GAO Faults Forest Service for Fee Demo

By secretly taking money from non-Fee Demo funds, the Forest Service has spent $15 million to raise $15 million in Fee Demoreceipts.

–Michael Zierhut, Free Our Forests (FOF)Forest

 

A new report by the GovernmentAccounting Office (GAO) has found fault with the Forest Service‘s participationin the Congressional Fee Demo program. The report is available online at http://www.gao.gov/new.items/d03470.pdf. 

 

In both American Whitewater’sanalysis of the report, and an analysis by Free Our Forests, it appearsthat the Forest Service is spending at least one dollar for every dollar itcollects to manage the Fee Demo program.

 

The Forest Service’s reportedgross Fee Demo revenue for FY 2001 was over $35 million (p.6).  From thisfigure subtract the reported cost of collection, $5,051,000 (p. 9), the $10million of appropriated funds used to support the fee demonstration program(p.32), and the $4.6 million in user-fees previously collected at sites thatproduced fee income prior to becoming fee-demonstration sites [i.e.,campgrounds, boat launches, etc. After these adjustments to gross are made, allof Forest Service fee-demo sites in all of the USA generated a total netincrease in fee revenues of a mere $15 million or about the same amountrequired to collect the funds. This calculation does not include administrativecosts, which can not be calculated due to incomplete reporting by the ForestService.  Inclusion of thoseadministrative costs would likely push the net revenue from the Fee Demo muchlower.

 

Some of the faults identified bythe GAO are included below, the paragraphs that these quotes were drawn fromare included afterwards:

 

Ø     “[W]e did find that the Forest Service does notprovide consistent information on where fee revenue is being spent.” (page 3)

Ø     “The Forest Service does not have a process formeasuring the impact of fee demonstration expenditures on reducing the deferredmaintenance backlog.” (page 4)

Ø     “[W]hile acknowledgingthat it has a significant deferred maintenance problem, the agency has notdeveloped a reliable estimate of its deferred maintenance needs.” (page 4)

Ø     “Although the Forest Service tracks its feerevenues and expenditures separately from other appropriated funds, it does notaccurately account for some fee collection costs. Specifically, the ForestService does not report total revenues and fee collection costs related todiscounts that vendors receive for selling recreation passes directly to thepublic.” (page 5)

Ø     “[T]he accuracy of program-wide informationdepicting the amounts of fee revenues spent for various categories isquestionable” (page 5)

Ø     ‘[W]e found that the information that the ForestService provides on categorizing expenditures is not consistently reported.First, the fee program managers do not allocate their expenditures into thespending categories in a systematic manner. Second, the Forest Service feerevenue expenditure reporting categories overlap” (page 16)

Ø     “[T]he Forest Service officials stated thattheir accounting system is not set up to track expenditures into thesecategories. Local fee program managers, who compile the fee revenue expendituredata, use various methods to record their expenditures. “ (page 16)

Ø     “[I]n the absence of forest managers having aconsistent and systematic method for tracking and recording the expenditureamounts by spending category, the accuracy of the spending information in theagency’s annual report is questionable.” (page 16)

Ø     “Another concern affecting the spendinginformation in the agency’s annual report is the subjectivity of the spendingcategories themselves… expenditures for fee enforcement activities and feecollections may also be reported inconsistently… These inconsistencies furtheraffect the consistency of the Forest Service’s reporting of where fee revenuesare actually spent.” (page 17)

Ø     “[T]he agency does not have a process formeasuring how much has been spent on deferred maintenance or its impact onreducing its deferred maintenance needs. In addition, while the agencyacknowledges that it has a significant deferred maintenance problem, it has notdeveloped a reliable estimate of its deferred maintenance needs. As a result,even if the agency knew how much fee revenue it is spending on deferredmaintenance, it would not know if its total deferred maintenance needs arebeing reduced.” (page 19)

Ø     “[T]he amount of agency expenditures fordeferred maintenance cannot be determined nor can the agency determine whetherthe backlog of deferred maintenance needs is being reduced.” (page 21)

Ø     “Although the Forest Services accounting systemshould capture all revenues and expenses, program officials were not aware atthe time the system was developed that vendor discounts should have beencaptured… Excluding vendor discounts from the cost of collection is alsoinconsistent with federal financial accounting standards…” (page 25)

Ø     “The Forest Service practice of allowing vendordiscounts results in inaccurate fee revenue and expenditure reporting… [B]oth fee revenues and fee collection costs areunderreported. Because of inaccurate reporting of fee revenues and collectioncosts, the Forest Service has no assurance that it is in compliance with therecreational fee demonstration legislation requirement only allowing 15 percentof fee revenues to be used for fee collection costs” (page 25)

Ø     “[T]he Forest Service accounting system does nottrack administrative overhead costs for the Recreational Fee DemonstrationProgram or any other individual program within the agency. As a result theagency cannot determine these costs.” (page 32)

 

SELECTED QUOTES FROM GAO REPORT (GAO-03-470, APRIL 2003)

 

Based on the most recent ForestService data available, in fiscal year 2001, the agency spent 29 percent of itsfee demonstration revenue expenditures on visitor services and operations, includingtrash collection, campfire programs, and visitor satisfaction surveys; 21percent on maintenance of facilities, such as repairing comfort stations andfixing roofs; and 17 percent on fee collection. The remaining 33 percent wasspent on such activities as enhancing facilities, protecting resources, andenforcing laws. The legislation authorizing the fee demonstration programpermitted the participating agencies to spend fee revenues on all of thesekinds of on-site activities as long as the expenditures contributed toenhancing the visitor experience or helped protect, preserve, or enhanceresources. We reviewed the activities of nine demonstration sites in threedifferent regions to verify that the fee revenues were actually being spent inaccordance with the authorizing legislation for the program and agency spendingpriorities. We found no inconsistency. However, we did find that the ForestService does not provide consistent information on where fee revenue is beingspent. At each of the sites we reviewed, officials told us that decidingwhich category a particular expenditure falls into is a subjective judgmentthat is not necessarily consistent among sites. For example, the repair of anaging restroom facility could be categorized as either “maintenance,” or afacility enhancement that could fall into the “other” category.[1]

 

The ForestService does not have a process for measuring the impact of fee demonstrationexpenditures on reducing the deferred maintenance backlog. According to theForest Service, the agency does not track the extent to which fee demonstrationexpenditures have been used for deferred maintenance for a number of reasonsincluding the temporary nature of the program and because the agency is notrequired by the fee program legislation to measure the impact of feedemonstration revenues on deferred maintenance. Further, while acknowledgingthat it has a significant deferred maintenance problem, the agency has notdeveloped a reliable estimate of its deferred maintenance needs… [L]ike the Forest Service, the Park Service has not yetdeveloped a reliable estimate of its deferred maintenance needs.[2]

 

 The Forest Service keeps its fee demonstrationrevenue in two different Treasury accounts separate from its other appropriatedfunds, as required by the authorizing fee program legislation. Eighty percentof its fee revenues are maintained in an account for expenditure withoutfurther appropriation at the site where the fees were collected and 20 percentof its fee revenues in another account for expenditure on an agencywide basis withoutfurther appropriation. Although the ForestService tracks its fee revenues and expenditures separately from otherappropriated funds, it does not accurately account for some fee collectioncosts. Specifically, the Forest Servicedoes not report total revenues and fee collection costs related to discountsthat vendors receive for selling recreation passes directly to the public.[3]

 

The Forest Service is responsiblefor managing over 192 million acres of public lands in the United States. In carrying out itsresponsibilities, the Forest Service traditionally has been a decentralizedorganization, in which its programs are administered through 9 regionaloffices, 155 national forests, and over 600 ranger districts (each forest hasseveral districts). The Forest Service implemented the Recreational FeeDemonstration Program in fiscal year 1996 with four demonstration sites thatgenerated $43,000 during the year.1 The program has steadily grown over thepast 5 years and covers 87 sites, in 80 national forests, that generated over $35million in fiscal year 2001. A demonstration site may consist of an individualforest; a group of forests, such as the National Forests in Texas;or a specific area or activity within a forest, such as Mount St. Helens NationalVolcanic Monument in the Gifford Pinchot National Forestin Washington.[4]

 

On the national level, the most recentlyavailable information indicates that about one half of the fee revenues werebeing spent for visitor services and maintenance activities. However, becausethe agency relies on subjective determinations by local forest managers tocategorize its expenditures, these determinations are not consistent among sites.Accordingly, the accuracy of program-wide information depicting the amountsof fee revenues spent for various categories is questionable.[5]

 

The Nantahala River Gorge, one ofthe sites in the National Forests of North Carolinafee demonstration project, is a world-class whitewater river that attractsabout 250,000 people annually. In fiscal year 2001, the site generated about$208,000 in fee revenues through user fees and special use permits forcommercial outfitters. During that year, the site spent over $292,000 in feerevenues, which included revenues generated from prior years. Nantahala Gorgeofficials spent most of their fee revenues to upgrade or enhance facilities forserving visitors. For example, they spent about $150,000 by providing handicapaccessibility, improving visitor safety, and eliminating erosion andsedimentation of the Nantahala Riverby constructing a concrete surface for launching boats and rafts on the river.The following figure shows the enhanced boat-launching area.[6]

 

However, we found that the informationthat the Forest Service provides oncategorizing expenditures is not consistently reported. First, the fee programmanagers do not allocate their expenditures into the spending categories in asystematic manner. Second, the ForestService fee revenue expenditure reporting categories overlap.

 

The Forest Service reports itsfee demonstration expenditures using spending categories largely correspondingto those identified in the legislation authorizing the demonstration program.These categories are visitor services and operations, maintenance,interpretation and signing, facility enhancement, resource preservation andenhancement, security and enforcement, and cost of collection. However, the ForestService officials stated that their accounting system is not set up to track expendituresinto these categories. Local fee program managers, who compile the fee revenueexpenditure data, use various methods to record their expenditures. At thesites we visited, we found that local managers relied on a variety of financialinformation sources such as project work plans and job code summary reports, aswell as reviewing bills and receipts, as a basis for allocating theirexpenditures into the reporting categories. Further, one manager stated that healso interviewed his staff on work performed and the time they devoted tovarious tasks to estimate the amount of fee revenues spent in each reportingcategory. Accordingly, in the absence of forest managers having a consistentand systematic method for tracking and recording the expenditure amounts byspending category, the accuracy of the spending information in the agency’sannual report is questionable.[7]

 

Another concern affecting thespending information in the agency’s annual report is the subjectivity of thespending categories themselves… expenditures for fee enforcement activities andfee collections may also be reported inconsistently. For example, we foundthat some sites we visited reported fee enforcement activities as part of their“cost of collections.” However, other sites reported fee enforcement activitiesas part of their expenditures for “security and enforcement.” Theseinconsistencies further affect the consistency of the ForestService’s reporting of where fee revenues are actually spent.[8]

 

The Forest Service has used aportion of its fee program revenues to help address its deferred maintenancebacklog. However, the agency does not have a process for measuring how muchhas been spent on deferred maintenance or its impact on reducing its deferredmaintenance needs. In addition, while the agency acknowledges that it has asignificant deferred maintenance problem, it has not developed a reliableestimate of its deferred maintenance needs. As a result, even if the agency knewhow much fee revenue it is spending on deferred maintenance, it would not knowif its total deferred maintenance needs are being reduced.[9]

 

However, even though the ForestService is spending a portion of its fee revenues in this area, the agency doesnot specifically track how much it spent on deferred maintenance. So,expenditures like the trail maintenance at Nantahala Gorge are reported as a“resource preservation and enhancement expenditure.” Because the Forest Serviceuses this approach, the amount of agency expenditures for deferredmaintenance cannot be determined nor can the agency determine whether thebacklog of deferred maintenance needs is being reduced.[10]

 

Forest Service officials told usthat there are a number of reasons why the agency has not developed a processto track deferred maintenance expenditures from fee demonstration revenues.First, the agency chose to use its fee demonstration revenue to improve andenhance on-site visitor services rather than to invest its fee demonstration revenuesfor developing and implementing a system for tracking deferred maintenancespending. Second, the fee demonstration program is temporary and it is unclearat this time whether the Congress will make the program permanent. As a result,agency officials said that this uncertainty makes them question the wisdom ofdeveloping an additional process for tracking deferred maintenance. Finally,the agency was not required by the fee program legislation to measure theimpact of fee revenues on deferred maintenance. They have chosen not to do so.[11]

 

The federal agenciesparticipating in the Recreational Fee Demonstration Program are required by theauthorizing legislation to maintain fee revenues in separate Treasury accountsand to account for fee expenditures separately from other appropriated funds.Consistent with this requirement, the Forest Service accounts for its feerevenues and expenditures separately from other appropriated funds, even whenusing fee demonstration revenues along with other appropriated funds… Althoughthe Forest Service generally tracks its fee revenues and expendituresseparately from other appropriated funds, it does not accurately account forsome fee collection costs.[12]

 

Forest Service officials in thePacific Southwest and Pacific Northwest regions did notrecord the vendor discount and did not count vendor discounts as part of theirfee collection costs. Although the ForestServices accounting system should capture all revenues and expenses, program officialswere not aware at the time the system was developed that vendor discountsshould have been captured. Forest officials at thelocations where this was occurring could not tell us the total amount of vendordiscounts that the agency has permitted. Excluding vendor discounts from thecost of collection is also inconsistent with federal financial accountingstandards and the U.S. Department of Agriculture financial manual. Thesestandards require that total revenues and expenses be reported.

 

The ForestService practice of allowing vendor discounts results in inaccurate fee revenueand expenditure reporting. Because the vendor retains the discount ratherthan the Forest Service first collecting all fee revenues and then paying thevendor out of these revenues, the amount of fee revenues that the forestreceives is reduced. In addition, the vendor discounts are not included as partof fee collection costs. Thus, both fee revenues and fee collection costsare underreported. Because of inaccurate reporting of fee revenues and collectioncosts, the Forest Service has no assurance that it is in compliance with therecreational fee demonstration legislation requirement only allowing 15 percentof fee revenues to be used for fee collection costs.[13]

 

[I]t appears that the feedemonstration revenues were used to supplement rather than supplant recreationprogram funds.[14]

 

ForestService officials estimate that in 2001 the agency spent about $10 million of appropriatedfunds to support the fee demonstration program.[15]

 

[T]he ForestService accounting system does not track administrative overhead costs for theRecreational Fee Demonstration Program or any other individual program withinthe agency. As a result the agency cannot determine these costs. Feeprogram expenses that could be considered administrative overhead are comprisedof the cost of collecting fees and expenditures for routine program operationsprovided at the fee demonstration sites—such as on-site management support,site operation and maintenance planning activities, and conducting on-sitevisitor surveys. In fiscal year 2001, the Forest Service spent approximately$5.1 million in fee revenues for fee collection. In addition, the national feeprogram manager estimates that a small percentage of the $8.6 million spent forfee program operations in fiscal year 2001 could also be consideredadministrative overhead.[16]

 

The Forest Service pays for itsannual national meeting of fee demonstration program managers and staff usingother recreation appropriated funds although agency officials told us that someattendees may use fee demonstration program funds if it is part of theirtraining program.[17]

PLEASE WRITE YOUR CONGRESSMAN AND SENATORS!

 

Please take a minute to write orcall your Congressman and your State’s Senators to share your opinion aboutforest fees. Call the Congressional switchboard at (202) 224-3121

to be connected.  Here’s alist of Senators from the major Western States that have forest fees, withtheir phone numbers and addresses.

 

WESTERN SENATORS

CA – Barbara Boxer (202)224-3553;

       112 Hart, Washington, DC  20510

CA – Dianne Feinstein (202)224-3841;

       331 Hart, Washington, DC  20510

OR – Gordon Smith (202) 224-3753;

       404 Russell, Washington, DC  20510

OR – Ron Wyden (202) 224-5244;

       516 Hart, Washington, DC  20510

WA – Maria Cantwell (202)224-3441;

       717 Hart,  Washington, DC  20510

WA – Patty Murray (202) 224-2621;

       173 Russell, Washington, DC 20510

ID – Larry Craig (202) 224-2752;

       520 Hart, Washington, DC 20510

ID – Michael Crapo (202)224-6142;

       111 Russell, Washington, DC 20510

UT – Robert Bennett (202)224-5444;

       431 Dirksen, Washington, DC 20510

UT – Orrin Hatch (202) 224-5251;

       104 Hart, Washington, DC 20510

MT – Max Baucus (202) 224-2651;

       511 Hart, Washington, DC 20510

MT – Conrad Burns (202) 224-2644;

       187 Dirksen, Washington, DC 20510

CO – Wayne Allard (202) 224-5941;

       525 Dirksen, Washington, DC 20510

CO – Ben Nighthorse Campbell(202) 224-5852;

       380 Russell, Washington, DC 20510

AZ – Jon Kyl,(202) 224-4521;

       730 Hart, Washington, DC 20510

AZ – John McCain (202) 224-2235;

       241 Russell, Washington, DC 20510

 

ON THE PHONE (A brief phone message is adequate.)

* Tell your Senator orCongressman’s staff that you’ve seen the GAO Report about Fee Demo on ourNational Forests (the Report’s number is GAO-03-470);

 

* Tell them why you’re callingabout it – (example) The Forest Service is unaccountable for the fee money they’vespent. – Forest fees make so little money – and are sounpopular – that they need to be terminated this summer;

 

SAMPLE LETTER (Please vary it somewhat from thissample version!)

 

Dear Senator…,

 

I’ve seen the GAO Report on theRecreation Fee Demo Program on our National Forests and do not believe thisprogram should be reauthorized since the Forest Service is not accountable forthe money the Agency has raised with forest fees.

 

The Forest Service has beensupplementing their fee revenues with $10 million in appropriated tax dollars,which means they spent $15 million in 2001 to raise $15 million, when Congress limitedFee Demo’s cost of collection to 15% of revenues.

 

Will you find out for me thetotal amount of appropriated dollars that the Forest Service has used on forestfees since 1996 and what it was spent on?

 

(Add why you personally opposeforest fees.)

 

Yours,

Sincerely,

(PLEASE PRINT YOUR NAME ANDADDRESS VERY CLEARLY.)