SITE ACQUISITION PRACTICES In a May 1968 report to the Congress on "Revised Practices Needed for Acquiring Control of Sites for Leased Postal Facilities (B-153129)" we pointed out that improvements were needed in the management controls over the program. The needed improvements related to the --establishment of criteria for studies of the feasibility and costs of acquiring and operating facilities on alternative sites; --revision of policies and procedures relative to selec- --development of guidelines for reviews of real estate Subsequent to our report the Department's internal auditors Each of the above matters are discussed below. Criteria for studies of feasibility and costs of facilities on alternative sites The Department had not established criteria for studies of the feasibility and costs of facilities on alternative sites. Our review of 45 sites disclosed that only two such studies had been made. We concluded that postal officials would have had greater assurance of constructing facilities at the lowest cost if the Department had established (1) guidelines as to when studies should be made of the feasibility and costs of acquiring and operating facilities on alternative sites, and (2) specific criteria regarding the factors to be considered in making and using such studies. The Department did not concur with our conclusions. The Deputy Postmaster General stated that the Department had followed a consistent policy of making economic feasibility studies in all instances where any serious questions of such feasibility existed and that the Department did not believe further specific criteria or guidelines for making studies of the feasibility and costs of acquiring and operating facilities on alternative sites were necessary, desirable, or practical. Subsequent to our review, several reports issued by the Department's internal auditors have dealt with the issue of considering alternate sites. In a report on the Denver Region-issued in March 1969--the internal auditors found that for each of eight of the 12 projects reviewed, only one site option was obtained for each project. The auditors pointed out that in many instances other available parcels of land may not have received full consideration. In two other internal audit reports--issued in July 1969 on the St. Louis Region and in February 1970 on the Memphis Region--the internal auditors pointed out that regional officials often passed up other acceptable sites in order to obtain sites located in main business districts. The auditors pointed out that the real estate officers--in selecting sites-should have considered the direction of population growth in order to obtain more acceptable sites away from the congested business districts. Policies and procedures relative to selection and control of sites for new postal facilities The Department procedures for selecting and acquiring control of sites for new postal facilities did not conform with practices commonly used by other Federal agencies. The Department (1) relied on estimates of property values prepared by individual employees and had permitted the same individuals to negotiate purchase options; (2) did not make independent reviews of the estimates before purchase options were negotiated; and (3) had no assurance that the realty survey analyses (appraisals) prepared by the real estate officers usually contained the documentation needed to demonstrate the reasonableness of the purchase option prices negotiated. We recommended certain revisions to the Department's policies and procedures. The Department did not concur with our findings; however, the Deputy Postmaster General stated that the Department would attempt to make its instructions and requirements for making and preparing appraisals more specific. Requirements for review of regional real estate transaction documents The Department had not specified detailed requirements for reviews of regional real estate transaction documents and, in many cases, reviewers at regional and headquarters levels had reached decisions or made recommendations without requiring real estate officers to supply complete and adequate data in support of proposed real estate actions. We recommended that, to insure implementation of the policy that real estate actions not be approved unless there was complete and convincing support for the actions proposed, the Department develop guidelines for reviews of real estate files by officials at regional and headquarters levels. The Deputy Postmaster General stated that the Department would take action to develop guidelines for management reviews of real estate transaction documents. He stated also that consideration would be given to providing additional personnel to review regional real estate files and cases. Subsequent to our review, the Department's internal auditors examined the real estate files in the Boston Region and found that regional files were not maintained in a satisfactory manner. In a June 1970 report, the auditors reported that separate files were maintained by the three branches concerned in the space acquisition program and that files in any one branch did not fully document the history of the project. The auditors pointed out that the files contained an unorderly collection of forms, letters, plans, and other correspondence including duplicate copies which served only to clutter up the file folders. It was recommended that the files pertaining to space acquisition be reviewed as a special project in order to establish a standard system for filing pertinent documentation and eliminating unnecessary and duplicate data. DEPARTMENT-CORPS OF ENGINEERS AGREEMENTS FOR ACQUISITION OF POSTAL FACILITIES EVENTS LEADING TO DEPARTMENT-CORPS AGREEMENTS In early 1969, the Postmaster General began to evaluate the problems facing the Department and concluded that a fairly substantial investment in new plant and equipment was needed. Plans were being developed by the Department which would result in the construction of a network of separate facilities, specifically designed for the efficient handling of parcels and sacks of nonpreferential second- and thirdclass mail. The Department estimated that the construction of the bulk mail facilities would enable the existing post offices to concentrate on important letter mail and would result in estimated annual savings of about $310 million once the bulk mail system was in operation. The planned bulk mail system would consist of 21 major facilities and 12 satellite facilities at an estimated cost of about $1 billion. It was planned that the 33 units of the system would be in full operation during fiscal year 1975. Separate mail handling facilities were also being planned for preferential mail. The Postmaster General was of the opinion that the Department did not have an organization capable of completing, within a reasonable span of time, the construction of the large scale modernization program needed. Accordingly, he began discussing his problem with the Corps and GSA. |