Federal Timber Sales: Process for Appraising Timber Offered for Sale Needs to Be Improved

Highlights

Pursuant to a congressional request, GAO reviewed the Forest Service's and Bureau of Land Management's (BLM) process for appraising timber offered for sale.

Recommendations

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Department of Agriculture	The Secretary of Agriculture should direct the Chief, Forest Service, to improve its timber process by improving the guidance to regions on developing and maintaining timber appraisal systems.	Closed – Implemented Language added to Forest Service Manual (2420.2) stating the objectives of the timber appraisal system and thereby giving guidance to all regions on what the appraisal system must include.
Department of Agriculture	The Secretary of Agriculture should direct the Chief, Forest Service, to improve its timber appraisal process by requiring routine headquarters monitoring of how well regional appraisal systems are approximating fair market value.	Closed – Implemented Language added to Forest Service Manual (2420.42) stating that it is the responsibility of the timber director in Washington to monitor the performance of the appraisal system. Section 2422.1 requires regional foresters to report to the WO twice a year on how well their appraisal systems are approximating fair market value.
Forest Service	In order to establish bid prices that better approximate fair market value, the Chief, Forest Service, should direct Regions 5 and 6 to switch to the transaction evidence appraisal method.	Closed – Implemented Language added in Forest Service Manual (2420.3) stating that all regions except Alaska (Region 10) are to use transaction evidence as its primary appraisal method starting late in 1992.
Forest Service	In order to establish bid prices that better approximate fair market value, the Chief, Forest Service, should direct Region 1 to reduce its rollback factor to be more consistent with the other regions.	Closed – Implemented The Forest Service directed, and Region I has accomplished, bringing appraisals within 30 percent of average bid and backoff to 5 to 25 percent.
Department of Agriculture	The Secretary of Agriculture should direct the Chief, Forest Service, to consider all timber sales costs in establishing advertised prices for timber sales.	Closed – Not Implemented The Forest Service has studied the below-cost issue since the early 1990's and had a draft policy in late 1992. The current administration did not pursue the draft policy and decreased the emphasis of the timber program, which not only dramatically reduced the size of the traditional program, but significantly changed the nature of the program from resource extraction to ecosystem management, forest health, and landscape management. In 1995, the Forest Service formed another task force which studied the issue of below-cost timber sales in relation to the new ecosystem management approach. In May 1997, the Forest Service developed proposed direction that addressed the role that timber harvesting would play in achieving the ecological, economic, and social objectives of the Service, but did not address the below-cost issue. In view of the significant change in the nature of the timber program, the time that has elapsed, and the lack of action, GAO is closing the recommendation.
Department of Agriculture	The Secretary of Agriculture should direct the Chief, Forest Service, to adopt the formal decisionmaking process described in this report as an integral part of its forthcoming guidelines and procedures regarding timber sales which do not recover costs.	Closed – Not Implemented The Forest Service has studied the below-cost issue since the early 1990's and had a draft policy in late 1992. The current administration did not pursue the draft policy and decreased the emphasis of the timber program, which not only dramatically reduced the size of the traditional program, but significantly changed the nature of the program from resource extraction to ecosystem management, forest health, and landscape management. In 1995, the Forest Service formed another task force which studied the issue of below-cost timber sales in relation to the new ecosystem management approach. In May 1997, the Forest Service developed proposed direction that addressed the role that timber harvesting would play in achieving the ecological, economic, and social objectives of the Service, but did not address the below-cost issue. In view of the significant change in the nature of the timber program, the time that has elapsed, and the lack of action, GAO is closing the recommendation.

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Topics

Natural Resources and Environment

Administrative costsAppraisalsCost accountingEvaluation methodsFair market valueFederal agency accounting systemsFederal property managementInternal controlsQuestionable procurement chargesTimber sales