Objective

The audit objective was to determine if the Office of General Services (OGS) has reviewed the warehouse space used by State agencies for cost-savings opportunities. Our audit covered the period January 1, 2014 through March 29, 2019.

About the Program

The Spending and Government Efficiency Commission was formed to streamline State government operations by eliminating redundancies and implementing cost-savings measures. As part of these efforts, the Warehouse Consolidation Initiative (Initiative) was implemented to achieve cost savings through the consolidation of warehouse space used by State agencies. At the start of the Initiative, a survey was issued to all State agencies inquiring about warehouse and storage space and the associated costs, because there was no central source for this information.

Key Finding

OGS has made progress in reducing leased warehouse space, having evaluated 29 leased warehouses, resulting in: the consolidation of 14, liquidation of 9, square footage reduction for 3, and no changes in the remaining 3. Three other warehouse evaluations were in progress during our audit. The Initiative realized cost savings of $1,699,020 during our audit scope and a reduction of 434,266 square feet. However, we also found:

• We could not determine the Initiative’s overall success, as an inventory of all State warehouses – leased and State owned – does not exist.
• OGS has not yet reduced any State-owned warehouse space as part of the Initiative, because OGS was directed to first evaluate and reduce leased warehouse space.

Key Recommendations

• Identify all State warehouses – both leased and State owned – including those previously evaluated and those yet to be evaluated as part of the Initiative, and maintain a comprehensive central listing. 
• Evaluate all State-owned and leased warehouses to optimize repurposing and cost-savings opportunities.