We audited the National Park Service (NPS) to determine whether it complied with contract closeout requirements established by the Federal Acquisition Regulation, the U.S. Department of the Interior Acquisition Regulations, and NPS acquisition. NPS annually oversees close to $1.5 billion in contracts. Compliance with closeout requirements is critical for ensuring verification of goods and services provided, validation of final payment and incurred costs, and releasing excess funds for possible use elsewhere.
We reviewed 89 contracts valued at $33,763,172, and identified deficiencies with contract closeout compliance. For example, two contracting offices, the Denver Service Center Contracting Services Division (DSC) and the National Capital Region Acquisition Management Division (NCR), did not close 76 contracts within required time standards, with delays ranging from 19 days to 1,130 days, and did not prepare contract closeout statements to verify that required closeout steps had been completed for 64 contracts. Further, these two contracting offices did not complete an initial funds review to identify excess funds for deobligation for 54 contracts, and did not obtain a release of claims for 10 contracts where the release was required. Further, DSC and NCR and did not close 74 contracts in the Procurement Information System that had been completed and did not adequately document 52 contracts.
These deficiencies occurred because NPS did not provide adequate oversight of compliance with closeout requirements, DSC and NCR did not properly prioritize closeout in the contract life cycle, and NPS had inadequate policies and procedures that did not ensure compliance with contract closeout requirements. As a result, DSC and NCR have a backlog of contracts that need to be closed. In addition, DSC and NCR have not deobligated 3.5 percent of the amount we tested. Specifically, DSC and NCR did not deobligate $568,322 in excess funds in a timely manner and have not deobligated $626,924 in excess funds that remain obligated on completed contracts.
We offered six recommendations to help NPS develop policies and procedures to ensure compliance with closeout requirements, implement a process to identify unliquidated obligations for excess funds, and devise procedures to eliminate backlog of unclosed contracts. NPS concurred with our findings and recommendations, and has already begun implementing them.