Summary: In 2003, the National Aeronautics and Space Administration (NASA) was authorized to demonstrate enhanced use leasing (EUL) at two centers, allowing the agency to retain the proceeds from leasing out underutilized real property and to accept in-kind consideration in lieu of cash for rent. NASA selected Ames Research Center and Kennedy Space Center for the demonstration program. The agency had requested that Congress extend this authority to additional NASA centers during formulation of the NASA Authorization Act of 2005. NASA's request was not granted. Instead, Section 710 of the NASA Authorization Act of 2005 (Public Law 109-155) directed GAO to review NASA's EUL program. We examined (1) the financial impact of the EUL authority on NASA and whether EUL revenue and other financial benefits would have been realized without the authority, (2) NASA's use of the authority and whether the arrangements made under the authority would have been made in the absence of the authority, and (3) what controls are in place to ensure accountability and transparency and to protect the government. The act also directed GAO to report back to the Congress by December 30, 2006. We presented our preliminary findings to Congress in December 2006. Because of Congress's interest in how NASA is implementing its EUL authority, we are enclosing the full briefing that supported that December presentation with this report, along with a summary of our findings and conclusions.
Although EUL authority provides NASA with increased flexibility in managing its real property, it also increases the need for effective controls and monitoring to ensure that the government's interests are protected. Without measures of effectiveness, criteria for determining best economic value, and adequate accounting controls and processes, it will be difficult for NASA to ensure that EUL is the best option for each instance in which EUL is used and that the purpose of the law providing NASA with EUL authority is met. In addition, when EUL funds and their use are not transparent within the agency's budget, congressional decision makers face a knowledge gap relative to monitoring NASA's EUL activities. Improved transparency would provide the Congress with a more complete basis for assessing NASA's wants and needs. If the EUL program is to be expanded, NASA needs to develop an agency wide policy that ensures accountability, protects the government, and provides transparency regarding the agency's EUL activities.
