This is the accessible text file for GAO report number GAO-04-914T 
entitled 'National Park Service: Comments on Provisions of S. 2543, a 
Bill to Establish a Federal Program and Criteria for National Heritage 
Areas' which was released on June 24, 2004.

This text file was formatted by the U.S. General Accounting Office 
(GAO) to be accessible to users with visual impairments, as part of a 
longer term project to improve GAO products' accessibility. Every 
attempt has been made to maintain the structural and data integrity of 
the original printed product. Accessibility features, such as text 
descriptions of tables, consecutively numbered footnotes placed at the 
end of the file, and the text of agency comment letters, are provided 
but may not exactly duplicate the presentation or format of the printed 
version. The portable document format (PDF) file is an exact electronic 
replica of the printed version. We welcome your feedback. Please E-mail 
your comments regarding the contents or accessibility features of this 
document to Webmaster@gao.gov.

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately.

Testimony:

Before the Subcommittee on National Parks, Committee on Energy and 
Natural Resources, U.S. Senate:

United States General Accounting Office:

GAO:

For Release on Delivery Expected at 2:30 p.m. EDT:

Thursday, June 24, 2004:

National Park Service:

Comments on Provisions of S. 2543, a Bill to Establish a Federal 
Program and Criteria for National Heritage Areas:

Statement of Barry T. Hill, Director: 
Natural Resources and Environment:

GAO-04-914T:

GAO Highlights:

Highlights of GAO-04-914T, testimony before the Subcommittee on 
National Parks, Committee on Energy and Natural Resources, U.S. 
Senate 

Why GAO Did This Study:

The Congress has established, or “designated,” 24 national heritage 
areas to recognize the value of their local traditions, history, and 
resources to the nation's heritage. These areas, including public and 
private lands, receive funds and assistance through cooperative 
agreements with the National Park Service, which has no formal program 
for them. They also receive funds from other agencies and nonfederal 
sources, and are managed by local entities. Growing interest in new 
areas has raised concerns about rising federal costs and the risk of 
limits on private land use.

GAO was asked to comment on how provisions of S. 2543 might affect 
issues identified in GAO’s March 2004 testimony addressing the process 
for (1) designating heritage areas, (2) determining the amount of 
federal funding to these areas, (3) overseeing areas’ activities and 
use of federal funds, and (4) determining the effects, if any, they 
have on private property rights.

What GAO Found:

Provisions of S. 2543 would establish a systematic process for 
identifying and designating national heritage areas, addressing many of 
the concerns identified in GAO’s March 2004 testimony. At that time, 
GAO reported that no such systematic process exists, noting that the 
Congress has, in some instances, designated heritage areas before the 
Park Service has fully evaluated them. S. 2543 contains provisions that 
would require that a suitability study be completed and the Park 
Service determine the area meets certain criteria before the Congress 
designates a heritage area. While the bill defines heritage areas more 
specifically in terms of their national significance, the criteria 
outlined in S. 2543 will benefit from guidance that the Park Service 
has recently developed to guide the application of the criteria. This 
guidance will improve the designation process.  
 
Provisions of S. 2543 would limit the amount of federal funds that can 
be provided to heritage areas through the Park Service’s budget. In 
March 2004, GAO testified that from fiscal years 1997 through 2002 
about half of heritage areas’ funding came from the federal government. 
Specifically, for 22 of the 24 heritage areas where data were 
available, $156 million of the areas' $310 million in total funding 
came from the federal government. Of this, over $50 million came from 
Park Service funds dedicated for this purpose, $44 million from other 
Park Service programs, and about $61 million from 11 other federal 
sources. S. 2543 would restrict annual dedicated Park Service funding 
for heritage areas to $15 million. Individual areas may not receive 
more than $1 million in a given fiscal year and $10 million over 15 
years. 

Furthermore, S. 2543 includes provisions that could enhance the Park 
Service’s ability to hold heritage areas accountable for their use of 
federal funds. In this regard, S. 2543 (1) establishes a program that 
would provide the Park Service with the direction and funding needed to 
manage the agency's and the heritage areas’ activities; (2) 
establishes a schedule and criteria for reviewing and approving 
heritage areas’ management plans; (3) identifies criteria for use in 
reviewing areas' plans; (4) requires that the plans include information 
on, among other things, performance goals and the roles and functions 
of partners; and (5) requires areas to submit annual reports 
specifying, among other things, performance goals and accomplishments, 
expenses and income, and amounts and sources of funds. GAO has 
identified potential amendments to S. 2543 that would further enhance 
areas' accountability. 

S. 2543 includes provisions that address some of the concerns GAO 
identified in March with regard to heritage areas' potential 
restrictions on property owners’ rights and land use. For example, S. 
2543 allows property owners to refrain from participating in any 
planned project or activity within the heritage area. Furthermore, the 
bill does not require any owner to permit public access to property 
and does not alter any existing land use regulation, approved land use 
plan, or other regulatory authority.

What GAO Recommends:

The Congress may wish to consider amending S. 2543 to direct the 
Secretary of the Interior to (1) review areas’ financial audit reports 
and (2) develop results-oriented goals and measures for the Park 
Service’s overall heritage area program. 

www.gao.gov/cgi-bin/getrpt?GAO-04-914T.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Barry T. Hill at (202) 
512-3841 or hillbt@gao.gov.

[End of section]

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss provisions of S. 2543, the 
National Heritage Partnership Act, which proposes, among other things, 
to establish a federal program and criteria for designating national 
heritage areas. Over the past two decades, the Congress has 
established, or "designated," 24 national heritage areas and provided 
them with millions of dollars in financial assistance through the 
National Park Service. Furthermore, the number of bills introduced to 
study or designate new areas has grown considerably in recent years. In 
the 108th Congress alone, as of early March 2004, over 30 bills had 
been introduced to either study or designate new areas. This growing 
interest in creating new heritage areas has raised concerns that their 
numbers may expand rapidly and significantly increase the amount of 
federal funds supporting them. In addition, private property rights 
advocates are concerned that heritage area designations could increase 
the risk that federal controls or other limits will be placed on 
private land use.

Currently, heritage areas receive funding through the National Park 
Service's budget, although the agency has no formal heritage area 
program. The Park Service provides technical assistance to the areas 
through cooperative agreements, and the Congress appropriates to the 
agency limited funds for these activities.[Footnote 1] Funds provided 
to heritage areas are considered to be "seed" money to assist them in 
becoming sufficiently established to develop partnerships with state 
and local governments, businesses, and other nonfederal organizations 
as their principal funding sources. Heritage areas also receive funds 
from other federal agencies through a variety of programs, primarily 
the Department of Transportation for road and infrastructure 
improvements. On March 30, 2004, my testimony before this Subcommittee 
identified a number of issues that need to be addressed to improve the 
effectiveness of the heritage area initiative.[Footnote 2]

Through several provisions of S. 2543, the Congress is now considering 
whether it should establish a permanent program that would provide 
direction and funding for the Park Service's heritage area activities. 
Central to the debate is the absence of a systematic process and 
specific criteria for identifying and designating national heritage 
areas that would ensure that only the most qualified sites become 
heritage areas and the implications for the federal budget. In this 
regard, my testimony today focuses on how S. 2543's provisions may 
affect the process for (1) designating heritage areas, (2) determining 
the amount of federal funding to these areas, (3) overseeing areas' 
activities and use of federal funds, and (4) determining the effects, 
if any, they have on private property rights.

My testimony today is based on the work conducted for our March 
testimony, which was performed in accordance with generally accepted 
government auditing standards.

In summary:

* S. 2543 contains provisions that would establish a systematic process 
for determining the suitability of proposed sites as national heritage 
areas and for designating those areas found to be qualified. In our 
March 2004 testimony, we stated that no such systematic process 
currently exists. In this regard, we noted that, while the Congress 
generally has made designation decisions with the advice of the Park 
Service, it has, in some instances, designated heritage areas before 
the agency has fully evaluated them. S. 2543, however, would require 
that a suitability-feasibility study be completed and that the 
Secretary determine the area meets certain criteria before the Congress 
designates a heritage area. While the bill defines heritage areas more 
specifically in terms of their national significance, the criteria 
outlined in S. 2543 for determining an area's qualifications as a 
heritage area are similar to those currently used by the Park Service 
and would benefit from supplementary implementing guidance. The Park 
Service has recently developed guidance for applying its criteria, 
which will supplement the criteria identified in S. 2543 and improve 
the process for identifying and designating heritage areas.

* Provisions of S. 2543 would limit the amount of federal funds that 
can be provided to national heritage areas through the National Park 
Service's budget. In our March 2004 testimony, we stated that from 
fiscal years 1997 through 2002 about half of heritage areas' funding 
came from the federal government. According to data from 22 of the 24 
heritage areas, the areas received about $310 million in total funding. 
Of this total, about $154 million came from state and local governments 
and private sources and another $156 million came from the federal 
government. Over $50 million was dedicated heritage area funds provided 
through the Park Service, with another $44 million coming from other 
Park Service programs and about $61 million from 11 other federal 
sources. S. 2543 would restrict the funding for heritage areas that is 
allocated through the Park Service's budget to $15 million for each 
fiscal year. Of this amount, an individual area could receive not more 
than $1 million in a given fiscal year and not more than $10 million 
over 15 years. While this provision would restrict the amount of 
federal funds passing from the Park Service--the largest provider of 
federal funds---to the heritage areas, these areas can obtain funding 
from other federal agencies as well.

* S. 2543 includes a number of provisions that could enhance the Park 
Service's ability to hold national heritage areas accountable for their 
use of federal funds. In March, we stated that the agency had not 
always reviewed areas' financial audit reports, developed consistent 
standards for reviewing areas' management plans, and developed results-
oriented goals and measures for the agency's heritage area activities, 
or required the areas to adopt a similar approach. Park Service 
officials said that the agency has not taken these actions because, 
without a program, it lacks adequate direction and funding. In this 
regard, provisions of S. 2543 (1) establish a program that would 
provide the Park Service with the direction and funding agency 
officials believe they need to more effectively manage their own and 
the heritage areas' activities; (2) establish a schedule and criteria 
for reviewing and approving or disapproving heritage areas' management 
plans; (3) identify criteria for determining whether to approve an 
area's plan; (4) require that the plans include information on, among 
other things, performance goals, the roles and functions of partners, 
and specific commitments by the partners to accomplish the activities 
outlined in the plan; and (5) require each area to submit an annual 
report specifying, among other things, performance goals and 
accomplishments, expenses and income, amounts and sources of matching 
funds and leveraged federal funds, and grants made to any other entity. 
The Congress may wish to consider specific amendments to S. 2543 that 
would further enhance the Park Service's ability to hold areas 
accountable.

* S. 2543 includes provisions that address some of the concerns we 
identified in March with regard to potential restrictions that the 
national heritage areas may place on property owners' rights and land 
use. Among other assurances, S. 2543 provides property owners the right 
to refrain from participating in any planned project or activity 
conducted within the national heritage area. Furthermore, it does not 
require any property owner to permit public access or modify public 
access under any other federal, state, or local law. It also does not 
alter any adopted land use regulation, approved land use plan, or other 
regulatory authority of any federal, state, or local authority.

We believe that several of the provisions of S. 2543 would represent 
positive steps towards addressing the concerns we raised in March, in 
particular with regard to the need for a more systematic approach for 
establishing heritage areas and greater accountability.

Background:

To date, the Congress has designated 24 national heritage areas, 
primarily in the eastern half of the country. Generally, national 
heritage areas focus on local efforts to preserve and interpret the 
role that certain sites, events, and resources have played in local 
history and their significance in the broader national context. 
Heritage areas share many similarities--such as recreational resources 
and historic sites--with national parks and other park system units but 
lack the stature and national significance to qualify them as these 
units.

The process of becoming a national heritage area usually begins when 
local residents, businesses, and governments ask the Park Service, 
within the Department of the Interior, or the Congress for help in 
preserving their local heritage and resources. In response, although 
the Park Service currently has no program governing these activities, 
the agency provides technical assistance, such as conducting or 
reviewing studies to determine an area's eligibility for heritage area 
status. The Congress then may designate the site as a national heritage 
area and set up a management entity for it. This entity could be a 
state or local governmental agency, an independent federal commission, 
or a private nonprofit corporation. Usually within 3 years of 
designation, the area is required to develop a management plan, which 
is to detail, among other things, the area's goals and its plans for 
achieving those goals. The Park Service then reviews these plans, which 
must be approved by the Secretary of the Interior.

After the Congress designates a heritage area, the Park Service enters 
into a cooperative agreement with the area's management entity to 
assist the local community in organizing and planning the area. Each 
area can receive funding--generally limited to not more than $1 million 
a year for 10 or 15 years--through the Park Service's budget. The 
agency allocates the funds to the area through the cooperative 
agreement.

S. 2543 Would Establish a Systematic Process for Identifying and 
Designating Proposed National Heritage Areas:

As proposed, S. 2543 would establish a systematic process for 
determining the suitability of proposed sites as national heritage 
areas and for designating those areas found to be qualified. In our 
March 2004 testimony, we stated that no systematic process exists for 
identifying qualified candidate sites and designating them as national 
heritage areas. We noted that, while the Congress generally has made 
designation decisions with the advice of the Park Service, it has, in 
some instances, designated heritage areas before the agency has fully 
evaluated them. Specifically, the Congress designated 10 of the 24 
existing heritage areas without a thorough Park Service review of their 
qualifications and, in 6 of the 10 cases, the agency had recommended 
deferring action. S. 2543, however, would create a more systematic 
process that would make the Congress' designation of a heritage area 
contingent on the prior completion of a suitability-feasibility study 
and the Secretary's determination that the area meets certain criteria. 
In addition, under S. 2543, the Secretary could recommend against 
designation of a proposed heritage area based on the potential 
budgetary impact of the designation or other factors.

Provisions in S. 2543 identify a number of criteria for the Secretary 
to use in determining a site's suitability and feasibility as a 
national heritage area, including its national significance to the 
nation's heritage and whether it provides outstanding recreational or 
educational opportunities. S. 2543 defines a heritage area as an area 
designated by the Congress that is nationally significant to the 
heritage of the United States and meets the other criteria specified in 
the bill. Further, S. 2543 defines national significance as possessing 
unique natural, historical, and other resources of exceptional value or 
quality and a high degree of integrity of location, setting, or 
association in illustrating or interpreting the heritage of the United 
States. Despite these very specific definitions, however, the criteria 
outlined in S. 2543 for determining an area's suitability are very 
similar to those currently used by the Park Service. Our March 2004 
testimony pointed out that these criteria are not specific enough to 
determine areas' suitability. For example, one criterion states that a 
proposed area should reflect "traditions, customs, beliefs, and folk 
life that are a valuable part of the national story." These criteria 
are open to interpretation and, using them, the agency has eliminated 
few sites as prospective heritage areas. As we stated in March, 
officials in the Park Service's Northeast region, for example, believe 
the criteria are inadequate for screening purposes. The Park Service's 
heritage area national coordinator believes, however, that the criteria 
are valuable but that the regions need additional guidance to apply 
them more consistently. The Park Service has recently developed 
guidance for applying these criteria, which will help to clarify how 
both the existing criteria and the criteria proposed in S. 2543 could 
be applied to better determine the suitability of a prospective 
heritage area.

Provisions in S. 2543 Would Limit the Amount of Federal Funds Dedicated 
to National Heritage Areas:

S. 2543 would impose some limits on the amount of federal funds that 
can be provided to national heritage areas through the National Park 
Service's budget. In our March 2004 testimony, we stated that from 
fiscal years 1997 through 2002 about half of heritage areas' funding 
came from the federal government. According to data from 22 of the 24 
heritage areas, the areas received about $310 million in total funding. 
Of this total, about $154 million came from state and local governments 
and private sources and another $156 million came from the federal 
government. Over $50 million was dedicated heritage area funds provided 
through the Park Service, with another $44 million coming from other 
Park Service programs and about $61 million from 11 other federal 
sources. We also pointed out that the federal government's total 
funding to these heritage areas increased from about $14 million in 
fiscal year 1997 to about $28 million in fiscal year 2002, peaking at 
over $34 million in fiscal year 2000. Table 1 shows the areas' funding 
sources from fiscal years 1997 through 2002.

Table 1: National Heritage Area Funding from All Sources, Fiscal Years 
1997-2002.

Source: Total Park Service funds; 
Amount: $95,393,506; 
Percentage: 30.8%. 

Source: Dedicated heritage area funds[A]; 
Amount: $50,922,562; 
Percentage: 16.5%. 

Source: Other Park Service support funds[B]; 
Amount: $44,470,944; 
Percentage: 14.3%. 

Source: Total other federal funds; 
Amount: $60,545,816; 
Percentage: 19.5%. 

Source: Department of Transportation; 
Amount: $55,852,269; 
Percentage: 18.0%. 

Source: Department of Education; 
Amount: $2,000,000; 
Percentage: 0.6%. 

Source: Department of Agriculture; 
Amount: $547,009; 
Percentage: 0.2%. 

Source: Department of Housing and Urban Development; 
Amount: $420,183; 
Percentage: 0.1%. 

Source: Environmental Protection Agency; 
Amount: $400,000; 
Percentage: 0.1%. 

Source: Army Corps of Engineers; 
Amount: $266,000; 
Percentage: 0.1%. 

Source: Department of Commerce; 
Amount: $96,555; 
Percentage: 0.0%. 

Source: National Railroad Passenger Corporation; 
Amount: $23,800; 
Percentage: 0.0%. 

Source: National Endowment for the Arts; 
Amount: $5,000; 
Percentage: 0.0%. 

Source: Federal earmarks and awards[C]; 
Amount: $935,000; 
Percentage: 0.3%. 

Source: Total nonfederal funds; 
Amount: $154,078,203; 
Percentage: 49.7%. 

Source: State governments; 
Amount: $61,404,323; 
Percentage: 19.8%. 

Source: Local governments; 
Amount: $46,612,624; 
Percentage: 15.0%. 

Source: Nonprofit organizations; 
Amount: $7,255,416; 
Percentage: 2.3%. 

Source: Private foundations; 
Amount: $14,515,996; 
Percentage: 4.7%. 

Source: Corporate sponsors; 
Amount: $2,126,870; 
Percentage: 0.7%. 

Source: Other nonfederal funding sources; 
Amount: $22,163,473; 
Percentage: 7.2%. 

Source: Total; 
Amount: $310,017,525; 
Percentage: 100.0%. 

Source: GAO analysis of data obtained from 22 of the 24 heritage areas.

[A] These funds were provided through the Park Service's Heritage 
Partnership Program and Statutory and Contractual Aid budget line 
items. The Heritage Partnership Program promotes the conservation of 
natural, historic, scenic, and cultural resources. Statutory and 
Contractual Aid provides financial assistance in the planning, 
development, or operation of natural, historical, cultural, or 
recreation areas that are not managed by the Park Service.

[B] These funds are from other Park Service budget line items-including 
the Land and Water Conservation Fund, Operation of the National Park 
Service and the Construction Fund-that are not typically reported as 
part of heritage area funding but include funding for specific projects 
undertaken by heritage areas.

[C] These funds earmarked for Federal Government Pass-Through Awards 
($610,000) and Hugh Moore Historical Park & Museums, Inc. ($325,000).

[End of table]

S. 2543 restricts the funding for heritage areas that is allocated 
through the Park Service's budget to $15 million for each fiscal year. 
Of this amount, not more than $1 million may be provided to an 
individual area in a given fiscal year and not more than $10 million 
over 15 years. For any fiscal year, the costs for oversight and 
administrative purposes cannot exceed more than 5 percent of the total 
funds. While this provision restricts the amount of federal funds 
passing from the Park Service--the largest provider of federal funds--
to the heritage areas, these areas can obtain funding from other 
federal agencies as well.

In March, we also pointed out that, generally, each area's designating 
legislation imposes sunset provisions to limit the amount of federal 
funds provided to each heritage area. However, since 1984, five areas 
that reached their sunset dates had their funding extended. S. 2543 
establishes a fixed time frame after which no additional funding, 
except for technical assistance and administrative oversight, will be 
provided. Specifically, it states that the Secretary of the Interior 
can no longer provide financial assistance after 15 years from the date 
that the local coordinating, or management, entity first received 
assistance.

S. 2543 Includes a Number of Provisions to Enhance the Park Service's 
Ability to Hold National Heritage Areas Accountable for Their Use of 
Federal Funds:

S. 2543 includes a number of provisions that could enhance the Park 
Service's ability to hold national heritage areas accountable for their 
use of federal funds. In March, we stated that the Park Service 
oversees heritage areas' activities by monitoring their implementation 
of the terms set forth in cooperative agreements. These terms, however, 
did not include several key management controls. That is, the agency 
had not (1) always reviewed areas' financial audit reports, (2) 
developed consistent standards for reviewing areas' management plans, 
and (3) developed results-oriented goals and measures for the agency's 
heritage area activities, or required the areas to adopt a similar 
approach. Park Service officials said that the agency has not taken 
these actions because, without a program, it lacks adequate direction 
and funding. We recommended that, in the absence of a formal heritage 
area program within the Park Service, the Secretary of the Interior 
direct the Park Service to develop well-defined, consistent standards 
and processes for regional staff to use in reviewing and approving 
heritage areas' management plans; require regional heritage area 
managers to regularly and consistently review heritage areas' annual 
financial reports to ensure that the agency has a full accounting of 
their use of funds from all federal sources; develop results-oriented 
performance goals and measures for the agency's heritage area 
activities, and require, in the cooperative agreements, that heritage 
areas adopt such a results-oriented management approach as well.

S. 2543 takes several steps that will enhance accountability. In this 
regard, S. 2543 establishes a formal program for national heritage 
areas to be administered by the Secretary of the Interior. By 
establishing this program, the bill would provide the Park Service with 
the direction and funding that agency officials believe they need to 
impose management controls on their own and heritage areas' activities. 
Furthermore, S. 2543 includes a number of provisions that address the 
concerns we raised in March. First, the bill establishes a schedule and 
criteria for reviewing and approving or disapproving heritage areas' 
management plans. The Secretary must approve or disapprove the 
management plan within 180 days of receiving it. If disapproved, the 
Secretary must advise the local coordinating entity in writing of the 
reason for disapproval and may make recommendations for revision. After 
receiving a revised management plan, the Secretary must approve or 
disapprove the revised plan within 180 days. In addition, the bill 
identifies criteria that the Secretary is to use in determining whether 
to approve an area's plan. This is a positive step towards establishing 
the well-defined, consistent standards and processes for reviewing and 
approving areas' management plans that we recommended in March.

S. 2543 also requires that the management plans include information on, 
among others, performance goals, the roles and functions of partners, 
and specific commitments by the partners to accomplish the activities 
outlined in the management plan. Furthermore, to ensure better 
accountability, the local coordinating entity must submit an annual 
report to the Secretary for each fiscal year for which the entity 
receives federal funds. This report must specify, among other things, 
the local coordinating entity's performance goals and accomplishments, 
expenses and income, amount and sources of matching funds, amounts and 
sources of leveraged federal funds, and grants made to any other entity 
during the fiscal year.

While provisions contained in S. 2543 address some of the issues we 
raised in our March testimony, they do not require that the Park 
Service consistently review areas' financial audit reports or develop 
results-oriented goals and measures for the agency's heritage area 
activities as we recommended in March. We continue to believe that 
these are important management controls that are necessary to ensure 
effective oversight and accountability.

S. 2543 Provides Some Measures for Ensuring That Owners' Use of Their 
Property Is Not Restricted by the Establishment of Heritage Areas:

S. 2543 includes provisions to ensure that property owners' rights and 
land use are not restricted by the establishment of national heritage 
areas. In our March testimony, we stated that national heritage areas 
do not appear to have affected property owners' rights. In fact, the 
designating legislation of 13 areas and the management plans of at 
least 6 provide assurances that such rights will be protected. However, 
property rights advocates are concerned about the effects of provisions 
in some management plans that encourage local governments to implement 
land use policies that are consistent with the heritage areas' plans. 
Some advocates are concerned that these provisions may allow the 
heritage areas to indirectly influence zoning and land use planning in 
ways that could restrict owners' use of their property.

S. 2543 provides property owners the right to refrain from 
participating in any planned project or activity conducted within the 
national heritage area. Furthermore, it does not require any property 
owner to permit public access, nor does it modify public access under 
any other federal, state, or local law. It also does not alter any 
adopted land use regulation, approved land use plan, or other 
regulatory authority of any federal, state, or local authority.

Conclusions:

The growing interest in creating new heritage areas has raised concerns 
that their numbers may expand rapidly and significantly increase the 
amount of federal funds supporting them. A significant increase in new 
areas would put increasing pressure on the Park Service's resources. 
Therefore, it is important to ensure that only those sites that are 
most qualified are designated as heritage areas. However, as we noted 
in March, no systematic process for designating these areas exists, and 
the Park Service does not have well-defined criteria for assessing 
sites' qualifications or provide effective oversight of the areas' use 
of federal funds and adherence to their management plans. As a result, 
the Congress and the public cannot be assured that future sites will 
have the necessary resources and local support needed to be viable or 
that federal funds supporting them will be well spent. Park Service 
officials pointed to the absence of a formal program as a significant 
obstacle to effective management of the agency's heritage area efforts 
and oversight of the areas' activities. As a result, the Park Service 
is constrained in its ability to determine both the agency's and areas' 
accomplishments, whether the agency's resources are being employed 
efficiently and effectively, and if federal funds could be better 
utilized to accomplish its goals.

Several of the provisions in S. 2543 represent positive steps towards 
addressing the concerns we raised in March. In particular, by 
establishing a formal program, the bill would remove the obstacle to 
effective management and oversight identified by agency officials. 
Furthermore, by establishing a more systematic process for designating 
heritage areas, S 2543's provisions can help to ensure that only the 
most qualified sites become heritage areas. In addition, by placing a 
$15 million per year cap on funding to the heritage areas through the 
Park Service, the bill limits the federal government's funding 
commitment to these areas. Finally, provisions in S. 2543 would enhance 
the Park Service's ability to oversee and hold areas accountable for 
their use of federal funds by establishing criteria for reviewing and 
approving areas' management plans and by requiring heritage areas to 
annually report on performance goals and accomplishments.

Matters for Congressional Consideration:

To ensure greater accountability for the use of federal funds, the 
Congress may wish to consider amending S. 2543 by adding provisions 
directing the Secretary to (1) review heritage areas' annual financial 
reports to ensure that the agency has a full accounting of heritage 
area funds from all federal sources, and (2) develop results-oriented 
performance goals and measures for the Park Service's overall heritage 
area program.

Mr. Chairman, this concludes my prepared statement. I would be happy to 
respond to any questions that you or other Members of the Subcommittee 
may have.

Contacts and Acknowledgements:

For more information on this testimony, please contact Barry T. Hill at 
(202) 512-3841. Individuals making key contributions to this testimony 
included Preston S. Heard, Roy K. Judy, and Vincent P. Price.

FOOTNOTES

[1] Although no heritage area program exists within the Park Service, 
the Congress has provided the Park Service an annual appropriation for 
administering its heritage area activities. The agency has allocated 
these amounts to fund a national coordinator position in the Park 
Service's headquarters, which directs and monitors the agency's 
heritage area activities.

[2] U.S. General Accounting Office, National Park Service: A More 
Systematic Process for Establishing National Heritage Areas and Actions 
to Improve Their Accountability Are Needed, GAO-04-593T, (Washington, 
D.C.: March 30, 2004).