Federal agencies spend some $7.4 billion a year to purchase heavy equipment but are not fully considering whether some of that could have been leased instead, GAO has said.
“Federal regulations provide that agencies should consider whether it is more economical to lease or purchase equipment when acquiring heavy equipment, and federal internal control standards require that management clearly document all transactions in a manner that allows the documentation to be readily available for examination,” a report said. However, in reviewing selected leases and purchases of heavy equipment from these three agencies, GAO found that officials did not consistently conduct or document lease-versus-purchase analyses.
Of the 24 agencies GAO reviewed, 20 reported owning over 136,000 heavy equipment items such as cranes, backhoes, and forklifts. DoD owned about three-quarters of that total, followed by Agriculture, Interior and the VA.
GAO looked in-depth at the Air Force, Fish and Wildlife Service and National Park Service, which together spent about $360 million in purchases over 2012-2016, compared with only $5 million in lease expenses over that time. It found that officials “did not consistently conduct or document lease-versus-purchase analyses. Officials at the Air Force and Interior said that there was a lack of clarity in agency policies about when they were required to conduct and document such analyses. Without greater clarity on when lease-versus-purchase analyses should be conducted and documented, these agencies may not be spending funds on heavy equipment effectively.”
DoD and Interior concurred with recommendations that they should clarify the circumstances in which lease-versus-purchases analyses for heavy equipment acquisitions are to be conducted and documented.
FEMA Pressed on Response to IT-Related Recommendations
In the latest of the increasing efforts to hold agencies to their promises to comply with IG recommendations, auditors have issued a management alert calling for more attention by FEMA to IT issues raised in a series of reports dating to 2005.
FEMA has made only “limited progress” toward addressing those issues, and many of those problems “remain unchanged, with adverse impact on day-to-day operations and mission readiness,” the IG of the agency’s parent department, DHS, has said.
It said for example that FEMA has issued six compliance reports on five recommendations of a late 2015 audit but that only one of those, relating to implementation of an IT governance board charter, was closed as completed. “Especially disconcerting, our recent work revealed that the justification that FEMA provided to support our closing [that] recommendation was misleading, as governance board procedures had not truly met the intent of the recommendation,” it said.
“Given these deficiencies, we are suspending our verification review and will initiate a more comprehensive audit of FEMA’s IT management approach,” the IG said.