Pursuant to a congressional request, GAO reviewed the Forest Service's management of its timber sales program in the Tongass National Forest, focusing on: (1) Tongass Timber Supply Fund expenditures; (2) the Department of Agriculture's (USDA) and the timber industry's opinions regarding the Service's use of funds; (3) the effectiveness of timber supply and funding provisions in maintaining timber industry employment; (4) the economic basis of the Service's policies in the Tongass Land Management Plan; and (5) a comparison of the government's costs for growing and selling timber with timber sales revenues.

GAO found that: (1) Tongass timber industry employment declined from about 2,700 jobs in 1980 to 1,420 jobs in 1986; (2) neither the act nor the land management plan provided the Service with the flexibility it needed to deal with reduced demand; (3) contrary to timber industry perceptions and interpretations, Congress passed the act to protect the timber industry from the effects of designated wilderness areas, not to guarantee protection against timber market fluctuations; (4) during 1986, the Service incurred costs of about $25.4 million and received revenues of $3.3 million; (5) the Service properly spent about $30 million from the Tongass Timber Supply Fund for construction of administrative roads and facilities which had a substantial connection with the fund's purposes; and (6) the Service lacks authority to use the fund to pay for firms' road-building costs.