BLM and the Forest Service:

Land Exchanges Need to Reflect Appropriate Value and Serve the Public Interest

RCED-00-73: Published: Jun 22, 2000. Publicly Released: Jul 12, 2000.

Additional Materials:

Contact:

Robin M. Nazzaro
(202) 512-3000
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO reviewed Bureau of Land Management's (BLM) and the Forest Service's land exchange programs, focusing on the: (1) agencies' use of land exchanges since 1989; (2) extent to which the agencies ensure that their land exchanges meet exchange requirements; (3) effect of the agencies' recent efforts to improve the management of their exchange programs; and (4) extent to which problems in specific exchanges are reflective of inherent difficulties in the land exchange program as a whole.

GAO noted that: (1) the Forest Service and BLM used land exchanges to acquire about 1,500 total square miles of land during fiscal years 1989 through 1999; (2) the Forest Service completed 1,265 exchanges during this period and BLM completed about 2,600 transactions, resulting in the acquisition of a net total of about 950 and 550 square miles, respectively; (3) the agencies did not ensure that the land being exchanged was appropriately valued or that exchanges served the public interest or met with certain other exchange requirements; (4) GAO found numerous problems with the exchanges, including; (a) the use of appraisals that did not always meet federal standards; (b) agencies' failure to follow requirements to ensure that the public's interest was served in making the exchange; and (c) BLM's unauthorized use of federal land sales proceeds; (5) both agencies recently increased their management oversight of exchanges by; (a) creating review teams composed of headquarters and field staff to examine proposed exchanges that are valued at $500,000 or more and are considered to be controversial; (b) revising their policies and procedures that address exchanges; and (c) creating additional training for agency personnel involved in land exchanges; (6) these efforts, if properly implemented, should improve how these programs are conducted; (7) however, they do not address all land exchanges; (8) BLM's review team has not addressed the unauthorized selling or buying of land under the program or the financial management of these funds; (9) furthermore, handbook revisions and enhanced training can clarify the agencies' land exchange policies and procedures, but they do not ensure that those policies or procedures are appropriate or followed; (10) at least some of the agencies' continuing problems may reflect inherent underlying difficulties associated with exchanging land compared with the more common buying and selling of land for cash; and (11) difficulties in land exchanges are exacerbated when the properties are difficult to value.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: In response to the report, the requester wrote letters to both agencies asking them to adopt a moratorium on land exchanges, which neither agency did. There has been no other congressional action taken on this issue.

    Matter: Since Congress passed legislation to facilitate land exchanges more than a decade ago, BLM and the Forest Service have increasingly relied on exchanges to acquire land. In recent years, many controversies and problems have been reported in both agencies' land exchange programs. While both agencies have taken steps to improve their programs, GAO believes that these problems reflect, in part, the difficulties and inefficiencies that are inherent in land exchanges. And GAO remains concerned that the BLM want to continue to sell and buy land under the umbrella of its assembled land exchanges. On the basis of these fundamental issues, Congress may wish to consider directing both agencies to discontinue their land exchange programs.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In response to the draft report, the Bureau of Land Management issued new guidance that requires (1) the national review team to review and concur with exchange initiation agreements that are over $500,000 in value, part of an assembled land exchange, use ledger accounts, and contemplate competitive processing; and (2) state directors to review all other exchange initiation agreements. In addition, the Bureau expects to issue revised guidance relating to exchange initiation agreement requirements, content, and format later this year.

    Recommendation: The Secretary of the Interior and BLM should review all exchange initiation agreements for ongoing exchanges to ensure that they comply with regulations--for example, specifically and clearly describing the land that will be exchanged--and amend them if warranted.

    Agency Affected: Congress

  2. Status: Closed - Implemented

    Comments: In response to the draft report, the Bureau of Land Management issued new guidance that requires (1) the national review team to review and concur with exchange initiation agreements that are over $500,000 in value, part of an assembled land exchange, use ledger accounts, and contemplate competitive processing; and (2) state directors to review all other exchange initiation agreements. In addition, the Bureau expects to issue revised guidance relating to exchange initiation agreement requirements, content, and format later this year.

    Recommendation: The Secretary of the Interior and BLM should review all exchange initiation agreements for ongoing exchanges to ensure that they comply with regulations--for example, specifically and clearly describing the land that will be exchanged--and amend them if warranted.

    Agency Affected: Department of the Interior

  3. Status: Closed - Implemented

    Comments: In response to the report, the Bureau of Land Management hired an independent accounting firm to audit the financial records associated with 23 specific assembled land exchanges. The accounting firm's final report was issued earlier this year. GAO was told that BLM's management is preparing a summary of the reports and that they will determine what, if any, additional measures need to be taken based on the reports.

    Recommendation: The Secretary of the Interior and BLM should conduct a full audit of financial records associated with assembled exchanges under which land has been sold and purchased--including escrow accounts and expenses deducted by third-party facilitators--to: (1) determine whether sale proceeds were handled properly; (2) resolve any augmentation, erroneous use of public funds, or deficiency in accordance with appropriate laws; and (3) take appropriate actions, including reporting to the President and to Congress, as required by law, all relevant facts and a statement of the actions taken.

    Agency Affected: Department of the Interior

  4. Status: Closed - Implemented

    Comments: In response to the report, the Bureau of Land Management hired an independent accounting firm to audit the financial records associated with 23 specific assembled land exchanges. The accounting firm's final report was issued earlier this year. GAO was told that BLM's management is preparing a summary of the reports and that they will determine what, if any, additional measures need to be taken based on the reports.

    Recommendation: The Secretary of the Interior and BLM should conduct a full audit of financial records associated with assembled exchanges under which land has been sold and purchased--including escrow accounts and expenses deducted by third-party facilitators--to: (1) determine whether sale proceeds were handled properly; (2) resolve any augmentation, erroneous use of public funds, or deficiency in accordance with appropriate laws; and (3) take appropriate actions, including reporting to the President and to Congress, as required by law, all relevant facts and a statement of the actions taken.

    Agency Affected: Department of the Interior: Bureau of Land Management

  5. Status: Closed - Not Implemented

    Comments: In response to the report, the Bureau of Land Management (1) identified funds (sales proceeds and interest balances) that were in escrow accounts set up for assembled exchanges, and deposited the interest balances into the Treasury; (2) issued guidance that defined the terms and elements of assembled exchanges and established more stringent financial controls; and (3) contracted with the Appraisal Foundation to review their appraisal processes. However, the Bureau continues assembled exchanges under which it uses sale proceeds to buy nonfederal land.

    Recommendation: The Secretary of the Interior and BLM should identify and immediately discontinue assembled exchanges under which the BLM is--either directly or through third-party facilitators--following the unauthorized practice of selling federal land, retaining the sales proceeds (and interest) in escrow accounts rather than depositing them into the Treasury, and using these proceeds to buy nonfederal land.

    Agency Affected: Department of the Interior

  6. Status: Closed - Implemented

    Comments: In response to the draft report, the Forest Service began to require that its national review team or regional directors review all land exchanges twice during the exchange process, once at the feasibility phase and again prior to making a formal decision.

    Recommendation: The Secretary of the Interior should instruct the Director of BLM and the Secretary of Agriculture should instruct the Chief of the Forest Service to require that all exchanges be reviewed and approved by the agencies' review teams (or other designated officials) before those exchanges are completed. In this review, the agencies must ensure that the federal and nonfederal lands proposed to be exchanged are appropriately valued, that the officials give full consideration to improving federal land management or addressing state or local needs, that the benefits from acquiring the nonfederal land will match or exceed the benefits from retaining the federal land, and that all statutory and regulatory requirements for land exchanges are met.

    Agency Affected: Department of the Interior: Bureau of Land Management

  7. Status: Closed - Implemented

    Comments: In response to the draft report, the Bureau of Land Management began to require that its national review team or state directors review and concur with all land exchanges.

    Recommendation: The Secretary of the Interior should instruct the Director of BLM and the Secretary of Agriculture should instruct the Chief of the Forest Service to require that all exchanges be reviewed and approved by the agencies' review teams (or other designated officials) before those exchanges are completed. In this review, the agencies must ensure that the federal and nonfederal lands proposed to be exchanged are appropriately valued, that the officials give full consideration to improving federal land management or addressing state or local needs, that the benefits from acquiring the nonfederal land will match or exceed the benefits from retaining the federal land, and that all statutory and regulatory requirements for land exchanges are met.

    Agency Affected: Department of Agriculture

 

Explore the full database of GAO's Open Recommendations »

Sep 15, 2014

Sep 12, 2014

Sep 9, 2014

Aug 11, 2014

Jul 28, 2014

Jul 16, 2014

Jul 15, 2014

Jul 9, 2014

Jun 30, 2014

Jun 16, 2014

Looking for more? Browse all our products here