GSA Logo - Blue field with white letters and has a star in the center of the 'A' for GSA. U.S.General Services Administration Administrator's Semiannual Management Report to Congress A collage of pictures, The inside of the Capitol Rotunda looking upward, two outside sections of the Capitol Building and the American Flag flowing in the breeze. Report No. 38 October 1,2007 to March 31,2008 U.S. General Services Administration David L. Bibb Acting Administrator Office of the Chief Financial Officer Kathleen M. Turco Chief Financial Officer Office of the Controller Faye C. Basden Controller Internal Control and Audit Division Ralph L. Boldt Director May 2008 This report is in the public domain. Authorization to reproduce it in whole or inpart is granted. While permission to reprint this publication is not necessary, the citation should be: U.S. General Services Administration, Office of the Chief Financial Officer, Office of the Controller, Internal Control and Audit Division, Administrator’s Semiannual Management Report to Congress, No. 38, Washington, DC 20405. To obtain copies of this report, Write to: U.S. General Services Administration, Office of the Chief Financial Officer, Office of the Controller, Internal Control and Audit Division (BEI), 1800F St., N.W., Washington, DC 20405-0001; Call in your request: (202) 501-2117; or Obtain a copy of this report on GSA’s Website at: http://www.gsa.gov, under “About GSA.” EXECUTIVE SUMMARY In accordance with the Inspector General Act of 1987, as amended, theAdministrator of the General Services Administration (GSA) submits this report to Congress on final actions regarding audit recommendations. The report covers the period from October 1, 2007, through March 31, 2008. The Act requires the Administrator to report directly to the Congress on management decisions and final actions taken on audit recommendations. The report mustalso explain why final action on any audit has not been taken one year after thedate of the management decision. This report statistically summarizesmanagement's implementation of the recommendations contained in auditreports issued by the General Services Administration's Office of Inspector General. The results achieved clearly demonstrate that GSA’s audit follow-upefforts continue to play a significant role in the effective management of theagency’s operations and the accomplishment of its mission. During the reporting period, GSA issued management decisions on 68 audit reports. These included management decisions on 35 audit reports thatidentified a total of $1,406,933 in disallowed costs and $272,849,322 in funds that could be put to better use. The latter category is comprised of estimatedand actual cost avoidance determined to have no impact on the agency's budget. The other 33 management decisions did not identify any disallowed costs orfunds to be put to better use. There were no management decisions this periodthat involved actual cost avoidance determined to have a potential impact onthe budget. During the six-month period, final action was taken on 49 audits withmanagement decisions identifying disallowed costs or funds to be put to better use. These actions resulted in the recovery of $1,652,341 and theimplementation of $1,858,094 of actual cost avoidance that has no impact on theagency’s budget. As of March 31, 2008, 53 internal and contract audit reports remained openwithout final action one year after the management decision. Of this total, 19 were under formal administrative or judicial appeal. Explanations as to whyfinal actions on the remaining 34 audits that have not been taken are providedin the report. TABLE OF CONTENTS Page Introduction Overview…………………………………………………………………………………..1 General Services Administration Organization…………..…………………………1 Agency Audit Follow-up Process.………………………………………….……...…...2 Organization Chart………………………………………………………….……...…...3 Progress of Audit Closure……………..……….…………………..……………..….4 Audits with Disallowed Costs………………………..……………....……………..5 Audits with Better Use Funds………………….…………………………………...6 Internal Audits………………………..………………..........……………...……...…..7 Audits under Appeal/Litigation…………………………………....…………….8-9 Contract Audits……………………………………………….…………..............10-15 Glossary of Terms………………………………………………………..………..16-17 INTRODUCTION Overview This report, submitted pursuant to the Inspector General Act of 1978, asamended, presents management's perspective on audit resolution and follow-upactivity at the General Services Administration (GSA) for the period October 1, 2007, through March 31, 2008. This is the agency's 38th report to the Congresssince the implementation of the Act (Public Law 100-504). The data in the report indicates that GSA's audit follow-up efforts continue to play a significantrole in the effective management of the agency's operations and theaccomplishment of its mission. General Services Administration Organization GSA is organized around two major business functions represented by theFederal Acquisition Service and the Public Buildings Service. In addition, there are 11 Regions and a number of Staff Offices that provide support to the otherGSA organizations. The Administrator of GSA directs the execution of all functions pertaining tothe agency. Members of the Administrator’s office, as well as Regional Administrators and Heads of Services and Staff Offices, advise and make recommendations on policy or operational issues of national scope. Each Service is led by a Commissioner located in the Central Office inWashington, DC. The Commissioners are responsible in their respectivefunctional areas for policy development, program direction, funding, andinterfacing with Congressional staffs, clients and other constituents regardingissues of policy of national scope. Each Region has a Regional Administrator who reports directly to theAdministrator and is responsible for managing the Regional functions. GSA's structure requires a matrixed approach to management where communicationbetween the Regions and Central Office organizations is critical to the effectivemanagement of the agency. 1 Agency Audit Follow-up Process GSA has effective systems in place for keeping track of audit recommendations. It also has senior management commitment to ensure that appropriatecorrective action is taken and agency managers have an unambiguousresponsibility to act upon the audit recommendations. The following provides adescription of the responsibilities of GSA officials involved in the audit follow-up process. Senior Agency Official The Deputy Administrator is the Senior Agency Official responsible for audit follow-up in the agency. As such, he has overall responsibility for ensuring the adequacy of the agency's follow-up system, monitoring the resolution of audit recommendations, and ensuring the prompt implementation of correctiveactions. He is also responsible for final resolution of any differences betweenagency management and the Office of Inspector General. The Chief Financial Officer The Chief Financial Officer provides administrative direction to the officials inthe Office of the Chief Financial Officer who manage GSA’s Audit Resolutionand Follow-up System. Their responsibilities include: • Acting as the liaison with the Government Accountability Office (GAO) for the coordination of GAO audits in progress within GSA and forcoordination of responses to reports for the signature of theAdministrator on GAO recommendations as required by law; • Ensuring timely resolution and implementation of internal and external audit recommendations made by the Office of Inspector General andGAO; • Overseeing the collection and proper accounting of amounts determineddue to the Government as the result of audit-related claims; and • Maintaining an automated report control system for both internal andexternal audits that provides an accurate means for tracking and documenting actions taken in implementing audit recommendations. Heads of Services and Staff Offices and Regional Administrators Heads of Services and Staff Offices and Regional Administrators to whom audit recommendations pertain have primary responsibility for resolving andimplementing recommendations promptly. Their responsibilities include: 2 • Ensuring controls are implemented to provide timely, accurate, andcomplete responses to audit reports; • Developing, advocating, and documenting agency positions on auditrecommendations; • Preparing responses to draft and final GAO reports in coordination withthe Office of the Chief Financial Officer; and • Providing comments on audit decision papers prepared by the Office ofInspector General to ensure that management's position on unresolvedaudit recommendations is properly stated. A picture of the GSA Organization Chart listing all Offices, Regions, and Services. 3 PROGRESS OF AUDIT CLOSURE FOR THE SIX-MONTH PERIOD ENDING MARCH 31, 2008 Timely closing of open audits remains a priority for the General ServicesAdministration. In keeping with that focus, the Office of the Chief Financial Officer (OCFO) successfully closed out a substantial number of internal and contract audits during the reporting period of October 1, 2007, through March31, 2008. During this period, the OCFO successfully closed 36 percent, or 78internal and contract audits out of 217 audits that were reported as open. The remaining 139 audits could not be closed due to litigation, negotiations, collections, and implementation of corrective actions. A chart of Open and Closed Audits October 1, 2007 - March 31, 2008 217 - Total Open Audits 78 - Total Closed Audits 139 - Total Audits In Progress 4 AUDITS WITH DISALLOWED COSTS Final action for the six-month periodending March 31, 2008 A. Audit reports for which final action hadnot been taken by the commencement of thereporting period. Number of Audit Reports 17 Disallowed Costs $17,220,546 B. Audit reports on which managementdecisions were made during the reportingperiod. Number of Audit Reports 4 Disallowed Costs $1,406,933 C. Audit reports on which final action wastaken during the reporting period. Number of Audit Reports 6 Disallowed Costs $4,613,468 (i) the dollar value of disallowed costs that were recovered by management through: $1,652,341 - collections…………….………...$1,569,831 - offset………………….…….…...$82,510 - property in lieu of cash…….…$0 - other………………………….… $0 (ii) the dollar value of disallowed costs that were written off by management.** $2,961,127 D. Audit reports for which no final actionhas been taken by the end of the reportingperiod. Number of Audit Reports 15 Disallowed Costs $14,014,011 ** For the purposes of this report, write-offs are interpreted to represent thedifference between the amount successfully recovered and the disallowed cost, which is a questioned cost that GSA management in a management decisionsustained or agreed should not be charged to the Government. However, duringnegotiations management might have agreed to a smaller amount in order tosettle the case with the contractor. 5 AUDITS WITH BETTER USE FUNDS Final action for the six-month period ending March 31, 2008 A. Audit reports for which finalaction had not been taken by thecommencement of the reportingperiod. Number of Audit Reports 81 No Budget Impact – Actual and Estimated $596,337,871 Budget Impact $0 B. Audit reports on whichmanagement decisions were madeduring the reporting period. Number of Audit Reports 31 No Budget Impact – Actual and Estimated $272,849,322 Budget Impact $0 C. Audit reports for which final action was taken during thereporting period. Number of Audit Records - 43 No Budget Impact – Actual and Estimated $409,214,511 Budget Impact $0 (i) the actual dollar value of recommendations that were actually completed. $1,858,094 (ii) the actual dollar value of recommendations that management has subsequently concluded should not or could not be implemented or completed. $771,721 (iii) the actual dollar value of recommendations that management has subsequently concluded should not or could not be determined (calculated). $0.00 (iv) the estimated dollar value of “funds to be put to better use” as agreed to by GSA management and the OIG. $406,584,696 D. Audit reports for which no finalaction had been taken by the end ofthe reporting period. Number of Audit Reports 69 No Budget Impact – Actual and Estimated $459,972,682 Budget Impact $0 INTERNAL AUDITS AUDITS WITH MANAGEMENT DECISIONS MADE PRIOR TO MARCH 31, 2007, BUT WITH FINAL ACTION NOT TAKEN AS OF MARCH 31, 2008 REPORT NUMBER TITLE OF REPORT DATE OF REPORT MANAGEMENT DECISION AMOUNTS (Disallowed Costs/Better Use Funds) REASON FOR NO FINAL ACTION PROJECT COMPLETE DATE A020161F3V03003 Distribution Center Operations 03/18/2003 $0 $0 Awaiting closure documentation. 7/15/2008 A040246FTV05003 GSA Advantage 09/29/2005 $0 $0 Awaiting closure documentation. 06/15/2008 A040127OTF06016 FPDS-NG 03/30/2006 $0 $0 Implementation of FPDS-NG GSA's developmentand supportcontractor for the is in progress. 8/15/2008 A050130PWR06007 NCR PBS Overtime Management Controls 04/19/2006 $0 $0 Actions have been implemented. 7/15/2008 A050197OFF07005 Telework Program 11/14/2006 $0 $0 Awaiting closure documentation to close steps. 5/15/2008 A050263PRR07002 Occupancy Agreements 12/28/2006 $0 $0 Action plans are inthe implementation state. 11/15/2008 7 AUDITS UNDER APPEAL/LITIGATION AUDITS UNDER APPEAL/LITIGATION REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS (Disallowed Costs/Better Use Funds) A82441P9X98100 Morse Diesel International, Inc. 06/17/1998 $0 $1,230,088 A995128P6X99558 Sachs Electric Company 03/24/1999 $0 $0 A995231P2X99585 Rael Automatic SprinklerCompany, Inc. 06/24/1999 $230,539 $0 A000971P5X00107 Midwest Curtainwalls, Inc. 06/01/2000 $0 $488,953 A010281P9X02028 Lawson Mechanical Contractors 01/11/2002 $0 $2,052,477 A020124P9X02051 Res-com Insulation, Inc. 05/29/2002 $0 $420,630 A020097P9X02063 Artisans G & H Fixtures, Inc. 06/12/2002 $0 $1,071,076 A020086P9X02076 Raymond Interior SystemsNorth 07/30/2002 $0 $960,982 A010279P9X03015 Morse Diesel International, Inc. 11/20/2002 $0 $10,387,248 A020133P9X03055 Cosco Fire Protection, Inc. 03/21/2003 $0 $754,153 AUDITS UNDER APPEAL/LITIGATION AUDITS UNDER APPEAL/LITIGATION (Con't.) REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS (Disallowed Costs/Better Use Funds) A030140FWX03056 Science ApplicationsInternational Corporation 03/25/2003 $0 $1,028,099 A030106P9X03061 George Foss Company 05/02/2003 $0 $434,057 A020230P9X03068 C.E. Toland & Son 05/29/2003 $0 $732,958 A040095P2X04077 M.L. Benjamin Enterprises, Inc. 06/09/2004 $0 $569,890 A040095P2X04079 M.L. Benjamin Enterprises, Inc. 06/15/2004 $18,027 $0 A040085F7X04085 Onboard Software, Inc. 06/28/2004 $348,158 $0 A050138P3X05082 Nason and Cullen, Inc. 07/08/2005 $0 $770,701 A050157T6X05100 Compucom FederalSystems, Inc. 08/15/2005 $0 $6,026,255 A050147F5X06018 Herman Miller, Inc. 11/30/2005 $50,410 $0 9 CONTRACT AUDITS AUDITS WITH MANAGEMENT DECISIONS MADE PRIOR TO MARCH 31, 2007, BUT WITH FINAL ACTION NOT TAKEN AS OF MARCH 31, 2008 REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS (Disallowed Costs/Better Use Funds) REASON FOR NO FINAL ACTION A21266F4X96034 Rose Talbert Paint Company 11/09/1995 $728,000 $0 GSA is in the process ofcollecting funds owed theGovernment from the contractor. A73617PWX97197 Committee For Purchase 08/05/1997 $2,703,694 $0 Negotiations are proceeding betweencontracting officer and contractor. A82441P9X98100 Morse Diesel International, Inc. 06/17/1998 $0 $1,230,088 Contracting officer's final decision pending legalreview. A995128P6X99558 Sachs Electric Company 03/24/1999 $0 $0 Audit case is pendingwith GSA Civilian Board of Contract Appeals. A995231P2X99585 Rael Automatic Sprinkler Company, Inc. 06/24/1999 $230,539 $0 Audit case is pendingwith GSA Civilian Board of Contract Appeals. A000971P5X00107 Midwest Curtainwalls, Inc. 06/01/2000 $0 $488,953 The contractor has appealed the contractingofficer's decision and the audit is now in the litigation process. 10 CONTRACT AUDITS (Con't.) AUDITS WITH MANAGEMENT DECISIONS MADE PRIOR TO MARCH 31, 2007, BUT WITH FINAL ACTION NOT TAKEN AS OF MARCH 31, 2008 REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS (Disallowed Costs/Better Use Funds) REASON FOR NO FINAL ACTION A010127P6X01079 DKW Construction, Inc. 04/30/2001 $303,193 $0 GSA is in the process ofcollecting funds owed theGovernment from the contractor. A63630FWX02004 The Presidio Corporation 10/18/2001 $273,000 $0 GSA is in the process ofcollecting funds owed theGovernment from the contractor. A010265PWX02011 HNTB District of Columbia Architecture, P.C. 10/31/2001 $0 $61,722 Negotiations are proceeding betweencontracting officer and contractor. A010281P9X02028 Lawson Mechanical Contractors 01/11/2002 $0 $2,052,477 AMEC/Morse Diesel St. Louis and Sacramento Courthouse projects case. AMEC/Morse Dieselclaim forfeited. Audit case is pending U.S. Court of Appeals determination. A020124P9X02051 Res-Com Insulation, Inc. 05/29/2002 $0 $420,630 AMEC/Morse Diesel St. Louis and Sacramento Courthouse projects case. AMEC/Morse Dieselclaim forfeited. Audit case is pending U.S. Court of Appealsdetermination. A020097P9X02063 Artisans G & H Fixtures, Inc. 06/12/2002 $0 $1,071,076 AMEC/Morse Diesel St. Louis and Sacramento Courthouse projects case. AMEC/Morse Dieselclaim forfeited. Audit case is pending U.S. Court of Appealsdetermination. A020191PWX02074 McMullan & Associates, Inc. 07/16/2002 $0 $112,320 Negotiations have beencompleted betweencontracting officer and contractor. Awaiting copyof award document priorto closure. A010127P6X01079 DKW Construction, Inc. 04/30/2001 $303,193 $0 GSA is in the process ofcollecting funds owed theGovernment from the contractor. A63630FWX02004 The Presidio Corporation 10/18/2001 $273,000 $0 GSA is in the process ofcollecting funds owed theGovernment from the contractor. A010265PWX02011 HNTB District of Columbia Architecture, P.C. 10/31/2001 $0 $61,722 Negotiations are proceeding betweencontracting officer and contractor. A010281P9X02028 Lawson Mechanical Contractors 01/11/2002 $0 $2,052,477 AMEC/Morse Diesel St. Louis and Sacramento Courthouse projects case. AMEC/Morse Dieselclaim forfeited. Audit case is pending U.S. Court of Appealsdetermination. A020124P9X02051 Res-Com Insulation, Inc. 05/29/2002 $0 $420,630 AMEC/Morse Diesel St. Louis and Sacramento Courthouse projects case. AMEC/Morse Dieselclaim forfeited. Audit case is pending U.S. Court of Appealsdetermination. A020097P9X02063 Artisans G & H Fixtures, Inc. 06/12/2002 $0 $1,071,076 AMEC/Morse Diesel St. Louis and Sacramento Courthouse projects case. AMEC/Morse Dieselclaim forfeited. Audit case is pending U.S. Court of Appealsdetermination. A020191PWX02074 McMullan & Associates, Inc. 07/16/2002 $0 $112,320 Negotiations have beencompleted betweencontracting officer and contractor. Awaiting copyof award document priorto closure. 11 CONTRACT AUDITS (Con't.) AUDITS WITH MANAGEMENT DECISIONS MADE PRIOR TO MARCH 31, 2007, BUT WITH FINAL ACTION NOT TAKEN AS OF MARCH 31, 2008 REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS (Disallowed Costs/Better Use Funds) REASON FOR NO FINAL ACTION A020086P9X02076 Raymond InteriorSystems North 07/30/2002 $0 $960,982 AMEC/Morse Diesel St. Louis and Sacramento Courthouse projects case. AMEC/Morse Dieselclaim forfeited. Audit case is pending U.S. Court of Appealsdetermination. A020180PWX02087 ADTEK Engineering, Inc. 09/04/2002 $0 $27,840 Negotiations are proceeding betweencontracting officer and contractor A020196PWX02090 BEI Structural Engineers, Inc. 09/24/2002 $0 $544,000 Negotiations are proceeding betweencontracting officer and contractor. A020178F7X03001 Motorola, Inc. 10/02/2002 $0 $700,000 Negotiations are proceeding betweencontracting officer and contractor. A010279P9X03015 Morse Diesel 11/20/2002 $0 $10,387,248 AMEC/Morse Diesel St. Louis and Sacramento International, Inc. Courthouse projects case. AMEC/Morse Dieselclaim forfeited. Audit case is pending U.S. Court of Appealsdetermination. A020248P5X03036 Doan/Lake Erie LLC 01/30/2003 $0 $2,988,179 The contracting officer isin the process ofnegotiating with thecontractor for possible settlement. A020133P9X03055 Cosco Fire Protection, 03/21/2003 $0 $754,153 AMEC/Morse Diesel St. Louis and Sacramento Inc. Courthouse projects case. AMEC/Morse Dieselclaim forfeited. Audit case is pending U.S. Court of Appealsdetermination. 12 CONTRACT AUDITS (Con't.) AUDITS WITH MANAGEMENT DECISIONS MADE PRIOR TO MARCH 31, 2007, BUT WITH FINAL ACTION NOT TAKEN AS OF MARCH 31, 2008 REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS (Disallowed Costs/Better Use Funds) REASON FOR NO FINAL ACTION A030140FWX03056 Science ApplicationsInternational Corporation 03/25/2003 $0 $1,028,099 The contractor has appealed the contractingofficer’s decision and the audit is now in the litigation process. A030106P9X03061 George Foss Company 05/02/2003 $0 $434,057 AMEC/Morse Diesel St. Louis and Sacramento Courthouse projects case. AMEC/Morse Dieselclaim forfeited. Audit case is pending U.S. Court of Appealsdetermination. A020230P9X03068 C.E. Toland & Son 05/29/2003 $0 $732,958 AMEC/Morse Diesel St. Louis and Sacramento Courthouse projects case. AMEC/Morse Dieselclaim forfeited. Audit case is pending U.S. Court of Appealsdetermination. A040098P5X04038 Gonzales Hasbrouck, Inc. 01/12/2004 $0 $80,010 Negotiations are proceeding betweencontracting officer and contractor. A040119P5X04044 Julie Snow Architects, Inc. 02/03/2004 $0 $76,575 Negotiations are proceeding betweencontracting officer and contractor. A030186F5X04054 NOVA Solutions, Inc. 03/09/2004 $46,805 $0 GSA is in the process ofcollecting funds owed theGovernment from the contractor. A040162F5X04053 NOVA Solutions, Inc. 03/09/2004 $0 $17,000 GSA is in the process ofcollecting funds owed theGovernment from the contractor (collections arebeing tracked throughOIG audit A030186). A040095P2X04077 M.L. BenjaminEnterprises, Inc. 06/09/2004 $0 $569,890 Audit case is pendingwith GSA Civilian Board of Contract Appeals. A030140FWX03056 Science Applications International Corporation 03/25/2003 $0 $1,028,099 The contractor has appealed the contractingofficer’s decision and the audit is now in the litigation process. A030106P9X03061 George Foss Company 05/02/2003 $0 $434,057 AMEC/Morse Diesel St. Louis and Sacramento Courthouse projects case. AMEC/Morse Dieselclaim forfeited. Audit case is pending U.S. Court of Appealsdetermination. A020230P9X03068 C.E. Toland & Son 05/29/2003 $0 $732,958 AMEC/Morse Diesel St. Louis and Sacramento Courthouse projects case. AMEC/Morse Dieselclaim forfeited. Audit case is pending U.S. Court of Appealsdetermination. A040098P5X04038 Gonzales Hasbrouck, Inc. 01/12/2004 $0 $80,010 Negotiations are proceeding betweencontracting officer and contractor. A040119P5X04044 Julie Snow Architects, Inc. 02/03/2004 $0 $76,575 Negotiations are proceeding betweencontracting officer and contractor. A030186F5X04054 NOVA Solutions, Inc. 03/09/2004 $46,805 $0 GSA is in the process ofcollecting funds owed theGovernment from the contractor. A040162F5X04053 NOVA Solutions, Inc. 03/09/2004 $0 $17,000 GSA is in the process ofcollecting funds owed theGovernment from the contractor (collections arebeing tracked throughOIG audit A030186). A040095P2X04077 M.L. BenjaminEnterprises, Inc. 06/09/2004 $0 $569,890 Audit case is pendingwith GSA Civilian Board of Contract Appeals. 13 CONTRACT AUDITS (Con't.) AUDITS WITH MANAGEMENT DECISIONS MADE PRIOR TO MARCH 31, 2007, BUT WITH FINAL ACTION NOT TAKEN AS OF MARCH 31, 2008 REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS (Disallowed Costs/Better Use Funds) REASON FOR NO FINAL ACTION A040095P2X04079 M.L. BenjaminEnterprises, Inc. 06/15/2004 $18,027 $0 Audit case is pendingwith GSA Civilian Board of Contract Appeals. A040085F7X04085 Onboard Software, Inc. 06/28/2004 $348,158 $0 Audit case is pendingwith GSA Civilian Board of Contract Appeals. A040211F6X05011 Allsteel, Inc. 10/29/2004 $0 $16,500,000 Negotiations areproceeding betweencontracting officer and contractor. A050112F7X05068 Entrust, Inc. 05/10/2005 $0 $3,300,000 Negotiations are proceeding betweencontracting officer and contractor. A050138P3X05082 Nason and Cullen, Inc. 07/08/2005 $0 $770,701 Audit case is pendingwith GSA Civilian Board of Contract Appeals. A050157T6X05100 Compucom FederalSystems, Inc. 08/15/2005 $0 $6,026,255 Audit case is pendingwith GSA Civilian Board of Contract Appeals. A050105F6X06006 BCOP Federal 10/12/2005 $0 $29,550,000 Negotiations areproceeding betweencontracting officer and contractor. A050147F5X06018 Herman Miller, Inc. 11/30/2005 $50,410 $0 Audit case is pending anoutcome from litigationbrought by the Air Force. A050176F6X06030 E.F. Johnson Company 12/30/2005 $0 $2,700,000 Negotiations are proceeding betweencontracting officer and contractor. A050247T1X06031 Lockheed Martin Information Technology 01/05/2006 $0 $682,278 Negotiations are proceeding betweencontracting officer and contractor. A040095P2X04079 M.L. BenjaminEnterprises, Inc. 06/15/2004 $18,027 $0 Audit case is pendingwith GSA Civilian Board of Contract Appeals. A040085F7X04085 Onboard Software, Inc. 06/28/2004 $348,158 $0 Audit case is pendingwith GSA Civilian Board of Contract Appeals. A040211F6X05011 Allsteel, Inc. 10/29/2004 $0 $16,500,000 Negotiations areproceeding betweencontracting officer and contractor. A050112F7X05068 Entrust, Inc. 05/10/2005 $0 $3,300,000 Negotiations are proceeding betweencontracting officer and contractor. A050138P3X05082 Nason and Cullen, Inc. 07/08/2005 $0 $770,701 Audit case is pendingwith GSA Civilian Board of Contract Appeals. A050157T6X05100 Compucom FederalSystems, Inc. 08/15/2005 $0 $6,026,255 Audit case is pendingwith GSA Civilian Board of Contract Appeals. A050105F6X06006 BCOP Federal 10/12/2005 $0 $29,550,000 Negotiations areproceeding betweencontracting officer and contractor. A050147F5X06018 Herman Miller, Inc. 11/30/2005 $50,410 $0 Audit case is pending anoutcome from litigationbrought by the Air Force. A050176F6X06030 E.F. Johnson Company 12/30/2005 $0 $2,700,000 Negotiations are proceeding betweencontracting officer and contractor. A050247T1X06031 Lockheed Martin Information Technology 01/05/2006 $0 $682,278 Negotiations are proceeding betweencontracting officer and contractor. 14 CONTRACT AUDITS (Con't.) AUDITS WITH MANAGEMENT DECISIONS MADE PRIOR TO MARCH 31, 2007, BUT WITH FINAL ACTION NOT TAKEN AS OF MARCH 31, 2008 REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS (Disallowed Costs/Better Use Funds) REASON FOR NO FINAL ACTION A050248T9X06056 Information SystemsSupport, Inc. 03/30/2006 $3,138,873 $0 Negotiations are proceeding betweencontracting officer and contractor. A050122F6X06059 Fasternal Company 04/18/2006 $35,274 $0 Negotiations are proceeding betweencontracting officer and contractor. A050265F5X06061 Lawson Products, Inc. 04/25/2006 $0 $16,092,000 Negotiations areproceeding betweencontracting officer and contractor. A050180F3X06069 Office Depot, Inc. 05/09/2006 $0 $36,000,000 Negotiations areproceeding betweencontracting officer and contractor. A060127F4X06096 W.B. BrawleyCompany 08/15/2006 $0 $1,267,845 Negotiations areproceeding betweencontracting officer and contractor. A060181F7X06100 Haverstick Government Solutions, Inc. 09/07/2006 $0 $765,634 Negotiations areproceeding betweencontracting officer and contractor. A060231P5X06102 Teng & Associates, Inc. 09/13/2006 $0 $191,524 Contract has been awarded. The contractingofficer is in the process offinalizing the PriceNegotiationMemorandum. A060206T9X07012 Information SystemsSupport Incorporated 10/31/2006 $4,026,287 $0 Negotiations areproceeding betweencontracting officer and contractor. A060115F2X07025 WFI Government Services, Inc. 12/08/2006 $0 $771,178 Negotiations areproceeding betweencontracting officer and contractor. A050248T9X06056 Information SystemsSupport, Inc. 03/30/2006 $3,138,873 $0 Negotiations are proceeding betweencontracting officer and contractor. A050122F6X06059 Fasternal Company 04/18/2006 $35,274 $0 Negotiations are proceeding betweencontracting officer and contractor. A050265F5X06061 Lawson Products, Inc. 04/25/2006 $0 $16,092,000 Negotiations areproceeding betweencontracting officer and contractor. A050180F3X06069 Office Depot, Inc. 05/09/2006 $0 $36,000,000 Negotiations areproceeding betweencontracting officer and contractor. A060127F4X06096 W.B. BrawleyCompany 08/15/2006 $0 $1,267,845 Negotiations areproceeding betweencontracting officer and contractor. A060181F7X06100 Haverstick Government Solutions, Inc. 09/07/2006 $0 $765,634 Negotiations areproceeding betweencontracting officer and contractor. A060231P5X06102 Teng & Associates, Inc. 09/13/2006 $0 $191,524 Contract has been awarded. The contractingofficer is in the process offinalizing the PriceNegotiationMemorandum. A060206T9X07012 Information SystemsSupport Incorporated 10/31/2006 $4,026,287 $0 Negotiations areproceeding betweencontracting officer and contractor. A060115F2X07025 WFI Government Services, Inc. 12/08/2006 $0 $771,178 Negotiations areproceeding betweencontracting officer and contractor. 15 GLOSSARY OF TERMS The following definitions, based on the Inspector General Act Amendment of1988, apply to terms used in this Semiannual Management Report: Questioned Costs. Costs questioned by the Office of Inspector General (OIG) as a result of: • an alleged violation of a provision of a law, regulation, contract, grant, cooperative agreement, or other agreement or document governing theexpenditure of funds; • a finding that, at the time of an audit, such cost is not supported byadequate documentation; or • a finding that the expenditure of funds for the intended purpose isunnecessary or unreasonable. Disallowed Cost. Questioned costs that General Services Administration management in a management decision sustained or agreed should not becharged to the Government. Recommendation that Funds be Put to Better Use. A recommendation bythe OIG that funds could be used more efficiently if management took action toimplement and complete the recommendations, including: • reductions in outlays; • de-obligation of funds from programs or operations; • costs not incurred by implementing recommended improvements relatedto the operations of the establishment, a contractor or grantee; • avoidance of unnecessary expenditures noted in pre-award reviews of contract or grant agreements; or • any other savings that are identified specifically. Management Decision. The evaluation by management of the findings andrecommendations included in an audit report and the issuance of a finaldecision by management concerning its response to such findings andrecommendations, including planned corrective actions to remedy weaknessesidentified in the report. 16 Final Action. The completion of all actions that General ServicesAdministration (GSA) management concluded in its management decision were necessary with respect to the findings and recommendations included in theaudit report. In the event that GSA management concluded no action wasnecessary, final action occurred when the management decision was made. Management Actions – Questioned Costs. The following is a list of thedifferent management actions used by GSA management to resolve questionedcosts in an audit report: • Audit reports where management decisions were made during the period. The number of audit reports on which management decisions were madeduring the period and the associated amount of disallowed costs werefurnished by the Office of Inspector General (OIG). • Write-offs. The difference between the disallowed cost and the amount successfully recovered. Management Actions – Better Use Funds. The following is a list of thedifferent management actions used by GSA management to resolve the “betteruse” of funds in an audit report: • Better Use Funds. The figure that represents amounts cited as “costavoidance” and “funds to be put to better use,” as agreed to by GSAmanagement and the OIG. • Budget Impact Funds. Funds identified as “budget impact” involve theobligation process. Audit-related savings of these funds, depending onthe particular fund involved, may be available for reprogramming. • No Budget Impact Funds. Funds identified as “no budget impact” arecomposed of estimated and actual amounts, and do not involve obligatedmonies, and, therefore, cannot be construed as having a material effect onGSA’s appropriated funds. • Audit reports where management decisions were made during the period. Data pertaining to the number of audit reports on which managementdecisions were made during the period and the associated dollar amounts agreed to by management were furnished by the OIG. • Value of recommendations that management concluded should not orcould not be calculable. Management was unable to determine the awardamounts and “better use funds” implemented since the amount isincluded in the overall award to the prime contractor and savings couldnot be determined. 17 U.S. General Services Administration 1800 F Street, NW Washington, DC 20405