Federal Land Management:

BLM and the Forest Service Have Improved Oversight of the Land Exchange Process, but Additional Actions Are Needed

GAO-09-611: Published: Jun 12, 2009. Publicly Released: Jun 12, 2009.

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The Bureau of Land Management (BLM) in the Department of the Interior (Interior) and the Forest Service in the Department of Agriculture (USDA) manage millions of acres of public land. To enhance land management and fulfill other public objectives, they acquire and dispose of land using exchanges--trading federal lands for lands owned by willing private entities, individuals, or state or local governments. GAO and others have raised concerns about whether the public interest has always been served in these land exchanges. GAO was asked to (1) analyze the number, trends, and characteristics of BLM and Forest Service land exchanges and (2) determine the effectiveness of agency actions to address previously identified key problems. GAO interviewed and surveyed agency officials, analyzed agency data on recent exchanges, and reviewed documents on a nongeneralizable sample of 31 land exchanges representing at least 85 percent of the acres that agencies acquired, or plan to acquire, during the time of GAO's review.

From October 2004 through June 2008, BLM and the Forest Service processed 250 completed, pending, or terminated land exchanges. Completion times for exchanges within this period varied widely, from 2 months to more than 12 years. These exchanges involved 628,429 federal acres and 621,588 nonfederal acres. According to agency officials, the number of exchanges since 2000 has generally declined because of the availability of qualified staff and funding and the lower priority given to land exchanges compared with other activities. Of the 250 land exchanges, 47 were facilitated by third parties, 9 were conducted in multiple phases, and 20 were specifically legislated by Congress. GAO, the agencies' inspectors general, and others identified problems in the agencies' land exchange programs and have made recommendations to correct them. The agencies have taken actions to address most of these problems, but the effectiveness of the actions has been mixed. Specifically: (1) According to most agency officials surveyed, headquarters reviews at least somewhat improved exchange quality; often ensured that exchanges complied with laws, regulations, and policies; and were processed properly. However, the reviews did not always document problems or indicate their resolution, making the process less transparent. (2) BLM stopped using interest-bearing accounts outside of the U.S. Treasury, according to agency officials, and issued new guidance on managing ledgers, which are used to track land value imbalances over time in multiphase exchanges. However, the agency is not always adhering to this guidance and, therefore, cannot fully know how much is owed. Specifically, BLM cannot be assured that the $2.6 million land value imbalance due to the United States, recorded in its ledgers as of June 30, 2008, is accurate. (3) Both agencies issued new guidance to require full disclosure of the relationship between a third-party facilitator and other parties to an exchange. But the guidance does not clearly define third-party facilitators and officials do not consistently apply the disclosure policy. Without consistent application, the agencies fail to obtain critical information and potentially risk losing the ability to control the exchange process. (4) The agencies updated their exchange guidance to provide clearer direction on exchanges and incorporated it into their training. However, staff generally are not required to attend this training, and the agencies do not systematically track staff participation. Therefore, the agencies cannot ensure that realty staff develop and maintain necessary skills. The agencies took steps to improve appraisal timeliness, but the process, particularly for BLM, continues to delay some exchanges, officials said. Neither agency has a national strategy to guide land transactions, nor does either track all costs of individual exchanges. Developing national strategies and tracking the costs of individual exchanges will enhance the agencies' ability to make informed decisions in pursuit of shared goals.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In May 2010, BLM issued Instruction Memorandum 2010-122 to all field locations that requires copies of all executed ledgers and updated security determinations and documentation be submitted to the National Land Exchange Team immediately after signature of the State Director. In March 2012, BLM headquarters provided a copy of the update it had received from BLM state offices. According to the document, three states--California, New Mexico, and Utah--had open exchange ledgers as of March 2012 and it provided key details on those ledgers, including the name of the non-federal exchange party, value imbalance, and brief history of ledger transactions.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior should direct the Director of BLM to better manage value imbalances in multiphase exchanges and protect federal funds by providing copies of ledger updates to agency headquarters for tracking of balances due to the United States.

    Agency Affected: Department of the Interior

  2. Status: Closed - Implemented

    Comments: In October 2012, the Forest Service issued draft guidance on third party facilitators. The draft guidance clarifies the definition of a third party facilitator. For example, it clarifies when the policy applies to a facilitator, such as when a facilitator does not hold title, option, or other written agreement to convey non-federal land and when a facilitator does not sign the agreement to initiate a key exchange document. It identifies problems that have occurred with facilitated exchanges, thereby making such issues more apparent to staff processing facilitated exchanges. It also adds direction for required documentation from a third party facilitator under certain situations. In June 2013, Forest Service officials told us that the guidance had not been finalized and that, for consistency, the concept for third party facilitator guidance had been expanded to purchase and appraisal processes. Officials hope to have all of this guidance completed in 2013. On February 10, 2014, Forest Service officials provided GAO its policy revision on third party facilitators that addresses this recommendation. Specifically, the revised policy clarifies the definition of a third party facilitator, further distinguishing between land exchange facilitators and land exchange consultants. It also requires a consistent application of the guidance by requiring officials to consult with regional lands staff prior to negotiating a land exchange involving a facilitator and requires parties to include third party disclosures in land exchange reviews.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior and the Secretary of Agriculture should direct the heads of BLM and the Forest Service to clarify the definition of a third-party facilitator, ensure that disclosure guidelines are consistently applied to all third-party facilitators, and include disclosure documentation in the review process.

    Agency Affected: Department of Agriculture

  3. Status: Closed - Implemented

    Comments: In May 2010, BLM issued Instruction Memorandum 2010-123 to all field locations that clarifies the definition of a third-party facilitator. Further, the memo states that a full disclosure provision must be included in the letter of intent, agreement to initiate, or other agreements for all land tenure adjustment actions involving a facilitator. The memo includes new language for the facilitated land exchange full disclosure provision which is applicable to all land exchanges. The memo further states that the decision package for a land exchange must reference the date and results of the verification of the status of any contracts, options, or other agreements with a facilitator.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior and the Secretary of Agriculture should direct the heads of BLM and the Forest Service to clarify the definition of a third-party facilitator, ensure that disclosure guidelines are consistently applied to all third-party facilitators, and include disclosure documentation in the review process.

    Agency Affected: Department of the Interior

  4. Status: Closed - Not Implemented

    Comments: In September 2009, the Department of the Interior stated that BLM would re-address the national land tenure strategy and would seek Department-level feedback and approval to proceed with implementation. In September 2011, the Department stated that BLM uses the land use planning methodology contained in its land use planning handbook to identify properties for both land acquisitions and land disposals. The Department further stated that BLM does not have the authority to acquire or dispose of lands unless they have been identified for such actions through the land use planning process. Additional guidance may be periodically issued as part of the annual budget process, or as updates when legislation is enacted that requires the BLM to either acquire or dispose of specific parcels of land. Based on this information, BLM therefore did not develop a national land tenure strategy.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior and the Secretary of Agriculture should direct the heads of BLM and the Forest Service to develop and issue national land tenure strategies for each agency and encourage the BLM state and Forest Service regional offices to develop their own plans to help guide land exchange decisions.

    Agency Affected: Department of the Interior

  5. Status: Closed - Not Implemented

    Comments: As of June 2013, Forest Service officials said that they continue to believe that the agency?s 2005 National Land Acquisition Plan is sufficient and therefore they have not developed a national land tenure strategy. We have stated that we do not think this plan offers a specific strategy on making land exchange and other land transaction decisions on a national basis. Also, at the time our report was issued in 2009, only one of nine regions had a regional plan in place. As of June 2013, the Forest Service reported that most regions still do not have a regional plan in place nor do they have plan on having a regional plan. Rather, the regions rely on the forests to address land planning opportunities to meet management objectives.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior and the Secretary of Agriculture should direct the heads of BLM and the Forest Service to develop and issue national land tenure strategies for each agency and encourage the BLM state and Forest Service regional offices to develop their own plans to help guide land exchange decisions.

    Agency Affected: Department of Agriculture

  6. Status: Closed - Not Implemented

    Comments: Forest Service officials state that while some individual exchange costs, such as the costs of appraisals, are tracked in their systems and key exchange documents, other costs, such as staff time spent on individual exchanges, are not. Staff time is charged to broad appropriation accounts and not to specific land transactions. The agency would have to make extensive changes for the system to track these specific costs. Forest Service officials said that the Forest Service is not capable of tracking transaction level costs of land exchanges.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior and the Secretary of Agriculture should direct the heads of BLM and the Forest Service to track the agencies' costs of processing individual land exchanges.

    Agency Affected: Department of Agriculture

  7. Status: Closed - Not Implemented

    Comments: In September 2011, the Department of the Interior reported that BLM had put considerable effort into determining a means to identify the costs for processing individual land exchanges. The department further stated that a thorough analysis had been completed and found that the department's current financial management system does not have the capability to track the cost of processing individual land exchanges.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior and the Secretary of Agriculture should direct the heads of BLM and the Forest Service to track the agencies' costs of processing individual land exchanges.

    Agency Affected: Department of the Interior

  8. Status: Closed - Implemented

    Comments: In May 2010, BLM issued Instruction Memorandum 2010-124 to all field locations regarding training requirements for processing land exchange proposals. The memo states that managers and supervisors at all levels have the responsibility to (1) ensure employees have the knowledge, skills, and abilities to perform their assigned duties, (2) determine the capability of their staffs, individually and collectively, to perform required functions, and (3) determine when training is necessary to achieve that performance. Thus, the memo does not make any land exchange training mandatory. The memo provides a list of minimum competencies required for the processing of land exchanges and definitions of levels of competency that may be used to evaluate an employee's working knowledge of land exchanges, and to determine the need for additional formal or on-the-job training. In terms of tracking, the agency has stated that it will continue to use the DOI Learn system, which allows managers to track training completion. Because BLM does not mandate any of the exchange courses, it did not determine how often such training needed to be retaken.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior and the Secretary of Agriculture should direct the heads of BLM and the Forest Service to determine the elements of current training that should be mandatory to ensure that staff are able to process exchanges in conformance to agency guidance, create a formal system to track attendance at training, and determine how often training should be retaken.

    Agency Affected: Department of the Interior

  9. Status: Closed - Implemented

    Comments: The Forest Service has four courses that include land exchange training: Beginning Lands, Intermediate Lands, Complex Lands, and National Training for Line Officers. The agency has determined that one of them--National Training for Line Officers--is mandatory. Due to tight fiscal conditions, the three other courses continue to be recommended. The Forest Service has taken steps to track training attendance. Specifically, the Forest Service uses USDA's AgLearn database to track training attendance, as supplemented by employee training plans and course completion information submitted by the agency's training liaison. Also, the Forest Service has determined that National Training for Line Officers is to be taken once every five years; the other courses only need to be taken once.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior and the Secretary of Agriculture should direct the heads of BLM and the Forest Service to determine the elements of current training that should be mandatory to ensure that staff are able to process exchanges in conformance to agency guidance, create a formal system to track attendance at training, and determine how often training should be retaken.

    Agency Affected: Department of Agriculture

  10. Status: Closed - Not Implemented

    Comments: The Forest Service has made one course--National Training for Line Officers--mandatory, but does not require staff to complete this training before staff work on exchanges. Forest Service officials state that training all lands staff before they work on land exchanges is not possible because of high workload and staff shortages, but that more experienced staff provides close supervision of inexperienced staff.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior and the Secretary of Agriculture should direct the heads of BLM and the Forest Service to ensure that staff have completed this mandatory training before working on land exchanges.

    Agency Affected: Department of Agriculture

  11. Status: Closed - Implemented

    Comments: In May 2010, BLM issued Instruction Memorandum 2010-122 to all field locations that states that if a multiple phased land exchange is proposed at either the feasibility or decision stages, the feasibility or decision package submitted to the National Land Exchange Team for formal review must explain the rationale for the multiple phases versus a single closing. The memo adds that proposing a multiple phased land exchange at the feasibility stage is discouraged. Further, any decision package for a proposed multiple phased exchange in which a ledger is proposed must include the draft ledger for the current phase of the exchange.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior should direct the Director of BLM to better manage value imbalances in multiphase exchanges and protect federal funds by including ledgers in feasibility and decision reviews to ensure quality.

    Agency Affected: Department of the Interior

  12. Status: Closed - Implemented

    Comments: In May 2010, BLM issued Instruction Memorandum 2010-122 to all field locations that requires all BLM offices to use standard ledger formats for all exchange transactions involving a ledger, unless the BLM Director approves the use of a different format. Templates for those formats are provided in the guidance. The memo further states that written requests for the use of a different format with the accompanying rationale as to why the standard formats should not be used, may be submitted for the Director's concurrence through the National Land Exchange Team. If the Director approves the use of a different format, the request must explain how the identification of whether the ledger is open or closed and the three year anniversary date would be documented.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior should direct the Director of BLM to better manage value imbalances in multiphase exchanges and protect federal funds by ensuring that offices prepare ledgers and follow the ledger format, including revisions cited above.

    Agency Affected: Department of the Interior

  13. Status: Closed - Implemented

    Comments: In May 2010, BLM issued Instruction Memorandum 2010-122 to all field locations that states that ledgers must include language to identify whether the ledger is open or closed and must identify the three year anniversary date by which the ledger must be balanced (i.e., reduced to zero). The memo includes ledger templates for open and closed ledgers that include appropriate language for identifying them as open or closed and the three year time frame. BLM officials provided an example of an approved ledger dated March 2011 that used the new ledger template and included the required language clearly showing the ledger status as open and the date upon which it must be balanced.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior should direct the Director of BLM to better manage value imbalances in multiphase exchanges and protect federal funds by revising the standard format for ledgers prescribed in the exchange handbook to assure that each ledger clearly demonstrates that the ledger (1) is balanced at least every 3 years and (2) is either open or closed.

    Agency Affected: Department of the Interior

  14. Status: Closed - Implemented

    Comments: In May 2010, BLM issued Instruction Memorandum 2010-121 to all field locations that states that all substantive issues identified during formal reviews and their resolution must be documented and retained in the case file. It further states that BLM State Directors are responsible for ensuring that all substantive issues are resolved and documented. The memorandum includes a template for recording issues and their resolution. In a March 2012 meeting, BLM officials said that BLM headquarters has emphasized informal review of exchanges early in the process to provide comments and address issues before formal review and, if issues remain during formal review, they are documented. Officials noted that no major issues have been identified to date because the informal dialog has pre-empted the issues.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior and the Secretary of Agriculture should direct the heads of BLM and the Forest Service to strengthen the review process by assuring that key problems identified and their resolutions are systematically recorded.

    Agency Affected: Department of the Interior

  15. Status: Closed - Implemented

    Comments: Since June 2009, the Forest Service's National Landownership Adjustment Team has assessed the effectiveness of regional case review processes by reviewing randomly selected land exchanges throughout the country, exchanges valued at over $1 million and nearly all land exchange cases in Regions 8 and 9 because they are conducted under an act triggering headquarters and congressional reviews. Regions 8 and 9 comprise the eastern United States and account for most of the land exchange cases for the Forest Service Agency officials said that for the roughly 10 exchanges that are completed in a given year, about 6-7 are from Regions 8 and 9. As part of its review, the team reviews a standard land exchange summary that documents any issues with the exchange. Furthermore, memoranda in exchange files, such as briefing documents for agency officials and Congress, also document key issues and their resolution.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior and the Secretary of Agriculture should direct the heads of BLM and the Forest Service to strengthen the review process by assuring that key problems identified and their resolutions are systematically recorded.

    Agency Affected: Department of Agriculture

  16. Status: Closed - Implemented

    Comments: In May 2010, BLM issued Instruction Memorandum 2010-121 to all field locations that states that documents submitted in formal reviews must be retained in exchange case file and includes an extensive checklist of documents that should be included in case files. The memorandum stresses the importance of ensuring that the exchange record is maintained properly and indicates that BLM State Directors are responsible for ensuring proper case files.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior and the Secretary of Agriculture should direct the heads of BLM and the Forest Service to strengthen the review process by clarifying the retention policy for key exchange documents and ensuring staff follow the policy.

    Agency Affected: Department of the Interior

  17. Status: Closed - Implemented

    Comments: In May 2010, the Forest Service issued a memorandum to Regional Foresters clarifying the agency's records retention policy. The memorandum included the specific pages from agency guidance on records retention.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior and the Secretary of Agriculture should direct the heads of BLM and the Forest Service to strengthen the review process by clarifying the retention policy for key exchange documents and ensuring staff follow the policy.

    Agency Affected: Department of Agriculture

  18. Status: Closed - Implemented

    Comments: The Forest Service National Landownership Adjustment Team has continued to conduct reviews of regional land exchange programs. Specifically, the team completed reviews in March 2011 of Region 3, April 2012 of Region 6, and May 2013 of Region 9. In July 2013, the team lead reported that the team plans to review Region 10 in September 2013 and Regions 5 and either Regions 2 or 8 in fiscal year 2014. In addition, the Forest Service reports that it follows up on its previous recommendations. For example, the team holds a monthly conference call with regional lands staff to discuss issues and any potential changes in policy. Also, at a May 2010 national lands conference, time was dedicated to discussing actions items from previous team reviews. While the Forest Service does not appear to have a formal mechanism to follow-up on previous recommendations, agency actions to make review of regional programs a priority coupled with frequent communication with regional staff on exchange issues better ensures such recommendations are implemented.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of Agriculture should direct the Chief of the Forest Service to improve the review process by making it a priority for the headquarters land exchange review team to review regional exchange programs and follow up on implementation of their recommendations.

    Agency Affected: Department of Agriculture

  19. Status: Closed - Implemented

    Comments: Since June 2009, the Forest Service's National Landownership Adjustment Team has continued to conduct periodic reviews of regional land exchange programs, helping to ensure that regions provide consistent oversight of exchanges. The reviews document conformance with applicable law and policy and include reviews of individual exchange cases and the region's training and staffing issues, among other things. The team completed regional reviews in March 2011 of Region 3, April 2012 of Region 6, and May 2013 of Region 9. In addition to these periodic reviews, the team reviews randomly selected land exchanges throughout the country, exchanges valued at over $1 million and nearly all land exchange cases in Regions 8 and 9 because they are conducted under an act triggering headquarters and congressional reviews. Regions 8 and 9 comprise the eastern United States and account for most of the land exchange cases for the agency. Agency officials said that for the roughly 10 exchanges that are completed in a given year, about 6-7 are from Regions 8 and 9. Through all of these reviews, the Forest Service is helping to ensure that regions provide consistent oversight of land exchanges.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of Agriculture should direct the Chief of the Forest Service to improve the review process by ensuring that the regions provide consistent oversight of land exchanges.

    Agency Affected: Department of Agriculture

  20. Status: Closed - Implemented

    Comments: In May 2010, BLM issued Instruction Memorandum 2010-122 to all field locations that states that land exchange decisions must justify how the chosen configuration of the land exchange is the most reasonable alternative to minimize cash equalization. Further, the memo states that whenever a proposed ledger imbalance is in favor of (due to) the U.S., the State Director must make a written determination on the need to secure the ledger imbalance. The determination must be included as part of the administrative record for the exchange and reviewed and updated in conjunction with each posting of the ledger. Finally, the memo states that the decision package for a proposed multiple-phased exchange sent for review by the National Land Exchange Team must include the State Director's draft determination and rationale on the need to secure a ledger imbalance in favor of the U.S.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior should direct the Director of BLM to better manage value imbalances in multiphase exchanges and protect federal funds by ensuring that BLM state offices document their decision and supporting rationale for whether and how to secure land exchange imbalances.

    Agency Affected: Department of the Interior

  21. Status: Closed - Implemented

    Comments: In May 2010, BLM issued Instruction Memorandum 2010-122 to all field locations that states that the provisions for a multiple phased land exchange must be documented in the draft agreement to initiate (ATI) or ATI amendment.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior should direct the Director of BLM to better manage value imbalances in multiphase exchanges and protect federal funds by ensuring that an agreement to initiate (ATI) documents how the ledger will be used to process a multiphase exchange.

    Agency Affected: Department of the Interior

  22. Status: Closed - Not Implemented

    Comments: In May 2010, BLM issued Instruction Memorandum 2010-124 to all field locations regarding training requirements for processing land exchange proposals. The memo states that managers and supervisors at all levels have the responsibility to (1) ensure employees have the knowledge, skills, and abilities to perform their assigned duties, (2) determine the capability of their staffs, individually and collectively, to perform required functions, and (3) determine when training is necessary to achieve that performance. Thus, the memo does not make any land exchange training mandatory.

    Recommendation: In order to build on the improvements to the land exchange programs BLM and the Forest Service have made, the Secretary of the Interior and the Secretary of Agriculture should direct the heads of BLM and the Forest Service to ensure that staff have completed this mandatory training before working on land exchanges.

    Agency Affected: Department of the Interior

 

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