Corporate & Securities Law

A $66.5 Million Math Error?

Wow…:

GSA officials were asked recently to reassess the total cost of donated items in what the agency called a routine audit.  “In doing so, it was determined that some of the unit costs were ‘eaches’ and others were ‘for-case’ lots. The final adjustments reveal there was a significant overstatement in the total asset valuation,” GSA officials reported to FEMA, which released the findings Monday.  For example, each spork was assigned the value of an entire case, inflating the original estimated value of the supplies a thousandfold to $36 million from $36,000. Packs of toilet paper originally estimated to be worth $1.5 million dropped to about $18,000, and plastic cutlery kits, from $6.3 million to about $25,000.

“The actual total value of the surplus property was determined to be approximately $18.5 [million], and this figure was validated by both FEMA and the GSA Office of Personal Property Management,” FEMA told CNN in an e-mail.  GSA spokeswoman Viki Reath said Monday she would investigate whether it is unusual for the agency to make such a large accounting mistake … . The agency told CNN in February that the value of the FEMA items was about $85 million.

Full post as published by Truth on the Market on July 22, 2008 (boomark / email).