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NASA: Enhanced Use Leasing Program Needs Additional Controls. GAO-07-306R, March 1.

Status Report From: Government Accountability Office
Posted: Thursday, March 1, 2007

Full report

Summary

Since beginning the EUL demonstration, NASA has realized about $1.3 million in EUL-related financial benefits--$972,546 of lease revenue and over $350,000 of in-kind consideration--most of which would not have been realized by NASA without EUL authority. Under its existing authorities, the agency would have been required to remit lease revenue in excess of costs to the U.S. Treasury and would not have been allowed to accept in-kind consideration exceeding costs for rent, except to a limited extent for historic property. Of the lease revenue collected, NASA spent about $480,000--all at Ames Research Center--on maintenance and improvement of real property assets. In addition to the $1.3 million, NASA collected $1.2 million--that could have been collected without EUL authority--that agency officials told us offset, to some extent, the agency's costs for common services such as security.

NASA is using EUL authority to develop underutilized real property at Ames and Kennedy for use by others. Ames and Kennedy have entered into EUL agreements for underutilized office space, unique research and development facilities, and land, and both centers plan to use EUL agreements to develop research parks. According to agency officials, while NASA would have conducted some development under existing authorities, EUL authority provided the agency with increased incentive and flexibility to develop underutilized real property.

While each demonstration center has mechanisms to ensure that EUL agreements provide benefit, beyond rent, to NASA and fair market consideration is received for all property, we found that the agency does not have adequate controls in place to ensure accountability and transparency and to protect the government. For example, the agency has not established measures of effectiveness or criteria for determining whether EUL represents the best economic value to the government. In terms of financial accountability, we found weaknesses that hamper accountability and transparency. For example, the agency has no accounting system for tracking and reporting the value of in-kind consideration, and in some instances, we could not trace financial data to source documents and financial data were not readily available. Finally, NASA's implementation of EUL could lessen budget transparency. For example, NASA's EUL authority allows the agency to accept in-kind consideration in the form of services or construction that is not recognized in the budget. In addition, EUL cash revenue is not readily apparent within the agency's reimbursable budget line.

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