Valles Caldera

Trust Has Made Some Progress, but Needs to Do More to Meet Statutory Goals

GAO-06-98, Nov 16, 2005

Highlights

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In 2000, Congress authorized the purchase of the Valles Caldera (the Caldera) in north-central New Mexico. The Valles Caldera Trust (Trust), a wholly owned government corporation, is to become financially self-sustaining and to manage the Caldera for multiple purposes while sustaining the land's valuable natural resources. GAO was mandated to assess the progress the Trust is making in meeting its statutory goals.

The Trust has made progress in meeting its goals to preserve and protect the Caldera for future generations as well as to provide for public recreation and sustained yield management. Specifically, it has (1) established a basic organization with about 25 staff; (2) drafted policy and procedures and contracted with the Department of the Interior's National Business Center for accounting services; (3) begun engineering and construction efforts to address infrastructure problems--roads, water systems, fences, and buildings; (4) established interim grazing and recreation programs; and (5) implemented an adaptive management approach that focuses on making management decisions based on scientific data. The Trust, however, still has much work to do to meet its goals, including achieving a financially self-sustaining operation. Strategic and performance plans with measurable goals and objectives: For example, the Trust must decide on the level of activities (e.g., grazing, hiking, and hunting) that will be allowed without seriously harming the land's resources, and yet will still provide sufficient recreational activity and sustained yield management. The Trust also must select additional opportunities for generating revenues, such as securing private donations. Plans to manage program risks: The Trust has not addressed program risks, including fire and legal liabilities. For example, the Trust lacks a fire plan, which would outline a decision-making process for responding to fires, and has not obtained liability coverage. Because it did not have a fire plan, the Trust spent about $338,000 in May 2005 to suppress a fire, which, in the opinion of the Forest Service Region 3 Fire Manager, could have been left to burn because the fire did not threaten any key resources or public infrastructure. Also, because it has not obtained liability coverage, the Trust has restricted the number of Caldera visitors. Mechanisms for monitoring progress: Among other things, the Trust has not had annual financial audits and has not prepared performance reports that would help it assess its progress toward meeting its financial and other goals. The Trust's efforts to raise the revenues needed to bring it closer to meeting its financial self-sustainability goal could be undermined by one or more of these issues. Frequent turnover in Board members and key staff has contributed to the problems experienced to date.

Status Legend:

In Process
Open
Closed - implemented
Closed - not implemented

Recommendations for Executive Action

Recommendation: To help ensure that the Trust meets its goals under the Preservation Act, to improve management oversight, and to increase accountability to Congress and other stakeholders, the Board of the Valles Caldera Trust should provide a status report or the auditor's final opinion on the Trust's financial condition in its January 2006 annual report to Congress.