GAO finds fault with advisory contracts

Federal agency recordkeeping on contracting for advisory and assistance services is such a mess that the records are practically worthless, concludes a new report by the Government Accountability Office.

Five departments spent $14 billion on so-called advisory and assistance services contracts in fiscal 2006, GAO said. But the reports are so riddled with inconsistencies that they are useless in terms of preparing budgets and managing agency tasks, the report said.

"Agencies' reported Advisory and Assistance Services obligations are inaccurate to the point of being meaningless and are not used for management purposes," the GAO report stated.

The problems are long-standing. First, agencies tend to interpret the definition of such contracts differently. Second, there are inconsistencies in the reporting of such contracts. And third, the lack of integration between agency procurement and budget systems prohibits accurate accounting, GAO found.

GAO reviewed 334 advisory and assistance contracts at 10 agencies of the Defense, Energy, Health and Human Services, Homeland Security and Treasury departments.

Nearly 20 percent of the cases reviewed included errors, such as including contracts for fitness center maintenance and cabling installations wrongly listed in this category. GAO also discovered that some agencies had detailed accounting of their advisory and assistance expenditures, but other agencies "could not explain to us where their reported numbers came from."

GAO also discovered that agencies tend to award advisory and assistance contracts on a recurring basis and to the same contractors. Of the 233 contracts with recurring requirements, 117 went to the same contractor on a sole-sourced basis.

To address the problems, Congress should consider reevaluating whether such expenditures should continue to be listed in a separate category from other professional management-support contracts. Also, Congress may want to strengthen data collection for such contracts.