The U.S. General Services Administration (GSA) should expand its support for telematics in leased vehicles and change its fuel rate structure to charge agencies for actual fuel use rather than miles traveled, according to a report from the U.S. Government Accountability Office (GAO).

GSA officials have agreed to implement the report's recommendations.

GSA procures vehicles it leases at a discount, passes on savings to its customers, and provides agencies with data that can be used to eliminate wasteful spending. Federal agencies in fiscal-year 2012 spent $1.1 billion to lease vehicles through GSA. Considering this cost, GAO conducted the report in order to ensure the GSA "is operating its leasing program in a manner that encourages agencies to minimize costs associated with their leased vehicles."

GAO consulted with experts and federal fleet managers about telematics, and they said its use can facilitate cost savings by providing fleet managers with information. However, its high cost impedes widespread adoption.

Under the report's recommendation, GSA will attempt to lower the cost of telematics devices to federal agencies through its purchasing power. The agency is currently trying to secure new contracts for telematics devices to make them available by the end of fiscal-year 2014. GSA will also collect and share information about federal agencies' experiences using telematics.

The GAO found two areas where GSA's rates and terms don't encourage agencies to reduce fleet costs.

First, the GSA charges agencies for fuel with a monthly fee based on miles traveled rather than actual fuel used. By doing this, agencies are not incentivized to reduce fuel costs not reflected by miles traveled, such as costs associated with idling and speeding, according to the report. GSA should also define what's considered "excessive wear and tear" so user agencies can decide whether it is more economical to lease or own vehicles, the report noted.

Read the full report here.