Audit Report: DOE-OIG-19-25

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April 3, 2019

Leased Space at Selected Department of Energy Sites

The Department of Energy maintains an inventory of approximately 21,000 real property assets covering an estimated 131.4 million square feet.  The inventory is comprised of real property that is either owned or leased by the Department, General Services Administration, and Department contractors.  The Office of Asset Management has responsibility for establishing policy, guidance, and oversight for the Department’s real and personal property.  The Office of Asset Management’s Senior Real Property Officer, who also is the Director of the Office of Asset Management, has overall responsibilities for monitoring and reporting on the real property inventory.  Program offices are responsible for identifying and developing real property requirements as well as the execution of acquisition and disposal transactions. 

The Department’s corporate real property inventory system is the Facilities Information Management System (FIMS), which stores real property asset data and is required to be kept current throughout its lifecycle.  FIMS is a real-time database used to make decisions regarding real property management and for reporting information to the General Services Administration, Office of Management and Budget, Congress, and the taxpayers.  According to FIMS data as of July 2018, the Department maintained approximately 15 million gross/rentable square feet of leased space, costing approximately $314 million in annual rent; this total included space that was leased directly by the Department, through the General Services Administration, or by the Department’s contractors.  Due to the amount of leased space, we conducted this audit to determine whether the Department and its contractors managed leases at selected sites in accordance with applicable regulations and policies.

We found that the Department and its contractors were generally managing leases at selected sites in accordance with applicable regulations and policies.  However, our audit identified two issues regarding the reporting of leased space by the Department’s contractors: (1) contractor leased space information within the Department’s FIMS for some of the leased facilities reviewed was not always complete and accurate, and (2) contractors at the Hanford Site had not properly classified 25 leased trailers as real property.  The misclassification of leased trailers occurred because site office and contractor officials at the Hanford Site were unclear of the requirement to re-classify personal property trailers as real property once the trailers became affixed to the ground or permanently attached to utilities.  Furthermore, inaccurate and incomplete information contained within FIMS occurred because contractor leased space had not always been entered correctly or consistently.  Therefore, we made two recommendations to address the issues related to the re-classification of trailers and FIMS data, as well as a third recommendation to specifically address the issues related to trailers at the Hanford Site.

Topic: Management & Administration