Budget Scorekeeping Prompts Difficult Decisions
T-AIMD/GGD-94-43: Published: Oct 28, 1993. Publicly Released: Oct 28, 1993.
GAO discussed the budget implications of financing the acquisition of federal office space. GAO noted that: (1) the two predominant obstacles to capital investment in federal real property are the General Services Administration's (GSA) lack of a strategic asset management plan for its real estate inventory and resource constraints that force GSA to make short-term leases instead of pursuing ownership; (2) office space leases are a costly alternative to ownership over the long term, particularly when permanent government activities and special purpose facilities are involved; (3) GSA cannot take advantage of long-term leases with purchase options because budget scorekeeping rules treat such leases as purchases; (4) the Federal Building Fund does not have sufficient cash to finance property acquisitions; (5) changing budget scorekeeping rules to allow GSA to consider leases with purchase options could have unfavorable consequences on other financial objectives; and (6) changing the scoring of operating leases to recognize all long-term costs would better promote the most cost-effective alternatives.