Questions for the Record:

Hearing on the Judiciary's Ability to Pay for Current and Future Space Needs

GAO-05-941R: Published: Jul 27, 2005. Publicly Released: Jul 27, 2005.

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On June 21, 2005, we testified at the Subcommittee on Economic Development, Public Buildings, and Emergency Management Committee on Transportation and Infrastructure's oversight hearing on the judiciary's ability to pay for current and future space needs. This report responds to a June 23, 2005, request in which Congress asked additional questions about the Federal Buildings Fund (FBF) and the judiciary's efforts to manage its space needs. To respond to these questions, we primarily relied on our previous work and knowledge of these areas. We prepared this response during June and July 2005 in accordance with generally accepted government auditing standards. Because our response is primarily based on previously issued products, we did not seek agency comments on a draft of this report.

As we reported in 1995, flexible design guidance refers to the wide latitude the General Services Administration (GSA) and the judiciary had in choosing the location, design, construction, and finishes of courthouse projects. These choices significantly affected courthouse construction costs. Because of such choices, some courthouses had more expensive materials or costly design configurations and enhancements than other courthouses. This flexibility contributed to large degrees of uncertainty and variability in courthouse construction budgets. We have not formally evaluated the overall effectiveness and/or organizational placement of the Courts Management Group within GSA's Office of the Chief Architect. However, we have recognized that the creation of such an office is important to bringing more focus and discipline into the courthouse planning, funding, and construction process. We have found that rent caps, or restrictions, have had a serious, detrimental impact on the ability of the Federal Buildings Fund (FBF) to finance the government's real property asset management needs. Since the early 1980s, we have repeatedly noted that rent exemptions, such as those instituted at various times by OMB and Congress, have contributed to shortfalls in FBF. In a 1989 report, we described the restrictions as a principal reason why FBF has accumulated insufficient money for capital improvements, and we recommended the elimination of all rent restrictions. As discussed on July 15, 2005, with the office of the Subcommittee on Economic Development, Public Buildings, and Emergency Management, we are pursuing the following three objectives. (1) How are rent payments calculated by GSA and planned and accounted for by the judiciary? (2) What trends has the judiciary experienced in rent payments and space needs in recent years? (3) What challenges, if any, does the judiciary face in managing its need for space to accomplish its mission? Federal landholding agencies we reviewed have not historically received enough funding to meet their federal real property management needs. These agencies commonly have sizable deferred maintenance backlogs that are continually increasing because of insufficient funding for facility maintenance. In 1995, we reported that GSA and the judiciary have processes to identify needs and to propose courthouse construction projects; however, they had not developed and implemented a strategic capital investment plan that (1) puts projects in some longterm strategic context, (2) sets priorities among competing projects, and (3) identifies short- and long-term project funding needs. While the judiciary's cost-containment initiatives could be a step forward, we believe our original 1995 recommendation to implement a strategic capital investment plan is still relevant. Additionally, our 1997 analysis of actual courtroom use for trials and nontrial activities at seven locations suggested there may be opportunities to reduce costs by building fewer full-sized trial courtrooms through implementing courtroom sharing. Our prior reports have shown that rent payments have provided a relatively stable, predictable source of revenue for FBF, but that this revenue has not kept pace with demands. All of the excerpts AOUSC quoted from our reports were accurate, but they did not reflect the full breadth of the issues related to federal real property management included in those products. GAO has not developed criteria for determining effective courtroom utilization, but we have recommended that the judiciary do so.

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