Forest Service:

Actions Needed to Ensure That Salvage Sale Fund Is Adequately Managed

RCED-97-228: Published: Sep 26, 1997. Publicly Released: Sep 26, 1997.

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Pursuant to a congressional request, GAO reviewed the status of the Salvage Sale Fund's balance and the management practices affecting the replenishment of the fund.

GAO noted that: (1) after reaching a high of $247 million at the end of fiscal year (FY) 1993, the Salvage Sale Fund's balance declined 25 percent to $186 million at the end of FY 1996; (2) the decline occurred for a variety of reasons, and the fund's balance appears to be stabilizing in FY 1997; (3) if the Forest Service's estimates are correct, the Salvage Sale Fund's balance will total about $182 million at the end of FY 1997, a balance the Forest Service believes is sufficient to meet the estimated obligations for FY 1998; (4) several management practices that affect the flow of salvage sale receipts into the Salvage Sale Fund need to be improved; and (5) specifically, these practices include how regions and forests: (a) establish priorities for distributing salvage timber sale receipts; (b) establish estimates of the costs to recovered; (c) review salvage sale plans for completeness and accuracy; and (d) satisfactorily correct deficiencies.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Forest Service agreed that the agency's guidance for deposits to the Salvage Sale Fund and K-V fund needs clarification. The Forest Service said that deposits to the Salvage Sale Fund will have priority on timber sales designated as salvage or totally funded from the Salvage Sale Fund and will provide for recovery of salvage sales preparation and administration costs before salvage sale receipts are further distributed. The guidance was incorporated into the Forest Service Manual and the Timber Sale Preparation Handbook.

    Recommendation: To help ensure that appropriate and consistent practices are in place to manage the Salvage Sale Fund, the Secretary of Agriculture should direct the Chief of the Forest Service to clarify the agency's guidance to emphasize that the Salvage Sale Fund takes priority over the Knutsen-Vandenberg (K-V) Fund for the distribution of salvage sale receipts until preparation and administration costs have been recovered.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: The Forest Service acknowledged that the method chosen to estimate the salvage sale costs can have a significant impact on the amount of salvage sale funds deposited. The Forest Service said that, through its management review process, they continue to emphasize that the cost estimates need to reflect the actual experienced costs and that the assumptions used in developing these costs should be documented. The Forest Service revised its Forest Service Manual and Timber Sale Preparation Handbook to include direction that requires that Salvage Sale Plans reflect current costs and overhead rates.

    Recommendation: To help ensure that appropriate and consistent practices are in place to manage the Salvage Sale Fund, the Secretary of Agriculture should direct the Chief of the Forest Service to establish national guidance that identifies acceptable data sources and methods for calculating the cost estimates that determine the fund's replenishment requirements.

    Agency Affected: Department of Agriculture

  3. Status: Closed - Implemented

    Comments: The Forest Service concurs with GAO's finding that errors frequently occurred in the development of the Salvage Sale Fund collection plans. The Forest Service revised its Forest Service Manual and Timber Sale Preparation Handbook to require Line Officers to review and initial each Salvage Sale Fund Plan and specifies items to review prior to approving the each plan.

    Recommendation: To help ensure that appropriate and consistent practices are in place to manage the Salvage Sale Fund, the Secretary of Agriculture should direct the Chief of the Forest Service to establish national procedures to ensure that salvage sale plans will be adequately reviewed to detect errors.

    Agency Affected: Department of Agriculture

  4. Status: Closed - Implemented

    Comments: The Forest Service concurs with the finding that opportunities exist to communicate local findings across the Forest Service. In addition, the Forest Service believes that distributing an annual report of Salvage Sale Fund management findings to the Regional Foresters will facilitate service-wide communications by sharing findings and observations that have service wide benefits. The Forest Service revised its Forest Manual and Timber Preparation Handbook to provide for an annual report that will be prepared and distributed in the second quarter of each year. The report will identify common problems or issues noted during the previous year's administrative reviews, identify common problems or issues noted in preparing and accumulating the information from the annual balance analysis, communicate best practices identified during the annual reviews and, encourage the application of the best practices as appropriate.

    Recommendation: To help ensure that appropriate and consistent practices are in place to manage the Salvage Sale Fund, the Secretary of Agriculture should direct the Chief of the Forest Service to develop national follow-up procedures to ensure that errors, problems, or best practices found in one location are communicated, corrected, or implemented everywhere.

    Agency Affected: Department of Agriculture

 

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