Senator CHILES. Of course, there could be a reason for this. They may be looking to fill a vacancy there or something, so that may not be so bad.

What else?

Mr. GRANETTO. Up until a day or two ago I had no real knowledge of this type of problem. Then it was pointed out to me that immediately after the Department of Agriculture stories broke on the furniture, the Department of Agriculture put a one-time memo out which said anybody with excess furniture put it in the hallways and we will pick it up and put it in the basement. The next day, they picked up over 200 pieces of furniture.

Senator CHILES. So there is a lot of furniture out there in people's offices that is excess?

Mr. GRANETTO. Yes, sir.

Senator CHILES. Then the last possibility was misappropriation of furniture. Do you have any examples on that?

Mr. GRANETTO. We have the one which is what the newspaper article was discussing, usable furniture ending up at the dump at Lorton. Quite frankly, Senator, I could not even assure you that furniture was not being stolen; at least from the Department of Agriculture.

Senator CHILES. Explain that a little bit more. How did the usable furniture end up in the dump, and what specific furniture was that?

Mr. GRANETTO. Well, nobody knows for sure, Senator, how that specific furniture got there, but I can give you some ideas from what I was told. It is caused by a combination of security and poor control.

First, since nobody has an inventory of the excess furniture, nobody can tell what is missing.

Second, dumpsters are inside an inner court of the Department of Agriculture and not in view of guards, and quite frankly, anybody could dump anything in there.

Third, the inner court where the dumpsters are is used for parking by Agriculture personnel and deliveries by almost anybody. The loading dock is actually next to the dumpster.

Senator CHILES. The loading dock and the dumpster are side by side?

Mr. GRANETTO. Yes.

Senator CHILES. So anybody coming to the dumpster can pick that off?

Mr. GRANETTO. Yes, sir.

Senator CHILES. That wouldn't be the most secure place to have a loading dock, would it?

Mr. GRANETTO. No, sir. Anybody coming by could throw something into the dumpster.

Senator CHILES. If you take anything out of the dumpster, after all, you are only taking garbage out of there.

You mentioned poor security in the Department of Agriculture facility. Is it possible that somebody could be stealing furniture from this building? I know this sounds ridiculous, but is it possible? Mr. GRANETTO. In my opinion, yes, sir. Now, I have no evidence that this has happened; however, the security and layout of that building is such that someone could drive in with an official look

ing truck and load it up with furniture and I don't know if anybody would know the difference.

The storage area in the attic, for example, where the new furniture was, is completely unlocked. Similarly the Department of Interior furniture in the first floor of the South Auditors Building was accessible to anyone. There was some new furniture there also. Anybody could have backed up with a truck and loaded up via an open door in an inner courtyard.

The second floor of that building is used by the Department of Agriculture College. Anybody could walk in that building. There was new furniture there.

Senator CHILES. You just walked into the building?

Mr. GRANETTO. Yes, sir.

Senator CHILES. You could have driven a truck up to the building and taken furniture?

Mr. GRANETTO. Yes, sir.

Senator CHILES. How long had the problem at the Department of Agriculture been going on?

Mr. GRANETTO. Well, I can tell you this, Senator; it goes back to at least 1972. The problem was not recently discovered. Agriculture auditors have reported the basic problem at least twice; once in 1972 and again in 1977. There was also a GSA physical security survey report in 1976. Of course, the Agriculture Inspector General has again gotten involved recently because of the newspaper reports. He issued another report on the situation yesterday. Senator CHILES. It goes back to 1972, the problem?

Mr. GRANETTO. Yes, sir.

Senator CHILES. This kind of raises a question in my mind-how good is the furniture that we are really excessing through accepted GSA procedures, do you know?

Mr. GRANETTO. I have some limited information on that, Senator. I know that a lot of furniture that is excessed is taken by the various States through the donation program. A discussion with the sales people at GSA Region III disclosed that they can sell all the desks and tables that are not taken by the States. A number of building managers, GSA personnel who work with excess furniture, and procurement personnel have told me that much of the furniture that goes out of a building as excess to GSA is really very usable and serviceable. It is just that someone wants a new colorcoordinated desk or there is enough money in the budget to buy new furniture.

Senator PRYOR. We have talked a great deal about the Department of Agriculture and NASA this morning, and really not a great deal about other departments of Government. Let's take the Department of Agriculture just a moment.

What really focused our attention on this particular situation was a newspaper article; is that correct?

Mr. GRANETTO. That is correct.

Senator PRYOR. So we are basically responding to a newspaper story?

Mr. GRANETTO. Yes, sir.

Senator PRYOR. When we talk about Agriculture and then the NASA problem, really aren't we talking about the problem of this

being the rule and not the exception within the entirety of the federal system of government?

Mr. GRANETTO. Every bit of knowledge or everybody I have talked to indicates that is exactly the case, Senator.

Senator PRYOR. Are there regular inspections of any sort by the General Services Administration of the departments of govern ment, onsite inspections, to see what furniture is stored, what furniture is usable, what furniture should be declared surplus, or the conditions of the surplus?

Mr. GRANETTO. The GSA region III down here, as in most regions, have, I believe, what they call area utilization officers whose job it is to go around and look at excess furniture. If you take a military base or a large military base, those people will probably get in once a week because they know that base is generating a lot of furniture or excess material in the past.

However, the Department of Agriculture has not been known for generating excess material, so they don't bother coming over. If Agriculture doesn't call them, they don't get involved. I suspect that is the case in most of the Federal buildings in this area.

Senator PRYOR. Does the regulation require of the departments to report surplusses? You cited an instance where a $13,000 excess furniture report was turned in and they went to look at the furniture and it was not there.

Mr. GRANETTO. There was four different reports of excess furniture, and two of those actually got to a donation stage, and when the State that it was donated to came to pick up the furniture, it couldn't find it. I presume because it was curied in the other furniture and couldn't be identified.

Senator PRYOR. What sort of a compliance do you think there is with this particular regulation?

Mr. GRANETTO. I suspect minimal.

Senator PRYOR. If there is not full compliance with this regulation, whose fault is it?

Mr. GRANETTO. I don't know whose responsibility it is to enforce that regulation, Senator. I am at a loss to answer that question. Perhaps the Administrator of GSA or the Inspector General can answer that question.

Senator PRYOR. If we adopted a moratorium in the U.S. Congress this afternoon saying that no more furniture would be ordered for a period of one year, would we have enough furniture to supply the needs of the Federal Government?

Mr. GRANETTO. I think we probably would. My own personnel opinion is that we would.

Senator PRYOR. If we had a moratorium adopted this afternoon saying no more furniture would be ordered for the next 2 years, would we have enough furniture to last the Federal Government? Mr. GRANETTO. I suspect the answer to that is yes, Senator. A desk doesn't break. You use a desk a long time, Senator.

Senator PRYOR. Do we have any repair centers?

Mr. GRANETTO. There are repair facilities. They are limited. Lorton is one.

Senator PRYOR. What about out in the country?

Senator CHILES. We repaired all the Art Metal furniture two or three times, so there must be repair centers.

Senator PRYOR. Every time they sold an order of furniture to us, they sent a repair team along behind because they knew it was going to be inferior. I assume there are repair centers in the country?

Mr. GRANETTO. Yes, sir. GSA runs some. Prison Industries, I think runs one.

Senator PRYOR. You don't really have an inventory of furniture now in the Federal Government, do you?

Mr. GRANETTO. I don't think so, Senator. The stuff in the Department of Agriculture basement was totally unaccounted for. NASA was the same kind of a situation.

Senator PRYOR. When I was Governor of Arkansas, each piece of furniture in the Governor's Mansion had a number on it. When I went in, I signed a statement that all the furniture was there, and we did a check. When I left office, we did an inventory. If there was anything missing, I was personally responsible for it.

Do you think something like that might apply in the federal system and would work?

Mr. GRANETTO. I think it would and should. I believe that there are agencies that do it that way. I think there are one or two agencies controlling location, and they number every piece of furniture. I know a firm like General Motors does.

Senator CHILES. Even the Senate does that. I had a similar experience to yours when I was a company commander. We used to have the inventory when you took over the company. If you were Green, you were in for problems, because you counted the blankets at one door and the old company commander was taking them out another door and giving them to his neighbors. You only hoped you had a green company commander taking over when you left. The first thing they told me is that you put your own locks on the supply door and have your own people watch the back door.

Senator PRYOR. How does your method of investigation differ from that used by the Inspectors General?

Mr. GRANETTO. Well, I would imagine that in basic, none. However, the Inspectors General would have a lot more manpower to go behind them and develop and probably know where to look.

I happened to find these caches by accident. The Inspector General's people should know where they are.

Senator PRYOR. You were able to uncover a very large amount of information in a relatively short period of time within the Department of Agriculture.

Senator CHILES. He didn't go in and uncover something that they hadn't already found.

Mr. GRANETTO. They told me where to look, and I would look;

yes.

Senator CHILES. Give credit where we can.

Senator PRYOR. Mr. Granetto, that is all the questions I have at this point. You testified about 610,000 chairs. That is about a new chair for every fourth employee of the Federal Government.

Mr. GRANETTO. Yes, sir.

Senator PRYOR. That seems like a very large number of chairs. Senator CHILES. Thank you, Mr. Granetto, for your testimony.

Our next witnesses will be Adm. R. D. Freeman, the Administrator of the General Services Administration, and Kurt Muellenberg, the agency's Inspector General.

TESTIMONY OF ROWLAND G. FREEMAN, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, ACCOMPANIED BY KURT MUELLENBERG, INSPECTOR GENERAL

Mr. FREEMAN. It is a pleasure for me to appear before this committee today. I have now completed 3 months as Administrator of General Services. They have been fast moving months, months of many dramatic changes which I believe will restore confidence in GSA and make it a model agency.

I am proud to be Administrator of GSA. Over the past 3 months I have met more than 12,000 of my people. They are professional and honest. They want to deliver a good day's work. They want to be proud of their agency, and they are innovative and desirous of improving GSA's performance.

These last 2 years have been very tough ones for GSA employees, as the honest, hard working ones were tarred with the same brush as the small group of dishonest, self-serving employees. We have a lot to do to get the agency moving again, but we are moving ahead with confidence.

This morning I will describe what we found, and discuss our plan for improving GSA's program areas.

Last spring while I was awaiting confirmation by the Senate, I had an opportunity to study GSA and to determine my contribution to its future.

I found a complete absence of mission understanding. The agency had lost sight of its reason for existence, which is to provide administrative services to the other Federal executive agencies in a timely and efficient manner, at the lowest overall cost to the taxpayer. Many conscientious people could describe their specific function, but very few employees could relate their efforts to the overall mission of GSA.

There was a lack of clear policy on decisionmaking and procedure. Important decisions were being made without proper study and analysis. Business was transacted on an informal basis. Existing management information systems were totally inadequate.

This sad state of existence had evolved from an almost total lack of long-range planning. GSA was a completely reactive agency, fighting today's fires today, and worrying about tomorrow's fires when they became heated enough to be uncomfortable. The absence of an adequate planning process had destroyed management controls and resulted in an environment which permitted malfea

sance.

The budget was vertical with no integrated analytical nucleus and no means for appraisal against the overall agency objectives. Each of GSA's six services, Federal Supply, Public Buildings, Automated Data and Telecommunications, Federal Property Resources, Transporation and Public Utilities, and National Archives and Records-built its own budget without any consideration for the overall objectives of the agency. Likewise, performance was not measured against the budget objectives or any other standards.