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Despite efforts to identify and eliminate underused or vacant federal facilities, the three civilian agencies owning the most government property still waste a substantial amount of space, according to a new report from the General Accounting Office.

As of last fall, the General Services Administration, Veterans Affairs Department and Postal Service together reported 927 empty or underutilized properties, ranging from offices to hospitals and occupying about 32.1 million square feet, the report (GAO-03-747) said. Veterans Affairs reported the bulk of the underused space, with 577 facilities, followed by GSA, with 236 facilities and the Postal Service, with 114 buildings.

This inventory of wasted space overstates the actual problem, GSA said in response to the report. GSA noted that it has plans to use 43 of the properties and has decided 37 of the facilities could be put to good use in the future. Veterans Affairs and the Postal Service agreed with GAO's assessment.

Underused federal property should be of great concern to the government, GAO said, because agencies waste taxpayer money by maintaining facilities that are obsolete. The government could put the property to another use, sell it for profit, or exchange it for other assets, according to the report.

"In addition, continuing to hold real property that may no longer be needed does not present a positive image of the federal government in local communities," GAO noted. "Instead, it can present an image of waste and inefficiency that erodes taxpayers' confidence and can have a negative impact on local economies if the property is occupying a valuable location and is not used for other purposes."

Even though a substantial amount of federal property remains underused, GAO praised the three agencies surveyed for their efforts to fix the problem. "All three agencies have recognized the importance of realigning their real property portfolios by identifying and disposing of unneeded real property," the report said.

The agencies rely primarily on their field offices to catalog wasted space while visiting property or reviewing lease renewals, GAO observed. Specifically, GSA began a "portfolio restructuring initiative" in June 2001 to review its properties and rid itself of buildings with no potential for long-term federal use.

The Veterans Affairs Department has addressed the issue through its Capital Asset Realignment for Enhanced Services (CARES) project, which dates back to October 2000, GAO said. A draft CARES proposal released on Aug. 7 suggested closing seven VA medical facilities throughout the country, and has drawn mixed reactions from advocacy groups.

Postal Service officials considered consolidation when drawing up an April 2002 transformation plan, GAO said. The Presidential Commission on the U.S. Postal Service last month recommended that the agency look for additional opportunities to close rarely used mail processing facilities and sell off some of its real estate.

The GAO report does not include recommendations for how the three agencies could improve upon their current efforts to identify and eliminate underused facilities. Lawmakers have suggested that in general, agencies could better manage federal space if granted more authority to lease or sell property and collect revenue from the transactions.

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