oversight

U.S. Army Facilities in Europe: Management Improvement Needed

Published by the Government Accountability Office on 1977-07-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                         DOCUMENT RESUME

02763 - [A1933004]

U.S. Army Facilities in Europe: Management Improvement Needed.
LCD-77-313; B-133102. Juj) 1, 1977. 22 pp. + 3 appendices (15
pp.)
Report to the Congress: by Elmer B. Staats, Comptroller General.

Issue area: Facilities and Material Management (700); Facilities
    and Material Management: Operation and Maintenance of
    Facilities (708).
Contact: Logistics and Communications Div.
Budget Function: National Defense: Department of Defense -
    Military (except procurement & contracts) (051).
Organization Concerned: Department of the Army; Department of
    Defense.
Congressional Relevance: House Committee on Armed Services;
    Senate Committee on Armed Services; Congress.
         The U.S. Army in Europe uses various German Government
facilities under the Status of Forces Agreement and spent $504
mill.on in FY 1975 to operate and maintain these facilities.
Findingc/Conclusions: The Army's management system in Europe
produced inaccurate and incomplete facility inventory data, and
efforts at improvement were not successful. Over $15 million
could have been saved in 1975 if Army personnel had used
available quarters rather than off-post quarters. Many
facilities were underutilized. and little was done to
consolidate activities and return facilities to Germany. The
Army Audit Agency estimated that such action would save about
$28 million annually. Recommendations: The Secretary of the
Army should require the commander of the U.S. Army in Europe to:
(1) retain only those facilities required for mission
performance; and (2) return unneeded facilities to the German
Government. Actions that should be included in efforts to make
better use of facilities are: (1) obtaining accurate inventories
of facilities; (2) stopping payment of quarters allowance for
off-post quarters where adequate quarters are available; and (3)
giving priority to families for whom the Department of Defense
is required to provide quarters. (Author/HTW)
    ';~u         REPORT TO THE' (CONGRESS

°     ;.~   -.   BY THE C(OMPTROLLER (hENERAL
                 OF THE UNITED STA TE S




                 U.S. Army Facilities In Europe--
                 Management Improvement Needed
                 Department of the Army

                 The U.S. Army Europe uses various German
                 Government facilities under the Status of
                 Forces Agreement. In fiscal year 1975 the
                 Army spent $504 million to operate and
                 maintair these fa.ilities. GAO estimates that
                 over $16 million could have been saved in
                 1975 had Army personnel used available quar-
                 ters rather than off-post quarters.

                 Many facilities are underutilized. The Army
                 Audit Agency has reported that an estimated
                 $28 million in operation and maintenance
                 costs could be saved annually if activities were
                 consolida!,?d and unneeded facilities returned
                 to the Geri, an Government.
                 This report discusses these facilities problems,
                 what the Army did to improve ;ts manage-
                 ment, and recommends further improvements.




                 ICD-77-313                                         JULY 1, 1977
               COMPTROLLER GENERAL OF THE UNITED STATES
                          WASHI-. 4TON, D.C.   20S48




B-1331n2


To the President of t':e Senate and the
Speaker of the H'ouse of Representatives
     This report describes (1) the weakne.sses in the manage-
ment of U.S. Army facilities in Europe and (2) the efforts to
improve this management.
     While reviewing the Army management system we found that,
had the Army followed its regulations, the facilities under
their control would have been more fully utilized and extra
costs could :have been avoided.
     We maai, our review pursuant to the Budget and Accounting
Act, 1921 (31 U.S.C. 53), and the Accounting and Auditing
Act of 1950 (31 U.S..- 67).
     We are sending c,:nies of this repurt to the Director,
Office of Mana;ement andrBudget and the Secretar of Defense.



                                      Comptroller General
                                      of the United States
COMPTROLLER GENERAL'S                   U.S. ARMY FACILITIES IN EUROPE--
REPORT TO THE CONGRESS                  MANAGEMENT IMPROVEMENT NEEDED
                                        Department of the Army
             D I G E ST
             The U.S. Army in Europe operates and main-
             tains over 250 million square feet of building
             space in Germany, where most Furopean Army
             facilities are located. the German Government
             makes these facilities available to U.S. for-
             ces under the Status of Forces Agreement. The
             agreement states that facilities no longer re-
             quiced by U.S. forces are to be returned to
             tLe German Government in as good condition as
             when they iere received.

             In fiscal year 1975 the U.S. Army spent $504
             million to operate and maintain these facili-
             ties.

             The U.S. Army's management system in Europe
             produces inaccurate and incomplete facility
             inventory data. Efforts to improve t tis data
             have not been successful.  (See pp. 4 to 6.)
             The Army agreed that central oversight is
             needed arid noted that corrective actions have
             been or are being taken to improve facilities
             management and use. The Army noted that re-
             curring utilization reports on certain facili-
             ties are not required and that the data's
             accuracy depends upon those filling out the
             forms. Utilization depends upo. onsite in-
             spections--however, the Army does not make on-
             site inspections.
             The Army has paid quarters allowance to bache-
             lors living offpost when adequate installation
             quarters were available. The Army recognized
             that $9 million could be saved annually if
             available quarters were used. GAO estimates
             that $16.7 million could have been saved in
             1975 if adequate available bachelor quarters
             had been used.  (See p. 9.)
             Although the Army did not agree with GAO's
             calculation method, it did not dispute the
             fact that personnel were living off base and

                                                             LCD-77-313
cover d't.   Upon removal, the rsport
cover date should be noted hereon.       i
receiving quarters allowance when quarters
were available for them on base.

Regulations permit renting excess family
housing to families who are ineligible for
either housing or basic allowances for quar-
ters. However, the rent the ALmy charges
does not cover operation and maintenance
costs as required by those regulations.
We also found eligible families awaiting
housing while ineligible families were renting
housing from the Army.  (See pp. 13 and 14.)
In commenting on this report, the Army stated
that it is revalidating its rates and total
rent income for comparison with actual unit
operating and maintenance costs.

An Army Audit Agency report issued in 1974,
circulated to Army cfficials in Europe, showed
facilities t¢be un:derutilized. That report
noted that about $28 million could be saved
annually if activities were consolidated and
unneeded facilities returned to the German
Government. (See p. 15.)
The facilities remain underutilized and very
little has been done to consolidate activities
and return facilities to Germany.
In several military installations, activities
are spread thin throughout the facilities to
show space occupancy.  (See pp. 16 and 17.)
The Army noted that, with the requirements
they have, some excess facilities will al-
ways exist. However, if more attention were
given to the reports prepared, the number of
excess facilities could be reduced.

The Secretary of the Army should require the
commander of the U.S. Army in Europe to em-
phasize more effective facilities management
and ,.se by (1) retaining only those facilities
required for mission performance, and (2)
returning unneeded facilities to the German
Government.
The following actions should be included in
added efforts to make better use of facilities:


                      ii
            --Obtain a complete and accurate inventory of
              facilities and require periodic reporting
              from subordinate commands on the use of
              all of them.

            -- Stop paying quarters allowance to bachelors
               living off post where adequate quarters
               are available, and strengthen controls for
               issuing statements of nonavailability.

            -- Give priority to families for whom the
               Department of Defense is required to pro-
               vide quarters.




TearSheet                       iii
                     Contents

 DIGEST

 CHAPTER

       1    INTRODUCTION                                1
                Scope of review                         1
       2    FACILITIES MANAGEMENT NEEDS MORE
              EMPHASIS                                  3
                Utilization data inaccurate or
                  not reported                      4
                Identification of unneeded
                  facilities not emphasized         4
                Facilities utilization not
                  effectively monitored             5
                Army efforts to improve             6
                Conclusions                         7
                Recommendations                     7
       3   USAREUR NOT EFFECTIVELY UTILIZING
             QUARTERS                               8
               Bachelor quarters not fully
                 utilized                           8
               Army efforts to more fully
                 utilize bachelor quarters         12
               Family housing not effectively
                 used                              13
               Conclusions                         14
               Recommendations                     14
   4       POTENTIAL FOR CONSOLIDATING AND
             RELEASING UNDERUTILIZED FACILITIES    15
               Bachelor quarters underutilized     15
               Other facilities underutilized      15
               Conclusions                         21
               Recommendations                     22
APPENDIX
   I       Eighty-one USAREUR installations
             showing utilization of available
             space                                 23
  II       Letter dated March 11, 1977, from the
             Acting Deputy for Installations and
             Housing, Office of the Assistant
             Secretary of the Army (I&L)           28
                                                     Page
 APPENDIX

 III          Principle officials responsible for
                administering activities discussed
                in this report                        37
                          ABBREVIATIONS
BAQ         Basic Allowance for Quarters
DOD         Department of Defense
FRG         Federal Republic of Germany
GAO         General Accounting Office
USAREUR     U.S. Army Europe
                            CHAPTER 1

                          INTRODUCTION
     We reviewed the management of facilities
                                                under control
of the Air Force and the Army in Europe.
                                           We found no signifi-
cant problems with the Air Force's facilities
                                               management;
however, the Army's facilities management
                                           sistem had weak-
nesses.  Therefore this report addresses those weaknesses
found in U.S. Army in Europe iUSAR£UR)
                                        management and concen-
trates on the facilities located in the
                                         Federal Republic of
Germany (FRG).

     USARCUR manages over 260 million square
                                             feet of building
space, and roads, airfields and other property
                                                on over 800
installations.  Over 250 million square feet of this building
space is in Germany.  These facilities for storage, adminis-
tration, community activities, living quarters,
                                                 medical serv-
ices, and maintena ce are provided by the
                                          German Government
under the Status of Forces Agreement.

     The Status of Forces Agreement stipulates
                                                that the German
Covernment will supply the facil ities neeced
                                              to support U.S.
forces, and the United States will be responsible
                                                   for operation
and maintenance costs while the facilities
                                            are in U.S. custody.
In fiscal year 1975, the U.S. Army spent
                                          about $504 million
for facilities operations and maintenance
                                           in Germany.
Status of Forces Agreement states that facilities       The
                                                   no longer
required by U.S. forces be returned to
                                        the German Government
in as good condition as when they were receied.

     Responsibility for   facilities management
                                              in Germany is
organized along command channels. The organization
of a command headquarters, three regional commands, consists
tary communities in specified locations, and over   36 mili-
                                                  800 inst'
lations composing these communities.
SCOPE OF REVIEW

     Our review evaluated both Army and Air Force
management systems. We concentrated our efforts facility
                                                  on the Air
Force and the Army because those services manage
significant amounts of property in Europe than    much  more
                                                does the Navy.
Our evaluation included the effectiveness of methods
the Air Force and the Army to manage facilities        used by
                                                 in Europe.
     We visited sites at various Air Force and Army
                                                     instal-
lations and discussed facilities management with
                                                  local com-

                               1
manders and other officials. We toured facilities at selected
locations, reviewed records and documents, and analyzed re-
ports.
     Our site visits included Air Force headquarters, Europe
(Ramstein, Germany); Air Force bases at Hahn and Spangdahlem,
Germany; and at Incirlik, Turkey. We visited USAREUR head-
quarters (Heidelberg, Germany), the headquarters of VII Corps
(Stuttgart, Germany), and the 1st Support Brigade (Kaisers-
lautern, Germany). We also visited [UAREUR military communi-
ties in Munich, Stuttgart, Mannheim, Nuernberg, and Bremer-
haven; Germany.




                             2
                            CHAPTER 2
                     FACILITIES MANAGEMENT

                      NEEDS MORE EMPHASIS
      In 1974, the U.S. Army Europe (USAREUR)
 most facilities management                   decentralized
                            responsibility by delegating it to
 the regional commanders, who delegated
                                        the responsibility to
 the 36 community commanders.

      USAREUR's instructions to the community
 USAREUR's policy on facility use, however,   commander, and
                                            are
 and do not establish utilization or disposal   not explicit
                                              priorities.
      The Department of Defense (DOD)
which the maximum allowable amount of publishes  criteria by
                                       space
for administration, maintenance, and various can  be determined
                                              types of commu-
nity activities. Although DOD regulations
establish priorities for space utilization, do not specifically
require that space diverted for use other    Army regulations
unit integrity space 1/ be used as quartersthan quarters and
                                             in communities
where vacancies are not sufficient to meet
ments.                                      housing require

     Greater emphasis on facilities management
because                                        is needed

     -- utilization information is incomplete
                                              and not always
        accurate;
     -- the management systems are not geared
        arid releasing nonessential facilities; for identifying
                                                 and
     -- lower level implementation of facility
        not effectively monitored.             use policy is

     Because of a lack of emphasis and guidance
on utilization policy, bachelors at several       from USAREUR
living off post and receiving quarter's       communities were
                                         allowances while ade-
quate space was available at their installation.
cussed in more detail on pages 8 through            This is dis-
                                          12.
     Commenting on this report, the Army
audit, USARFUR has placed greater emphasisnoted that, since our
                                            on facilities


1/Unit integrity allowance is the assignment
  unit of a block of barrack spaces based     to a specified
                                           on assigned strength,
  plus 10 percent more spaces for future
                                          unit expansion.


                               3
management and that many corrective actions either have been
taken or are underway to improve management and utilization
of facilities. The Army noted that USAREUR has recently pub-
lished a stationing program--real property inventory utiliza-
t-nn system--which can identify facilities for disposal, and
that USAREUR is revising its regulations on space allocation
and use. According to the Army, the stationing program and
revised regulations will provide more definitive guidance on
facilities utilization and disposal.
UTILIZATION DATA INACCURATE
OR NOT REPORTED

     USAREUR prepares utilization reports for bachelor and
family housing and some storage facilities. USAREUR officials
at all command levels generally consider the reported data on
utilization tn be inaccurate. Utilization of other facilities
for administration, training, maintenance, community, and med-
ical services is not reported.

     Lack of utilization data and the inaccuracy of reported
data have caused problems in assigning space for incoming units.
USAREUR personnel have had to perform special studies to deter-
mine the availability of facilities before they can make sta-
tioning decisions. In one instance, the Army decided to sta-
tion two battalions in a community based on the reported utili-
zation data. The community responded that it had insufficient
quarters for the battalions, and a special survey was required
to verify spaze availability.

     The Army noted that, except for housing and some storage
facilities, recurring utilization reports are not required.
According to the Army, USAREUR's real property inventory
utilization system--under development at the time of our audit
and now operational--will report utilization of most facility
categories. The Army noted, however, that accuracy is depen-
dent upon those filling out the forms, and determination of
how well space is being utilized is still dependent upon onsite
inspections. USAREUR, however, does not make onsite inspec-
tions.
IDENTIFICATION OF UNNEEDED
FACILITIES NOT EMPHASIZED

     Identification of unneeded property is usually initiated
by local commanders, who submit release requests to USAREUR
headquarters for review and approval.  From January 1973
through December 1975 USAREUR approved over 300 real estate
release requests received from lower commands. While this


                              4
  had caused some property releases, not
  perty is identified and released.      all nonessential pro-

      According to Army comments, USAREUR
 size efficient facilities                directives do empha-
                           use and that those no longer required
 be identified.  The Army noted that this is a responsibility
 of the major subordinate commands.
       The action taken by the subordinate
 ion, has not been effective. As siown     commands, in our opin-
                                        in chapters 3 and 4,
 units are occupying several facilities
 and could be consolidated, thereby      which are underutilized
                                     releasing facilities and re
 ducing maintenance costs. There are
 that could be returned to the German also vacant facilities
                                       Government, further re-
 ducing operation and maintenance costs.

      USAREUR officials are aware that many
                                            military communities
 do not use all their facilities effectively.
 however, that without reliable data           They believe,
 insure that unneeded facilities are the only effective way to
                                     released is to periodically
 inspect facilities.
 FACILITIES UTILIZATION NOT
 EFFECTIVELYMONITORED
        Neither USAREUR nor its corps effectively
  ties utilization to assure compliance              monitor facili-
 dures. Data is periodically r ported     with  policies  and proce-
 Army on utilization of family housing, to the Department of the
 some storage space. These reports are bachelor housing, and
                                           not used by USAREUR to
 identify unneeded facilities or opportunities
 activities. For example, utilization               to consolidate
 housing are prepared by each installationreports   on bachelor
 the communities and regions to USAREUR.       and submitted through
 checked at USAREUR headquarters for         The reports are then
                                       completeness and mathe-
 matical errors and sent to the Department
                                              of the Army.
       Department of the Army and USAREUR
 visual inspection of facilities.           regulations require
                                     USAREUR officials stated
 that they do not make onsite inspections
consuming and the personnel responsible because they are time-
nave higher priority assignments.           for conducting them
                                      USAREUR officials also stated
that sufficient staffing has not been
                                         allocated for the task.
      The Army noted that USAREUR's new real
utilization system will assist in improving property inventory
monitoring.                                      facilities use
ARMY EFFORTS TO IMPROVE

     USAREUR is attempting to obtain more accurate and complete
Inventory and utilization data. Recent efforts include comput-
erizing facility utilization and inventory data, developing
master plans for each community, and preparing a long-range
stationing plan for USAREUR.

     USAREUR's computerized information system is expected to
include data on facilities (location, type, and condition) and
their intended use. As noted earlier, however, the Army stated
that the determination of how well space is used will still
depend upon onsite inspections.

     USAREUR is having problems obtaining an accurate and com-
plete data base. In a recent attempt to identify transient
quarters, it requested all installations to report the transient
quarters and beds they had available. Many installations, in-
cluding Heidelberg, the location of USAREUR headquarters, re-
ported no transient quarters when in fact some were available.
The inaccurate and incomplete information being submitted to
USAREUR by the installations and communities is delaying
USAREUR's efforts to compile inventory and utilization data on
all facilities. Once obtained, the data will still be incom-
plete because it will not include information about the manner
and extent facilities are actually being used.

Development of master plan

      USAREUR is also developing a master plan for each commu-
nity, to provide information on the community composition and
Army plans for its development over a 20-year period. The
master plans are being prepared in th-ee phases: an accounting
of existing facilities, a comparison of present facilities
with future mission requirements, and plans for future commu-
nity development. We were told that the future development
phase will include a section identifying unneeded facilities.
Development of the master plans began about 3 years ago, and
completion is a long-range goal. As of March 31, 1976, USAREUR
had approved the phase I stage for only one community master
plan.

     We reviewed the master plans for Augsburg, Munich,
Stuttgart, and Bremerhaven, none of which have been approved.
They provide little more than general information, and it is
questionable whether unneeded facilities will be identified
when the plans are complete.

     After the Army commented on this report, we obtained
tte following data on the master plans as of December 30,

                              6
 1976. When complete, 42 plans will
 European areas outside Getmany.    be submitted, 6 from

                        Number of plans
                     subittedtoe  USAREUR
                     Phase I     -     40
                     Phase II    -     38
                     Phase III   -     38
     The Army stated that all phases of
communities have been approved. Other the plans for three
                                        community plans are
either partially approved and/or undergoing
The Army did not comment on whether          USAREUR review.
                                    the approved plans will
identify unneeded facilities.

Stationing plans
     USAREUR is also developing its first
                                            staciuninc plan,
which is a long-range forecast of
and within USAREUR communities. Theunit r-ves into, out of,
all communities for use in developing plan will be provided to
plans and for developing their own     phase II of their master
                                    stationing plans. With such
data, communities can anticipate facility
construction and request necessary         needs and program
                                    funding 5 years in advance.
     The Army stated that Lhe plan has
is being used as a long-range planning since been published and
                                        document.
CONCLUSIONS
     At the time of our review USAREUR
emphasis on facilities manag ment.      was rat placing enough
                                    The Army agreed, and stated
that USAREUR has since placed greater
However, according to the Army, how    emphasis in this area.
                                    w11ll
used depends upon onsite inspections,     facilities are being
                                       which USAREUR officials
have stated they do not make.

RECOMMENDATIONS

    The Secretary of the Army should require
                                              USAREUR to:
    -- Establish procedures for periodic
                                         onsite inspections to
       provide for more effective utilization
                                              of facilities.
    -- Obtain a complete and accurate inventory
       under its control, and to report annually of facilities
       facilities' utilization.                   on those



                             7
                            CHAPTER 3

                     USAREUR NOT EFFECTIVELY

                      UTILIZING QUARTERS

     U.S. Army Europe (USAREUR) officials estima.e that about
$9 million in basic allowa.ice for quarters (BAQ) could be saved
by using readily available vacant facilities. We believe the
savings for BAQ could amount to $16.7 million if bachelor
quarters were more fully utilized.   Also, USAREUR does not
fully utilize family housing and other facilities which, if
properly utilized or returned to the host country, could pro-
duce additional savings.

BACHELOR QUARTERS
NOT FULLY UTILIZED

      Di;Jring 1975, more than $19.5 million in quarters allowance
was paid to about 6,100 bachelors living off post.     As of July
31, 1975, an annual utilization report showed that only about
56 percent of the bacielor enlisted quarters and about 77 per-
cent ?f bachelor officer quarters were being utilized for
housin.g.    Although its standards for family housing is 98 per-
cent occupancy, USAREUR has not established a utilizationl
standard for bachelor quarters.

     The Army did not agree with these utilization percentages,
noting that the computations were basea on gross capacity,
which includes authorized diversions and substandard space,
and believes that net usable space is a more reasonable basis.
We discuss this point in more detail later.  The Army also
stated that two additional facility reports, January 1976 and
July 1976, were submitted since the date of the one we used.
The Army stated that the January 1976 report shows a higher
utilization rate (63 percent) for bachelor enlisted quarters.
It should be noted that as late as September 23, 1976, we met
with the USAREUR Chief of Staff and other USAREUR officials to
obtain more recent data.  The Chief of Staff advised us that
updated information was not available at that time because
USAREUR had not completed its 1976 analysis.

     Ir our opinion, the Army comments about the calculation
methcd and the data in later reports do not address the issue
of personnel living off post and receiving quarters allow-
ance while quarters are available for them.

     A special USAREUR study showed that, as of July 31, 1975,
vacant quarters were sufficient in 24 of the 36 communities

                               8
to accommodate all enlisted bachelors paid quarters allowance
to live off base.  Further, if space diverted for use other
than quarters and unit integrity allowance were used for
                                                         quar-
ters, seven more communities could house all enlisted bache-
lors living off post and receiving quarters allowance.

     In most communities, however, there are not enough quar-
ters for all bachelor officers.

     In military communities lacking enough   housing, Army re-
gulations require that (1) bachelor housing   diverted to ad-
ministrative and other uses be changed back   to housing and (2)
empty spaces reserved for unit integrity be   made available to
bachelors from other units.

      By comparing available space, including vacant, diverted,
and unit integrity allowance space, on each installation
                                                          with
the number of personnel receiving allowances at those instal-
lations, we determined that only 681 of the 6,119 receiving
allowances could not be accommodated by their installations.
Because Army policy allows personnel from the rank of major
and above to live on or off base as they choose, an additional
188 persons would be eligible to live off base regardless
                                                           of
availability cf quarters. Therefore, about 5,250 personnel
living off base could be required to move into vacant Govern-
ment quarters. We estimated that up to $16.7 million could
                                                              be
saved in quarters allowance.

     As noted earlier, the Army disagreed with our method of
calculating available rpace; however, USAREUR officials
                                                         did
not disagree with our method of calculating the savings.
                                                           Also,
a special program to modernize tJS. facilities was in process
to renovate about 10,000 bachelor quarters. When the program
is complete, additional quarters will be available.

     Commenting on this report, the Army stated that its policy
is to reduce the number of bachelors drawing BAQ to a minimum,
and that proaress is being made.  The Army agreed that
housing is not fully utilized, but noted that the right USAREUR
is not always available where needed.                    housing
                                        According to the Army,
some places have excess housing while others have a shortage.
The Army agreed, however, that improvements are needed and
that steps are being taken to that end.

     Undoubtedly, there are instances where available housing
is not located at needed bases.  But there are also instances
where housing is available at the right places, yet remains




                              9
unused.  Following are some communities with available quar-
ters where enlisted bachelors were receiving quarters allow-
ances:

                             Number of
                           enlisted bachelors       Available
     Community            receiving allowance       vacancies

     Wuerzburg                      169                 152
     Fulda                          176                  82
     Giessen                        428                 104
     Hanau                          883                 443
     Mainz                          225                  53
     Worms                           58                  51
Each of these listed communities had also enough space, diverted
to other uses, to house all bachelors receiving allowances.

Policies and procedures
not fully implemented

     To be authorized quarters allowance tc reside off base,
military personnel must obtain a statement of nonavailability
of adequate quarters, which must be certified by the community
commander. Such statements should not be issued if adequate
space is available at a member's assigned post.  Certificates
have been issued when space was available.

     USAREUR regulation 405-15 defines diversion of bachelor
housing to other uses as a temporary change, returnable to its
original use within 72 hours, without extensive labor or addi-
tional funds.  These spaces at any time should not exceed more
than 10 percent of total base housing, or 1,200 spaces, which-
ever is less.  This criteria has been exceeded.

     Quarters allowances granted when
     adequate quarters are available

     The Deputy Chief of Staft Engineering is aware that state-
ments of nonavailability were being granted when adequate quar-
ters were available.  In 1974 the Army Audit Agency reported
that at one installation over 100 enlisted personnel were granted
quarters allowances while 300 vacant quarters were available.

     According to USXREUR officials statements of   nonavail-
ability of quarters were granted in certain cases   to boost
morale even though quarters were available.  This   practice
can also be detrimental because what improves the   morale of
a few may lower the morale of many. For example,    a January


                               10
1975 memorandum to the Commander in Chief, USAREUR, stated
that one installation in the Heidelberg community had a
significant morale problem because bachelors from one unit
were allowed to live off post while bachelors from another
unit, who wanted to live off post, were denied the privilege.

     Diversions not returned
     to housing
     Department of the Army and USAREUR approval must be ob-
tained before quarters can be diverted c, other uses. Our
analysis of the July 31, 1975, Bachelor Housing Capacities
and Utilization Report showed that the total diversion rate
for all ItSAREUR bachelor quarters was 16 percent, or 28,812
spaces. VII Corps reported 13 percent; V Corps, 20 percent;
and the 1st Support Brigade, 17 percent. Some of the communi-
ties reported diversion rates of over 30 percent.

     The Army stated that the majority of diverted bachelor
housing in Europe is located at installations with excess
housing and a shortage of administrative and storage space.
As shown below, our discussions with community commanders dis-
closed other reasons for not converting the space back to qu r-
ters use.
     USAREUR officials stated that the overall diversion rate
was probably closer to 25 percent, because many diversions are
unreported. A survey of communities made by the VII Corps In-
ternal Control Division showed that of 1,861 spaces actually
diverted at 11 installations, only 127 had been properly ap-
proved. A similar survey showed unauthorized diversions at
the Heidelberg community. Bachelor officer quarters space had
been diverted to administrative space while officers and ci-
vilians were living off post and receiving quarters allowance.
      We asked commanders and administrative personnel at three
communities why diverted quarters spaces were not being con-
verted back when needed for bachelor housing. The responses
were:

     -- Consideration has not been given to returning space
        to quarters.
     -- It would take too long to do so.

     -- If this were done, some space would have to be found
        for the activities moved out.



                               11
     --Cost advantages and other considerations would have
       to be weighed before converting the space back to
       quarters.

ARMY EFFORTS TO MORE FULLY
UTILIZE BACHELOR QUARTERS

     During the latter part of 197T, USAREUR issued a supple-
ment to Army regulations requiring new.procedures for the is-
suance and control of statements of nonavailability of quarters,
as well as requiring a letter requestirg the regional com-
manders' assistance in getting bachelor Personnel back on post
where vacancies exist.

     USAREUR's new procedures provided cuat the authority co
issue statements of nonavailability was to be centralized under
the community commander and a control copy was to be maintained
at his headquarters.  It also required revalidation of state-
ments in effect as of November 1, 1975.

     Some communities did not fully centralize the authority
to issue and control the statements at community headquarters.
For example, the greater Stuttgart military community still
allows the installation coordinators authority to approve state-
ments of nonavailability for enlisted personnel in grade E-1
through E-6.  These are not reviewed by the community headquar-
ters, nor is a control copy maintained there.

     In the Mannheim military community the family housing of-
ficer is responsible for issuing and controlling statements of
nonavailability of quarters for only senior enlisted bachelors
quarters and bachelors officer quarters.   Proof of nonavail-
ability for junior enlisted personnel is still provided by
the unit commanders and installation coordinators.   A copy
is not kept by the community headquarters.

     The Army's analysis of the July 1975 Bachelor Housing
Capacities and Utilization Report showed that 3,697 of those
receiving allowances might be accommodated in on post vacancies,
saving up to $9 million. As a result, USAREUR sent a letter
to the Regional Commanders requesting their assistance in re-
turning bachelors, livina off post and drawing allowances, to
post quarters wnere adequate quarters were available.

     Most communities contacted by us or the USAREUR Head-
quarters staff had sent letters to their subcommunities or
installations asking for their assistance in returning bache-
lor enlisted personnel to post, where vacancies exist.  The
communities had little success.  For example, the Nuernberg
family housing officer stated that once a person is allowed

                             12
 FAMILY HOUSING NOT
 EFFECTIVELY USED

      DOD policy permits assigniLn, milit;ary
 persons not eligible for either lousing       housing to certain
                                           or basic allowance
 for quarters. As of December 31, 1975,
                                           there were 610 inelig-
 ible families occupying Government quarters
 reimbursable basis. The rent charged           in USAREUR on a
                                        for the units is computed
by USAREUR and, according to regulation,
 to recover the Government's operating      should be sufficient
                                        costs.    The costs in-
clude related administration service
                                       charges such as refuse
collection and disposal; utilities; furnishings
replacement; and maintenance and repair             repair and
common areas, and other related real      of dwelling units,
                                       property.    We found that
the rental rates are actually based on
                                         proration of the fam-
ily housing funds budgeted for all family
throughout USAREUR and do not include        housing quarters
                                        all
curred by USAREUR in managing the family overhead costs in-
                                            housing management
account for the units.   Thus, the ccsfts to operate the units
are not being recovered by USAREUR.

      USAREUR officials stated that 227 employees
and Air Force Exchange Services occupy              of the Army
Munich for a total rent of $627,120 per Government   qdarters in
average maintenance and repair costs     year.   If  [;SAREUR
                                      as well as the manage-
ment costs were included in the rental
                                        computations, the rent
necessary to cover all costs could be
ficials stated that the primary reason $900,000.    USAREUR of-
                                        they do not include
all related costs (such as the administrative
red in managing                                overhead incur-
                the family housing funds) is that it is
possible to determine how much of the                     im-
                                      costs are applicable
to each housing type. We believe that if
to retain these facilities,                USAREUR decides
                            the full cost
should be recovered and that, when specificto the Government
                                             cost data is not
available, reasonable estimates should be
                                          made.
     The Army stated that USAREUP is revalidating
and total renter income for comparison             its rates
                                        with actual costs in-
curred for operation and mai'1tenance of the
                                             unit.
     We noted that contractor and foreign national
and college students are also occupying             employees
                                         Government
on a reimbursable basis. No report is made          quarters
                                             of the full extent
of such uses or whether the full cost to
                                          the Government is
being recovered.



                             13
      The Army agreed that USAREUR does have ineligible per-
sonnel occupying excess housing. The Army stated that such
assignments are in accordance with appropriate regulations
 ,ad are closely controlled.
     According to USAREUR regulation 210-50, ineligible per-
sonnel can only be assigned excess housing. However, an anal-
ysis of the December 31, 1975, report cn utilization showed
that in 14 family housing areas in Germany report:'.ng below
98-percent utilization, three had ineligible families occupy-
ing quarters while eligible families were awaiting assignment
to quarters. These families awaiting quarters were receiving
station housing allowance while living on the economy, and
at the same time USAREUR was not recovering full costs for
housing occupied by-those ineligible families.

CONCLUSIONS

     USAREUR is not enforcing its pblicy that facilities re-
quirements be met at the least possible cost to the Govern-
ment. It is paying quarters allowances to bachelors living
off post when adequate quarters are available at their instal-
lations. Even though USAREUR issued a supplement to the reg-
ulations to establish better control over the issuance of
statements of nonavailability, the results have. been less than
satisfactory. Also, USAREUR is not collecting the total oper-
ating costs of housing occupied by ineligible families in
Germany.

RECOMMENDATIONS

     The Secretary of the Army should require that USAREUR:
     -- Cease payment of quarters allowances to bachelors
        living off post when adequate quarters are available
        at their installations.

     -- Comply with regulations to control the issuance
        of statements of nonavailability of quarters.

     -- Give priority to those families awaiting assignment
        of Government quarters which are occupied by in-
        eligible families.

     In view of tile Army's comment that USAREUR is revalidating
its rental rates for comparison with costs for operating and
maintaining the units (see app. II), we are not making a re-
commendation concerning the rental for housing occupied by in-
eligible families.

                             14
                               CHAPTER 4

                    POTENTIAL FOR CONSOLIDATING
                                                AND
                  RELEASING UNDERUTILIZED FACILITIES

      In a 1974 report on USAREUR's
                                     facilities management, the
 Army Audit Agency n3ted that
                               many facilities were not fully
 and effectively utilized.
                            Most units and activities had
 space than authorized or needed.                          more
                                    The report recommended that
 USAREUR review and analyze
                            facilities utilization theater-
 wide, to (1) identify underutilized
 date Army activities at fewer        facilities, (2) consoli-
                                installations, and (3) close
 and release unneeded facilities.

      Facilities are swill underutilized.
                                           USAREUR headquarters
 officials, as well as Corps-
                              and community-level officials,
 are aware of underutilized
 Stuttgart, and Bremerhaven facilities at the Augsburg, Mun'ch,
                            communities, but are doing
 to correct the situation.                             little

     The   Army Audit Agency estimated
                                        that about $28 million
could be   saved in operation and maintenance
utilized   facilities were consolidated        costs if under-
released                                 and unneeded facilities
           to the German Government.
BACHELOR QUARTERS UNDERUTILIZED

      Army reports on utilization
                                   of bachelor enlisted quarters
showed as of July 31, 1975, a utilization
                                            rate of only 56 per-
cent througnout USAREUR.
                            If all 6,100 bachelor personnel
off post were to move Lack                                   living
                             on, about 20,000 vacant spaces
still exist.   This will be increased to                    would
special renovation program                about 30,000 when the
                             is complete.  Army commanders have
access to these reports which,
                                 in our opinion, can be useful
in identifying opportunities
                               for consolidating and releasing
facilities.   Bachelor enlisted quarters
for other essential purposes              being unused or unneeded
                               should be released.
      The Army stated that USAREUR
                                    has more than 800 installa-
tions, and the excess space
                              is scattered throughout them
small packets    The Army noted that, due to                in
activities space requirements                 imbalance between
                                and the available space at
given location, there will                                  a
                            always be some excess.   We
nize that this imbalance can                            recog-
                               cause some excess space at
locations.   We believe, however, that                     some
ilities management would help           closer attention to fac-
                                reduce the utilization problem--
and the maintenance    of excess facilities--ili
following data.                                    strated by the


                                15
     As of July 31, 1975, 11 of the 36 communities reported
utilization rates for bachelor enlisted quarters of 70 percent
or less. Six of these repcrted less than 50 percent. By in-
stallations, the reports show 81 installations with a utili-
zation rate for bachelor enlisted quarters of less than 70
percent.   (See app. I.) Nino of these installations--mainly
abandoned missile or communications sites--showed zero percent
utilizaticn    However, some other installations showing low
utilization are large troop housing areas.

OTHER FACILITIES UNDERUTILIZED

     We visited the military communities at Munich, Bremer-
haven, and Augsburg, and examined floor plans, toured some
facilities, and spoke with local officials. Several facili-
ties in these communities are underutilized and offer poten-
tial for consolidation and release to the German Government.
Munich military community

     The U.S. Government is paying nearly $8,000 annually
for renting buildings to house a military unit when adequate
free facilities are available at nearby McGraw Kaserne.   It
appears that the unit should be moved to McGraw Kaserne and
the rented buildings released.

      A postal facility at the train station in Munich is
being retained, although sufficient space has been identified
as available in McGraw Kaserne. This postal facility was
recommended closed and moved to McGraw Kaserne in February
1975. The estimated cost of the move ($10,000) produced an
annual savings estimated at $20,000. USAREUR requested the
release be deferred pending relocation of postal activities.
As of April 1976 release action has no- -carted on this faci-
lity.
     Five transient billeting facilities close to one another
are less than 50-percent occupied. If the personnel were con-
solidatel in two or three barracks, the other barracks could
be returned to the German Government, reducing operating and
maintenance costs.

     We observed many examples of vacant and underutilized
administrative space in several other buildings. For exam-
ple, USAREUR retains a mess hall that has been closed for
lack of utilization since D.-cember 1, 1974. About half of
two floors are vacant and some of the installed equipment is
still in place, but we understand there are no present plans
to reopen it.

                             16
     Activities at Munich are dispersed throughout the mili-
tary community to occupy available space. For example,
employees authorized only 90 square feet of office space
were occupying 300 square feet. Also, 10 enlisted military
personnel, who are authorized only 90 square feet each for
living quarters. were each occupying 180 square feet.
Bremerhaven military community

     The Bremerhaven military community also showed low faci-
lities utilization for several years; Army activities were
spread thir. throughout the military community to occupy all
available space.

     Support Group officials agreed with our observation that
only about 30 percent of the Bremerhaven hospital is being
used for hospital functions. The remaining 70 percent is used
by other activities, such as Girl Scout and Boy Scout meeting
places, a retail store, a barber shop, a community drug and
alcohol counseling center, a snack bar, a Stars and Stripes
bookstore, and other unrelated hospital activities.

     Other examples of low utilization in the Bremerhaven com-
munity are shown i. the following photographs:




                            17
Community officials stated that this administrative building above was only about 25-per-
cent utilized.




The building above was also used for administrative functions. An official estimated that less
than 50 percent of its space was used.

                                             18
The auministrstive building shown above, with at least 56,000 square feet of net usable
space, has been vacant for nearly 3 years.

Community officials stated that the Navy vacated the building
directly above in 1973 and that, since that time, at least
$22,000 has been expended on repair and maintenance. We ob-
served that the building's interior was in relatively poor
condition and would require major construction improvements
to become usable. Those officials stated that the building
had been left vacant for 3 years because of the costs to up-
grade it, bu't it has been retained for contingencies.

     USAREUR officials stated that the iremerhaven facilities
would be used fully within 2 years because Brigade '76 is to
be stationed there.
Augsburg

     Most buildings at Gai;lingen Kaserne have been unoccupied
for over 8 years. Because a special Army agency field station
was installed at that kaserne, these buildings remain unoccu-
pied. According to agency officials, any use of the vacant
buildings would seriously impair their mission. In October
1975 the Augsburg military community commander stated that
tne buildings were almost impossible to maintain due to their
age and the prohibitive cost to restore them to a usable con-
dition. He further stated that no foreseeable need existed
for the structures, either by German or U.S. forces, and re-
quested assistance from USAREUR in getting several structures
at Gablingen demolished.  The agency concurred with demolition
of the buildings, which is estimated to cost about $400,000.

     In March 1976 USAREUR requested that the agency provide
funds to either maintain or demolish the vacant buildings.
USAREUR stated that, because the Security Agency operation

                                          19
 prohibits USAREUR occupancy of vacant buildings, Gablingen
 Kaserne must be considered a single-function facility to meet
 unique tenant requirements, and the agency must provide the
 funds. The agency replied in March that they did not believe
 their command should be programing, budgeting, and funding for
 that purpose. As of April 1976 USAREUR and the Security Agency
 had not resolved the issue.

      The generally poor condition of some of the buildings is
 illustrated by the following picture. The German news media
 and Augsburg city officials have occasionally complained about
 the appearance and condition of the unoccupied buildings at
 the Gablingen Kaserne. The original annoyance expressed by
 the German press was over six buildings adjacent to a heavily
 traveled highway.




Retention for long-
range contingencies

     Retaining facilities for unforeseen future contingencies
seems to be a major factor in commanders' decisions to retain
nonessential facilities.

     The USAREUR Deputy Chief of Staff
other USAREUR officials stated that the for Engineering and
                                         Army does not release
some unneeded facilities to Germany because, by retaining them
until the German Government wants them, the Army improves its
bargaining position for alternate facilities needed in the
future. Since the Status of Forces Agreement requires that
Germany provide needed facilities to U.S. forces, this reserv-
ation appears questionable. Those officials also stated that
USAREUR does not keep records or make reports on facilities

                             20
specifically retained for this reason or for futu: e contin-
gencies.

     Space is needed for contingencies such as adding new
forces and moving active forces from one location to another.
USAREUR officials stated that new forces will be moved into
Augsburg, Wiesbaden, and Bremerhaven because of the under-
utilized space in those communities. Moves presently being
considered are (1) the European Command headquarters from
Stuttgart to Mons, Belgi an, (2) the University of Maryland
from Munich to Stuttgart, and (3) two Army schools from
Bremerhaven to Munich.

     The Army noted that three USAREUR schools have been
moved to Munich from Bremerhaven to make room for expansion
there.

     The personnel spaces for these schools are shown in the
following table:

Positions        Race       Drug and       Resource
 affected     relations   alcohol abuse   management   Total
Officers          5             1             0           6
Enlisted          7             3             (          10
Civilians        0              2             4           6
                12              6             4          22
     The Army stated that as of April 1°77 the Augsburg area
is no longer underutilized. Two artillery battalions are now
stationed there. USAREUR has also taken the initiative to
resolve the Gablingen Kaserne (Augsburg community) problem.
Activities there will be consolidated and unused facilities
returned to the FRG. The Army agency was instructed to plan
accordiigly.

     According to the Army, the recent decision to locate
units in Northern Germany will eliminate underutilization of
the Bremerhaven facilities, which will be expanded to meet
identified needs of both the Army and Air Force.

     USAREUR also plans to move selected units into the
Stuttgart area following the relocation of certain units
currently in place. Projected time frame is July/August 1978.
CONCLUSIONS

     The actions taken or planned may produce more effective
facilities management at Augsburg and Bremerhaven. We be-

                              21
lieve, however, that the actions planned 'or Munich will not
produce better facilities utilization.

RECOMMENDATIONS

     With regard to the Munich facilities, we recommend that
the Secretary of the Army require USAREUR to

     --relocate activities now in rented space
       into available free space where possible,
     -- prepare a plan for consolidating activities
        and identify those facilities which are not
        needed and available for rel'ease to the
        Federal Republic of Germany, and
     -- prepare a justification for retaining those
        facilities showing a low utilization rate.




                             22
APPENDIX I                                                 APPENDIX I
                         EIGHTY-ONE USAREUR

                        INSTALLATIONS SHOWING
                    UTILIZATION OF AVAILABLE SPACE

                                                            Percent
                                                            of spaces
                             Usable            Spaces       used for
                              space             used        quarters
Community/Installation      Gross Net          for qtrs.    Gross Net
       VII Corps
Ansbach
   Bleidorn Kaserne         617          555      342         55        62
Aschaffenburg
  Brettsell Corn.
    Facility                 33           30        8         24        27
Augsburg
  Gablinger Arfld.        1,305        1,175       0           0         0
  Flak Kaserne            1,153          851     510          44        60
  Sheridan Kaserne        3,256        2,553   1,429          44        56
Bamberg
  Harris Barracks           136          140      79          58        56
Garmisch
  Sheridan Barracks         418          355      97          23        27
  Strib Barracks            164          121      60          3/        50
Goeppengen
  Hohenstadt                 34           31      11          32        35
Heilbronn
  Reisenbach Com.            40           36      12          30        33
Munich
  Family Housing
  Chiemgau                1,200          904     225          19        25
New Ulm
  Wiley Barracks          2,125        1,484     882          42        59
Nuernberg                   923          794     550          60        69
  Johnson Barracks
  Monteith Barracks       1,596        1,336     894          56        67


                                  23
APPENDIX I                                            APPENDIX I
                                                        Percent
                                                        of spaces
                            Usable         Spaces       used for
                            spaces          used        quarters
Community/Installation   Gross   Net      for qtrs.     Gross Net
     VII Corps

7th Army Training Area
  Camp Wildflecken       3,178    2,619     1,210        38        46
  South Camp Vilseck     1,988    1,732       817        41        47
  Radio Station
    Schneebe                45       45         0         0        0
  Hohenfels Training
    Area                 6,096    5,424     1,255        21        23

Stuttgart
  Boeblingen
  Maintenance
  Plant                    184      166         0         0         0
  Flak Kase :ne          1,043      621       407        39        66
  Funker Kaserne           592      382       229        39        60
  Hospital Bad
    Cannstadt              377      339       105        28        31
  Coffey Barracks          947      717       463        49        65
  Karls Kaserne            130      124         0         j         0
  Ludendorf Kaserne        841      634       396        47        62
  Murphy Barracks          195      175         0         0         0
  Robinson Barracks        405      354       166        41        47
  Valdez Barracks           91       82        47        52        57
Wuerzberg
  Hindenburg Kaserne       517      465       116        22        25
  Nike Site Mainbullau     117      105         2         2         2
  Leighton Barracks        912      741       481        53        65
     V Corps
Bad Kreuznach
  Anderson Barracks        648      542       184        28        34
Baumholder
  WC Welzel Kaserne        320      203       129        40        64
  Nabollenbach             270      192       130        48        67
  Hospital Neubruecke      534      432       225        42        52
  Reitscheid Nike Site     105       94         0         0         0
  Comsite Erbeskopf          6        5         0         0         0
Darmstadt
  Ammunition depot
    Muenster               324      265       145        45        55
                             24
 APPENDIX I
                                                                 APPENDIX
                                                           Percent
                                                           of spaces
                              Usable            Spaces     used for
                               spaces            used      quarters
 Community/Installation     Gross    Net       for qtrs.   Gross Net
      V Corps
   Cambrai                 1,823       1,061    697
 Frankfurt                                                  38       66
   Hansa Allee Family
     Housing                459         276     189
   Gibbs Kaserne                                            41       69
                          1,000         769     526         53       68
   Gutleut                1,061         688     299
   Michael                                                  28       43
                            137         111      20         15       18
Frankfurt
  QM Mortuary                16          14       9
  FKT Troop Housing                                         56       64
                            402         284     122         30       43
  Frankfurt AFN Station      89          24      15         17       63
CS-essen
  Friedburg Training
    and Storage Area         41           7       9
  Pendleton Barracks                                        22       24
                            580         419     179         31       43
  Com. Site Linderhofe       79          48      17
  Bocksberg                                                 22       35
                             10           9       6         60       6?
Hanau
  Hutier Kaserne            915         549     343         37       62
Ma inz
   Camp Pieri               837         730     279         33       38
   1st Support Brigade
Bremerhaven
  Hospital Bremerhaven  120             108      46
  Com. Facility                                             38      43
    Garlstedt            21           19         0
  Carl Schurz Kaserne 1,149                                 0        0
                                   1,149       268         23       23
Heidelbtrg
  Hospital Heidelberg       294          235    94
  Tompkins Barracks                                        32       40
                          1,116          879   493         44       56
  Koenigstuhl Radio
    Relay Station            29           26    18         62       69
Kaiserslautern
  Kriegsfeld Ammunition
    Dep)t                  461          371    161         35       43

                                  25
 APPENDIX   I                                               APPENDIX I

                                                            Percent
                                                            of spaces
                              Usable            Spaces      used for
                              spaces             used       quarters
Community/Installation      Gross  Net          for qtrs.   Gross   Net
Einsiedlerhof
  Medical Depot             450          252            0        0        0
  1st Support Brigade

  Miesau Army Depot         858          711      305        36       43
  Bann Commo. Station        10            9        6        60       67
  Kleber Kaserne          2,170        1,730    1,129        52       65
  Landstuhl Hospital      1,581        1,283      707        45       55
  Panzer Kaserne            779          268      130        17       49
  Kapaun Barracks         1,962        1,106      575        29       52
  Daenner Barracks        1,050          945.     487        46       65
Karlsruhe
  Neureut Kaserne         1,244        1,030      674       54       65
  Pforzheim Missile
    Site                     88          79         0        0         0
  Rheinland Kaserne       1,203         894       573       48       64
  Smiley Barracks           326         290       189       58       65
Mannheim
  Funari Barracks          536          425       247       46       58
  Hammonds                 422          299       193       46       66
  Spinelli               1,116          840       538       48       64
  Taylor                 1,030          776       346       34       45
Pr imasens
   Dahn Ammunition Depot   202       182           15        7        8
   Hustephohe Kaserne    3,023     1,948        1,343       44       69
Primasens
  Primasens Storage        268          241        42       16       17
Worms
  De La Police              73           41       27        37       66
  Taukkunen Barracks       616          510      101        16       20
Zweibruecken
  Kreuzberg Kaserne      1,116          652      301        27       46
   Total                63,627     49,110       23,324      37       47
 All other BEQ
 spaces in Germany     116,188     77,076       76,990      66       99


                                  26
APPENDIX I                                        APPENDIX I

 Grand total         179,815 126,186 100,314     56    79
1/ Gross capacity is the total number of individual rooms
   planned for sleeping purposes.
2/ Net capacity equals gross capacity minus diverted spaces
   and unit integrity allowance.




                            27
APPENDIX II                                                           APPENDIX II


                            DEPARTMENT OF THE ARMY
                       OFFICE OF THE ASSISTANT SECRETARY
                                 WASHINGlON, D.C. 20310




   Mr. Fred J.Shafer
   Director, Logistics and
      Communications Divisicn
   General Accounting Office
   Washington, D. C.    20548



   Dear Mr. Shafer:

   This is in reply to your letter of 16 December 1976 to the Secretary of
   Defense regarding your draft report, "Improvements Needed in Managing
   U. S. Army Facilities in E :ope," OSD Case #4491.

   With the exception of a few areas discussed more fully in the attached
   comments, the Army concurs with most of the recommendations and agrees
   that various aspects of the management and utilization of facilities in
   Europe require improvement over those existing at the time of the GAD
   audit.  Corrective actions are underway by US Army Europe (USAREUR) to
   improve the management and utilization and significant improvement has
   been made in tl,at direction.

    It is recognized that more work needs to be done and that many of the
    corrective actions will take additional time to achieve the desired de-
    gree of improvement.  The Department of the Army intends to insure that
    USAREUR continues its efforts to manage and to utilize properly its fa-
    cilities. These areas will be looked into during the Army Inspector
    General and Auditor General's FY 1977 general inspection of USAREUR/
    Seventh .rmy scheduled to commence o/a 25 April 1977.

    Specific comme,.ts to your report are inclosed.

                                              Sincerely,




    I Incl                                   Jon Perkias III
    Comments                    Acting Deputy for Installations and Housing
                                                  OASA(I&L)




                                            28
APPENDIX II                                                         APPENDIX II



                          Department of the Army Comments
                                        on
                       GAO Draft Report of 16 December 1976

                         "Improvement Needed in Managing
                         U.S. Army Facilities in Europe"
                                   Code 945267
                                  D Case No. 4491)




  I. Finding: US Army Europe (USAREUR) has not placed sufficient emphasis
  on facilities management resulting in inaccurate and incomplete inventory
  data. Efforts to improve this data have not produced the desired effect
  of more accurate inventory data.

  Specific Findings:

       1. Tn 1974, USAREUR decentralized most facilities management responsi-
  bility by delegating it to the regional commanders, who in turn delegated
  it to the 36 (report indicates 32, which is in error) community commanders.
  However, central oversight is needed.

  Comment: The Army agrees that central oversight is needed. Since the GAO
  audit, USAREUR has placed greater emphasis on facilities management and
  many corrective actions have been taken, or are underwav, to improve man-
  agement and utilization of facilities.

      2. USAREUR's instructions and its policy on facility use are not
  explicit and do not establish utilization or disposal priorities.

  Comments:

  Existing policies require that all properties found excess to US needs be
  reported to HQ USAREUR for determination of disposition. Once a property
  is determined for release, explicit instructions are issued to the US Army
  Real Estete Agency, Europe for disposal of the property. If.priorities
  for dispoal are involved, these are contained in the instructions issued
  by USAREUR.

  USAREUR recently published the Stationing Program (STATPRO) which contains
  a Facilities Disposition Plan, a means to identify facilities for disposal.
  Additionally, USAREUR Regulation 405-15, Space Allocation and Use of
  Facilities is under revision. This regulation and the STATPRO will pro-
  vide more definitive guidance on facilities utilization and disposal.

      3. The management systems are not geared for emphasizing the identi-
  fication and release of nonessential facilities.




                                         29
APPENDIX II                                                         APPENDIX II




 Comments:

 The identificat4 n of nonessential facilities is a responsibility of the
 major subordinate commands who manage resources, including real property,
 as igned to thee.   ;SAE;i'P has neriodicallv issued instructions for the
 survey of holdings, such as hieh-rental facilities, placing emphasis on
 continuing action by the subordinate cormandq to assess the need, if any,
 to retain real pronertv accommodations.

 USAREUR directives, such as USAREUR Regulation 4C5-15 and the STATPRO,
 emphasize th? efficient use of facilities and identifying facilities for
 release when no longer required. Periodically, command letters are sent
 to reemphasize this policy. Such a command letter, nersonally signed by
 tl'- C1NCUSAREUR, that emphasized release of rental properties, was sent
 on 10 Feb 75.

     4. Lower level implementation of facility use policy is not effec-
 tivelv monitored.

 Comment: USAREUR is emphasizing management improvements for facilities
 use within available resources. It is anticipated that USAREUR Real
 Prop.rtv Inventory Utilization system, now operational, will assist in
 improvin, monitoring of facility use.

 II. Finding: Utilization data is not reported for several types of
 facilities and, in chose instances where it is reported, the data is in-
 accurate and unreliable.

 Specific Finding: USAREUR prepares utilization rfports for bachelor and
 'amilv housing and some storage facilities. USARi'JR officials at all
 command levels generally consider reported data on utilization to be in-
 accurate. Utilization of other facilities for administration, training,
 maintenance, community, and medical services is not reported.

 Comment: Recurring utilization reports, except for housing and some stor-
 age facilities, are not reouired by higher authority. These reports are
 expensive in terms or m-npower and maintenance time. However, USAREUR's
 Real Property Inventors _nd Facility Utilization System, undeC development
 at the time of the nCAO review, is now operational. Initial input data for
 this report was received 30 September 1976. As with any new system, error
 rates were high but are being reduced as people become familiar with the
 system. Like the Bachelor Housing Utilization report, accuracy is dependent
 upon those filling out the forms. It is intended that actual utilization
 for most facility categories will be reflected in reports for this system.
 Determination of how well space is being utilized is still dependent upon
 on-site inspections. Frequency of facility utilization inspection will be
 specified in the revised USAREUR Regulation 405-15.




                                        30
APPENDIX II                                                           APPENDIX II




 III. Finding: Efforts to improve facility management, through computer-
 i,~ing data and long-range planning, have moved slowly and when completed
 may still not provide the information needed for effective management.

 Specific Findings:

      1,. USAREUR's planned computerized information system will orovide
 data including location, type, condition and dedicated use. Inaccuracies
 in data received are a problem.   Actual utilization may not be reflected
 on the report.

 (Comment:   See comment on Finding II.

    2. Development of USAREUR Master Plans began about three years ago.
As of 31 March 1976, only one Phase I stage Dlan has been approved by
USAREUR.

Comment: USAREUR master planning began in CY 74. As of March 1976, one
Phase I document had been apnroved by U;APEITr.   The community involved,
Bamberg, was the one used as a test master-rlan community, and began docu-
mentation earlier than other communities.    As of 29 November 1976, USAREUR
communities had coimpleted 18 Phase I documents, 13 Thase II documents and
four Phase IV documents. At that time, some of the documents had been
approved and the remainder were being reviewed. Scheduled submission date
of initial master plans by all USAREUR commnunuties was 31 December 1976.
These plans have to be technically and administratively reviewed prior to
USAREUR approval.

     3. A Stationing plan is being developed.   It is geared toward future
 facilities requirements.

Comment: The Durpose of t: e stat in.iag ilan is to support the USAREUR
mission. This document was published ..d distributed 30 June 1976 and is
being used as a long-range planning document.

IV. Finding: The Army has Daid auprters allowance to bachelors living
off post when adequate quarters we:e available at their installation. The
Army recognized that abouL $9 million annually could be saved if available
quarters were used.   C,AO estimated, however, that about $16.7'million could
have been saved in 1975 if adequate bachelor ouarters, which were available,
had been used.

Specific Findings:

    1. As of 31 July 1975, an annual utilization report showed that only
about 56 percent of the bachelor enlisted quarters and about 77 percent of
bachelor officer quarters were being utilized for housing.




                                          31
APPENDIX II                                                         APPENDIX II




 Comment: Percentages computed by the GAO from the Bachelor Housing capa-
 bilities and Utilization Report were based on gross capacity, which includes
 authorized diversions and substandard space. This is not an objective
 basis for computing percentage utilization. Net usable space is the more
 reasonable base figure. Since 31 July 1975, two additional reports have
 been submitted, those of 31 January 1976 and 31 July 1976. The 31 January
 1976 report shows a utilization of 63 percent if calculated in the same
 manner as the GAO report.   (Calculated on the worst case, actual utiliza-
 tion vs gross capacity, which is contrary to existing regulation which
 permits diversion of spaces to include those building spaces undergoing
 MDUSF renovation). Usine normal lv nccented methods, the utilization per-
 centage from the same two reports would be 74 percent and 82 percent,
 respectively. The reports show significant improvements over that six-
 month period and efforts are being made to achieve further improvement.

     2. GAO estimated that by fully and uniformly implementing policy and
 procedures regarding utilization of bachelor quarters and payment of BAQ,
 around $16.7 million could be saved in quarters allowance.

 Comments:

 DA policy is to reduce to a minimum the numbec of bachelors drawing Basic
 Allowance for Quarters. Progress is being made. For example, the number
 of bachelor enlisted drawing BAQ in USAREUR was reduced from 4,941 to 4,00O
 during the period 31 July 1975 to 1 January 1976, as reflected by the
 Bachelor Housing Capacities and Utilization Report. Although USAREUR
 housing is not fully utilized, the right housing is not always available
 at the place needed for the mission. In some places there is housing
 excess to the number of personnel needed for the mission. On other loca-
 tions the reverse is true. Thus, mission requirements preclude attaining
 a perfect balance which would permit eliminating all BAQ payments to bach-
 elor personnel. Nonetheless, additional improvements are needed and steps
 are being taken to that end.

  Command letters were sent out on 3 October 1975 to each USAREUR major
  command to emphasize the policy of reducing authorizations for living off
  post. HQ USAREUR included a check of this policy in visits to communities
  concerning facilities utilization.

      3. Department of the Army and USAREUR approval must be obtained before
  quarters can be diverted. Our analysis of the July 31, 1975, Bachelor
  Housing Capacities and Utilization Report summaries showed that the total
  diversion rate for all USAREUR bachelor quarters was 16 percent, or 28,812
  spaces.

  Comments:

  Under existing DA regulations, major Army commanders (MACOM's) are dele-
  gated authority to approve divcriion of adequate, or substandard may be
  made adequate (S?4BMA), bachf'or housing using the following guidelines:




                                         32
APPENDIX II                                                          APPENDIX II




    a. The duration of the diversion should be no longer than 36 months
from the date of crproval.

    b. The diversion should not result in the dislocation of assigned
personnel to other than better or equal facilities.

    c. Total spaces in a diverted status at any one time should not exceed
more than ten percent of the installation's adequate or SMBMA assets or
1,200 barracks/100 BOO spaces, whichever is the lesser.

An information copy of each diversion approval by MACOM's is required to
be provided to HQ DA. DA approval to divert substandard bachelor housing
is not required.

Based on information copies of diversion approvals by USAREUR and DA 1709
reports, majority of diverted bachelor housing in Europe is located at
those installations having excess housing but are short of other types of
facilities required to support their mission, such as administrative and
storage space.

V. Finding: Family housing is being occupied by some families on a reim-
bursement basis. Regulations permit this, but the rent being charged by
the Army does not cover operation and maintenance costs as required by
these regulations.

Specific Findings

    1.  As of 31 December 1975, there were 610 ineligible families occupying
government quarters in USAREUR on a reimbursable basis.

Comment: USAREUR does have ineligible military and civilian personnel oc-
cupying government housing that is generally excess to Army needs. Assign-
ment of these ineligibles is accomplished in accordance with appropriate
DA and USAREUR regulations and is closely controlled. The subject of
appropriate reimbursement is covered in the next two Specific Findings.

    2. We found that the rental rates are actually based on proration of
the family housing funds budgeted for all family housing quarters through-
out USAREUR and do not include all overhead costs incurred by USAREUR in
managing the Family Housing Management Account for the units.

Comment: USAREUR is revalidating Fair Market Rental rates and total income
derived from subject renters for comparison with actual costs incurred for
operation and management of the units.


                    (See GAO Note p. 49)




                                           33
APPENDIX II                                                         APPENDIX II




                      (See GAO note p.   )




 VI. Finding: As the result of an Army Audit Agency report, issued in
 1974, Army officials in Europe are aware that facilities are under utilized.
 That report noted that an estimated $28 million in operation and maintenance
 costs could be saved annually if activities were consolidated and unneeded
 facilities returned to the German Government.

 GAO's review disclosed that the facilities are still underutilized and that
 very little effort has been made to consolidate activities and to return
 facilities to Germany. To the contrary, GAO's review disclosed that in
 several military installations, activities are spread thin throughout the
 facilities to show occupancy of space.

 Specific Findings:

     1. Facilities are still being underutilized and USAREUR officials are
 doing little to correct the situation.

 Comment: The AAA report cited some valid observations concerning excess
 facilities. Since that time (Feb 7!'), more than 50 installations have
 been released. The report did recognize the difficulty in consolidating




                                         34
APPENDIX II                                                         APPENDIX II




  activities to use up vacant space; however, USAREUR has more than 800
  installations, and the excess space is scattered throughout them in small
  packets. Due to the imbalance between space requirements of activities
  and the available space at a given location, there will always be some
  excess.

      2. Augsburg, Bremerhaven, Munich and Stuttgart showed low utilization
  for long periods. Munich has been underutilized for about eight years.

  Comments:

  .,ugsburg is not underutilized now. Two artillery battalions that were
  allocated from CONUS in June 1976 are now stationed in Augsburg.

  Additional units are planned to be relocated to the Bremerhaven area in
  Jul-Aug 1978. Additional support personnel, inclueing US Air Force Europe
  units, will more fully utilize Bremerhaven facilities.

  Three USAREUR schools moved to Muni'n from Bremerhavei.. This was a result
  of the space requirements for incoming units at Bremerhaven exceeding the
  space available in the area. Additionally, it provided for fuller utili-
  zation of Munich's housing and transient billeting assets.

  USAPEUR's current plans include the relocation of several units/activities
  to the Stuttgart area upon completion of the planned relocation of selected
  activities from Stuttgart. These planned moves should result in more effi-
  cient utilization of facilities in the Stuttgart area.

      3. Gablingen Kaserne (Augsburg community) has been vacant for over
  eight years. It has been the cause of local adverse publicity. The prob-
  lem of whether USAREUR or the Army Security Agency (ASA) is responsible
  for the deteriorating buildings should be resolved.

  Comment, USAREUR has taken the initiative to resolve the problem at
  Gablingen. The activities there will be consolidated and USAREUR plans
  for the unused facilities to be returned to the FRG. ASA has been advised
  of this intention and instructed to plan accordingly.

   4. Retention of facilities for contingencies seem to be a factor in
  the commanders' decision to retain nonessential facilities. We were told
  that new forces will be moved into Augsburg, Wiesbaden, and Bremerhaven
  because of the underutilized space in these communities.

  Comments:

  Augsburg was identified as the best location for deploying and stationing
  two rotational field artillery battalions from the operational standpoint.
  Secondarily, it would better utilize facilities which were at that time
  underutilized.




                                        35
APPENDIX II                                                         APPENDIX II




 Wiesbaden was identified as the best location for stationing a rotational
 Bde. The Weisbaden/Kaiserslautern exchange and reactivation of Sembach
 AB were necessitated by this stationing action. Wiesbaden facilities were
 not underutilized; in fact, major reloca-ions of Air Force units to
 Kaiserslautern had to occur in order to staticn the brigade in Wiesbaden.
 Bremerhaven facilities were drawn down to the minimum requirement to sup-
 port the port operation and the USAREUR schools that were located there.

 The decision to locate additional units in NORTHAG necessitated expansion
 of Bremerhaven facilities to accommodate the units. With the addition of
 an Air Force beddown requirement in Bremerhaven and the accommodation of
 the Bde at Garlstedt, Bremerhaven facilities will NOT be underutilized;
 rather, they will be expanded in order to accommodate the new units.




              GAO note: The deleted comments relate to matters
              which were discussed in the draft report but were
             deleted from this final report.




                                       36
APPENDIX III                                         APPENDIX III

               PRINCIPAL-OFFICIALS   -RESPONSIBLE

                FOR-ADMINISTERING ACTIVITIES

                  DISCUSSED'IN'THIS'REPORT

                                              Tenure-of-office
                                              Prom          To
SECRETARY OF DEFENSE:
    Harold Brown                       Jan. 1977       Present
    Donald H. Rumsfeld                 Nov. 1975       Jan. 1977
    James R. Schlesinger               July 1973       Nov. 1975
SECRETARY OF THE ARMY:
    Clifford L. Alexander              Feb.   1977     Present
    Martin R. Hoffmann                 Aug.   1975     Feb. 1977
    Norman R. Augustine (acting)       July   1975     Aug. 1975
    Howard H. Callaway                 May    1973     July 1975




                            37