GSA Inspector General to Issue Report February 24 Finding $1.2 Billion in Unverified Federal Lease Payments

$1.2 Billion in Charges Lack Proper Documentation or Market Verification

The General Services Administration's inspector general will release a report on February 24 concluding that the agency paid at least $1.2 billion in federal lease charges since 2023 without adequate documentation or market-rate verification, according to three congressional appropriators briefed on the findings and a GAO investigator who reviewed a draft. The report, titled "Audit of GSA Lease Oversight: Billions in Unchecked Rent Payments," found that GSA contracting officers approved rent increases, operating-expense adjustments, and utility pass-throughs for 1,847 federal buildings without obtaining required independent appraisals or cost certifications, the sources said.

The draft report focuses heavily on leases held in the Washington metropolitan area, San Francisco, Chicago, and Dallas, where annual rent increases are tied to local commercial indexes. Two congressional appropriators said the inspector general found that GSA accepted landlord calculations for roughly $410 million in operating-expense escalations without reconciling them against actual building costs. In one case cited in the draft, the federal government paid $18.3 million over three years for a 14-story building at 1800 F Street NW in Washington after the landlord submitted operating expenses that were never audited against actual invoices, one of the appropriators said.

The GAO investigator told The Alamo Post that the $1.2 billion figure represents payments that "could not be reconciled to supporting documentation" during the inspector general's sample review, not necessarily proven overcharges. Still, the report is expected to recommend that GSA recover or withhold at least $270 million pending verification, the investigator said. The GSA inspector general's office declined to comment, citing its policy of not discussing reports before release.

OMB Identified Red Flags in December but Did Not Act, Sources Say

The report is likely to renew scrutiny of the Office of Management and Budget's oversight of federal real-property spending. A budget analyst at OMB said the Office of Federal Procurement Policy flagged the GSA lease-data gaps in a December 18, 2025, internal memo to OMB Director Russell Vought. The memo, reviewed by The Alamo Post, warned that "inconsistent lease-cost documentation across GSA regions presents elevated risk of overpayment" and recommended that OMB require quarterly certifications from GSA regional commissioners before fiscal year 2026 rent payments continued at full volume.

Two congressional appropriators said OMB did not impose the recommended quarterly certifications and instead directed GSA to submit a corrective-action plan by March 15, 2026. That plan is still pending. The budget analyst at OMB, who was not authorized to speak publicly, said the delay was due to a broader review of federal real-property policy that the administration planned to announce in late March. Republican staff on the House Transportation and Infrastructure Committee and the Senate Environment and Public Works Committee are expected to use the February 24 report to press for hearings in early March, the three appropriators said.

The draft inspector general report also identifies specific contracts of interest. One is a 15-year lease signed in 2022 for a 312,000-square-foot Department of Homeland Security complex in St. Louis. The report found that GSA approved $67 million in rent escalations tied to a local producer-price index even though the landlord's actual property-tax and insurance costs decreased during the same period, according to the GAO investigator. Another case involves a Veterans Affairs lease in Denver where the landlord billed the government $9.4 million for "capital improvements" that were never independently inspected, two of the appropriators said.

Recovery Efforts Could Stretch Through 2027

The report is expected to recommend that GSA stand up a centralized lease-audit unit with authority to withhold rent from landlords that fail to produce supporting documents within 60 days. It will also call for a formal reconciliation of the $1.2 billion in questioned costs by August 31, 2026, and a separate recovery plan by December 1, 2026, the sources said. One of the congressional appropriators said the recovery effort could extend into 2027 because many leases contain clauses requiring arbitration before the federal government can unilaterally withhold payments.

The General Services Administration, in its draft response to the inspector general, agreed with five of the seven recommendations and partially agreed with two, according to the GAO investigator. GSA Administrator Stephen Ehikian is expected to testify before the House Transportation and Infrastructure Committee's subcommittee on economic development, public buildings, and emergency management during the week of March 9, two congressional aides said. The aides were briefed on the tentative hearing schedule on February 20.

What to Watch for After Release

The first test will be whether the administration moves quickly to implement the report's recommendations or treats the findings as a long-term management issue. Two congressional appropriators said they expect the White House to issue a statement on February 24 framing the report as evidence of prior mismanagement, while Democrats on the oversight committees are likely to demand a Government Accountability Office follow-up review by mid-March.

Industry groups are also preparing for fallout. The Building Owners and Managers Association International and the National Association of Real Estate Investment Trusts both plan to issue statements emphasizing that the $1.2 billion figure reflects documentation failures rather than confirmed overcharges, according to lobbyists familiar with the groups' communications plans. Several large federal landlords, including Boston Properties and JBG Smith, have scheduled internal calls for February 25 to review lease files in anticipation of congressional inquiries, a defense contractor present at a related industry briefing told The Alamo Post.

The report is scheduled for release at 10:00 a.m. Eastern on February 24 on the GSA Office of Inspector General website. The Alamo Post will publish follow-up coverage as agencies, Congress, and federal contractors respond.