General Services Commission
A Follow-Up Audit Report on Management Controls at the General Services Commission
February 1999
Report Number 99-029
Overall Conclusion
The General Services Commission (Commission) has made little progress in correcting longstanding problems in critical operations since the issuance of An Audit Report on Management Controls at the General Services Commission (SAO Report Number 97-080, August 1997). Problems in the key areas of cost recovery, construction management, and procurement continue despite the fact they have been brought to management's attention repeatedly over the last six years.
Many of the outstanding issues reflect management's inability to improve the quality and cost-effectiveness of the goods, facilities, and services the Commission provides to other state agencies. This is concerning because the Commission's primary role in state government is to provide support services for other state agencies. The Commission received over $81 million from selling a variety of goods and services to other state agencies in addition to its $100 million in appropriations during fiscal year 1998.
Key Facts and Findings
The Commission has accumulated a combined fund balance of approximately $32 million as of August 31, 1998. The Commission's revolving fund accounts include a surplus balance of approximately $19.2 million, $8.6 million of which is available after allowing for a $10.5 million cushion for working capital.
The Commission continues to have problems managing construction schedules and budgets, following good business practices, and improving client relations because it has not developed basic construction project management processes. Without a project management system, the Commission cannot determine when to take actions to mitigate the effects of time and cost overruns. At the time of our review, the Commission was responsible for managing construction projects valued at $355 million.
- The Commission may be missing opportunities to save the State money because procurement trends are not formally evaluated to ensure the State takes full advantage of volume buying to obtain lower prices. This type of analysis should be an expected practice for the State's central procurement officer.
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