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Costs, Benefits of Federal EUL Programs Unclear, GAO Finds

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  • January 22, 2013
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While federal agencies report a variety of benefits from their enhanced use leasing (EUL) programs — more efficient use of underutilized property, a new stream of revenue and enhanced mission activities — the net benefits are not clear since some agencies do not report all costs associated with their EUL programs, according to a new report from the Government Accountability Office (GAO).

For example, the Department of Veterans Affairs (VA) and the State Department do not consistently attribute the costs of consultant staff who administer the leases, and VA does not attribute various administrative costs that offset EUL benefits. Without fully accounting for all associated costs, agencies may overstate the net benefits of their EUL programs, the congressional watchdog agency concluded.

The study — which looked at only VA, NASA and the State and Agriculture departments — touched on related issues as well. NASA said that the restriction on its authority to receive in-kind consideration has limited the interest in its EUL program from developers. Prospective lessees are reluctant to make costly capital improvements to a property that will have to be returned to the government at the end of the lease without other compensation, such as a reduction in cash rent.

Another concern is the disagreement between VA and the Congressional Budget Office over the extent to which the department should account for the budget impacts for EULs that include long-term government commitments. VA has made multi-year commitments with certain EULs without fully reporting them in its budget, GAO reported.

Read the story in Government Executive.

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