposals  in the year 2010, for example, some agencies reported 1 year of  operations and maintenance savings in the year in which the disposal  occurred, whereas other agencies reported up to 3 years of operations  and maintenance savings for disposals occurring in 2010 (see table 4). Similarly, GSA reported savings from property  exchanges under space management, while State reported this type of  savings under innovation. Despite this, we found  instances in which some agencies did not deduct costs in their reported  savings, for example:
State and DHS did not deduct costs associated with disposals in their  reported savings.with the approximately $114 million in disposal savings reported over  the 2010-to-2012 time period were about $4 million. DOE deducted the costs associated with some of its reported disposal  savings, but did not do so if the disposals were carried out by its  Office of Environmental Management. However,  GSA retained ownership of the city’s site in 2013 and the city will  retain ownership of the GSA property after the construction of the new  courthouse is completed, which has yet to be determined. USDA reported rent savings from office closures, some of which did  not occur until fiscal year 2013. In addition, OMB did not include  detailed information about the types of savings agencies reported in  response to the memorandum on Performance.gov. Recommendation for Executive Action

To improve future real property cost-savings initiatives and promote  reliability and transparency, we recommend that the Director of OMB, in  collaboration with FRPC agencies, develop clear and specific standards  for:  identifying and reporting savings that help ensure common  understanding of the various types of cost savings;  consistently reporting across categories and agencies; and  sufficiently documenting, validating, and reviewing results. OMB generally agreed with our  recommendation. Specifically, OMB stated that the June 2010  memorandum had positive effects on federal real-property management,  and acknowledged that there are opportunities to improve future cost-  savings efforts, as identified in our report. Our objectives were to (1)  describe the cost savings agencies reported in response to the June 2010  presidential memorandum and how those savings were identified by  selected agencies and (2) determine the extent that selected agencies’  reporting of savings was reliable and transparent and how, if at all, the  reporting of real property cost savings could be improved. To describe the cost savings agencies reported in response to the June  2010 memorandum and how those savings were identified by selected  agencies, we reviewed and analyzed information on the administration’s  Performance.gov website, including agencies’ individual cost savings  targets, the total amount of savings reported by the agencies at the end of  fiscal year 2012, and the amount of savings reported across the four  categories—disposals, space management, sustainability, and  innovation—established by OMB. We also obtained and analyzed documentation on the cost savings reported by six civilian agencies: the  General Services Administration and the Departments of Agriculture,  Energy, Homeland Security, Justice, and State. We selected the six agencies because they had the largest  cost savings targets for civilian agencies, collectively accounting for about  75 percent of the $3 billion savings goal; reported a variety of cost  savings measures to achieve their savings target; and had a range of  property types in their real property portfolios. To determine the extent that selected agencies’ reporting of savings was  reliable and transparent and to identify how, if at all, reporting of real  property cost savings could be improved, we reviewed the agencies’  reported cost savings against key factors identified in our data-reliability  and cost-estimating guidance.reported by the six agencies in our review to determine whether similar  types of savings were consistently reported, met the requirements set   In particular, we analyzed the savings  forth by the memorandum, and were well-documented.
Why GAO Did This Study

In June 2010, the President issued a memorandum directing federal agencies to achieve $3 billion in real property cost savings by the end of fiscal year 2012 through a number of methods, including disposal of excess property, energy efficiency improvements, and other space consolidation efforts.
GAO was asked to review the cost savings agencies reported in response to the memorandum. This report (1) describes the cost savings agencies reported in response to the June 2010 presidential memorandum and how those savings were identified by selected agencies and (2) determines the extent that selected agencies' reporting of savings was reliable and transparent, and how, if at all, reporting of real property cost savings could be improved. GAO reviewed OMB guidance for implementing the memorandum, reviewed the cost savings agencies reported on the administration's Performance.gov website, and obtained documentation from and interviewed officials from six agencies and OMB staff about the agencies' reported cost savings. GAO selected the agencies based on their overall cost-savings targets and the types of savings measures implemented, among other things.

What GAO Found

Agencies reported real property cost savings of $3.8 billion in response to the June 2010 presidential memorandum from disposal, space management, sustainability, and innovation activities. Space management savings, defined by the Office of Management and Budget (OMB) as those savings resulting from, among other things, consolidations or the elimination of lease arrangements that were not cost effective, accounted for the largest portion of savings reported by all agencies, and for about 70 percent of the savings reported by the six agencies GAO reviewed--the General Services Administration (GSA) and the Departments of Agriculture (USDA), Energy (DOE), Homeland Security (DHS), Justice (DOJ), and State (State). The requirements of the memorandum, as well as agencies' individual savings targets and the time frame for reporting savings, led the selected agencies to primarily report savings from activities that were planned or under way at the time the memorandum was issued.
GAO's review of the six selected agencies identified several problems that affect the reliability and transparency of the reporting of cost savings in response to the June 2010 memorandum. In particular, the memorandum and subsequent guidance issued by OMB were not clear on the types of savings that could be reported, particularly because the term "cost savings" was not clearly defined. For example, officials from several agencies GAO reviewed said the guidance was unclear about whether savings from cost avoidance measures could be reported. In addition, the agencies interpreted the guidance differently and, in some cases, did not follow the guidance, practices that led to inconsistent reporting, for example:
Agencies made different assumptions in reporting disposal savings: Two agencies reported one year of avoided operations and maintenance savings for the year in which the disposal occurred, while three agencies reported up to 3 years of savings depending on when disposals occurred during the 3-year period.
Some agencies did not deduct costs associated with their disposals: State and DHS did not deduct the costs associated with their reported disposal savings. DOE deducted costs for some of its reported disposals savings, but did not deduct costs for disposals carried out by its Office of Environmental Management.
Some agencies reported savings outside the time frame of the memorandum: GSA reported savings from a property exchange, but retained ownership of the site in 2013, after the deadline, fiscal 2012's end. USDA reported savings from office closures that occurred in fiscal year 2013.
Finally, OMB did not require agencies to provide detailed documentation of their reported savings or include specific information about agencies' reported savings on Performance.gov, limiting transparency. Agency officials stated that the memorandum broadened their understanding of real property cost-savings opportunities. However, 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.

What GAO Recommends

GAO recommends that the Director of OMB establish clear and specific standards to help ensure reliability and transparency in the reporting of future real-property cost savings. OMB generally agreed with GAO's recommendation.