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Testimony: 

Before the Committee on Natural Resources, House of Representatives: 

United States Government Accountability Office: 

GAO: 

For Release on Delivery Expected at 10:00 a.m. EST: 

Friday, February 16, 2007: 

Department Of The Interior: 

Major Management Challenges: 

Statement of Robin M. Nazzaro, Director: 
Natural Resources and Environment: 

GAO-07-502T: 

GAO Highlights: 

Highlights of GAO-07-502T, testimony before the Committee on Natural 
Resources, House of Representatives 

Why GAO Did This Study: 

The Department of the Interior is responsible for managing much of the 
nationís vast natural resources. Its agencies implement an array of 
programs intended to protect these precious resources for future 
generations while also allowing certain uses of them, such as oil and 
gas development and recreation. In some cases, Interior is authorized 
to collect royalties and fees for these uses. Over the years, GAO has 
reported on challenges facing Interior as it implements its programs. 
In addition to basic program management issues, the department faces 
difficult choices in balancing its many responsibilities, and in 
improving the condition of the nationís natural resources and the 
departmentís infrastructure, in light of the federal deficit and long-
term fiscal challenges facing the nation. 

This testimony highlights some of the major management challenges 
facing Interior today. 

What GAO Found: 

The Department of the Interior has made progress in addressing 
challenges that GAO has identified in such areas as developing and 
maintaining better data to manage the departmentís programs and 
strengthening internal controls. However, numerous important problems 
remain, as discussed below. 

* Management of resource protection efforts needs to be strengthened. 
Interior has undertaken steps to improve some of its resource 
protection efforts, but it has yet to develop a cohesive national 
strategy to address wildland fire issues, as GAO has recommended. In 
addition, Interior agencies that manage hardrock mining and oil and gas 
production on their lands have not effectively carried out their 
environmental protection responsibilities. 

* Management problems in Indian and island community programs persist. 
While Interior has implemented major reforms to address weaknesses in 
managing Indian trust funds and other assets, concerns remain about 
finalizing organizational changes and delays in decisions about land 
that the department will take into trust status. In addition, island 
community programs continue to lack accountability measures. 

* Land appraisals continue to fall short of standards. While Interior 
has consolidated the land appraisal function into a departmental office 
to address serious problems with the quality of its appraisals and the 
millions of dollars that had been lost as a result, a large portion of 
appraisals that GAO reviewed still did not comply with recognized 
appraisal standards. 

* Deferred maintenance backlog needs to be addressed. Interior has 
implemented improved inventory and asset management systems for some 
programs, but it is not clear how it will address the estimated $17 
billion in deferred maintenance. Other programs continue to lack 
information required to accurately estimate needs. 

* Revenue collection needs more management attention. Interior may not 
be collecting billions of dollars of revenue from oil and gas 
royalties; geothermal royalties; and fees from individual recreational 
uses, air tour operations in and around national parks, and commercial 
filming and still photography in national parks. 

* Contract and grant management lack needed controls. Because it lacks 
adequate controls over management of grants and contracts, Interior 
cannot ensure that millions of dollars in grant and contract funding 
were used appropriately. 

What GAO Recommends: 

GAO has made a number of recommendations intended to improve Interiorís 
programs by enhancing the information it uses to manage its programs, 
strengthening internal controls, and providing clearer guidance. 
Interior has agreed with most of the recommendations and taken some 
steps to implement them. However, the department has been slow to 
implement other recommendations. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-502T]. 

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

[End of section] 

Mr. Chairman and Members of the Committee: 

I am pleased to be here today to discuss our work at the Department of 
the Interior. As the stewards for more than 500 million acres of 
federal land and 1.8 billion acres of the Outer Continental Shelf, 
Interior agencies are responsible for a wide array of programs to 
ensure that our nation's natural resources are adequately protected and 
that access to and use of those resources is appropriately managed. 
Difficult choices face this Congress and administration in fulfilling 
the federal government's responsibilities as a steward of these 
resources under increasing budgetary constraints. My testimony today 
includes findings from a number of reports we have issued over the past 
few years on some of Interior's natural resource management programs. 
Specifically, I will discuss management challenges in six key areas: 
(1) resource protection, (2) Indian and insular affairs, (3) land 
appraisals, (4) deferred maintenance, (5) revenue collection, and (6) 
contracts and grants. 

Summary: 

In summary, our reports indicate that while Interior agencies have 
improved the management of some of the programs we have reported on 
over the years, some issues remain problematic. Moreover, more recent 
work has identified new problems that need to be addressed. In many 
cases, Interior agencies have work underway or planned to address our 
recommendations, but we have not evaluated these efforts. 

* Management of resource protection efforts needs to be strengthened. 
Our work on the challenges that Interior, working with the U.S. 
Department of Agriculture (USDA), faces in protecting the nation 
against the threat of wildland fires has revealed a continued need for 
several improvements. Despite concurrence with our previous 
recommendations, Interior and USDA have yet to complete a cohesive 
national strategy that identifies long-term options and associated 
funding needs for responding to wildland fire issues. Nor have the 
departments developed a tactical plan to inform the Congress about the 
steps and time frames needed to develop such a strategy. And while they 
have undertaken steps to improve upon the information they use to 
assess and allocate resources for addressing wildland fire threats, it 
remains unclear whether the agencies will successfully complete these 
efforts. In addition, the Bureau of Land Management (BLM) and the Fish 
and Wildlife Service (FWS) have not been effectively carrying out their 
important responsibilities for ensuring that hardrock mining, oil, and 
gas operations occurring on their lands do not cause unnecessary 
environmental harm. Specifically, we found that BLM was not ensuring 
that hardrock mining operations had sufficient financial assurances to 
provide for proper reclamation of disturbed lands and was not 
effectively carrying out its environmental mitigation responsibilities 
for oil and gas operations. Similarly, we reported that FWS was not 
consistently inspecting oil and gas operations in national wildlife 
refuges to ensure that environmental standards were being met. 

* Management problems in Indian and island community programs persist. 
While Interior has taken significant steps in the last 10 years to 
address weaknesses in certain Indian programs, it is still in the 
process of implementing key trust fund reforms, and several concerns 
exist about the completion of these reforms. We have also reported on 
serious delays in the Bureau of Indian Affairs' (BIA) program for 
determining whether the department will accept land in trust: over 
1,000 land in trust applications from tribes and individual Indians are 
currently pending. In addition, the department could be doing more to 
assist seven island communities--four U.S. territories and three 
sovereign island nations--with long-standing financial and program 
management deficiencies. 

* Land appraisals continue to fall short of standards. Over the years, 
we and Interior's Inspector General (IG) have reported on the 
difficulties BLM and other federal land management agencies have had in 
managing land appraisals and the loss of millions of federal dollars 
resulting from inadequate appraisals. While major program changes have 
been made, significant problems continue. Specifically, we found that 
appraisals still do not adhere to appraisal standards and, thus, the 
federal government risks losing millions of dollars more if land is 
undervalued. In addition, Interior does not have a process for setting 
and meeting realistic deadlines for completing appraisals, which can be 
particularly important for transactions in areas with changing land 
values. 

* Deferred maintenance backlog needs to be addressed. While Interior 
has made progress addressing prior recommendations to improve 
information on the deferred maintenance needs of National Park Service 
facilities and BIA schools, its maintenance backlog continues to grow 
substantially--the department's estimate increased from between $8.1 
billion and $11.4 billion in 2003, to between $9.6 billion and $17.3 
billion in 2006. It is not clear how the department will secure needed 
funding to reduce this daunting backlog to a manageable level. In 
addition, we recently reported that better information was needed on 16 
BIA irrigation projects with an estimated $850 million in deferred 
maintenance. Specifically, we found that some of the irrigation 
projects classified items as deferred maintenance when they were 
actually new construction, and some had incomplete information on their 
deferred maintenance needs. 

* Revenue collection needs more management attention. Recent work 
indicates that the federal government may not be collecting all the 
revenue that it could be and that some programs that receive revenue do 
not have needed controls. For example, we reported that billions of 
dollars in oil and gas royalties may be forgone because of a failure to 
include important price limitations in leases during 1998 and 1999. We 
also reported that while the department is required by law to continue 
to collect a certain level of revenue from geothermal leases, it is not 
collecting the necessary information to do so. Furthermore, the 
National Park Service is authorized to collect fees from a number of 
different types of uses of its lands, but has not done so in all cases. 
Finally, should the Congress choose to authorize it to do so, BLM could 
be collecting more in grazing revenue, thereby bringing its fees more 
in line with the fees charged by other federal agencies. 

* Contract and grant management lack needed controls. Interior's 
management of contracts and grants has been identified as a management 
challenge by Interior's IG for a number of years. Recent work we have 
conducted echoes some of the IG's concerns, in particular with regard 
to a lack of management controls. Specifically, we reported on 
weaknesses in (1) management of two Interior interagency contracting 
mechanisms that the Department of Defense (DOD) has used to obtain 
services and (2) a program that provides grants to nonfederal entities 
for activities related to the Chesapeake Bay. 

Background: 

The Department of the Interior has jurisdiction over more than 500 
million acres of land--about one-fifth of the total U.S. landmass--and 
over 1.8 billion acres of the Outer Continental Shelf. As the guardian 
of these resources, the department is entrusted to preserve the 
nation's most awe-inspiring landscapes, such as the wild beauty of the 
Grand Canyon, Yosemite, and Denali national parks; our most historic 
places, like Independence Hall and the Gettysburg battlefield; and such 
revered national icons as the Statue of Liberty and the Washington 
Monument. At the same time, Interior is to provide for the 
environmentally sound production of oil, gas, minerals, and other 
resources found on the nation's public lands; honor the nation's 
obligations to American Indians and Alaskan Natives; protect habitat to 
sustain fish and wildlife; help manage water resources in western 
states; and provide scientific and technical information to allow for 
sound decision-making about resources. In recent years, the Congress 
has appropriated about $10 billion annually to meet these 
responsibilities. With these resources, Interior employs about 73,000 
people in eight major agencies and bureaus at over 2,400 locations 
around the country to carry out its mission. 

Interior's management of this vast federal estate is largely 
characterized by the struggle to balance the demand for greater use of 
its resources with the need to conserve and protect them for the 
benefit of future generations. GAO, among others, have identified 
management problems facing the department and have made many 
recommendations to improve its agencies and programs. In some cases, 
Interior has made significant improvements; in others, progress has 
been slow. As a result, several major management challenges remain. 

Management of Resource Protection Efforts Needs to Be Improved: 

Although Interior, working with USDA's Forest Service, has taken steps 
to help manage perhaps the most daunting challenge to its resource 
protection mission--protecting lives, private property, and federal 
resources from the threats of wildland fire--concerns remain. In 
addition, Interior's programs for managing hardrock mining, oil, and 
gas operations have not adequately protected federal resources from the 
environmental effects of these activities. 

Wildland Fire Management Challenges Persist: 

The wildland fire problems facing our nation continue to grow. The 
average number of acres burned by wildland fires annually from 2000 to 
2005 was 70 percent greater than the average number burned annually 
during the 1990s, and appropriations for the federal government's 
wildland fire management activities tripled from about $1 billion in 
fiscal year 1999 to nearly $3 billion in fiscal year 2005. Experts 
believe that catastrophic damage from wildland fire will continue to 
increase until an adequate long-term federal response is implemented 
and has had time to take effect. While USDA's Forest Service receives 
the majority of fire management resources, Interior agencies--the 
National Park Service, BIA, FWS, and, particularly, BLM--are key 
partners in responding to the threats of wildland fire. Consequently, 
most of our work and recommendations on wildland fire management 
address both departments. 

The Interior agencies and the Forest Service have not yet developed a 
cohesive strategy that identifies long-term options and associated 
funding estimates for addressing wildland fire threats, as we first 
recommended in 1999;[Footnote 1] nor have they developed a tactical 
plan that outlines the critical steps and time frames needed to 
complete such a strategy, as we recommended in 2005.[Footnote 2] While 
the agencies together issued a document in February 2006 titled 
Protecting People and Natural Resources: A Cohesive Fuels Treatment 
Strategy, it does not identify long-term options or associated funding 
estimates.[Footnote 3] Also, although the agencies have undertaken some 
tasks over the past 7 years that they stated are important to 
developing the cohesive strategy that we recommended, we have concerns 
about when and whether such tasks will be completed as 
planned.[Footnote 4] For example, the agencies began developing two 
modeling systems to help them (1) allocate resources to respond to 
wildland fires and (2) identify the extent, severity, and location of 
wildland fire threats to our nation's communities and ecosystems; these 
systems are slated for completion in 2008 and 2009, respectively. We 
are concerned, however, that the agencies' recent endorsement of 
significant, mid-course design changes to the resource allocation model 
may not fulfill key project goals, including determining the most cost- 
effective allocation of resources. In addition, the agencies currently 
have no plans to routinely update data in the threat modeling system-- 
this would be necessary, for example, after major fires, hurricanes, or 
other factors have significantly altered the landscape. Such updated 
data are necessary to accurately capture the nature of wildland fire 
threats and to optimize allocation of resources over time. For these 
reasons, we continue to believe that a cohesive strategy and tactical 
plan would be helpful to the Congress and the agencies in making 
informed decisions about effective and affordable long-term approaches 
to addressing the nation's wildland fire problems. 

In addition, in 2006, we reported that the agencies needed to develop 
better guidance on sharing the costs of suppressing fires among federal 
and nonfederal entities.[Footnote 5] In some cases, these entities used 
different cost-sharing methodologies for fires with similar 
characteristics, which resulted in inconsistent sharing of costs among 
federal and nonfederal entities. The cost-sharing method used can have 
consequences in the millions of dollars for the entities involved. As 
of January 2007, the agencies were updating their guidance on possible 
cost-sharing methods and when each typically would be used, but it is 
unclear how the agencies will ensure that the guidance is followed. 

Finally, as we testified last month, preliminary findings from our 
ongoing work indicate that the effectiveness of the agencies' efforts 
to contain wildfire suppression costs may be limited because the 
agencies have not clearly defined their cost-containment goals, 
developed a strategy for achieving those goals, or developed related 
performance measures.[Footnote 6] In addition, for efforts to contain 
wildfire suppression costs to be effective, once the agencies have 
defined their cost-containment goals, they need to integrate them with 
other goals of the wildland fire program--such as protecting life and 
property--and to recognize that trade-offs will be needed to meet 
desired goals within the context of fiscal constraints. 

Hardrock Mining Operations Lack Needed Financial Assurances: 

Under BLM regulations, hardrock mining operators who extract gold, 
silver, copper, and other valuable mineral deposits from land belonging 
to the United States are required to provide financial assurances, 
before they begin exploration or mining, to guarantee that the costs to 
reclaim land disturbed by their operations are paid.[Footnote 7] 
However, we reported in June 2005 that BLM did not have a process for 
ensuring that adequate assurances were in place.[Footnote 8] As a 
result, some assurances may not fully cover all future reclamation 
costs, some operators do not have financial assurances, and some have 
either outdated reclamation plans and cost estimates or none at all. 
When operators with insufficient financial assurances fail to reclaim 
BLM land disturbed by hardrock mining operations, BLM is left with 
public land that poses risks to the environment and public health and 
safety, and requires millions of federal dollars to reclaim. For 
example, we reported that 48 hardrock operations had ceased to operate 
and had not been reclaimed since the financial assurance requirement 
began in 1981; for 43 of these sites, BLM identified a total of about 
$56 million in unfunded reclamation costs. We also reported that BLM's 
system for managing financial assurances did not have current 
information or track certain information critical to managing the 
program. 

In response to our 2005 recommendations, BLM has taken substantial 
steps to correct these problems. In 2006, the agency modified its 
system for managing financial assurances to track key data. BLM also 
began requiring its state office directors to use a newly created 
report available from the system to ensure that adequate financial 
assurances are in place, and to (1) develop corrective action plans to 
address any financial assurance deficiencies with operators and (2) 
certify that reclamation cost estimates are adequate. If implemented 
properly, these efforts should ensure that appropriate financial 
assurances are in place to pay for necessary reclamation of federal 
lands. 

Increases in Oil and Gas Permitting Activities Lessen BLM's Ability to 
Meet Its Environmental Protection Responsibilities: 

The number of oil and gas operations occurring on or under federal 
lands and private lands for which the federal government retains 
mineral rights that are permitted by BLM, has increased dramatically-- 
more than tripling from fiscal year 1999 to fiscal year 2004--in part 
as a result of the desire to reduce the country's dependence on foreign 
sources of oil and gas. In June 2005, we reported that BLM has 
struggled to deal with this permitting workload increase while also 
carrying out its responsibility to mitigate the impacts of oil and gas 
development on land that it manages.[Footnote 9] Overall, BLM officials 
told us that staff had to devote increasing amounts of time to 
processing drilling permits, leaving less time to ensure mitigation of 
the environmental impacts of oil and gas development. For example, two 
field offices we visited that had the largest increases in permitting 
activity were each able to meet their annual environmental inspection 
goals only once in the past 6 years. BLM has authority to assess and 
charge fees to cover its expenses for processing oil and gas permits, 
which would enable it to supplement its program resources. While the 
agency had not exercised this authority at the time of our report, it 
had begun taking steps to develop a fee structure for these permits. To 
help BLM better respond to its increased workload, we recommended that 
the agency finalize and implement this fee structure to recover its 
costs for processing applications for oil and gas drilling permits. 

In response to our recommendation, BLM issued a proposed regulation in 
July 2005 that included a $1,600 fee for processing oil and gas 
permits.[Footnote 10] However, the next month, the Congress prohibited 
Interior from initiating the new fee in the Energy Policy Act of 2005, 
and the final regulation did not include the proposed fee.[Footnote 11] 
Nevertheless, the department has continued to express interest in 
initiating such a fee and has proposed that the Energy Policy Act be 
amended to allow the fee to move forward. 

FWS Oversight of Oil and Gas Activities in Wildlife Refuges Needs 
Improvement: 

Similar to the concerns we have about BLM's protection of environmental 
resources from oil and gas activities, we reported in 2003 that FWS's 
oversight of oil and gas operations on wildlife refuge lands was not 
adequate.[Footnote 12] For example, we found that some refuge managers 
took extensive measures to oversee operations and enforce environmental 
standards, while others exercised little or no control. We found that 
such disparities occurred for two primary reasons. First, FWS had not 
officially determined its authority to require permits--which would 
include environmental conditions to protect refuge resources--of all 
oil and gas operations in refuges; we believe the agency has such 
authority. Second, refuge managers lacked guidance, adequate staffing 
levels, and training to properly oversee oil and gas activities. We 
also found that FWS was not collecting complete and accurate 
information on damage to refuge lands as a result of oil and gas 
operations and what steps were needed to address that damage. 

FWS has taken some steps to address recommendations we made to resolve 
these problems. For example, the agency has implemented training for 
staff overseeing oil and gas activities and has begun collecting better 
data on the nature and extent of oil and gas activities. However, FWS 
has not implemented two key recommendations that would strengthen its 
ability to protect refuge resources. 

* First, because FWS had not formally clarified its authority to 
oversee all types of oil and gas operations on refuges, we recommended 
that the agency (1) determine its authority to oversee such operations 
and report that determination to the Congress and (2) seek from the 
Congress any additional authority that might be needed to apply a 
consistent and reasonable set of controls over all oil and gas 
activities occurring on national wildlife refuges. To date, FWS has not 
finalized its determination, but it has indicated that it does not 
believe it has the authority to require permits of all oil and gas 
operations that would include steps that must be taken to protect 
refuge resources. Further, FWS has indicated that it does not believe 
it needs additional authority to effectively manage oil and gas 
operations on refuges. We continue to believe, however, that FWS does 
have the authority to require such permits of all operators. Moreover, 
because of the effects of oil and gas activities on refuge resources 
that we previously reported, we also continue to believe that if FWS 
ultimately determines that it does not have the authority to require 
permits, it should seek this authority from the Congress in order to 
adequately protect refuges. 

* Second, although FWS has taken steps to identify the level of 
staffing it needs to adequately oversee oil and gas activities 
occurring on national wildlife refuges, it has not--as we recommended-
-sought the funding to meet those needs through appropriations, its 
authority to assess fees, or other means. 

Management Problems in Indian and Island Community Programs Persist: 

GAO has reported on management weaknesses in Indian programs for a 
number of years. While the department has taken significant steps in 
the last 10 years to address these weaknesses, it is still in the 
process of implementing key trust fund reforms, and several concerns 
exist about the completion of these reforms. We have also reported on 
serious delays in BIA's program for determining whether the department 
will accept land in trust. In addition, the department could be doing 
more to assist seven island communities--four U.S. territories and 
three sovereign island nations--with long-standing financial and 
program management deficiencies. 

Indian Trust Funds and Assets Need to Be More Effectively Managed: 

The Secretary of the Interior administers the government's trust 
responsibilities to tribes and individual Indians, including 
maintaining about 1,450 trust fund accounts for more than 250 tribal 
entities with assets of about $2.9 billion and about 300,000 individual 
Indian trust fund accounts with assets of about $400 million. 
Management of Indian trust funds and assets has long been plagued by 
inadequate financial management, such as poor accounting and 
information systems; untrained and inexperienced staff; backlogs in 
appraisals, determinations of ownership, and record-keeping; lack of a 
master lease file or accounts-receivable system; inadequate written 
policies and procedures; and poor internal controls. 

In response to these problems, the Congress enacted the American Indian 
Trust Fund Management Reform Act of 1994, which among other things, 
established the Office of the Special Trustee (OST) to oversee and 
coordinate the department's implementation of trust fund management 
reforms.[Footnote 13] In December 2006, we reported that OST had made 
progress implementing reforms, and it estimated that almost all key 
reforms needed to develop an integrated trust management system and to 
provide improved trust services would be completed by November 
2007.[Footnote 14] However, OST also estimated that data verification 
for leasing activities would not be completed for all Indian lands 
until December 2009. Furthermore, OST's most recent strategic plan, 
issued in 2003, did not include a timetable for implementing trust 
reforms or a date for OST's termination, as required by the reform act. 
As a result, we recommended, among other things, that the department 
provide the Congress with a timetable for completing the trust fund 
management reforms. The department agreed with our recommendation and 
stated that it expects to have a timetable for implementing the 
remaining trust reforms by late June 2007, including a date for the 
proposed termination or eventual deposition of OST. Although the 
department's consolidated financial statements for the fiscal year 
ending September 30, 2006, received an unqualified audit opinion, the 
management of Indian trust funds continued to be reported as a material 
internal control weaknesses, and information security was reported as 
an internal control weakness. 

Improvements Needed in BIA's Processing of Land in Trust Applications: 

BIA is the primary federal agency charged with implementing federal 
Indian policy and administering the federal trust responsibility for 
1.9 million American Indians and Alaska Natives. BIA provides basic 
services to 561 federally recognized Indian tribes throughout the 
United States, including social services, child welfare services, and 
natural resources management on about 54 million acres of Indian trust 
lands. Trust status means that the federal government holds title to 
the land in trust for tribes or individual Indians; land taken in trust 
is no longer subject to state and local property taxes and zoning 
ordinances. Many Indians believe that having their land placed in trust 
status is fundamental to safeguarding it against future loss and 
ensuring their sovereignty. In 1980, the department established a 
regulatory process intended to provide a uniform approach for taking 
land in trust.[Footnote 15] While some state and local governments 
support the federal government's taking additional land in trust for 
tribes or individual Indians, others strongly oppose it because of 
concerns about the impacts on their tax base and jurisdictional 
control. 

We reported in July 2006 that while BIA generally followed its 
regulations for processing land in trust applications, it had no 
deadlines for making decisions on them.[Footnote 16] Specifically, the 
median processing time for the 87 land in trust applications with 
decisions in fiscal year 2005 was 1.2 years--ranging from 58 days to 
almost 19 years. We also found that while there was little opposition 
to applications with decisions in fiscal year 2005 from state and local 
governments, some state and local governments we contacted said (1) 
they did not have access to sufficient information about the land in 
trust applications and (2) the 30-day comment period was not 
sufficient. We recommended, among other things, that the department 
move forward with adopting revisions to the land in trust regulations 
that include (1) specific time frames for BIA to make a decision once 
an application is complete and (2) guidelines for providing state and 
local governments more information on the applications and a longer 
period of time to provide meaningful comments on the applications. The 
department agreed with our recommendations, and BIA has developed a 
corrective action plan to implement them by June 30, 2007. 

Improve Effectiveness and Accountability for Island Programs: 

The Secretary of the Interior has varying responsibilities to the 
island communities of American Samoa, Guam, the Commonwealth of the 
Northern Mariana Islands, and the U.S. Virgin Islands, all of which are 
U.S. territories--as well as to the Federated States of Micronesia, the 
Republic of the Marshall Islands, and the Republic of Palau, which are 
sovereign nations linked with the United States through Compacts of 
Free Association. The Office of Insular Affairs (OIA) carries out the 
department's responsibilities for the island communities. OIA's mission 
is to assist the island communities in developing more efficient and 
effective government by providing financial and technical assistance 
and to help manage relations between the federal government and the 
island governments by promoting appropriate federal policies. The 
island governments have had long-standing financial and program 
management deficiencies. Specifically, island governments experience 
difficulties in accurately accounting for expenditures, collecting 
taxes and other revenues, controlling the level of expenditures, and 
delivering program services. 

In December 2006, we reported on serious economic, fiscal, and 
financial accountability challenges facing the U.S. insular areas of 
American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, 
and the U.S. Virgin Islands.[Footnote 17] The economic challenges stem 
from dependence on a few key industries, scarce natural resources, 
small domestic markets, limited infrastructure, shortages of skilled 
labor, and reliance on federal grants to fund basic services. To help 
diversify and strengthen their economies, OIA sponsors conferences and 
business opportunities missions to the areas to attract U.S. 
businesses; however, there has been little formal evaluation of these 
efforts. In addition, efforts to meet formidable fiscal challenges and 
build strong economies are hindered by financial reporting that does 
not provide timely and complete information to management and oversight 
officials for decision making. The insular area governments have also 
submitted required audits late, received disclaimer or qualified audit 
opinions, and had many serious internal control weaknesses identified. 
As a result of these problems, numerous federal agencies have 
designated these governments as "high-risk" grantees. Interior and 
other federal agencies are working to help these governments improve 
their financial accountability, but more should be done. 

To increase the effectiveness of the federal government's assistance to 
the U.S. insular areas, we recommended, among other things, that the 
department (1) increase coordination activities with officials from 
other federal grant-making agencies on issues of common concern 
relating to the insular area governments, such as single audit reports, 
high-risk designations, and deficiencies in financial management 
systems and practices and (2) conduct formal periodic evaluations of 
OIA's conferences and business opportunities missions, assessing their 
impact on creating private sector jobs and increasing insular area 
income. The department agreed with our recommendations, stating that 
they were consistent with OIA's top priorities and ongoing activities. 
We will continue to monitor OIA's actions on our recommendations. 

Also in December 2006, we reported on challenges facing the Federated 
States of Micronesia and the Republic of the Marshall Islands.[Footnote 
18] In 2003, the United States amended a 1986 compact with the 
countries by signing Compacts of Free Association with the two 
governments. The amended compacts provide the countries with a combined 
total of $3.6 billion from 2004 to 2023, with the annual grants 
declining gradually. We found that for 2004 through 2006, compact 
assistance to the respective governments was allocated largely to the 
education, infrastructure, and health sectors, but that neither country 
has planned for long-term sustainability of the grant programs, taking 
into account the annual decreases in grant funding. In addition, both 
countries' single audit reports for 2004 and 2005 indicated (1) 
weaknesses in their ability to account for the use of compact funds and 
(2) noncompliance with requirements for major federal programs. For 
example, the Federated States of Micronesia's audit report for 2005 
contained 57 findings of material weaknesses and reportable conditions 
in the national and state governments' financial statements for sector 
grants and 45 findings of noncompliance. We recommended, among other 
things, that the department work with the countries to establish plans 
to minimize the impact of declining assistance and to fully develop a 
reliable mechanism for measuring progress towards program goals. The 
department concurred with our recommendations. 

Land Appraisals Continue to Fall Short of Standards: 

Over the years, we and Interior's IG have reported on the difficulties 
BLM and other federal land management agencies have had in managing 
land appraisals. Conducting appraisals is an important function-- 
between November 2003 and May 2006, for example, Interior appraised 
more than 6.5 million acres of land that was valued at over $7 billion. 
Land appraisals are needed when Interior agencies are buying, 
exchanging, or leasing land. Such transactions are an integral part of 
Interior's land management in order to achieve specific purposes, such 
as consolidating existing holdings, acquiring land deemed important for 
wildlife habitat or recreational opportunities, and opening land to the 
development of energy and mineral resources. Interior generally 
requires land acquisitions to be based on market value and, thus, 
objective land appraisals are essential. Past reports, however, have 
identified serious problems with Interior agencies' appraisal programs, 
particularly with regard to appraisal independence, and have identified 
millions of dollars that the federal government had lost because of 
inadequate appraisals. 

While Interior has made major program changes, significant problems 
continue. Specifically, to remedy decades of problems with the quality 
and objectivity of its land appraisals, Interior removed the land 
appraisal function from its land management agencies and consolidated 
it into a departmental office--the Appraisal Services Directorate--in 
November 2003. This was a substantial move in the right direction to 
help ensure the independence of the appraisal function, and we reported 
in September 2006 that the objectivity of appraisals has improved since 
the directorate's inception.[Footnote 19] However, we also identified 
two major remaining challenges. 

* First, there is still wide variation in the quality of appraisals for 
land transactions involving potentially billions of dollars. For 
example, about 40 percent of Interior's appraisals for land 
transactions that we reviewed did not comply with recognized appraisal 
standards. This lack of compliance occurred, in large part, because 
appraisers appeared not to apply the specialized skills needed to 
perform their duties for certain appraisals. In addition, peer reviews 
of appraisals were cursory, with reviewers approving appraisals without 
considering property characteristics that can impact the value of land, 
such as the presence of roads. 

* Second, the directorate does not have a system for ensuring that it 
sets and meets realistic time frames for appraisal delivery. Of the 
3,500 appraisals completed since the directorate was created, over 70 
percent missed their deadlines, with an average delay of 4 months. 
Delays in delivery of appraisals can impact the ability of land 
management agencies to carry out land acquisition missions, and some 
land deals have been scuttled as a result. 

Since our report last fall, Interior has taken encouraging steps to 
address our recommendations. For example, Interior has stated that it 
has implemented a compliance inspection program for appraisals that are 
considered "high risk" to help ensure that such appraisals comply with 
recognized appraisal standards. We will continue to monitor the 
department's progress in this area. In addition, we currently we have a 
review under way to evaluate Interior's management of land exchanges. 

Deferred Maintenance Backlog Needs to Be Addressed: 

In addition to the challenges the department faces in adequately 
maintaining the natural resources under its stewardship, it also faces 
a challenge in adequately maintaining its facilities and 
infrastructure. The department owns, builds, purchases, and contracts 
services for assets such as visitor centers, schools, office buildings, 
roads, bridges, dams, irrigation systems, and reservoirs; however, 
repairs and maintenance on these facilities have not been adequately 
funded. The deterioration of facilities can adversely impact public 
health and safety, reduce employees' morale and productivity, and 
increase the need for costly major repairs or early replacement of 
structures and equipment. In 2003, we reported that the department 
estimated that the deferred maintenance backlog was between $8.1 
billion and $11.4 billion. In November 2006, the department estimated 
that the deferred maintenance backlog for fiscal year 2006 was between 
$9.6 billion and $17.3 billion, an increase of between 18 to 51 percent 
(see table 1). 

Table 1: Department of the Interior's Estimate of Deferred Maintenance 
for Fiscal Year 2006: 

Dollars in billions. 

Type of structures: Roads, bridges, and trails; 
Estimated range of deferred maintenance: Low estimate: $4.80; 
Estimated range of deferred maintenance: High estimate: $9.18. 

Type of structures: Irrigation, dams, and other water structures; 
Estimated range of deferred maintenance: Low estimate: 1.39; 
Estimated range of deferred maintenance: High estimate: 1.85. 

Type of structures: Buildings (e.g., administration, education, 
housing, historic buildings); 
Estimated range of deferred maintenance: Low estimate: 2.12; 
Estimated range of deferred maintenance: High estimate: 3.70. 

Type of structures: Other structures (e.g., recreation sites and fish 
hatcheries); 
Estimated range of deferred maintenance: Low estimate: 1.29; 
Estimated range of deferred maintenance: High estimate: 2.57. 

Type of structures: Total; 
Estimated range of deferred maintenance: Low estimate: $9.60; 
Estimated range of deferred maintenance: High estimate: $17.30. 

Source: Department of the Interior. 

[End of table] 

Interior is not alone in facing daunting maintenance challenges. In 
fact, we have identified the management of federal real property, 
including deferred maintenance issues, as a governmentwide high-risk 
area since 2003.[Footnote 20] While Interior has made progress 
addressing prior recommendations to improve information on the 
maintenance needs of Park Service facilities and BIA schools, the 
challenge of how the department will secure the significant funding 
needed to reduce this maintenance backlog to a manageable level 
remains. 

While some programs have improved information on their deferred 
maintenance needs, in February 2006, we reported that similar 
information is still needed for 16 BIA irrigation projects with an 
estimated $850 million in deferred maintenance.[Footnote 21] For 
example, we found that some of the irrigation projects classified items 
as deferred maintenance when they were actually new construction, and 
some had incomplete information on their deferred maintenance needs. To 
further refine the deferred maintenance estimate for the 16 irrigation 
projects, BIA plans to hire experts in engineering and irrigation to 
conduct thorough condition assessments of all 16 irrigation projects 
every 5 years. The first such assessment was completed in July 2005, 
with all 16 assessments expected to be completed by 2010. 

Revenue Collection Needs More Management Attention: 

For many years, Interior's IG has identified revenue collection as a 
top management challenge for the department because of the significant 
potential for underpayments given that it collects, on average, over 
$10 billion annually. Work we have conducted in the past 2 years also 
raises questions about how and when Interior is collecting authorized 
revenues from oil and gas leases, geothermal leases, recreational uses, 
and grazing and whether funds are properly controlled and accounted 
for. 

Substantial Revenue May Be Forgone Because of Royalty Relief: 

We testified in January 2007 on ongoing work investigating the Minerals 
Management Service's (MMS) implementation of the Outer Continental 
Shelf Deep Water Royalty Relief Act of 1995 and other authorities for 
granting royalty relief for oil and gas leases.[Footnote 22] We 
reported that MMS had issued lease contracts in 1998 and 1999 that 
failed to include price thresholds above which royalty relief would no 
longer be applicable. As a result, large volumes of oil and natural gas 
are exempt from royalties, which significantly reduces the amount of 
royalty revenues that the federal government can collect. At least $1 
billion in royalties has already been lost because of this failure to 
include price thresholds. MMS has estimated that forgone royalties from 
leases issued between 1996 and 2000 under the act could be as high as 
$80 billion. However, there is much uncertainty in MMS's estimate as a 
result of, for example, the inherent difficulties in estimating future 
production and prices, as well as ongoing litigation addressing MMS's 
authority to set price thresholds for some leases. Other authorities 
for granting royalty relief may also affect future royalty revenues. 
Specifically, under discretionary authority, the Secretary of the 
Interior administers programs granting relief for certain deep water 
leases issued after 2000, certain deep gas wells drilled in shallow 
waters, and wells nearing the end of their productive lives. In 
addition, the Energy Policy Act of 2005 mandates relief for leases 
issued in the Gulf of Mexico during the 5 years following the act's 
passage, provides relief for some gas wells that would not have 
previously qualified for royalty relief, and would provide relief in 
certain areas of Alaska where there currently is little or no 
production. 

The U.S. Comptroller General has highlighted royalty relief as an area 
needing additional oversight by the 110th Congress.[Footnote 23] 
Currently, we are assessing MMS's estimate of forgone royalties in 
light of changing oil and gas prices, revised estimates of future oil 
and gas production, and other factors. We are also seeking to identify 
comprehensive studies that quantify the potential benefits of royalty 
relief. We intend to issue a report on these issues later this year. 

Revenue from Geothermal Leases May Change: 

In May 2006, we reported that a change in how royalties on geothermal 
leases are disbursed may result in a change in the amount of royalties 
collected by the federal government.[Footnote 24] Specifically, while 
the Energy Policy Act of 2005 included provisions to encourage 
geothermal development, it also reduced the royalty percentage the 
federal government receives. Despite this, the act directs the 
Secretary of the Interior to seek, for most leases, to maintain the 
same level of royalty revenues as before the act. This could be 
accomplished by negotiating different royalty rates based on past 
royalty history, provided that electricity prices remain constant. 
Although it is impossible to predict with reasonable assurance how 
these prices will change in the future, Interior must make its best 
effort to mitigate the impact of changing prices if federal royalty 
revenue is to remain the same. This mitigation can only be achieved if 
there is timely and accurate knowledge of the revenues that lessees 
collect when they sell electricity. However, we reported that MMS does 
not routinely collect revenue data from electricity sales. Without such 
knowledge, MMS will have difficulty collecting the same level of 
royalties from lessees under the new royalty process. To demonstrate 
its commitment to collect the same level of royalty revenues as prior 
to passage of the act, we recommended that MMS routinely collect future 
sales revenues for electricity when royalty payments are due. MMS has 
plans to address these issues, and we will continue to monitor their 
efforts. 

Interior Has Not Maximized Revenue Collections from Recreational and 
Other Uses: 

Interior agencies are authorized--and in some cases required--to 
collect fees for a variety of uses. For example, the Park Service 
collects fees from air tour operators at selected national parks and 
from individuals and companies conducting commercial filming. However, 
we found that the agencies were not collecting such fees in the 
following cases: 

* In May 2006, we reported that the Park Service was not collecting all 
required fees from companies conducting air tours in or around three 
highly visited national parks because of (1) an inability to verify the 
number of air tours conducted over the three national parks and, 
therefore, to enforce compliance and (2) confusion resulting from 
differing geographic applicability of legislation governing air tours 
in national parks.[Footnote 25] 

* In May 2005, we reported that the Park Service could be collecting 
more revenue through the permits it issues for special park uses, such 
as special events, but was not doing so because park units were not 
consistently applying criteria for charging permit fees.[Footnote 26] 
In addition, the Park Service had not implemented a May 2000 law that 
required the collection of location fees for commercial filming and 
still photography, resulting in significant annual forgone revenues. In 
response to our recommendation, the Park Service began collecting 
location fees in May 2006. 

* In September 2006, we reported that Interior agencies have been slow 
to implement authorities for charging fees for recreational uses of 
federal lands and waters.[Footnote 27] We also reported that some 
agencies lacked adequate controls and accounting procedures for 
collecting fees. 

Additional Revenue Could be Generated Through an Adjustment to BLM 
Grazing Fees: 

Ten federal agencies manage grazing on over 22 million acres, with BLM 
and the Forest Service managing the vast majority of this 
activity.[Footnote 28] In total, federal grazing revenue amounted to 
about $21 million in fiscal year 2004, although grazing fees differ by 
agency. For example, in 2004, BLM and the Forest Service charged $1.43 
per animal unit month, while other federal agencies charged between 
$0.29 and $112 per animal unit month.[Footnote 29] We reported in 2005 
that while BLM and the Forest Service charged generally much lower fees 
than other federal agencies and private entities, these fees reflect 
legislative and executive branch policies to support local economies 
and ranching communities.[Footnote 30] Specifically, BLM fees are set 
by a formula that was originally established by a law that expired, but 
use of the formula has been extended indefinitely by Executive Order 
since 1986. This formula takes into account a rancher's ability to pay 
and, therefore, the purpose is not primarily to recover the agencies' 
costs or capture the fair market value of forage. Instead, the formula 
is designed to set a fee that helps support ranchers and the western 
livestock industry. Other federal agencies employ market-based 
approaches to setting grazing fees. 

Using this formula, BLM collected about $12 million in receipts in 
fiscal year 2004, while its costs for implementing its grazing program, 
including range improvement activities, were about $58 million. Were 
BLM to implement approaches used by other agencies to set grazing fees, 
it could help to close the gap between expenditures and receipts and 
more closely align its fees with market prices. We recognize, however, 
that the purpose and size of BLM's grazing fee are ultimately for the 
Congress to decide. 

Contract and Grant Management Lack Needed Controls: 

Interior's management of contracts and grants has been identified as a 
management challenge by Interior's IG for a number of years. Our recent 
work echoes some of the department's IG's concerns, in particular with 
regard to interagency contracting and grant management for the 
Chesapeake Bay Gateways grant program. 

Interior's Management of Interagency Contracting Activities Needs 
Improvement: 

The Department of Defense (DOD) has used interagency contracting to 
help support the war in Iraq, including contracting with Interior. 
Governmentwide, the use of interagency contracts to procure goods and 
services has continued to increase over the past several years. Because 
of this continued growth, limited expertise in using these contracts, 
and unclear lines of responsibility, GAO has designated interagency 
contracting as a governmentwide high-risk area.[Footnote 31] In our 
review of 11 task orders Interior issued on behalf of DOD--amounting to 
about $66 million--we found numerous breakdowns in management controls. 
[Footnote 32] Specifically, we found that Interior: 

* issued task orders that were beyond the scope of the contract, in 
violation of federal competition rules; 

* did not comply with additional DOD competition requirements when 
issuing task orders for services on existing contracts; 

* did not comply with ordering procedures meant to ensure the best 
value for the government; and: 

* inadequately monitored contractor performance. 

Moreover, we found that the contractor was allowed to play a role in 
the procurement process normally performed by the government because 
the officials at Interior and DOD responsible for the orders did not 
fully carry out their roles and responsibilities. In response to the 
concerns identified, Interior and DOD initiated actions to strengthen 
management controls. In our report, we made recommendations to further 
refine their efforts. 

In 2005, we also reported on weaknesses in Interior's GovWorks. 
GovWorks is a government-run, fee-for-service organization that 
provides various services, including contracting services, on which DOD 
has relied.[Footnote 33] Specifically, Interior did not always ensure 
that GovWorks contracts received fair and reasonable prices and may 
have missed opportunities to achieve savings from millions of dollars 
in purchases. In addition, GovWorks added substantial work--as much as 
20 times above the original value of a particular order--without 
determining that prices were fair and reasonable. We made 
recommendations to Interior to improve the manner in which GovWorks 
funds are used to ensure value and compliance with procurement 
regulations. Interior concurred with our recommendations and identified 
actions to take to address them. We will continue to monitor their 
implementation of these actions. 

Chesapeake Bay Gateways Grant Program Lacks Needed Controls: 

In September 2006, we reported on weaknesses in the Park Service's 
management of grants provided to nonfederal entities under its 
Chesapeake Bay Gateways Program.[Footnote 34] In 1998, Congress passed 
the Chesapeake Bay Initiative Act to establish (1) a network of 
locations where the public can access and experience the bay and (2) a 
grant program to accomplish this objective. From 2000 through 2005, the 
Park Service awarded 189 grants totaling over $6 million to support the 
network. However, our review revealed several accountability and 
oversight weaknesses in the Park Service's management of these grants, 
including (1) inadequate training of Park Service staff, (2) a lack of 
timely grantee reporting on progress and finances, (3) continuing 
awards to nonperforming grantees, and (4) a backlog of uncompleted 
grants. To enhance accountability and oversight, we recommended that 
the department: 

* develop and implement a process to determine the extent to which 
grants are effectively meeting program goals; 

* ensure that staff responsible for grant management are adequately 
trained; 

* ensure that grantees submit progress and financial reports in a 
timely manner; and: 

* ensure that grants are awarded only to applicants who completed any 
previous grants they received or to applicants who have demonstrated 
the capacity for completing a grant on schedule. 

Interior concurred with our recommendations and has plans to implement 
them. 

Concluding Observations: 

To conclude, Mr. Chairman, I would like to note that in 1993, GAO 
testified at a broad oversight hearing on Interior before this 
Committee, similar to today's hearing. At that time, we testified that 
Interior faced serious challenges to addressing the declining condition 
of the nation's natural resources and related infrastructure under its 
responsibility. Unfortunately, almost 15 years later, the message in my 
testimony today is very similar. While some of the programs we 
evaluated in the past have improved, evaluations of additional programs 
reveal many of the same persistent management problems--a lack of 
adequate data to understand the condition of its natural resources and 
infrastructure and the actions necessary to improve them, a lack of 
adequate controls and accountability to ensure federal resources are 
properly used and accounted for, and a lack of adequate strategic 
planning and guidance for program implementation. Clearly the 
department needs to address management and control gaps in its programs 
and ensure its activities are carried out in the most cost-effective 
and efficient manner, but difficult choices remain for improving the 
condition of the nation's natural resources and the department's 
infrastructure in light of the federal deficit and long-term fiscal 
challenges facing the nation. Either new sources of funding need to be 
identified and pursued, or the department must determine the services 
it can continue and the standards it will use for maintaining its 
facilities and lands. As we stated in our testimony nearly 15 years 
ago, we believe that in reaching these decisions, policy makers should 
know the full extent of the resource shortfalls facing federal natural 
resource management agencies. In addition, it is essential for the 
department to identify the impacts on services and infrastructure that 
would occur should serious cutbacks be necessary in order to maintain a 
certain standard of quality. 

Mr. Chairman, this concludes my prepared statement. I would be pleased 
to answer any questions that you or other Members of the Committee may 
have at this time. 

GAO Contact: 

For further information about this testimony, please contact me at 
(202) 512-3841 or nazzaror@gao.gov. Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this statement. 

[End of section] 

Related GAO Products: 

Performance and Accountability Series: 

High-Risk Series: An Update. GAO-07-310. Washington, D.C.: January 
2007. 

Major Management Challenges at the Department of the Interior (2005 Web-
based Update--http://www.gao.gov/pas/2005/doi.htm). 

High-Risk Series: An Update. GAO-05-207. Washington, D.C.: January 
2005. 

Major Management Challenges and Program Risks: Department of the 
Interior. GAO-03-104. Washington, D.C.: January 2003. 

High-Risk Series: An Update. GAO-03-119. Washington, D.C.: January 
2003. 

High-Risk Series: Federal Real Property. GAO-03-122. Washington, D.C.: 
January 2003. 

Major Management Challenges and Program Risks: Department of the 
Interior. GAO-01-249. Washington, D.C.: January 2001. 

High-Risk Series: An Update. GAO-01-263. Washington, D.C.: January 
2001. 

Major Management Challenges and Program Risks: Department of the 
Interior. GAO/OCG-99-9. Washington, D.C.: January 1999. 

High-Risk Series: An Update. GAO/HR-99-1. Washington, D.C.: January 
1999. 

Resource Protection Efforts: 

Wildland Fires: 

Wildland Fire Management: Lack of a Cohesive Strategy Hinders Agencies' 
Cost-Containment Efforts. GAO-07-427T. Washington, D.C.: January 30, 
2007. 

Wildland Fire Suppression: Better Guidance Needed to Clarify Sharing of 
Costs between Federal and Nonfederal Entities. GAO-06-896T. Washington, 
D.C.: June 21, 2006. 

Wildland Fire Suppression: Lack of Clear Guidance Raises Concerns about 
Cost Sharing between Federal and Nonfederal Entities. GAO-06-570. 
Washington, D.C.: May 30, 2006. 

Wildland Fire Management: Update on Federal Agency Efforts to Develop a 
Cohesive Wildland Fire Strategy. GAO-06-671R. Washington, D.C.: May 1, 
2006. 

Wildland Fire Management: Timely Identification of Long-Term Options 
and Funding Needs Is Critical. GAO-05-923T. Washington, D.C.: July 14, 
2005. 

Wildland Fire Management: Important Progress Has Been Made, but 
Challenges Remain to Completing a Cohesive Strategy. GAO-05-147. 
Washington, D.C.: January 14, 2005. 

Wildland Fires: Forest Service and BLM Need Better Information and a 
Systematic Approach for Assessing the Risks of Environmental Effects. 
GAO-04-705. Washington, D.C.: June 24, 2004. 

Wildland Fire Management: Additional Actions Required to Better 
Identify and Prioritize Lands Needing Fuels Reduction. GAO-03-805. 
Washington, D.C.: August 15, 2003. 

Wildland Fire Management: Reducing the Threat of Wildland Fires 
Requires Sustained and Coordinated Effort. GAO-02-843T. Washington, 
D.C.: June 13, 2002. 

Severe Wildland Fires: Leadership and Accountability Needed to Reduce 
Risks to Communities and Resources. GAO-02-259. Washington, D.C.: 
January 31, 2002. 

Western National Forests: A Cohesive Strategy is Needed to Address 
Catastrophic Wildfire Threats. GAO/RCED-99-65. Washington, D.C.: April 
2, 1999. 

Other Resource Protection Products: 

Endangered Species: Many Factors Affect the Length of Time to Recover 
Select Species. GAO-06-730. Washington, D.C.: September 6, 2006. 

Endangered Species: Time and Costs Required to Recover Species Are 
Largely Unknown. GAO-06-463R. Washington, D.C.: April 6, 2006. 

Wind Power: Impacts on Wildlife and Government Responsibilities for 
Regulating Development and Protecting Wildlife. GAO-05-906. Washington, 
D.C.: September 16, 2005. 

Hardrock Mining: BLM Needs to Better Manage Financial Assurances to 
Guarantee Coverage of Reclamation Costs. GAO-05-377. Washington, D.C.: 
June 20, 2005. 

Oil and Gas Development: Increased Permitting Activity Has Lessened 
BLM's Ability to Meet Its Environmental Protection Responsibilities. 
GAO-05-418. Washington, D.C.: June 17, 2005. 

Oil and Gas Development: Challenges to Agency Decisions and 
Opportunities for BLM to Standardize Data Collection. GAO-05-124. 
Washington, D.C.: November 30, 2004. 

Endangered Species: More Federal Management Attention Is Needed to 
Improve the Consultation Process. GAO-04-93. Washington, D.C.: March 
19, 2004. 

National Wildlife Refuges: Opportunities to Improve the Management and 
Oversight of Oil and Gas Activities on Federal Lands. GAO-03-517. 
Washington, D.C.: August 28, 2003. 

Invasive Species: Clearer Focus and Greater Commitment Needed to 
Effectively Manage the Problem. GAO-03-1. Washington, D.C.: October 22, 
2002. 

Managing Indian Trust Responsibilities and Island Communities: 

Indian Trust Funds: 

Office of the Special Trustee for American Indians: Financial Statement 
Audit Recommendations and the Audit Follow-up Process. GAO-07-295R. 
Washington, D.C.: January 19, 2007. 

Indian Issues: The Office of the Special Trustee Has Implemented 
Several Key Trust Reforms Required by the 1994 Act, but Important 
Decisions about Its Future Remain. GAO-07-104. Washington, D.C.: 
December 8, 2006. 

Indian Trust Funds: Individual Indian Accounts. GAO-02-970T. 
Washington, D.C.: July 25, 2002. 

Indian Trust Funds: Tribal Account Balances. GAO-02-420T. Washington, 
D.C.: February 7, 2002. 

Indian Land Management: 

Indian Issues: BLM's Program for Issuing Individual Indian Allotments 
on Public Lands Is No Longer Viable. GAO-07-23R. Washington, D.C.: 
October 20, 2006. 

Indian Issues: BIA's Efforts to Impose Time Frames and Collect Better 
Data Should Improve the Processing of Land in Trust Applications. GAO- 
06-781. Washington, D.C.: July 28, 2006. 

Indian Irrigation: Numerous Issues Need to Be Addressed to Improve 
Project Management and Financial Sustainability. GAO-06-314. 
Washington, D.C.: February 24, 2006. 

Alaska Native Allotments: Conflicts with Utility Rights-of-way Have Not 
Been Resolved through Existing Remedies. GAO-04-923. Washington, D.C.: 
September 7, 2004. 

Columbia River Basin: A Multilayered Collection of Directives and Plans 
Guides Federal Fish and Wildlife Plans. GAO-04-602. Washington, D.C.: 
June 4, 2004. 

Alaska Native Villages: Most Are Affected by Flooding and Erosion, but 
Few Qualify for Federal Assistance. GAO-04-142. Washington, D.C.: 
December 12, 2003. 

Island Communities: 

Compacts of Free Association: Micronesia and the Marshall Islands Face 
Challenges in Planning for Sustainability, Measuring Progress, and 
Ensuring Accountability. GAO-07-163. Washington, D.C.: December 15, 
2006. 

U.S. Insular Areas: Economic, Fiscal, and Financial Accountability 
Challenges. GAO-07-119. Washington, D.C.: December 12, 2006. 

Compacts of Free Association: Development Prospects Remain Limited for 
Micronesia and Marshall Islands. GAO-06-590. Washington, D.C.: June 27, 
2006. 

U.S. Insular Areas: Multiple Factors Affect Federal Health Care 
Funding. GAO-06-75. Washington, D.C.: October 14, 2005. 

Compacts of Free Association: Implementation of New Funding and 
Accountability Requirements Is Well Underway, but Planning Challenges 
Remain. GAO-05-633. Washington, D.C.: July 11, 2005. 

American Samoa: Accountability for Key Federal Grants Needs 
Improvement. GAO-05-41. Washington, D.C.: December 17, 2004. 

Compact of Free Association: Single Audits Demonstrate Accountability 
Problems over Compact Funds. GAO-04-7. Washington, D.C.: October 7, 
2003. 

Compact of Free Association: An Assessment of the Amended Compacts and 
Related Agreements. GAO-03-890T. Washington, D.C.: June 18, 2003. 

Foreign Assistance: Effectiveness and Accountability Problems Common in 
U.S. Programs to Assist Two Micronesian Nations. GAO-02-70. Washington, 
D.C.: January 22, 2002. 

Foreign Relations: Kwajalein Atoll Is the Key U.S. Defense Interest in 
Two Micronesian Nations. GAO-02-119. Washington, D.C.: January 22, 
2002. 

Managing Federal Land Appraisals: 

Interior's Land Appraisal Services: Action Needed to Improve Compliance 
with Appraisal Standards, Increase Efficiency, and Broaden Oversight. 
GAO-06-1050. Washington, D.C.: September 28, 2006. 

Land Acquisitions: Agencies Generally Used Similar Standards and 
Appraisal Methodologies in CALFED and CVPIA Transactions. GAO-02-278R. 
Washington, D.C.: January 23, 2002. 

Deferred Maintenance Backlog: 

Indian Irrigation Projects: Numerous Issues Need to Be Addressed to 
Improve Project Management and Financial Sustainability. GAO-06-314. 
Washington, D.C.: February 24, 2006. 

Recreation Fees: Comments on the Federal Lands Recreation Enhancement 
Act, H.R. 3283. GAO-04-745T. Washington, D.C.: May 6, 2004. 

National Park Service: Efforts Underway to Address Its Maintenance 
Backlog. GAO-03-1177T. Washington, D.C.: September 27, 2003. 

Bureau of Indian Affairs Schools: Expenditures in Selected Schools Are 
Comparable to Similar Public Schools, but Data Are Insufficient to 
Judge Adequacy of Funding and Formulas. GAO-03-955. Washington, D.C.: 
September 4, 2003. 

Bureau of Indian Affairs Schools: New Facilities Management Information 
System Promising, but Improved Data Accuracy Needed. GAO-03-692. 
Washington, D.C.: July 31, 2003. 

National Park Service: Status of Agency Efforts to Address Its 
Maintenance Backlog. GAO-03-992T. Washington, D.C.: July 8, 2003. 

National Park Service: Status of Efforts to Develop Better Deferred 
Maintenance Data. GAO-02-568R. Washington, D.C.: April 12, 2002. 

Revenue Collection Opportunities: 

Oil and Gas Royalties: Royalty Relief Will Likely Cost the Government 
Billions, but the Final Costs Have Yet to Be Determined. GAO-07-369T. 
Washington, D.C.: January 17, 2007. 

Recreation Fees: Agencies Can Better Implement the Federal Lands 
Recreation Enhancement Act and Account for Fee Revenues. GAO-06-1016. 
Washington, D.C.: September 22, 2006. 

Renewable Energy: Increased Geothermal Development Will Depend on 
Overcoming Many Challenges. GAO-06-629. Washington, D.C.: May 24, 2006. 

National Parks Air Tour Fees: Effective Verification and Enforcement 
Are Needed to Improve Compliance. GAO-06-468. Washington, D.C.: May 11, 
2006. 

Oil and Gas Development: Increased Permitting Activity Has Lessened 
BLM's Ability to Meet Its Environmental Protection Responsibilities. 
GAO-05-418. Washington, D.C.: June 17, 2005. 

National Park Service: Revenues Could Increase by Charging Allowed Fees 
for Some Special Uses Permits. GAO-05-410. Washington, D.C.: May 6, 
2005. 

Weaknesses in Contracts and Grants Management: 

Chesapeake Bay Gateways Program: National Park Service Needs Better 
Accountability and Oversight of Grantees and Gateways. GAO-06-1049. 
Washington, D.C.: September 14, 2006. 

Interagency Contracting: Franchise Funds Provide Convenience, but Value 
to DOD Is Not Demonstrated. GAO-05-456. Washington, D.C.: July 29, 
2005. 

Interagency Contracting: Problems with DOD's and Interior's Orders to 
Support Military Operations. GAO-05-201. Washington, D.C.: April 29, 
2005. 

FOOTNOTES 

[1] GAO, Western National Forests: A Cohesive Strategy Is Needed to 
Address Catastrophic Wildfire Threats, GAO/RCED-99-65 (Washington, 
D.C.: Apr. 2, 1999). 

[2] GAO, Wildland Fire Management: Important Progress Has Been Made, 
but Challenges Remain to Completing a Cohesive Strategy, GAO-05-147 
(Washington, D.C.: Jan. 14, 2005). 

[3] GAO, Wildland Fire Management: Update on Federal Agency Efforts to 
Develop a Cohesive Strategy to Address Wildland Fire Threats, GAO-06-
671R (Washington, D.C.: May 1, 2006). 

[4] GAO, Wildland Fire Management: Lack of a Cohesive Strategy Hinders 
Agencies' Cost Containment Efforts, GAO-07-427T (Washington, D.C.: Jan. 
30, 2007). 

[5] GAO, Wildland Fire Suppression: Lack of Clear Guidance Raises 
Concerns about Cost Sharing between Federal and Nonfederal Entities, 
GAO-06-570 (Washington, D.C.: May 30, 2006). 

[6] GAO-07-427T. 

[7] Unlike operations that extract oil and gas from federal lands, 
hardrock mining operations are not required to pay royalties on the 
minerals they extract. 

[8] GAO, Hardrock Mining: BLM Needs to Better Manage Financial 
Assurances to Guarantee Coverage of Reclamation Costs, GAO-05-377 
(Washington, D.C.: June 20, 2005). 

[9] GAO, Oil and Gas Development: Increased Permitting Activity Has 
Lessened BLM's Ability to Meet Its Environmental Protection 
Responsibilities, GAO-05-418 (Washington, D.C.: June 17, 2005). 

[10] 70 Fed. Reg. 41532, 41542 (July 19, 2005). 

[11] Pub. L. No. 109-58, title III, subtitle F, ß 365(i), 119 Stat. 
594, 725 (2005) and 70 Fed. Reg. 58854 (Oct. 7, 2005). 

[12] GAO, National Wildlife Refuges: Opportunities to Improve the 
Management and Oversight of Oil and Gas Activities on Federal Lands, 
GAO-03-517 (Washington, D.C.: Aug. 28, 2003). 

[13] Pub. L. No. 103-412, 108 Stat. 4239 (1994). Also, in 1996, a class 
action lawsuit was filed by Elouise Cobell, a member of the Blackfeet 
Tribe, and others against the federal government concerning the 
department's management of Indian trust fund accounts (Cobell v. 
Kempthorne). The lawsuit is still ongoing and the recent attempts 
during the 109th Congress for a legislative settlement were not 
enacted. 

[14] GAO, Indian Issues: The Office of the Special Trustee Has 
Implemented Several Key Trust Reforms Required by the 1994 Act, but 
Important Decisions about Its Future Remain, GAO-07-104 (Washington, 
D.C.: Dec. 8, 2006). 

[15] 25 C.F.R. pt. 151. 

[16] GAO, Indian Issues: BIA's Efforts to Impose Time Frames and 
Collect Better Data Should Improve the Processing of Land in Trust 
Applications, GAO-06-781 (Washington, D.C.: July 28, 2006). 

[17] GAO, U.S. Insular Areas: Economic, Fiscal, and Financial 
Accountability Challenges, GAO-07-119 (Washington, D.C.: Dec. 12, 
2006). 

[18] GAO, Compacts of Free Association: Micronesia and the Marshall 
Islands Face Challenges in Planning for Sustainability, Measuring 
Progress, and Ensuring Accountability, GAO-07-163 (Washington, D.C.: 
Dec. 15, 2006). 

[19] GAO, Interior's Land Appraisal Services: Actions Needed to Improve 
Compliance with Appraisal Standards, Increase Efficiency, and Broaden 
Oversight, GAO-06-1050 (Washington, D.C.: Sept. 28, 2006). 

[20] GAO, High-Risk Series: An Update, GAO-03-119 (Washington, D.C.: 
Jan. 2003); GAO, High-Risk Series: Federal Real Property, GAO-03-122 
(Washington, D.C.: Jan. 2003); GAO, High-Risk Series: An Update, GAO-05-
207 (Washington, D.C.: Jan. 2005); GAO, High-Risk Series: An Update, 
GAO-07-310 (Washington, D.C.: Jan. 2007). 

[21] GAO, Indian Irrigation Projects: Numerous Issues Need to Be 
Addressed to Improve Project Management and Financial Sustainability, 
GAO-06-314 (Washington, D.C.: Feb. 24, 2006). 

[22] In order to promote oil and gas production, the federal government 
has at times and in specific cases provided "royalty relief"--the 
waiver or reduction of royalties that companies would otherwise be 
obligated to pay. See GAO, Oil and Gas Royalties: Royalty Relief Will 
Likely Cost the Government Billions, but the Final Costs Have Yet to Be 
Determined, GAO-07-369T (Washington, D.C.: Jan. 18, 2007). 

[23] GAO, Suggested Areas for Oversight for the 110th Congress, GAO-07-
235R (Washington, D.C.: Nov. 17, 2006). 

[24] GAO, Renewable Energy: Increased Geothermal Development Will 
Depend on Overcoming Many Challenges, GAO-06-629 (Washington, D.C.: May 
24, 2006). 

[25] GAO, National Park Air Tour Fees: Effective Verification and 
Enforcement Are Needed to Improve Compliance, GAO-06-468 (Washington, 
D.C.: May 11, 2006). 

[26] GAO, National Park Service: Revenues Could Increase by Charging 
Allowed Fees for Some Special Uses Permits, GAO-05-410 (Washington, 
D.C.: May 6, 2005). 

[27] Total fee collections in fiscal year 2004 were about $192 million. 
See GAO, Recreation Fees: Agencies Can Better Implement the Federal 
Lands Recreation Enhancement Act and Account for Fee Revenues, GAO-06-
1016 (Washington, D.C.: Sept. 22, 2006). 

[28] The 10 agencies are the BLM, FWS, Park Service, Bureau of 
Reclamation, Forest Service, Department of Energy, Army Corps of 
Engineers, Army, Air Force, and Navy. In addition, a number of other 
federal agencies manage some minor grazing-related activities. 

[29] An animal unit month is the amount of forage (vegetation such as 
grass and shrubs) that a cow and her calf eat in a month (or one bull, 
one steer, one horse, or five sheep). 

[30] GAO, Livestock Grazing: Federal Expenditures and Receipts Vary, 
Depending on the Agency and the Purpose of the Fee Charged, GAO-05-869 
(Washington, D.C.: Sept. 30, 2005). 

[31] GAO, High-Risk Series: An Update, GAO-07-310 (Washington, D.C.: 
Jan. 31, 2007). 

[32] GAO, Interagency Contracting: Problems with DOD's and Interior's 
Orders to Support Military Operations, GAO-05-201 (Washington, D.C.: 
Apr. 29, 2005). 

[33] Such organizations are referred to as "franchise funds." See GAO, 
Interagency Contracting: Franchise Funds Provide Convenience, but Value 
to DOD Is Not Demonstrated, GAO-05-456 (Washington, D.C.: July 29, 
2005.) 

[34] GAO, Chesapeake Bay Gateways Program: National Park Service Needs 
Better Accountability and Oversight of Grantees and Gateways, GAO-06-
1049 (Washington, D.C.: Sept. 14, 2006). 

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