[Audit Report on the Servicewide Media Program, National Park Service]
[From the U.S. Government Printing Office, www.gpo.gov]
Report No. 97-I-1304
Title: Audit Report on the Servicewide Media Program, National
Park Service
Date: September 30, 1997
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******************************
United States Department of the Interior
MEMORANDUM
TO:
FROM:
SUBJECT SUMMARY: Final Audit Report for Your information - "Servicewide Media
Program, National Park Service" (No. 97-I-1304)
Attached for your information is a copy of the subject final audit report. The objective of
the audit was to determine whether the National Park Service's Harpers Ferry Center
operated the Servicewide Media Program efficiently and effectively and in compliance with
applicable laws, regulations, and guidance.
We found that the Center could be operated in a more efficient and effective manner if
actions were taken to strengthen administrative controls and to implement cost-saving
measures. Specifically, we found that the Center needed to maintain more accurate inventory
records on audiovisual equipment; transfer custodial responsibility for audiovisual equipment
to the parks; cancel its warehouse lease because the space was not needed; use competitive
procurement procedures, when appropriate, in placing orders under indefinite-quantity
contracts; and obtain better information on supplies of park brochures before printing
additional copies. We estimated that the Park Service could save about $204,000 annually
by transferring responsibility for audiovisual equipment to the parks and by canceling the
warehouse lease. Also, the Center could reduce costs by using competitive procurement
practices in placing orders under indefinite-quantity contracts and could use funding for
publications more effectively if more complete information were obtained on replenishment
requirements.
The Park Service did not provide a formal response to the report. Therefore, we considered
the report's seven recommendations to be unresolved.
If you have any questions concerning this matter, please contact me at (202) 208-5745 or
Mr. Robert J. Williams, Assistant Inspector General for Audits, at (202) 208-4252.
Attachment
E-IN-NPS-002-96
United States Department of the Interior
OFFICE OF INSPECTOR GENERAL
Washington, D.C. 20240
AUDIT REPORT
Memorandum
To: Assistant Secretary for Fish and Wildlife and Parks
From: Robert J. Williams
Assistant Inspector General for Audits
Subject: Audit Report on the Servicewide Media Program, National Park Service
(No. 97-I-1304)
INTRODUCTION
This report presents the results of our audit of the National Park Service's Servicewide
Media Program. The objective of the audit was to determine whether the Park Service's
Harpers Ferry Center operated the Servicewide Media Program efficiently and effectively
and in compliance with applicable laws, regulations, and guidance.
BACKGROUND
The Harpers Ferry Center, at Harpers Ferry, West Virginia, coordinates the National Park
Service's Servicewide Media Program and provides a wide range of informational media
products and services for use throughout the national park system. During 1996, the Center,
using in-house and/or contractor personnel, designed, planned, and supervised more than
1,000 new or ongoing projects for the construction of museum, visitor center, and wayside
exhibits; arranged the purchase and/or transfer of museum objects to furnish historic
structures; produced motion pictures, video programs, and sound recordings at Audiovisual
Centers in Harpers Ferry and Denver, Colorado; and produced 29.5 million copies of park
folders, maps, educational charts, and posters. The Center also purchases and repairs all
audiovisual equipment for the parks, maintains the inventory records for approximately
15,000 items of original art and 17,800 pieces of audiovisual equipment, and maintains a
library of 80,000 audiovisual and historical reference materials.
The Center's fiscal year 1996 budget was about $35.1 million, which consisted of Operation
of the National Park Service appropriation funds of $12.3 million (Center base funding of
$11.6 million and park reimbursements of $700,000) and no-year funds (carry-over funds
from prior-year appropriations) of $22.8 million (Park Service Construction appropriation
funds of $14.5 million; donation account funds of $3.8 million; and funds of $4.5 million
from reimbursable agreements with parks, other Departmental bureaus, and Federal and state
agencies). In fiscal year 1996, the Center spent $21.3 million to fund 164 full-time
equivalent positions, operate the Center, and obtain the services of about 65 contractors,
which designed, fabricated, and installed exhibits in the parks and produced park folders and
maps.
SCOPE OF AUDIT
The audit was made, as applicable, in accordance with the "Government Auditing
Standards," issued by the Comptroller General of the United States. Accordingly, we
included such tests of records and other auditing procedures that were considered necessary
under the circumstances.
In performing our audit, we examined financial and procurement records for fiscal years
1995 and 1996; reviewed project status reports; and interviewed program officials at Center
offices in Harpers Ferry and Charles Town, West Virginia. We also visited 10 Park Service
field locations, where we conducted physical inventories of audiovisual equipment and park
folders and maps, examined completed project work, and interviewed cognizant officials (see
Appendix 2).
As part of our audit, we evaluated the system of internal controls to the extent we considered
necessary. We found internal control weaknesses in the Park Service's administration of and
accounting for Center-owned audiovisual equipment and in its production of park brochures.
Our recommendations, if implemented, should improve the internal controls in these areas.
We also reviewed the Secretary's Annual Statement and Report to the President and the
Congress for fiscal year 1995, which is required by the Federal Managers? Financial Integrity
Act, and the Departmental Report on Accountability for fiscal year 1996, which includes
information required by the Act, and determined that no material weaknesses were reported
that directly related to the objective and scope of our audit.
PRIOR AUDIT COVERAGE
Neither the General Accounting Office nor the Office of Inspector General has issued any
audit reports in the past 5 years on the National Park Service's Servicewide Media Program.
RESULTS OF AUDIT
The National Park Service's Harpers Ferry Center needs to strengthen administrative controls
and implement cost-saving measures to improve the efficiency and effectiveness of its
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operations. Specifically, the Center needs to maintain accurate inventory records on
audiovisual equipment; transfer custodial responsibility for audiovisual equipment to the
parks; cancel its warehouse lease because the space is not needed; use competitive
procurement procedures, when appropriate, in placing orders under indefinite-quantity
contracts; and obtain better information on park requirements and inventories before
publishing park brochures.
We estimated that the Center could save about $204,000
annually by transferring responsibility for audiovisual equipment to the parks and by
canceling the warehouse lease. We also concluded that the Center could reduce costs by
soliciting competitive offers for items ordered under indefinite-quantity contracts and that
it could use its funding for publications more effectively if more complete information were
obtained on replenishment requirements.
Equipment Depot and Warehouse Operations
The Harpers Ferry Center operates a maintenance, repair, and replacement depot for all
audiovisual equipment. The depot's four full-time staff are responsible for: (1) processing
orders and shipping equipment to the parks; (2) tracking an inventory of 17,800 audiovisual
items; and (3) repairing and/or maintaining annually about 1,500 items that are returned to
the Center. The depot's fiscal year 1996 operating costs totaled about $406,000 for payroll
salaries and benefits ($258,000); repairs, replacement equipment, and shipping ($144,000);
and delivery services charges ($4,000). The $406,000 does not include any of the salary
costs of three other Center employees who provide additional support services or supervision
of staff.
We found that the Center did not operate its equipment depot and warehouse in an efficient
and effective manner. Office of Management and Budget Circular A-123, "Internal Control
Systems," requires Federal agencies to implement adequate controls to ensure that programs
and activities are conducted efficiently and effectively. Although the Center had adequate
controls for recording equipment acquisition, repair, and disposal, the Center did not ensure
that records were maintained accurately through periodic physical inventories and
reconciliations for audiovisual equipment, did not implement adequate controls to ensure that
equipment was repaired or replaced in a cost-effective manner, and incurred avoidable costs
for unneeded warehouse space. We estimated that the Center could save about $204,000
annually by transferring custody of audiovisual equipment to the parks ($120,000) and by
terminating a lease for warehouse space (about $84,000) (see Appendix 1).
Equipment Inventory Records. Physical inventories and record reconciliations are
necessary controls to ensure the existence and proper valuation of property. However, we
found that inventories requested by the Center were not conducted at all parks and that the
Center did not reconcile the results of physical inventories conducted by the parks with the
Center's property records. For example, in calendar year 1995, parks conducted only 33
percent (110 of 337) of the physical inventories requested by the Center. Also, at the time
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of our review, depot staff had not reconciled 58 of the 110 physical inventory reports
submitted to the Center in 1995. Although depot records showed that 65 (59 percent) of the
adjusted its inventory records to agree with the parks' records for only 7 of these 65 parks.
We noted discrepancies between the inventory records of the Center and the parks visited as
follows:
- The Harpers Ferry National Historical Park reported that it could not locate 32 (30
percent) of 106 items assigned to the Park but that it had located 54 other audiovisual items
(videodisc and videocassette players, televisions, and sound equipment), totaling at least
$11,000, that were not listed on the Center's inventory records. Center inventory records
showed that the Park had not completed an inventory since 1991.
- In a March 1996 memorandum to the Center, Friendship Hill National Historic Site
officials reported that they had only 7 of 20 laserdisc players that were listed on the Center's
inventory report but that they found 7 other players that were not listed on the Center's
report. The officials said that they could not locate the six remaining items, totaling $5,195.
The Center maintained two equipment databases, the official Park Service property system
("Prop System"), which tracks all equipment acquired by the Center, and a separate database
that is used to track audiovisual equipment sent to the parks. Depot personnel, however, did
not adjust either database to reflect the results of the physical inventories completed during
fiscal years 1995 and 1996. As a result, the audiovisual equipment inventory was not up to
date, and the data may not have been reliable.
Equipment Repair and Replacement. The Center's audiovisual equipment depot
provides lifetime repair or replacement of equipment purchased through the Center. When
notified of equipment failure, the depot ships a replacement item to the park, and the park
returns the defective item to the depot. At the depot, the item is either fixed or reshipped to
a contractor for repair.
We found that while the Center maintained logs on how equipment was repaired at the depot,
it did not maintain adequate records on the cost or frequency of equipment repair to
determine whether it was more cost effective to repair or replace equipment. Office of
Management and Budget Circular A-76 (Revised), "Performance of Commercial Activities,"
requires Federal agencies to determine whether services that are available in the commercial
sector should be performed in-house or by commercial sources. Although implementation
of the Circular is not required for operations of 10 or fewer people, as is the case with the
depot, we believe that the Center could use the Circular as a guide to evaluate alternatives
for audiovisual equipment services. During our review, depot personnel began to record the
amount of time spent on repair work in half-hour increments. However, because they did
not record the costs of supplies or materials used for individual repair jobs or the cumulative
cost of multiple repairs on the same item, the depot did not have the information needed to
determine whether it was more cost effective to perform repairs in-house or commercially
or to determine whether it was more economical to repair or replace items.
Streamlining Operations. We believe that the Center could streamline operations
and possibly reduce costs by consolidating and/or transferring certain functions to the parks.
Currently, the Center orders, receives, and tracks audiovisual-equipment, which it inspects
and ships to the parks as needed. The Center also receives broken or damaged audiovisual
equipment from the parks and either repairs the equipment in-house or ships it to a
commercial repair facility. To perform these functions, the Center incurs equipment
transshipping expenses of about $30,000 a year and employs an inventory
procurement/database clerk (annual salary of about $3 1,000 a year), two shipping and
receiving clerks (annual salaries totaling about $59,000 a year), and a repairman (annual
salary of about $41,000 a year). In our opinion, the Park Service could streamline the
audiovisual equipment purchasing and repair functions if the parks directly ordered and
arranged for the repair of their audiovisual equipment. The Park Service could achieve
annual savings of $120,000 by eliminating the cost of storing, tracking, and shipping items
from the Center to the parks and the salaries of the Center employees who inventory, inspect,
track, and ship the equipment.
Warehouse Operations. Under a lo-year lease signed in July 1990, the Center leased
14,440 square feet of warehouse space in Charles Town to receive merchandise and to store
publications, film, and travel exhibits. When we visited the leased facility in March 1996,
only about one third of the space was in use. A Center official said that equipment which
was declared excess in 1995 had been removed from the warehouse and that the remaining
items were either obsolete or no longer in use. In addition, the Center transferred the
warehouse's receiving function to another facility in May 1996.
We believe that continued use of the warehouse facility is not cost effective. Based on a
physical review of the premises, we estimated that less than 10 percent of the space was
being used and that the remaining inventory at the warehouse could be either disposed of or
moved to existing depot facilities. Since there is no charge for terminating the lease at this
time, the Park Service could save an estimated $83,628 a year (the 1996 annual lease
payment) if the lease was canceled.
Indefinite-Quantity Contracts
The Park Service often bought media program products and services (such as exhibit
planning, design, fabrication, and installation) by awarding indefinite-quantity contracts.
These contracts provided for labor and materials at fixed rates and costs. When making a
purchase, the Center would request that an indefinite-quantity contractor submit a fixed price
proposal using Center specifications. Based on the proposal, the Center would place an order
for the needed item or service at a fixed price.
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The Federal Acquisition Regulation (48 CFR 16.5) states, "Indefinite-quantity contracts may
be used to acquire supplies or services when the exact times and/or exact quantities of future
deliveries are not known at the time of contract award." The Regulation also requires that
indefinite-quantity contracts specify the minimum and maximum quantities and amounts that
can be ordered and include a statement of work, specifications, or other description "that
reasonably describes the general scope, nature, complexity, and purpose of the supplies or
services to be acquired under the contract."
We found that, in general, the Center complied with Federal Acquisition Regulation
provisions governing the use of indefinite-quantity contracts. However, we believe that, in
some instances, the Center could decrease acquisition costs by using competitive
procurement practices to obtain media program products and services. In placing an order
against an indefinite-quantity contract, the Center typically solicited a proposal from one
contractor and accepted the proposal without revision as long as the proposed cost was
within the range of the Government estimate. If the contractor's proposed cost exceeded the
Government estimate, additional justification for the increased costs generally was obtained.
In fiscal years 1995 and 1996, the Center placed 35 indefinite-quantity contract orders, each
over $60,000, of which only 3 were awarded competitively. There was no record in the
procurement files to show why 32 of the orders were not placed competitively. We found
that when the Center used competitive procurement practices, the indefinite-quantity
contractors, which provided comparable time and material prices, submitted proposals that
varied widely in total cost. For example:
- The Center requested bids for the fabrication, transportation, and installation of all
exhibits at the visitor center at Natural Bridges National Monument. The Center received
seven bids ranging from $78,766 to $123,279 from indefinite-quantity contractors and placed
the order with the lowest bidder, whose bid was $44,5 13 less than the highest bid.
- In response to an invitation for bids, 10 indefinite-quantity contractors submitted
proposals ranging from $68,273 to $138,727 for the fabrication and installation of exhibits.
The Center placed the order with the lowest bidder, whose bid was $70,454 less than the
highest bid.
We believe that the Center could achieve additional savings by combining orders and using
competitive procurement practices. We found that the Center often placed separate orders
with the same indefinite-quantity contractor for an exhibit's planning, design, and oversight
of the fabrication and installation of the exhibit. In such cases, the initial order was for a
relatively small amount, but subsequent orders placed noncompetitively with the same
contractor significantly increased the total amount of the procurement. For example, the
Center requested a proposal from one indefinite-quantity contractor for the planning phase
of three projects (a Lake Mead National Recreation Area project for $10,475, a Jean Lafitte
National Historical Park and Preserve project for $979, and a Holocaust Memorial Museum
project for $1,372). Subsequent awards to the sarne contractor for the latter phases of these
projects increased the total cost to $475,212 ($112,599 for the Lake Mead, $199,279 for the
Jean Lafitte, and $163,334 for the Holocaust Museum projects). In our opinion, the
cumulative cost of these three projects warranted the use of competitive procurement
practices.
We also found two instances in which the Center modified two contracts to include a new
service, the processing of digital map files, that was not included in the original statement
of work of either contract. Subsequently, the Center paid the contractors a total of $542,000
over a 3-year period to process the map files. Considering the substantial cost of this work,
we believe that the Center should have advertised this new requirement and awarded
separate contracts to provide for the service.
Park Brochures
The Center needs to improve controls over the production of brochures distributed to park
visitors to ensure that the limited funds available for visitor publications (funds of
$2.5 million were spent on publications in fiscal year 1996) are used effectively. According
to fiscal year 1997 Park Service budget documents, funds were available for printing only
one brochure for every 16 park visitors. However, the Center was able to use fiscal year
1996 funds transferred from other Center divisions to produce an average of one brochure
for every nine park visitors (the average ratio for the past 10 years).
The Center requires each park to submit a Free Informational Publications - Semiannual
Inventory Report, which provides data on the current inventory, the number of brochures
distributed during the past 6- and 12,month periods, the next replenishment date, the
brochure-to-visitor ratio, and other information such as inventory levels. The Center uses
the report to evaluate and rank requests for reprints and revisions. However, we found that
only 81 (25 percent) of 323 sites that received brochures submitted the required reports for
the 6-month period ending September 30, 1995, and that only 59 (18 percent) of the sites
submitted the reports for the following 6-month period. Instead, Center staff made followup
contacts by telephone or electronic mail but did not complete the semiannual report or obtain
all of the required information needed to manage brochure production. Management officials
at 7 of the 10 parks we visited said that they were unaware of the requirement to submit the
reports.
We believe that the practice of obtaining data from the parks by telephone and electronic
mail places an unnecessary burden on the Center. Furthermore, because complete and
consistent information on park brochure use and supplies was not obtained, the Center did
not always have sufficient information to make an informed decision on the number of
copies that should be printed and may have published unneeded materials. For example, the
Center printed a l-year supply of brochures for the Minute Man National Historical Park in
June 1996, even though the Park had not submitted the required reports. We visited the Park
prior to the shipment and determined that the Park already had a l-year supply of the
brochures in stock. Also, Center staff did not have the authority to refuse requests from
parks. We believe that the Park Service should ensure that all parks submit the required
reports to the Center and that the Center be authorized to reject printing requests if the
reports are not received.
Recommendations
We recommend that the Director, National Park Service, require the Manager of the Harpers
Ferry Center to:
1. Conduct a complete physical inventory of audiovisual equipment in the parks,
reconcile the differences between the official Park Service property system (Prop System)
and the Center audiovisual equipment database, and adjust the records accordingly. The
Director should also ensure that all park units cooperate fully in this effort.
2. Maintain records on the cost of each equipment repair job performed by depot
personnel and use this information to determine whether it is more cost effective to have the
equipment repaired either in-house or by contract with commercial sources or to repair or
replace an item of equipment.
3. Determine the feasibility and cost effectiveness of transferring custody of
audiovisual equipment to the parks. If this transfer is determined to be feasible and cost
effective, the audiovisual equipment database at the Center should be discontinued and
equipment inventories should be transferred to the parks.
4. Transfer or dispose of-warehouse items and cancel the lease at the Charles Town
warehouse.
5. Establish a dollar value for indefinite-quantity orders that should be placed
competitively and ensure that competitive bids are obtained for such acquisitions when
appropriate. Also, orders for all phases of a media product or service should be combined,
and the competitive acquisition threshold should be applied to these procurements.
6. Require contracting officials to award a new contract when purchasing an item
that is not included in the statement of work of an existing contract.
7. Require all parks to submit the Free Informational Publications - Semiannual
Report before processing park requests for additional brochures. The Director should also
ensure that all parks cooperate in this effort and should authorize the Center to reject printing
requests for parks that do not comply with the reporting requirement.
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National Park Service Response and Office of Inspector General
Comments
We requested that the Director, National Park Service, provide written comments to the draft
report by September 8, 1997. On that date, we received, from the Park Service's Audit
Liaison Officer, comments prepared by the Manager, Harpers Ferry Center, that were
addressed to the Audit Liaison Officer. On two occasions, we asked the Audit Liaison
Officer to provide a response from the Director. However, instead of providing the Park
Service's official response from the Director, the Audit Liaison Officer, on September 24,
1997, submitted a memorandum that formally transmitted to our office the Harpers Ferry
Center's comments of September 8, 1997. Although these comments were considered in
preparing our final report, this report is being issued without the benefit of the Park Service's
response because we did not receive the requested response from the Director. As such, all
of the recommendations are considered unresolved. In accordance with the Departmental
Manual (360 DM 5.3), we are requesting a written response to this report by November 28,
1997. The response should provide the information requested in Appendix 3.
The legislation, as amended, creating the Office of Inspector General requires semiannual
reporting to the Congress on all audit reports issued, the monetary impact of audit findings
(Appendix l), actions taken to implement audit recommendations, and identification of each
significant recommendation on which corrective action has not been taken.
We appreciate the assistance of National Park Service personnel in the conduct of our audit.
APPENDIX 1
CLASSIFICATION OF MONETARY AMOUNTS
Funds To Be Put
To Better Use
10
APPENDIX 2
PARKS VISITED
SITE LOCATION
Appomattox Court House National Historical Park
Boston National Historical Park
Frederick Law Olmsted National Historic Site
Harpers Ferry National Historical Park
Independence National Historical Park
John Fitzgerald Kennedy National Historic Site
Longfellow National Historic Site
Minute Man National Historical Park
Petersburg National Battlefield
Salem Maritime National Historic Site
Appomattox, Virginia
Boston, Massachusetts
Brookline, Massachusetts
Philadelphia, Pennsylvania
Brookline, Massachusetts
Cambridge, Massachusetts
Concord, Massachusetts
Petersburg, Virginia
Salem, Massachusetts
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APPENDIX 3
STATUS OF AUDIT REPORT RECOMMENDATIONS
Findings/Recommendations
Reference
Status
1-7
Unresolved.
Provide a response to each
recommendation. If concurrence
is indicated, provide a plan
identifying actions to be taken,
including target dates and titles of
offkials responsible for
implementation. If
nonconcurrence is indicated,
provide specific reasons for the
nonconcurrence.
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Sending written documents to: Calling:
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