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By Dugald McConnell and Brian Todd, CNN
(CNN) - Contractors at an Environmental Protection Agency warehouse were careless with inventories, and used government furniture and appliances to create hidden “man caves” complete with couches and TVs, an agency watchdog alleges.
Out of sight of the security cameras, and often hidden behind screens or boxes, employees created rec-rooms with furniture and appliances from government storage, according to an audit, feathering their nests with televisions, DVDs, refrigerators, microwaves, and couches.
Perhaps the most elaborate part of the setup was an extensive gym, with weights and equipment to rival a fitness center. Using floor tiles from storage, they carpeted the area, and they used notebooks from storage to record their workouts, according to the EPA inspector general’s report.
The EPA was paying contractor Apex Logistics $1.6 million per year to handle the warehouse, located just outside Washington in Landover, Maryland.
“They set up a gym, they set up all these things with our money," said Ryan Alexander, with spending watchdog Taxpayers for Common Sense. “So we're paying a contractor, so their guys can sit around and watch tv and work out?”
The report also alleges that valuable inventory was going unused. Large amounts of equipment were idle – not just surplus furniture, but new and unopened air conditioners and refrigerators that sat untouched for the past five years.
Photos also show several upright pianos lying on their backs collecting dust.
"Why are we paying people to store things we don't need? It's just waste upon waste upon waste," said Alexander. "We have old computers that have never been opened. We have lots of stuff that we're just not using."
The auditors also reported finding dirty or unsafe conditions – from furniture piled in the aisles, to unsafe electrical wiring, to dust and rat feces throughout the building.
"It seemed that every aisle you walked down – it was a cumulative effect," EPA auditor Robert Adachi told CNN. "There was inefficiency, there was waste, there was potential abuse."
Perhaps most puzzling of all was a box containing expired passports of EPA employees – including diplomatic passports.
"This was just a breach of security," said Adachi, who pointed out that they could be sold on the black market if they fell into the wrong hands. "There were also other sensitive documents that contained personal identifiable information," he said.
The EPA says it takes the report seriously, and is taking corrective steps.
"We took immediate action to secure the warehouse and its contents, and issued a stop work order to the contractor," said EPA spokeswoman Alisha Johnson.
An inventory has almost been completed, she said, adding that "all personally identifiable information has been secured and will be stored or disposed of properly."
Adachi said much of the blame goes to the contractor, whom CNN was not able to reach. But still, he said, while the EPA responded quickly once it was alerted to the situation, the agency was still at fault for what he called "a pure lack of oversight" over the years.
Johnson said the EPA believes this was an isolated case, after reviewing all other storage and warehouses and finding them appropriately managed. She said the agency will implement additional safeguards for their oversight and management.
CNN's Chief Political Analyst Gloria Borger sat down with former Republican presidential candidate Mitt Romney and his wife Ann in Park City, Utah to discuss life after the 2012 election and the future of the Republican Party.
Mitt Romney told Borger that he was "very upset" for making the "47%" comments that became a big roadblock in his campaign last year in the final months before Election Day.
On life after the election, Romney said that it "feels right" to be out of the public bubble.
Romney also discussed Obama's choosing of Susan Rice to be the next national security adviser, saying that he finds his pick "disappointing" and thinks she "seriously misled the American people" on what happened in Benghazi.
Gloria Borger's interview with the Mitt and Ann Romney airs on "The Lead" at 4 p.m. ET and "The Situation Room" at 5 p.m. ET and 6 p.m. ET.