GSA schedule revenue reserves draw scrutiny


A new inspector general report questions how much revenue the General Services Administration is setting aside for operations and future investments.

GSA Federal Acquisition Service (FAS) officials say the agency hasn’t met its goals for funding reserve accounts that pay for administering, managing and improving the schedule program. But the account thresholds have not been reviewed in several years and may not reflect actual needs, according to a report released last week by the GSA deputy assistant inspector general for acquisition audits.

The inspector general last audited GSA’s revenues – earned by charging agencies for use of its schedule contracts – in 1999.

GSA then reviewed its accounts in fiscal 2004 and returned $92 million in excess funds to the U.S. Treasury, the report states. The 2004 review also led GSA to lower the fee it charges agencies for using its schedule contracts from 1 percent of schedule sales to 0.75 percent, the report states.

The agency’s plan for funding its reserve accounts recommends that up to 8 percent of revenues be retained to pay for current needs and potential risk, and up to 4 percent be retained for future investments before money is returned to the Treasury, FAS Commissioner Steve Kempf said in a written response to the report. Currently, the account balances have not met those thresholds, Kempf said.

FAS had $688 million in its reserve accounts as of September 2009, the report states.

Since the fee was reduced in 2004, revenue has not kept up with an increase in business costs on the schedule, Kempf said.

“If anything, given the trend of increasing growth of costs and decreasing growth of revenues, one might conclude that the fee customers are paying is actually too low,” he wrote.

The inspector general’s office is not convinced that FAS has checked to make sure those thresholds are appropriately set, said Ted Stehney, assistant IG for auditing.

 “We hear what they’re saying but it doesn’t go far enough,” he said. “It doesn’t satisfy us.”


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  1. Is GSA Application Services owned by James Dale Sprecher? Was he arrested at least four times for falsifying official records, fraud, money laundering and RICO? Was he sentenced to eighteen months in federal prison for some or all of the above? Was he sentenced to pay more than three million dollars restitution to his fraud victims?

    Or is GSA Application Services owned by his son, Phillip Louis Sprecher? Was the younger Sprecher arrested at least eight times in the past ten years, for multiple heroin and marijuana charges? Was he labeled a ‘habitual offender’ in 1996?

    If PharmaSource partners with criminals, what does that say about PharmaSource’s ethics and judgment?

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