Federal Real Property: Progress Made in Reducing Unneeded Property, but VA Needs Better Information to Make Further Reductions

In our September 2008 report we estimated that VA spent about $481,000 each day on maintaining underutilized and vacant property. We also found that VA had not developed its own estimate and therefore did not know how much it was spending on maintaining underutilized and vacant property; money that could be better spent providing healthcare services to veterans. To provide VA with an accurate picture of what it spends annually to maintain these unneeded properties, and a benchmark from which to which to work in decreasing these costs, we recommended that VA develop an annual cost estimate. In response to the recommendation, VA has taken several actions. First, it analyzed over 5 years worth of data to determine the operating cost of buildings per square foot. It then evaluated specific vacant buildings to determine maintenance costs because VA believes that operating underutilized buildings is significantly different than operating vacant buildings. Finally, using this data, VA can calculate annual maintenance costs at the system wide as well as at the building level. VA now has a benchmark from which to work in decreasing the costs of maintaining vacant and underutilized property.

In September 2008, we found that the Department of Veterans Affairs (VA) did not collect or maintain comparable building-level data by fiscal year on building characteristics such as utilization, condition, and age, and therefore was unable to determine trends related to the reductions in underutilized and vacant space at the building level. We further reported that this information could help VA conduct analysis to prioritize assets based on their importance to mission and to identify assets for disposal. We therefore recommended that VA collect and maintain building-level data by fiscal year in order to correlate characteristics associated with underutilized and vacant buildings and identify unneeded assets. In response to our recommendation, in Fiscal Year 2009, VA implemented use of the "Business Intelligence Tool" a database that allows VA to collect building-level data by fiscal year for each of its properties. The implementation of this new database allows VA to track comparable building-level data by fiscal year on several building characteristics, including information on a building's condition, historical status, age, and utilization measure. As a result of this action, VA is able to complete detailed trend analysis of its vacant and underutilized properties to identify unneeded assets and to track reductions in underutilized and vacant space at the building level.

In September 2008, we found that the Department of Veteran Affairs did not track the extent to which its use of legal authorities, such as its authority to enter into Enhanced Use Lease (EUL) agreements, contributed to reductions in underutilized or vacant space. As a result, the cumulative effect of VA's use of these authorities was largely unknown. We therefore recommended that VA track, monitor, and evaluate square footage reductions and financial and non-financial benefits of new agreements as of fiscal year 2008. In fiscal year 2009, VA implemented use of the Business Intelligence Too which is a database that allows VA to collect several building-level data by fiscal year, including data related to existing EUL or other types of agreements. Further, the database also allows VA to track revenue associated with existing agreements, shared square footage, estimated costs to the government, and estimated cost avoidance to the government. According to VA officials, as a result of collecting this additional information, VA is able to measure monetary and other benefits resulting from the use of VA's legal authorities and the overall effect of its efforts to reduce underutilized and vacant property.