Innovative Financing for Acquiring Federal Real Estate and Scoring Issues




MAY 15, 1997


Mr. Chairman and Members of the Committee:

This is the third in a series of hearings relating to our revenue estimates for the Federal Buildings Fund. I am pleased to appear before you today to continue our discussions of the ways in which we are continuing to improve our revenue management.

As Commissioner, I am most concerned with the accuracy, reliability, and timeliness of our data. As I have testified previously, PBS has invested in a new information system -- STAR -- that will enable us to manage, track, and access data relating to the real property inventory in a responsible manner. STAR is an adaptation of a system which AT&T uses to manage its real estate portfolio.

To ensure that our transition to STAR is efficient, we have asked the GSA Inspector General to audit our inventory data. This audit will consist of a detailed examination of all basic information on a statistically significant sample of the GSA inventory. The buildings will be physically measured, and this actual square footage will be checked against data in the existing information system for the building including the square footage used to determine lease payments and the square footage used to bill the tenant customer. The inventory verification audit will also include such other things as rental rates, space classification, and assignments. If the initial results of the Inspector General's review indicate the need, then we intend to expand the inventory verification to additional buildings using outside resources until we are satisfied that the data base is accurate.

As I have stated on previous occasions, our data systems are outmoded and as a consequence, much of our data retrieval and verification currently is a cumbersome and unwieldy process. It is critically important that as we transition to our new system, we have confidence in the base data. The inventory verification will provide us that confidence.

In addition to taking steps to ensure that our data are accurate and reliable, we are improving the way in which we evaluate the data. For example, over the past several months, we have put into place interdisciplinary, agency wide teams charged with examining such things as the rent forecasting system, the effect of downsizing, and strategic finance. We will look to the recommendations of these teams for long term improvements to our systems.

I have a weekly financial management meeting with the senior managers of PBS as well as GSA's Chief Financial Officer and Budget Director. Through PBS' new Chief Financial Officer's organization, we are conducting intensive quarterly reviews of monthly income and expense data from the regions, tracking our billing and collection systems continuously and are monitoring data on a monthly basis in order to identify trends quickly. Thus far in the current fiscal year, we are experiencing normal month to month fluctuations in our revenue. Our projections for the current fiscal year remain within reasonable tolerances.

Managing the Federal Buildings Fund to accomplish what Congress intended when it established the Fund in 1972 is not an easy task. The fact that our revenues for Fiscal Years 1996 and 1997 were significantly less than we had projected, while certainly unfortunate, has nevertheless been the catalyst for an in depth review of the Federal Buildings Fund and how we manage it in light of demands and fiscal constraints unforeseen in 1972. The improvements which we must make will not happen overnight. However, in conclusion, Mr. Chairman, I am confident that we are taking the right steps to improve the reliability of our revenue projections and our overall management of the Federal Buildings Fund.

Last Reviewed 2010-04-30