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Government spending legislation aims to audit GSA each year (with related video)

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Following a series of hearings in Congress about the General Services Administration’s (GSA) lavish spending at a Las Vegas regional conference, Rep. Jeff Denham, R-Calif., has introduced legislation that will require an annual audit of the federal GSA be conducted and reported to committees in both the U.S. House of Representatives and the U.S. Senate. A GSA Inspector General report led to the resignation of GSA’s administrator and the firing of two high-level GSA deputies.

“It is unacceptable that the corruption, fraud and waste within GSA, an agency that has nearly a $10 billion slush fund, remains hidden from the American taxpayers every single year. Today I’m introducing a bill that will request transparency on an annual basis by requiring extensive audits so American taxpayers can see exactly where this waste is going to hold this agency accountable,” Denham said during remarks on the House floor last week. Denham is chairman of the House Subcommittee on Economic Development, Public Buildings and Emergency Management.

Govpro got the views of Eric Zoetmulder, a director at Cary, N.C.-based SciQuest, on technology’s role in controlling and monitoring government procurement and government spending. SciQuest helps government, academic, healthcare and research-centric organizations streamline their procurement and supplier management processes.

The company’s on-demand e-procurement software provides control and visibility to boost government spending efficiencies. It streamlines catalog management, directs spend to preferred vendors and drives compliance with contracts.

Govpro: What does overspending mean to you?

Eric Zoetmulder: Overspending in the procurement world means not using negotiated contracts where you can use them to take advantage of discounts. It means spending more than your budget allows because you do not know how much is left in your budget, or how much spend is already out the door via credit cards or other out-of-process spending.

Overspending also means buying cheap and not taking into account the entire lifecycle of a product (you don’t want a cheaper car that ends up being more expensive due to repairs and gas use).

In short, overspending is caused by lack of control and insight into historical and current spending, as well as lack of visibility toward future needs. If you have control over the process and insight into the entire spend ecosystem, you can avoid the overspending discussion.

If and only if people begin to treat any overspending as a scandal — a huge, alarming problem — then we’ll start to see organizations spend their money more wisely. They will put every contract and every purchase under a microscope.

Govpro: How does your organization help in the process?

EZ: At SciQuest, our mission is to eliminate overspending and make sure organizations get every last bit of value for every penny of their spending. We do things like comb our customers’ spending activities and alert customers if they are not getting the maximum value from each and every purchase decision.

In a public company, [overspending] hurts the bottom line and reduces shareholder value. In a school system, it takes money away from things that can more directly benefit students and families. In a hospital, it can hurt patient care. In government, it enrages taxpayers. In some companies, it can create situations in which layoffs can cause terrible disruption in peoples’ lives.

The problem is, even if an organization claims, “There’s no overspending here,” they cannot be certain about that unless they have the purchasing tracking and analytics to ensure it’s true. Truth is, most spending organizations do not.

Video of Rep. Jeff Denham introducing legislation requiring transparency and annual audits of GSA.

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