Army Corps of Engineers: Better Alignment with Key Practices Would Improve Management of Real Estate Administrative Fees
Fast Facts
The Army Corps of Engineers manages the real estate at its infrastructure projects nationwide that businesses, state governments, and others can work with the Corps to use. For example, a business can lease land on a lake to run a marina.
Users pay fees to the Corps to cover the costs of reviewing real estate use proposals and oversight—but some users have raised concerns about the fees' consistency and transparency.
We recommended addressing some problems with fee management. For example, the Corps uses inconsistent methods to set the fees, doesn't regularly review or update them, and often doesn't post information about them on its websites.
A utility company’s power line at the Corps’ Addicks Reservoir in Houston, Texas.
Highlights
What GAO Found
The U.S. Army Corps of Engineers (Corps) charges real estate administrative fees (administrative fees) to public and private entities that are issued leases, licenses, or easements to use Corps-managed property. These uses may include privately operated marinas on lakes and power lines crossing canals or rivers. The administrative fees cover expenses incurred by the Corps related to, for example, approving and overseeing these uses. Most of the work of managing administrative fees is handled by the Corps' division and district offices.
Examples of Nonfederal Uses of Real Estate at Corps-Managed Property
In reviewing division and district practices for managing administrative fees, GAO found that the Corps does not consistently follow key practices for user fees, as described below:
- The Corps uses inconsistent inputs to set fees. Selected districts generally set administrative fees by estimating the costs the Corps incurs using activity, time, and labor inputs. However, the specific inputs used to estimate costs differed across districts. For example, two selected districts include the cost of compliance inspections while the other four do not, which may result in disparate fees across districts for similar real estate transactions.
- The Corps does not regularly review and update fees. Almost none of the selected divisions and districts regularly reviewed and, as appropriate, updated administrative fees. Officials from one district noted that as a result, its fee amounts have not kept up with increases to its costs.
- The Corps does not consistently share information with the public. Less than half of the selected divisions and districts posted administrative fee information—including the amount of the fees—on their websites.
In most cases, GAO found that the Corps' agencywide policies for administrative fees lacked detail or direction to divisions and districts on how to set, review, and share information on administrative fees. By developing policies that better align with key considerations and practices, the Corps could improve the perceived equity and transparency of its administrative fees. For example, by regularly reviewing its fees, the Corps could better ensure it recovers its costs and does not significantly overcharge or undercharge payers. In addition, by sharing information on the fees on its websites, the Corps could make the purpose and amount of the fees transparent to the public.
Why GAO Did This Study
The Corps manages hundreds of civil works projects in the U.S. In addition, the Corps oversees over 65,000 uses of its real estate by individuals, businesses, and government entities nationwide. The Corps is authorized to charge fees to these users to cover the expenses it incurs in connection with entering into certain real estate transactions.
GAO was asked to review how the Corps manages administrative fees. This report examines the extent to which the Corps follows key practices for (1) setting fees, (2) reviewing and updating fees, and (3) sharing information about fees.
GAO reviewed policy documents and interviewed officials from Corps' headquarters and selected divisions and districts. The three selected divisions collected the most fees in fiscal years 2018–2022, and the six selected districts had the highest number of fee payers for the same fiscal years. GAO also interviewed a sample of fee payers. GAO compared the information collected to key considerations and practices in GAO's design guide for federal user fees and other federal guidance.
Recommendations
GAO is making six recommendations, including that the Corps require divisions or districts to set administrative fees in a consistent manner, regularly review fees, and post fee information on their websites. The Corps agreed with five of the recommendations and partially agreed with one. GAO continues to believe that recommendation is valid as discussed in the report.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Assistant Secretary of the Army for Civil Works should ensure the Chief of Engineers and the Commanding General of the U.S. Army Corps of Engineers develop an agencywide policy to provide details to divisions and districts on how to estimate costs to set real estate administrative fees consistently across the agency, such as defining the types of activities involved in managing real estate instruments to include when setting fees. (Recommendation 1) |
The Army concurred with this recommendation and said the Corps will implement it by developing policy that provides further details to Corps divisions and districts on the activities to be included in the calculation of administrative costs. In March 2024, the Corps shared its Corrective Action Plan to address these recommendations and is taking steps to implement this plan. When we confirm what actions the Corps has taken in response to this recommendation, we will provide updated information.
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| Department of Defense | The Assistant Secretary of the Army for Civil Works should ensure the Chief of Engineers and the Commanding General of the U.S. Army Corps of Engineers develop or update, as appropriate, cost tracking processes to more fully capture data on actual costs of real estate activities for standard real estate administrative fees. (Recommendation 2) |
The Army concurred with this recommendation and said the Corps will implement it by utilizing the Corps' existing systems for cost tracking to capture data on its actual costs to enter real estate transactions that are for private exclusive use of federal property. In March 2024, the Corps shared its Corrective Action Plan to address these recommendations and is taking steps to implement this plan. When we confirm what actions the Corps has taken in response to this recommendation, we will provide updated information.
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| Department of Defense | The Assistant Secretary of the Army for Civil Works should ensure the Chief of Engineers and the Commanding General of the U.S. Army Corps of Engineers develop an agencywide policy to require divisions or districts to regularly review and, as appropriate, update their real estate administrative fees, including specifying what reviews should entail and the frequency of reviews. (Recommendation 3) |
The Army concurred with this recommendation and said the Corps will implement a policy to address the recommendation. In March 2024, the Corps shared its Corrective Action Plan to address these recommendations and is taking steps to implement this plan. When we confirm what actions the Corps has taken in response to this recommendation, we will provide updated information.
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| Department of Defense | The Assistant Secretary of the Army for Civil Works should ensure the Chief of Engineers and the Commanding General of the U.S. Army Corps of Engineers develop a process to periodically provide opportunities for stakeholder input on real estate administrative fees. (Recommendation 4) |
The Army partially concurred with this recommendation, stating that providing opportunities for stakeholder input on administrative fees makes sense when it has the flexibility to charge less than its full administrative costs (e.g., for uses that provide a public benefit, such as parks) but not when it must charge its full costs (e.g., for exclusive uses such as access to a private dock). The Army said the Corps will develop a process to receive feedback from stakeholders related only to real estate transactions that serve a public or project purpose. GAO maintains the recommendation is warranted. Opportunities for stakeholder input could be beneficial even for private exclusive uses because they would allow users to provide input on the Corps' management of aspects of fees other than their amounts, such as how the Corps informs users about the fees and which payment methods it allows. When we confirm what actions the Corps has taken in response to this recommendation, we will provide updated information.
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| Department of Defense | The Assistant Secretary of the Army for Civil Works should ensure the Chief of Engineers and the Commanding General of the U.S. Army Corps of Engineers develop an agencywide policy to require divisions and districts to provide information about real estate administrative fees on their websites to include available fee schedules, lists of real estate instruments requiring administrative fees, and methodologies used to set administrative fee charges. (Recommendation 5) |
The Army concurred with this recommendation and said the Corps will develop a policy to address this recommendation. In March 2024, the Corps shared its Corrective Action Plan to address these recommendations and is taking steps to implement this plan. When we confirm what actions the Corps has taken in response to this recommendation, we will provide updated information.
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| Department of Defense | The Assistant Secretary of the Army for Civil Works should ensure the Chief of Engineers and the Commanding General of the U.S. Army Corps of Engineers develop an agencywide policy to require districts to provide information to payers of real estate administrative fees that describes the purpose of the fee being charged, the activities being performed related to their real estate instrument, and, when possible, a breakdown of the total amount being charged. (Recommendation 6) |
The Army concurred with this recommendation and said the Corps will develop a policy to address the recommendation. In March 2024, the Corps shared its Corrective Action Plan to address these recommendations and is taking steps to implement this plan. When we confirm what actions the Corps has taken in response to this recommendation, we will provide updated information.
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