The IRS spends some $600 million on real estate costs annually but is using only two-thirds of its available workstations, creating an opportunity for as much as $80 million in savings over five years, an IG report has said.
The audit was a follow-up to a previous one on opportunities for reducing leased office space in the wake of staff reductions, telework and increased sharing of workspaces. It said that since early 2012, the agency has reduced its workspace by about 8 percent, about 2 million square feet, through closing or consolidating 127 office spaces.
The review said that in 16 states there still are five or more buildings with workstation occupancy rates of half or less. In addition to savings on leased space, there is potential for associated savings on items such as furniture and equipment, it said.
“According to IRS officials, the retention of underutilized workspaces can be attributed in part to executives’ varied levels of support for the practice of workspace sharing. Also, internal factors such as substantial errors in real estate system records and a flawed methodology used to develop space requirements that does not incorporate workspace sharing or hoteling effectively have constrained space consolidation efforts. External challenges such as reduced budgetary resources, which are necessary to support the costs of closing or consolidating office space, have also limited the IRS’s progress,” it said.
It said that management generally agreed with recommendations to set annual space reduction goals agency-wide and at lower levels and to incentivize management to achieve those goals.