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'Valles Caldera: The Trust Has Made Progress but Faces Challenges to 
Achieve Goals of the Preservation Act' which was released on October 
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Report to Congressional Committees: 

United States Government Accountability Office: 

GAO: 

October 2009: 

Valles Caldera: 

The Trust Has Made Progress but Faces Significant Challenges to Achieve 
Goals of the Preservation Act: 

Valles Caldera Trust: 

GAO-10-84: 

GAO Highlights: 

Highlights of [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-10-84], 
a report to congressional committees. 

Why GAO Did This Study: 

In creating the Valles Caldera National Preserve from a unique parcel 
of land in north-central New Mexico, and by creating the Valles Caldera 
Trust as a wholly owned government corporation to manage the preserve, 
the Valles Caldera Preservation Act of 2000 established a 20-year 
public-private experiment to operate the preserve without continued 
federal funding. The Trust is charged with achieving a number of goals, 
including becoming financially self-sustaining by the end of fiscal 
year 2015. 

This report, GAO’s second and last mandated by the Preservation Act, 
examines (1) the Trust’s progress since 2000; (2) the extent to which 
the Trust has fulfilled certain of its obligations as a government 
corporation; and (3) the challenges the Trust faces to achieve the 
Preservation Act’s goals. GAO analyzed documents, financial records, 
and other Trust information and interviewed current and former members 
of the Trust’s Board and staff, as well as representatives of local 
interest groups and stakeholders. 

What GAO Found: 

The Trust has taken steps to establish and implement a number of 
programs and activities to achieve the goals of the Preservation Act. 
It has rehabilitated roads, buildings, fences, and other 
infrastructure; created a science program; experimented with a variety 
of grazing options; taken steps to manage its forests; expanded 
recreational opportunities; and taken its first steps toward becoming 
financially self-sustaining. Nevertheless, it is at least 5 years 
behind the schedule it set for itself in 2004. According to Trust 
officials, a number of factors—including high turnover among Board 
members and key staff and cultural and natural resources and 
infrastructure that were not as healthy or robust as originally 
believed—have delayed its progress. 

Through fiscal year 2009, the Trust had yet to develop and put in place 
several key elements of an effective management control program for a 
government corporation. Specifically, the Trust lacked a strategic plan 
and annual performance plans, and it had not systematically monitored 
or reported on its progress—elements called for by the Government 
Performance and Results Act and recommended by GAO in its first report 
in 2005. The Trust’s financial management has also been weak. 
Consequently, it has been difficult for Congress and the public to 
understand the Trust’s goals and objectives, annual plans and 
performance, or progress. 

According to current Trust officials, becoming financially self-
sustaining, particularly by the end of fiscal year 2015 when federal 
appropriations are due to expire, is the Trust’s biggest challenge. 
Most of the Trust’s other challenges follow from this one, including 
identifying, developing, or expanding revenue-generating activities 
that would enable the Trust to raise sufficient funds; obtaining funds 
for major capital investments; and addressing a number of legal 
constraints—such as its authority to enter into long-term leases or 
acquire property—which potentially limit its ability to attract long-
term businesses that could generate revenues. Nevertheless, the Trust 
is continuing to explore opportunities for becoming financially self-
sustaining. 

Figure: Valle Grande from Redondo Peak, the Highest Point in Valles 
Caldera National Preserve: 

[Refer to PDF for image: photograph] 

Source: GAO. 

[End of figure] 

What GAO Recommends: 

To further the Trust’s efforts to become financially self-sustaining, 
GAO recommends that the Trust work with relevant congressional 
committees to seek legislative remedies, as appropriate, for the legal 
challenges it faces. In commenting on a draft of this report, the Trust 
generally agreed with GAO’s findings and conclusions but did not 
comment on the recommendation. 

View [hyperlink, http://www.gao.gov/products/GAO-10-84] or key 
components. For more information, contact Robin M. Nazzaro at (202) 512-
3841 or nazzaror@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

The Trust Has Taken Steps to Achieve the Preservation Act's Goals but 
Has Made Less Progress Than Expected: 

The Trust Has Failed to Put in Place Key Elements of an Effective 
Management Program: 

The Trust Sees Becoming a Self-Sustaining Entity as Its Greatest 
Challenge: 

Conclusions: 

Recommendation for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Comments from the Valles Caldera Trust: 

Appendix II: GAO Contact and Staff Acknowledgments: 

Table: 

Table 1: Gross Revenues by Activity, as Reported by the Trust for 
Fiscal Years 2005-2008: 

Figures: 

Figure 1: Valles Caldera National Preserve, with Valles Caldera Crater, 
in North-Central New Mexico: 

Figure 2: Typical Logging Road System, Redondito Peak, 2005: 

Figure 3: Main Entrance of Valles Caldera Preserve, Before and After 
Installation of New Gate: 

Figure 4: Original Baca Ranch Owner's Home: 

Figure 5: Old and New Temporary Visitor Centers: 

Figure 6: Planned Timeline and Actual Status of the Valles Caldera 
Trust's Program Development: 

GCCA: Government Corporation Control Act: 

GPRA: Government Performance and Results Act of 1993: 

[End of section] 

United States Government Accountability Office: 

Washington, DC 20548: 

October 30, 2009: 

The Honorable Jeff Bingaman: 
Chairman: 
The Honorable Lisa Murkowski: 
Ranking Member: 
Committee on Energy and Natural Resources: 
United States Senate: 

The Honorable Nick Rahall, II: 
Chairman: 
The Honorable Doc Hastings: 
Ranking Member: 
Committee on Natural Resources: 
House of Representatives: 

In 2000, the Valles Caldera Trust was created by Congress as a 20-year 
public-private land management experiment, whose aim was to protect and 
preserve--without the need for continuing infusions of federal tax 
dollars--a unique volcanic parcel of land in New Mexico. Today, 
however, nearly halfway through the Trust's 20-year life span, 
supporters and critics disagree over whether this public-private model 
can succeed or should be terminated. 

The Valles Caldera Preservation Act of 2000[Footnote 1] authorized the 
federal government to purchase Valles Caldera, comprising about 89,000 
acres of privately owned land known as the Baca Ranch. The Caldera has 
served as a model for geological studies of this area and other 
volcanic areas around the world, and it has had religious significance 
for Native Americans since prehistoric times. In addition, the 
landscape offers opportunities for winter and summer recreation and 
provides ranchers with forage for livestock. To manage the land, for 
which the government paid close to $97 million, the Preservation Act 
also established the Trust, governed by a Board of Trustees, as a 
wholly owned government corporation.[Footnote 2] The act specifically 
charges the Trust with managing the land to achieve a number of goals, 
including the following: 

* protecting and preserving Valles Caldera's scientific, scenic, 
historic, and natural values and archaeological, geological, and 
cultural resources for future generations; 

* providing opportunities for public recreation; 

* providing for sustained-yield management of the ranch for timber 
production and domesticated livestock grazing, insofar as these 
activities are consistent with the Trust's other responsibilities; and: 

* becoming financially self-sustaining--that is, operating without 
federal funds--within 15 years of the law's enactment, or by the end of 
2015. 

In managing the preserve, the Trust is expected to incorporate elements 
of both public and private administration to promote the preserve's 
long-term sustainability. The Trust is subject to the Government 
Corporation Control Act (GCCA) and to the Government Performance and 
Results Act of 1993 (GPRA).[Footnote 3] These two laws provide general 
authorities for wholly owned government corporations to carry out 
government functions and a general management framework to enhance the 
federal government's efficiency and effectiveness and provide greater 
accountability for results, respectively. Among other requirements 
under GCCA, the Trust must obtain independent financial audits and 
report annually to Congress. Under GPRA, the Trust must prepare a 
strategic plan with long-term measurable goals and objectives and an 
annual performance plan for achieving the strategic plan's goals and 
objectives, and it must submit annual performance reports to Congress 
and the President. 

From the land's acquisition in 2000 through fiscal year 2009, the Trust 
received about $31 million in federal funding to operate and maintain 
the land as a national preserve. Under the Preservation Act, the 
authorization of appropriations for the Trust expires at the end of 
fiscal year 2015. If at the end of fiscal year 2014, the Board believes 
that the Trust has met the goals and objectives of the act but has not 
become financially self-sustaining, the Board may submit to the 
relevant congressional committees a recommendation to authorize 
appropriations beyond 2015. Also, under the act, the Trust itself is to 
terminate in fiscal year 2020. According to the Preservation Act, in 
2018 the Board must make a recommendation to the Secretary of 
Agriculture whether to extend or terminate the Trust in 2020. Within 
120 days after receipt of the recommendation, the Secretary must submit 
to Congress the Board's recommendation on extension or termination, 
along with the Secretary's recommendation. If the Trust is terminated, 
the preserve will become part of the Santa Fe National Forest and 
therefore be managed by the U.S. Forest Service, within the Department 
of Agriculture, as part of the national forest system. 

The Preservation Act also directs us to study and report twice on the 
Trust's activities, including on the Trust's ability to meet its 
obligations under the act. In November 2005, we issued our first 
report, which concluded that the Trust had made some progress in 
meeting goals of the act and recommended that it establish a more 
effective management control program and increase its accountability to 
Congress and other stakeholders.[Footnote 4] The present report, our 
second and last one required by the Preservation Act, examines (1) the 
Trust's progress since 2000; (2) the extent to which the Trust has 
fulfilled certain of its obligations as a government corporation; and 
(3) the challenges the Trust faces as it continues moving toward 
fulfilling the goals of the act. 

To address these issues, we analyzed documents, financial records, and 
other information from the Trust and Forest Service, and we visited the 
preserve to observe the actions the Trust has taken to date toward 
meeting its statutory obligations. In addition, we analyzed and 
assessed the Trust's fulfillment of GCCA's and GPRA's requirements. We 
also interviewed current and former officials of the Trust's Board and 
staff, as well as Forest Service officials, about the programs and 
activities that the Trust has initiated since assuming management of 
the preserve. We interviewed representatives of various local interest 
groups and stakeholders, such as Los Amigos de Valles Caldera and 
Caldera Action.[Footnote 5] We also assessed data related to revenue- 
generating programs and activities, such as the number of livestock 
grazing on the preserve from year to year, and determined that these 
data were sufficiently reliable for the purposes of this 
report.[Footnote 6] We conducted this performance audit from November 
2008 through October 2009, in accordance with generally accepted 
government auditing standards. Those standards require that we plan and 
perform the audit to obtain sufficient, appropriate evidence to provide 
a reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a reasonable 
basis for our findings and conclusions based on our audit objectives. 

Background: 

About 1.2 million years ago, a volcano erupted and collapsed inward, 
forming the crater now known as Valles Caldera, in north-central New 
Mexico (see fig. 1). Almost entirely surrounded by the Forest Service's 
Santa Fe National Forest and the National Park Service's Bandelier 
National Monument, this geologically and ecologically unique area 
covers about 89,000 acres of meadows, forests, hot springs, volcanic 
domes, and streams supporting elk herds, fish, and other wildlife. 
While in private hands, the Baca Ranch was operated as a working ranch, 
providing grazing for livestock plus hunting and fishing for a limited 
number of visitors. According to the Preservation Act, the working 
ranch arrangement was to continue after ownership was assumed by the 
federal government. 

Figure 1: Valles Caldera National Preserve, with Valles Caldera Crater, 
in North-Central New Mexico: 

[Refer to PDF for image: map] 

Source: Valles Caldera Trust (main map and Satellite photo); Map 
Resources (New Mexico). 

[End of figure] 

The act also calls for the Trust to protect and preserve the land while 
attempting to achieve a financially self-sustaining operation. 
"Financially self-sustaining," as defined by the act, means that 
management and operating expenditures--including trustees' expenses; 
salaries and benefits; administrative, maintenance, and operating 
costs; and facilities improvements--are to equal or be less than 
proceeds derived from fees and other receipts for resource use and 
development. Appropriated funds are not to be considered. To carry out 
its duties, the Trust has the authority to solicit and accept donations 
of funds, property, supplies, or services from any private or public 
entity; negotiate and enter into agreements, leases, contracts, and 
other arrangements with any individual or federal or private entity; 
and consult with Indian tribes and pueblos. 

The Trust's Board consists of nine trustees. The President of the 
United States appoints seven of these trustees, and the other two are 
the Supervisor of Santa Fe National Forest and the Superintendent of 
Bandelier National Monument, under the jurisdiction of the Department 
of the Interior's National Park Service. Of the seven presidential 
appointees, who are selected in consultation with New Mexico's 
congressional delegation, five must be New Mexico residents. Appointees 
are to be selected on the basis of their expertise or experience, as 
follows: one trustee each (1) with livestock and range management 
expertise; (2) with expertise in recreation management; (3) who is 
knowledgeable in sustainable management of forest lands for commodity 
and noncommodity purposes; (4) with expertise in financial management, 
budget and program analysis, and small business operations; (5) who is 
familiar with the cultural and natural history of the region; (6) who 
is active in a nonprofit conservation organization concerned with 
Forest Service activities; and (7) who is active in state or local 
government activities in New Mexico, with expertise in the customs of 
the local area. Trustees are appointed to 4-year terms and can be 
reappointed; no trustee, however, may serve more than 8 consecutive 
years. The trustees select a chairman from the Board's ranks. With the 
exception of the Board Chair, trustees serve without pay, although they 
are reimbursed for travel and subsistence expenses while performing 
their duties. The Board must hold at least three public meetings a year 
in New Mexico. An executive director, who is hired by the Board, 
oversees the Trust's day-to-day operations. 

The Trust Has Taken Steps to Achieve the Preservation Act's Goals but 
Has Made Less Progress Than Expected: 

Although the Trust has taken steps to establish and implement a number 
of programs and activities to achieve the goals of the Preservation 
Act, it is behind the schedule it set for itself in 2004. A number of 
factors, such as high turnover among Board members and key management 
staff, have contributed to this slow progress, according to former and 
current Board members and staff. 

The Trust Took a Number of Steps toward Achieving Preservation Act 
Goals: 

As we reported in 2005, the Board's first steps were to establish a 
basic organization and to acquaint itself with conditions at the 
preserve.[Footnote 7] In 2001, the Board held regular meetings and 
listening sessions with the public and gathered views on how the 
preserve should be managed. The Board hired its first employee, an 
executive director, in October 2001 and, in December 2001, issued 10 
principles to guide future decision making. These principles focused on 
a long-term view, emphasizing the ideas of landscape protection, sound 
business management and good-neighbor relations, the role of science in 
defining programs, and the quality of experiences to be provided to the 
public at the preserve. Overall, these principles constituted the 
Trust's initial philosophy and foundation for the programs and 
activities that the Trust undertook to fulfill the Preservation Act's 
goals. The following sections describe some of the Trust's 
accomplishments. 

The Trust Has Surveyed and Repaired Roads, Buildings, Fences, and Other 
Infrastructure: 

Shortly after the federal government assumed ownership of the preserve, 
the Trust learned that the existing infrastructure--such as roads, 
buildings, fences, and water treatment facilities--was in disrepair and 
needed rehabilitation. All the roads needed upgrading, fences were 
falling down, rodents had invaded all the structures, and the water 
supply system was not functioning. Work began immediately, and it 
continues today. 

The preserve has about 1,000 miles of roads, including 140 miles of 
main access roads. Road building into the preserve began in 1935, and 
by the 1970s, more than 800 miles of logging roads had been bulldozed 
into high-elevation forests, causing erosion and damaging downhill 
streams and wetland areas (see fig. 2). On assuming its management 
role, the Trust determined that the existing roads could not be readily 
used to support administration, ranching, recreation, or other needs. 
Since then, the Trust has upgraded over 14 miles of road to all-weather 
gravel standards, so they are usable for passenger vehicles and are not 
as environmentally damaging. To enhance safety and public viewing of 
the preserve, the Trust also installed kiosks, scenic turnouts, and a 
new gate (see fig. 3); in addition, it reconfigured the entry to and 
exit from New Mexico Highway 4, the main access road to the preserve. 
The Trust has systematically numbered and mapped a network of about 184 
miles of roads, which provide open public access, as well as restricted 
access for the Trust's land management activities. 

Figure 2: Typical Logging Road System, Redondito Peak, 2005: 

[Refer to PDF for image: picture] 

Source: Valles Caldera Trust. 

[End of figure] 

Figure 3: Main Entrance of Valles Caldera Preserve, Before and After 
Installation of New Gate: 

[Refer to PDF for images: two photographs] 

Before: 

Source: Valles Caldera Trust. 

After: 

Source: GAO. 

[End of figure] 

At the time of the federal government's purchase, the preserve had 
numerous existing buildings, fences, and other structures. In 2002, the 
Trust recognized that the majority of its structures needed major 
restoration to bring them up to local building codes. Over the next 6 
years, the Trust conducted minor maintenance on the ranch buildings 
used to house employees and documented the condition of structures of 
historic value throughout the preserve (see fig. 4). In addition, the 
Trust repaired the preserve's 54 miles of boundary fences--including 
adjusting their height to allow for elk movement--and installed signs 
restricting access to the preserve. The Trust also assessed the layout 
and condition of 64 miles of interior fences, many of which were used 
to separate pastures for livestock. Other facilities, such as livestock 
corrals, have also been assessed and rehabilitated, and in 2009 a new 
temporary visitor building was purchased and placed on site (see fig. 
5). 

Figure 4: Original Baca Ranch Owner's Home: 

[Refer to PDF for image: photograph] 

Source: GAO. 

[End of figure] 

Figure 5: Old and New Temporary Visitor Centers: 

[Refer to PDF for image: photographs] 

Old temporary visitor center; 
New temporary visitor center; 

Source: GAO. 

[End of figure] 

Regarding water supplies, when the federal government acquired the 
preserve, the existing water treatment facility was not functioning, so 
no potable water was available. Rehabilitating this facility became one 
of the Trust's top priorities. Repairs to the water collection and 
filtration systems were completed in 2004, the water distribution 
system was repaired in 2005, and potable water became available in 
spring 2006. Still, the present water supply freezes during the winter 
and can dry up during the summer; the Trust is therefore evaluating 
groundwater reserves and options for drilling a well to supply water 
year-round. 

In the end, rehabilitating deteriorating infrastructure has proven to 
be an expensive and time-consuming endeavor, and the Trust's efforts 
have not begun to address capital improvements, such as permanent 
visitor facilities or roads in support of the Preservation Act's goals. 
Indeed, as of 2008, the Trust still faced nearly $1.2 million in 
deferred maintenance costs for existing buildings alone. 

The Trust Created a Science Program to Lay the Foundation for 
Activities Allowed at the Preserve: 

From the time it first articulated the principles by which it would 
manage Valles Caldera, the Trust viewed science as key to protecting 
and preserving the land while developing programs that could bring in 
revenue. It committed to using science in an "adaptive management" 
framework, by continuously gathering and applying site- specific 
scientific knowledge. According to the Trust's Framework and Strategic 
Guidance for Comprehensive Management, the chief characteristic of the 
Trust's view of adaptive management is the monitoring of natural 
systems and the human activities impinging on those systems, coupled 
with use of the monitoring information to guide and, when needed, 
revise management goals and activities.[Footnote 8] Thus, according to 
Trust documents, the Trust makes land management decisions on the basis 
of scientific research and monitoring, taking into account the public's 
views and federal environmental requirements. 

The science program includes three components: inventorying natural 
resources, monitoring environmental changes resulting from the Trust's 
programs, and conducting research that will help manage the preserve's 
resources. Up and running in 2003, this program assists the Trust in 
complying with federal environmental requirements, including those of 
the National Environmental Policy Act of 1969 (NEPA).[Footnote 9] By 
2008, the Trust had assessed or was assessing most of the preserve's 
natural resources, such as its forests, biodiversity, watershed and 
stream health, fish habitats, ground water quality, and geology and 
soils. In inventories of cultural resources, the Trust has also 
uncovered over 430 historic and archaeological sites. Such inventories 
will continue to be done as needed before construction projects or 
other ground disturbance to comply with NEPA guidelines. In addition, 
to assess the effects of activities such as grazing, recreation, or 
forest thinning, the Trust has established long-term programs to 
monitor ecological conditions, including climate, stream water quality, 
and plant and animal habitat and population dynamics. Finally, in 
collaboration with universities, federal and state agencies, and other 
research entities, the Trust has hosted a wide range of research 
programs, ranging from a study of the ecological drivers of rodent-
borne diseases to earth-coring studies of past climate change. For 
example, hydrological research funded by the National Science 
Foundation through the University of Arizona is to provide information 
to aid in the day-to-day management of the preserve and also contribute 
to the understanding of hydrologic systems overall. This research 
should help scientists understand how much precipitation the preserve's 
lands absorb and predict the amount of runoff into its streams and 
rivers. As more data become available, scientists may be able to 
forecast the effect of precipitation and drought on water quality and 
forage availability on the preserve and to use the information to drive 
future management decisions about livestock and recreation. Each year 
the Trust has generated between $1 million and $2 million of externally 
funded research. 

To further enhance and communicate the results of the science program, 
the Trust in August 2009 leased a facility in the town of Jemez 
Springs, 20 miles west of the preserve's main gate, as a new science 
and education center adjacent to the Trust's administrative 
headquarters. The facility is to accommodate a laboratory, classrooms, 
offices, a dining hall, and lodging for visitors participating in the 
center's formal and informal science education programs for all age 
groups. 

Since 2002, the Trust Has Been Experimenting with a Variety of 
Approaches to Manage Grazing: 

Given that the Preservation Act requires keeping the preserve as a 
working ranch, grazing has been a central activity since the Trust 
began. Over the years, the grazing program's objectives, scope, and 
size have changed repeatedly, in response to annual scientific 
assessments of forage availability, as well as shifting directives from 
the Board. In addition, because the preserve is federal land, continued 
grazing requires completion of a NEPA environmental assessment. The 
Trust's ultimate goal is to manage its livestock operations for 
multiple aims, including revenue generation, local community benefit, 
research, and public education. 

To date, the Trust has experimented with a number of grazing programs, 
beginning in 2002 with a small drought-relief program that allowed just 
over 700 cow-calf pairs belonging to local ranchers to graze on 
preserve pastures for 5 weeks. The Trust also hosted a "conservation 
stewardship" program for local ranchers, allowing about 200 cattle in 
each of 2 years to graze on preserve lands for about 4 months while the 
ranchers implemented conservation measures on their own lands. In 
addition, the Trust has conducted a breeding program for 3 years to 
benefit local ranchers and has tested varied cattle management 
approaches in an attempt to make the program profitable for the Trust. 
In 2006, because of drought, the Trust switched its focus to research 
assessing the effects on cattle forage of controlled burning of the 
grasslands; initial findings suggested that such burning improved 
forage quality. Then in 2008, the Trust attempted to make a profit from 
grazing, allowing nearly 2,000 head of cattle to graze at the preserve 
over a 4-month period and generating about $58,000 in gross revenues. 
Because the cattle were brought in from Mexico and were sold in Texas, 
this effort drew local criticism. Moreover, the sheer number of cattle 
created conflicts with fishing and other recreational activities. In 
2009, the program again took on a research emphasis and aimed to 
benefit local communities.[Footnote 10] 

The Trust Has Taken a Number of Steps to Manage Its Forests: 

The preserve's lands encompass more than 60,000 forested acres. When 
the Trust was first established, these forests were envisioned as a 
possible source of revenue toward the Preservation Act's purpose of 
providing for the multiple use and sustained yield of the preserve's 
renewable resources.[Footnote 11] But the Trust's forest inventory in 
2006 revealed a lack of marketable timber, partly because of intensive 
logging in the past. As a result of this logging and past fire 
suppression, about half the preserve's forested acres contain dense 
vegetation that pose a very high risk of wildland fire. To date, 
therefore, the Trust's forest management efforts have focused on 
restoring forest health, reducing the risk of large fires, and 
protecting watersheds. These efforts have also included identifying the 
most effective means of reducing hazardous fuels and a potential market 
for the sale of wood products (poles, mulch, pellets), sometimes in 
collaboration with local businesses. 

The Trust Continues to Expand Recreational Opportunities: 

Beginning in 2002, the Trust granted the public limited access to the 
preserve for recreation; in most cases, it has charged a fee for this 
access. In the beginning, public recreation was confined to guided 
hikes or van tours. Over the next several years, the Trust allowed 
varied summer and winter activities, including: 

* Hunting. The Trust has worked with New Mexico's Department of Game 
and Fish to hold elk hunts since 2002. In 2008, the Trust added a 
spring turkey hunt. 

* Fishing. In 2003, the Trust granted 1,785 people access to the 
preserve's two fishable streams, on a first-come, first-served basis. 
The Trust also holds adult and youth fishing clinics. In 2009, it began 
allowing anglers to drive their own vehicles to parking areas near 
assigned stream reaches, instead of providing van transportation as in 
previous years. 

* Hiking. Visitors have been allowed to hike at the preserve since 
2002, first in guided hikes, then on their own. The Trust has increased 
the number and mileage of available hiking trails, opening about 30 
miles of trails to hikers, including 5 miles requiring no fee. 

* Other recreational activities. The Trust has also offered horse-drawn 
wagon rides, sleigh rides, van tours, snowshoeing, cross- country 
skiing, stargazing lectures, horseback riding, marathon runs, mountain 
biking, group tours and seminars, workshops, antler collection, and 
overnight photographic and birding excursions. 

* In 2006, the Trust also hosted its first free open house, which drew 
more than 1,400 cars and nearly 4,000 people. The Trust used this event 
to inform the public about then-current programs and future 
opportunities and to monitor the effects of so many visitors. Since 
2008, the preserve has been open 7 days a week from April through 
September for summer recreation and events and fewer days the rest of 
the year to accommodate hunting and winter activities. 

The Trust Has Taken Its First Steps toward Becoming Financially Self-
Sustaining: 

The Preservation Act's findings and purposes section states, among 
other things, that the Baca Ranch could serve as a model for 
sustainable land development and use of timber, grazing, and recreation 
and that management of the ranch through a trust would eventually allow 
the ranch to become financially self-sustaining. Over its existence, 
the Trust recognized it had no marketable timber, but it has 
experimented with a number of grazing options and expanded recreational 
opportunities. Collectively, from 2005 through 2008,[Footnote 12] the 
Trust's grazing, recreation, and other activities have generated, on 
average, about $733,000 in gross revenues per year (see table 1). In 
comparison, from 2000 through 2009, the Trust received nearly $31 
million in federal funding--an average of about $3.5 million per year 
over the time frame. 

Table 1: Gross Revenues by Activity, as Reported by the Trust for 
Fiscal Years 2005-2008: 

Activity: Hunting; 
2005: $285,625; 
2006: $317,365; 
2007: $330,276; 
2008: $368,776. 

Activity: Fishing; 
2005: 71,645; 
2006: 60,415; 
2007: 67,392; 
2008: 68,913. 

Activity: Grazing[A]; 
2005: 39,654; 
2006: 0; 
2007: 5,800; 
2008: 58,584. 

Activity: Concessions; 
2005: 9,558; 
2006: 48,496; 
2007: 42,513; 
2008: 54,743. 

Activity: Summer recreation; 
2005: 15,600; 
2006: 22,027; 
2007: 25,800; 
2008: 45,811. 

Activity: Miscellaneous[B]; 
2005: 131,288; 
2006: 246,817; 
2007: 183,058; 
2008: 43,091. 

Activity: Special events; 
2005: 67,646; 
2006: 38,719; 
2007: 42,439; 
2008: 40,425. 

Activity: Facility rentals; 
2005: 5,000; 
2006: 45,095; 
2007: 30,210; 
2008: 36,015. 

Activity: Winter recreation; 
2005: 26,203; 
2006: 15,910; 
2007: 22,469; 
2008: 19,170. 

Activity: Total; 
2005: $652,219; 
2006: $794,844; 
2007: $749,957; 
2008: $735,528. 

Source: Valles Caldera Trust. 

[A] The Trust did not have a revenue-generating grazing program in 2006 
because of drought. 

[B] Miscellaneous revenues include donations; sale of livestock; 
interest on investments; and grants received by the Trust for 
inventory, monitoring, research, and restoration projects. 

[End of table] 

Faced with average gross revenues amounting to about 20 percent of 
average federal funding, the Board of Trustees contracted with an 
independent consulting firm in 2008 to develop a revenue enhancement 
study aimed at realizing annual revenues of about $5 million.[Footnote 
13] Made public in April 2009, this document details various options 
for generating revenues of this scale and bringing the Trust to 
financially self-sustaining status by the end of fiscal year 2015. 
These options include high-end elements such as a luxury lodge, as well 
as more modest elements such as tent camps. The options could be mixed 
and matched to produce a plan that the Trust could use as it decides 
how to further develop infrastructure and public programs at the 
preserve. According to the Trust, many of the options described in this 
document are to be incorporated into the alternatives the Trust is 
evaluating in preparing the environmental analyses called for by NEPA 
before it can provide for greater public access and use of the 
preserve. 

The Trust Is Behind Its Own Schedule to Achieve the Goals of the Act in 
2015: 

The Trust has not met the timeline that it set for itself to meet the 
Preservation Act's goals, as outlined in a required report to Congress 
in 2004. The timeline called for achieving financially self-sustaining 
status in three phases over 15 years, a schedule reiterated in the 
Trust's 2005 Framework and Strategic Guidance.[Footnote 14] 

* Phase 1, institution building, was to take place from 2001 through 
2005. During this phase, the Trust was to develop the staff and tools 
needed to manage the preserve as a wholly owned government corporation, 
including accounting systems and support mechanisms for its science- 
based adaptive management approach. No new roads or facilities were to 
be constructed during phase 1; rather, all public programs were to use 
existing infrastructure and temporary buildings and would therefore not 
require a full environmental assessment or environmental impact 
statement under NEPA. 

* Phase 2, program development, was to take place from 2005 through 
2010. During phase 2, the Trust envisioned completing NEPA analyses for 
major infrastructure projects and beginning construction for an array 
of programs, such as an integrated road and trails system, an 
interpretive center, and a science and education facility. 

* Phase 3, program refinement, was to unfold from 2010 through 2015. 
During phase 3, the Trust planned to cultivate additional sources of 
funds and streamline programs to permit decreasing reliance on federal 
appropriations as revenue-generating programs expanded. It was believed 
that the experience gained in the prior phases would enable the Trust 
to increase revenues and decrease costs in time to be self-sustaining 
by the end of fiscal year 2015. 

As of September 2009, only the science and grazing programs at the 
preserve have moved into phase 2 of the Trust's envisioned timeline. 
The Trust's publication in 2003 of its own NEPA regulations and its 
adaptive management framework marked the passage of the science program 
into phase 2. With completion of a forage environmental assessment in 
January 2009, the grazing program moved into phase 2.[Footnote 15] For 
recreation and associated infrastructure development to move into phase 
2, a public use and access plan including NEPA compliance--which is due 
in mid-2010--must be completed. For the Trust's forest management 
program, too, a NEPA analysis will have to be done to move into phase 
2. Thus, at the close of fiscal year 2009, the Trust continued to work 
mostly on phase 1 of its programs and activities--at least 5 years 
behind its anticipated schedule (see fig. 6). 

Figure 6: Planned Timeline and Actual Status of the Valles Caldera 
Trust's Program Development: 

[Refer to PDF for image: horizontal timeline] 

Planned timeline; 
Phase 1: 2000-2005; 
Phase 2: 2005-2010; 
Phase 3: 2010-2015. 

Science program; 
Phase 1: 2000-After 2003; 
Phase 2: After 2003-2010; 
Phase 3: [Empty]. 

Grazing[A]; 
Phase 1: 2000-About 2009; 
Phase 2: About 2009-2010; 
Phase 3: [Empty]. 

Recreation;
Phase 1: 2000-2010; 
Phase 2: [Empty]; 
Phase 3: [Empty]. 

Infrastructure; 
Phase 1: 2000-2010; 
Phase 2: [Empty]; 
Phase 3: [Empty]. 

Forest management; 
Phase 1: 2000-2010; 
Phase 2: [Empty]; 
Phase 3: [Empty]. 

Source: GAO analysis of Valles Caldera Trust data. 

[A] Grazing was renamed "livestock operation" in 2009. 

[End of figure] 

A Number of Factors Have Delayed the Trust's Progress: 

Current and previous Trust Board and staff members have all identified 
certain factors as contributing most significantly to delays in the 
Trust's progress. Key among these factors is high turnover among Board 
members. Under the Preservation Act, at least three Board positions are 
up for appointment every 2 years. In addition, members may resign for 
personal reasons before completing their term of appointment, and the 
two ex officio Board members from the Forest Service and the Park 
Service may change according to how they are assigned within their own 
agencies. A time lag--ranging from 2 to 9 months--inevitably occurs 
between the end of some members' terms and the beginning of others'. 
Thus, it can take months before a full Board is seated once again. New 
members face a learning curve. The result of such frequent turnover has 
led to delays in decision making, as well as false starts to programs. 
For example, an environmental assessment that needed to be completed 
before permanent livestock operations could be put in place was 
restarted three times before it was finally completed in 2009, largely 
because of Board turnover. 

The Trust has also experienced high turnover among key management 
staff. Within its first 7 years, nine people served as acting executive 
director or executive director; the most recent executive director 
reported for duty in January 2009. The chief administrative officer 
position also turned over four times. In addition, the position of 
communications manager--key to the Trust's obligation to communicate 
and collaborate with the public--remained vacant for 3 years, until 
2009. Among the Trust's key management staff, only the preserve general 
manager, who is responsible primarily for the preserve's natural 
resources, infrastructure, and recreational programs, and the preserve 
science and education director, who is responsible for and has 
developed the science and education programs, have been with the Trust 
since they were first hired, in 2002 and 2003, respectively. 

In addition, according to the Trust's Board and staff, they discovered 
upon assuming their responsibilities that the preserve's cultural and 
natural resources and infrastructure were not as healthy or robust as 
they had expected or as described in the opening to the Preservation 
Act. For example, road building and timber cutting in high-elevation 
forests had been done since the early 1930s, and streamside and other 
areas had been damaged by logging roads and overgrazing. Forests clear- 
cut in the 1960s and 1970s had been replaced by dense stands of young 
trees that provide little marketable timber and present a wildland fire 
hazard. Further, the act directed the Trust to open the preserve for 
public recreation within 2 years after the federal government purchased 
the land. As a result, the Trust found itself with more ecological 
restoration and infrastructure rehabilitation to do than expected--even 
while providing public access to the preserve--almost immediately after 
it assumed active management of the land in August 2002. 

Finally, almost everyone we interviewed observed that one or more of 
the foregoing factors contributed to the Trust's inability to focus on 
establishing itself as a fully functioning government corporation, 
which in turn exacerbated the effects of Board and staff turnover. 
Ultimately, these shortcomings raised serious concerns among interest 
groups and the public about whether the Trust could successfully manage 
the preserve in the manner envisioned by the Preservation Act. 

The Trust Has Failed to Put in Place Key Elements of an Effective 
Management Program: 

As of September 2009, the Trust had yet to develop and put in place 
several key elements of an effective management control program for a 
government corporation, as required under GPRA and as we recommended in 
our previous report.[Footnote 16] Specifically, the Trust had not 
clearly defined a long-term strategic plan, developed annual 
performance plans, or systematically monitored and reported its 
progress. Additionally, the Trust's financial management has been weak. 
Consequently, it has been difficult for Congress and the public to 
understand the Trust's long-term goals and objectives, annual plans and 
performance, or progress. 

As a Government Corporation, the Trust Is Required to Have Effective 
Management Controls: 

For government agencies and corporations, GPRA and GCCA specify the 
means to achieve an effective management control program. That is, they 
establish a framework for government entities to provide reasonable 
assurance that an organization's operations are effective and 
efficient, that its financial reporting is reliable, and that the 
organization is complying with applicable laws and regulations. This 
framework includes, among other components, (1) a strategic plan with 
long-term, measurable goals and objectives; (2) annual performance 
plans for achieving the strategic plan's goals and objectives; (3) 
performance monitoring and reporting; and (4) annual management reviews 
and financial audits. Such plans, methods, and procedures are 
collectively known as internal, or management, controls. 

Under GPRA, a federal agency is required to develop a strategic plan 
that covers a period of at least 5 years, to be updated every 3 years, 
and includes the agency's mission statement, identifies its long-term 
strategic goals and objectives, describes strategies to achieve those 
goals and objectives, explains the relationship between long-term and 
annual goals, analyzes key external factors, and specifies how and when 
program evaluations will be conducted. GPRA further requires each 
agency to submit an annual performance plan, which must establish 
performance goals that link the goals of the agency's strategic plan 
directly with managers' and employees' day-to-day activities. In 
essence, this plan is to set forth the yearly performance goals the 
agency will use to gauge progress toward the strategic goals, 
identifies performance measures the agency will use to assess its 
progress, explains the procedures the agency will use to verify and 
validate its performance data, and ties these goals and measures with 
the processes and resources the agency will use to meet performance 
goals. In addition, GPRA requires agencies to report each year, usually 
to the President and Congress, on program performance for the previous 
fiscal year. This annual performance report should describe the 
performance indicators established in the agency's annual performance 
plan and the actual program performance achieved compared with the 
performance goals. It should also explain why a performance goal has 
not been met and set forth plans for achieving it. Finally, the plan 
should also summarize the year's program evaluations and findings. Key 
steps and critical practices for GPRA implementation include involving 
stakeholders in defining missions, plans, and outcomes; producing key 
results-oriented performance measures at each level of the agency or 
organization; and using the results of measuring past performance to 
inform future planning. 

Under GCCA, a government corporation must submit annual management 
reports to Congress, including statements of financial position, 
operations, and cash flow; a budget report reconciliation;[Footnote 17] 
a report summarizing the results of an annual financial audit; and 
other information about operations and financial status. GCCA also 
requires that the corporation's financial statements be independently 
audited in accordance with generally accepted government auditing 
standards. 

Finally, under the Preservation Act, the Trust is required to report 
annually to Congress on its activities. These reports are to be 
"comprehensive and detailed report[s] of [the Trust's] operations, 
activities, and accomplishments for the prior year, including 
information on the status of ecological, cultural, and financial 
resources . . . and benefits provided by the Preserve to local 
communities" and "shall also include a section that describes the 
Trust's goals for the current year."[Footnote 18] The law also requires 
preparation of an annual budget. 

The Trust Lacks a Strategic Plan: 

We reported in 2005 that the Trust lacked a GPRA-compliant strategic 
plan and recommended that it develop such a plan. Although the Trust 
agreed with our recommendation, it still did not have a plan in place 
as of September 2009. The Trust has, however, produced two documents 
(one of them in response to a previous recommendation from us) that 
offer some strategic guidance, although neither of these meets GPRA 
requirements or was used as a formal strategic plan. The first guidance 
document was the 2005 Framework and Strategic Guidance for 
Comprehensive Management, which presents the values and vision the 
Trust was to apply in making management decisions. The document 
articulates the Trust's commitment to the various goals of the 
Preservation Act, including operating the preserve as a working ranch 
according to principles of science-based adaptive management, striving 
toward financial self-sufficiency, and making the preserve accessible 
to visitors. As we observed in our 2005 report, the 187-page document 
describes, among other things, the preserve's history and natural 
features; the Trust's approach to decision making; and public 
involvement at the preserve, including a range of potential public 
uses, from hunting and fishing to hiking and camping.[Footnote 19] 

The second Trust document that contains some elements of a strategic 
plan was prepared in response to our recommendation in 2005 that the 
Trust develop strategic and annual performance plans. Issued in 
November 2006, this 7-page document includes a mission statement that 
echoes some of the goals in the Preservation Act: 

The mission of the Valles Caldera Trust is to operate the preserve as a 
working ranch; to become financially self-sustaining; to meet the 
varied needs of visitors; to utilize and steward the multiple resources 
of the preserve; and to work collaboratively with our neighbors. 

The document also outlines six goals--which the Trust labeled 
alternately as "actions" or "near-term goals"--each accompanied by a 
desired outcome, objectives, strategies or actions, and metrics. For 
example, one of the six near-term goals is to evaluate existing 
facilities and identify needs for additional infrastructure; eight 
strategies and actions are given for achieving the objectives for that 
goal. The desired outcome is "identification of essential 
infrastructure" to support operations and "achievement of financial 
self-sustainability," and one of the objectives is to improve the 
entrance to the preserve and visitor service center. To fulfill this 
objective, the document states that the Trust will engage a contractor 
to design and improve the preserve's entrance and gives as the metric 
for measuring progress the completion of a new preserve entrance during 
fiscal year 2007. 

Both the 2005 and 2006 documents fall short of GPRA's requirements for 
effective strategic planning in a number of respects. For example, 
despite its broad and philosophical articulation of the Trust's guiding 
principles--essentially, the Trust's vision and mission--the 2005 
Framework and Strategic Guidance does not meet GPRA's requirements for 
a formal and detailed strategic plan. Indeed, title aside, this 
document never claims to be a formal strategic plan. In its own words, 
the document does "not intend to present a blueprint for future 
management of the preserve" but rather to sketch "the range of possible 
programs the Trust will consider implementing in pursuit of [the 
Trust's land stewardship] goals."[Footnote 20] Likewise, although the 
2006 "Strategic Planning Document" combines elements of strategic 
planning (mission statement, goals, and objectives) with elements of 
annual performance plans (actions and metrics), it does not cover a 5- 
year period, has not been updated, does not explain the relationship 
between long-term and annual goals, does not analyze key external 
factors, and does not specify how and when program evaluations are to 
be conducted. Furthermore, according to Trust officials and senior 
staff, the document was drafted and approved by the Trust's Board 
without benefit of guidance or assistance from stakeholders, such as 
Congress and the public, as expected under GPRA; neither did the Board 
specifically instruct the staff to implement the actions or monitor the 
metrics. By failing to develop a strategic plan from the beginning of 
its operation of the preserve in 2002, as well as failing to craft and 
adopt a formal strategic plan later, the Trust lost an opportunity to 
move forward systematically as an institution--independent of personnel 
turnover in either the Board or staff--toward meeting the Preservation 
Act's goals. In September 2009, recognizing the value of better 
strategic planning, Trust officials told us they were planning to work 
to develop a GPRA-compliant plan with an outside consultant experienced 
in developing strategic plans for federal agencies. 

The Trust Has Not Fully Met the Requirements for Performance Planning, 
Monitoring, or Reporting: 

Since its beginning, the Trust has failed to fully meet GPRA's annual 
performance planning, monitoring, or reporting requirements. The Trust 
has not put together formal annual performance plans containing either 
specific performance goals for the next fiscal year--goals tied 
directly to any strategic goals stated in the 2005 Framework and 
Strategic Guidance or November 2006 strategic planning document--or any 
performance measures or related information for monitoring its 
progress. Under GPRA, an annual performance plan must establish yearly 
performance goals linked to long-term goals of a strategic plan; 
identify performance measures that will be used to gauge progress 
toward meeting long-term strategic goals; explain the methods to be 
used for validating and verifying performance data; and link the goals 
and measures with the processes and resources, such as staffing and 
funding, that will be used to meet the performance goals. The only 
documents that the Trust has produced to date that begin to address 
these requirements are its 2006 strategic planning document and fiscal 
year 2008 annual report to Congress. While not labeled an annual 
performance plan, the 2006 strategic planning document does identify 
"near-term" (performance) goals and metrics (performance measures) for 
fiscal year 2007, as well as for fiscal years 2008 and 2009. These 
goals and metrics, however, are not linked to any long-term strategic 
goal, as required by GPRA, nor does the planning document meet other 
GPRA requirements for annual performance plans. In addition, although 
the Trust's fiscal year 2008 annual report to Congress identifies goals 
for the upcoming 2009 fiscal year, along with metrics, neither the 
goals nor the metrics are linked to any long-term strategic goal or 
strategy for achieving such a goal. Neither are other requirements for 
annual performance plans addressed in this annual report. Although the 
Trust's fiscal year 2007 annual report identifies 2008 performance 
goals, without metrics, annual reports before 2007 do not identify 
either performance goals or metrics for the next fiscal year. 

In monitoring its performance, the Trust has not established or 
monitored a stable set of quantitative indicators of progress over 
time. In its annual reports to Congress, the Trust summarized the past 
year's accomplishments and mentioned its intentions for the future, 
sometimes quantitatively but more often qualitatively. For example, an 
early two-page report for fiscal year 2004 lists as one preserve goal 
to "manage public use, access to and the occupancy of the preserve" and 
notes an accomplishment under this goal as completing a road inventory 
of 76 miles. The Trust's plan, as stated, was to use this inventory to 
develop a transportation plan that was to begin in fiscal year 2007 and 
be completed in fiscal year 2008; development of this plan was labeled 
very high priority. But no methods or indicators for tracking the 
progress of this transportation plan were given. Moreover, although the 
transportation plan was supposed to begin in 2007 and be completed by 
2008, reference to the plan in the Trust's 2007 annual report to 
Congress is essentially identical to the wording in its 2006 annual 
report, and to date, no transportation plan has been 
developed.[Footnote 21] Similarly, for the Preservation Act's goal of 
achieving financially self-sustaining operations, the Trust's plan as 
stated in its 2004 annual report says only that it will implement 
financially sound business practices, develop and implement a business 
plan incorporating an annual budget tied to a plan of work for 5 years, 
and revise this business plan annually; again, the assigned priority is 
"very high." Nevertheless, our review of Trust documents found that 
progress toward implementing these very high-priority plans was not 
formally monitored, nor were the plans fully executed. In fact, the 
2005 annual report copies the wording of the 2004 report with respect 
to development of a business plan, the 2006 annual report makes no 
mention of a business plan, and the 2007 annual report lists developing 
a strategic business plan as one of its goals for 2008. 

Because it has not developed annual performance plans with performance 
goals, the Trust has not produced formal annual performance reports as 
required by GPRA. Since 2006, however, annual reports required by the 
Preservation Act, as well as a 5-year State of the Preserve report 
released in 2007, detail the Trust's operations, activities, and prior 
year's accomplishments, including the status of the preserve's natural, 
cultural, and financial resources and benefits to local 
communities.[Footnote 22] While the Trust's annual reports before 2006 
did not address all these elements, the reports have improved over the 
years, becoming more detailed and comprehensive. The most recent annual 
report, for fiscal year 2008, contains major sections devoted to 
attainment of fiscal year 2008 goals; Trust organization, program 
accomplishments, and budget; and goals for fiscal year 2009. Each 
section on fiscal year 2008 goals attained (e.g., develop a strategic 
business plan): 

* states the goal's objective (e.g., "to create a business plan that 
identifies options to generate revenues from programs"); 

* gives the status of progress (e.g., the Trust awarded a contract to a 
consulting firm to develop this business plan); and: 

* offers a brief narrative related to the goal. 

With respect to goals for 2009, the report states each goal along with 
a statement of its objective, metric for measuring progress, and 
related narrative. This annual report and previous ones do not, 
however, report on the status of current year goals that were not 
attained or link back to a long-term strategy. 

The evolution of the Trust's reports suggests a growing understanding 
within the organization of the need for key management elements, such 
as strategic goals, annual performance goals and plans, and measurable 
performance indicators. Our review of the annual reports nevertheless 
revealed a lack of consistency in report format, organization, and 
content from year to year, particularly in relation to measurable 
indicators of progress. For example, before 2007 the Trust counted and 
reported only the number of paying visitors to the preserve. In 2007, 
however, it began to include nonpaying visitors in visitor counts--a 
key change for understanding the growth in Trust programs. Yet this 
change in data collection was never explicitly pointed out in the 2007 
annual report. Furthermore, given the absence of links in any of these 
reports directly to metrics listed in the Trust's November 2006 
strategic planning document, it is difficult to follow the progress of 
one year's "plan" through subsequent years or to systematically track 
the Trust's progress toward accomplishing the Preservation Act's 
overarching goals. 

The Trust's Financial Management Has Been Weak: 

Compounding the absence of systematic strategic planning and routine 
performance planning, monitoring, and reporting, the Trust's financial 
management has suffered from varied and numerous weaknesses. From when 
the Trust first took over management of the preserve through fiscal 
year 2003, the Trust's finances were administered by the Forest 
Service. At the beginning of fiscal year 2004, the Trust briefly 
attempted to do its own accounting in house. When this attempt failed, 
however, partly because of turnover in accounting staff, it shifted 
these functions to the Department of the Interior's National Business 
Center, which provided accounting services from fiscal year 2004 until 
fiscal year 2008. At the start of fiscal year 2008, the Trust once 
again moved its accounting operations, to the Forest Service's 
Albuquerque Service Center, so as to bring its finances under a single, 
integrated financial management system and to reduce costs.[Footnote 
23] 

In part because of poor financial management and accounting practices, 
inadequate records, and difficulties in hiring and retaining accounting 
staff, until 2007 the Trust could not produce financial statements that 
would have enabled it to fulfill its obligation to undergo an annual 
independent audit, as required by GCCA. As we reported in 2005, the 
Trust contracted in 2003 with an independent accounting firm for 
auditing services, but the firm recommended that the audit be postponed 
because the Trust lacked the financial policies, procedures, and 
records needed to produce auditable financial statements. It took 
several years for the Trust to reconstruct its financial transactions 
and prepare any auditable statements. At the end of 2007, an 
independent auditing firm was contracted. The firm completed its work 
in 2009, producing independent auditor's reports for fiscal years 2005 
through 2008. 

The auditor's reports found numerous weaknesses in the Trust's 
accounting, management control, and compliance with applicable laws and 
regulations. For example, the audit report for fiscal year 2008 found 
"material weaknesses" and "significant deficiencies" ranging from a 
lack of documented policies and procedures to the lack of a secure 
information technology system and failure to properly process cash and 
check payments.[Footnote 24] Consequently, according to the auditor's 
report, decisions made by the Trust on the basis of deficient 
information could themselves be inaccurate or misleading. Moreover, 
because the Trust had not identified such deficiencies, it could not 
and did not report them to Congress. Among its other findings, this 
report also confirmed the lack of performance goals and objectives in 
compliance with GPRA requirements. The audit reports for all the 
audited fiscal years thus cast considerable doubt on the accuracy and 
completeness of the Trust's annual or other reports to date and its 
degree of compliance with applicable laws. 

As a result of the auditor's reports, the Trust has made an effort to 
improve its management control framework. In July 2009, for example, 
the Trust asked the Albuquerque Service Center to conduct an "internal 
control assessment" of the Trust's operations, which the center had 
begun to do as of the end of fiscal year 2009. Once completed, this 
assessment could help improve the Trust's management controls. 

The Trust Sees Becoming a Self-Sustaining Entity as Its Greatest 
Challenge: 

In managing a remote, undeveloped expanse of public land under the 
public-private experiment created by the Preservation Act, the Trust is 
breaking new ground. In accordance with the act's goals, the Trust is 
responsible for preserving and protecting the preserve's resources 
while generating revenues from these resources. The long-term vision 
articulated in the Preservation Act is for the Trust to become a self- 
sustaining entity, without need for federal funding. Yet the current 
Board chairman and the Trust's executive director believe that, of all 
the goals for the foreseeable future, becoming financially self- 
sustaining is the most challenging. A consensus among Board members is 
that the Trust will not become financially self-sustaining by the end 
of fiscal year 2015 as envisioned by the Preservation Act; a few within 
the Trust doubt that this goal can ever be achieved. In particular, as 
for other multiple-use land management agencies, a daunting corollary 
to the Trust's mission is how to balance managing the land to produce a 
sustained yield of revenue-generating resources with preserving and 
protecting those resources and other natural and cultural values of the 
preserve. Others external to the Trust, such as Los Amigos de Valles 
Caldera and Caldera Action, have expressed similar views about the 
Trust's ability to become financially self-sustaining. Nevertheless, 
the Trust is continuing to explore opportunities for becoming 
financially self-sustaining. 

As of the end of fiscal year 2009--nearly halfway through the 20-year 
public-private land management experiment and about 6 years before the 
authorization for Trust appropriations expires--the Trust had only 
begun to focus on the goal of becoming financially self-sustaining. A 
number of issues--such as its remaining life expectancy, activities 
capable of providing sufficient revenues, funds for needed key capital 
investments, and legal issues--present significant challenges to 
achievement of this goal. These challenges include the following: 

* Completing key steps to becoming financially self-sustaining in the 
time remaining before the end of fiscal year 2015, when the current 
authorization of appropriations expires. If the Trust is not well on 
its way toward becoming financially self-sustaining by the end of 
fiscal year 2015, the Trust may or may not have the funds to continue 
operating, regardless of how much or how little progress it has made on 
its various land management and recreation programs. Yet within the 6 
years from the beginning of fiscal year 2010 to the end of fiscal year 
2015, the Trust must develop a public use and access plan, including an 
environmental impact statement and an associated transportation plan; 
secure funding to implement these plans; begin and complete 
construction; and then begin operating the programs to generate 
revenues. All these activities could well take longer than 6 years. 

* Identifying, developing, or expanding revenue-generating activities 
that would enable the Trust to raise sufficient funds to become 
financially self-sustaining. To date, several anticipated sources of 
revenue have not materialized or have not materialized to the degree 
anticipated. For example, the vision of timber production as a major 
source of revenue disappeared when an inventory of the preserve's 
timber resources revealed that few to no trees of commercial value 
remained after clear-cutting in the mid-twentieth century. Both current 
and former Trust officials noted that many of the forested areas are 
more a liability than an asset to the Trust because they are covered 
with dense vegetation that could fuel large wildland fires. Recreation, 
too, failed to prosper as expected. The Trust had anticipated holding 
luxury elk hunts to provide a major source of future revenue and, in 
2008, sought state legislation to allow these hunts. The proposal 
received public criticism, however, and the legislation failed. In 
addition, the Trust's several years of experimenting with various 
approaches to grazing has led to the realization that grazing will not 
make as much money as anticipated. 

* Obtaining funding for major capital investments to construct and 
preserve facilities and other infrastructure needed to generate 
revenues. The 2009 revenue enhancement study commissioned by the Trust 
estimated that somewhere between $21 million and $53 million would be 
needed to further develop the facilities and infrastructure to support 
greater public use of the preserve, such as additional parking lots and 
further road upgrades, a visitor center, an educational research 
center, and a visitor lodge. Yet neither the revenues the Trust has 
generated to date through any of its programs nor current 
appropriations are sufficient to make such investments. 

* Legal constraints. The Trust faces several legal constraints that may 
affect its ability to achieve financially self-sustaining operations, 
according to Trust officials. Provisions of the Preservation Act-- 
specifically, that the Trust expires in 2020 and that it is prohibited 
from entering into leases lasting longer than 10 years--limit the 
Trust's ability to attract concessionaires or other enterprises 
desiring to establish long-term businesses on the preserve that could 
generate revenue for the Trust. Another question facing the Trust, 
according to Trust officials, is what authority it has to borrow and 
lend money. Trust officials said that Agriculture's General Counsel 
told them that the Preservation Act does not specifically address this 
question. The Trust recently learned it has no authority to borrow 
money from the Federal Financing Bank, whose purpose is to make loans 
to government corporations. Trust officials also raised concerns about 
the Trust's authority to purchase property outside the preserve or to 
construct new buildings inside the preserve. In addition, the Trust has 
expressed concern about not having access to the federal "judgment 
fund"--a permanent indefinite appropriation available to federal 
agencies under certain circumstances to satisfy judgments against them-
-to cover liability incidents such as hunting accidents. According to a 
Senate committee report on a 2004 bill amending the Preservation Act, 
the Department of Justice opposed a provision of the bill that would 
have provided the Trust access to the judgment fund.[Footnote 25] The 
Trust is paying over $80,000 annually for liability insurance. 

Conclusions: 

Nine years have passed since the federal government purchased Valles 
Caldera, and 11 years remain before the Valles Caldera Trust could, 
under the Preservation Act, come under Forest Service jurisdiction if 
it fails to become financially self-sustaining. The ultimate success of 
the Valles Caldera land management experiment hinges on the Trust's 
ability to become a fully functioning, financially self-sustaining 
government corporation while simultaneously preserving and protecting 
the land's natural, cultural, and recreational values. We acknowledge 
that achieving such a mission is no easy task, and we recognize that 
the Trust continues to work toward achieving these goals. Nevertheless, 
the Trust has struggled for nearly a decade to establish the basic 
framework for effective management required of government corporations, 
it has not maintained the pace of progress it set for itself, and it 
faces a number of legal constraints. Thus, it is uncertain whether the 
Trust can overcome its management and legal challenges and, as many 
Board and management officials of the Trust have also noted, whether it 
can achieve financially self-sustaining status by the Preservation 
Act's 2015 deadline. We believe that our previous recommendations, if 
implemented, could substantially enhance the Trust's ability to make 
greater progress toward meeting the goals of the act, as well as to 
improve management oversight, accountability, and transparency under 
GCCA and GPRA. We therefore reiterate the need for the Trust to fully 
implement recommendations from our 2005 report, specifically, continue 
to develop--and systematically implement--the following elements of 
effective management: 

* a formal strategic plan that includes measurable goals and 
objectives; 

* a plan, including planned timelines, for becoming financially self- 
sustaining; and: 

* mechanisms for periodic monitoring and reporting of the Trust's 
performance to Congress and other stakeholders. 

Recommendation for Executive Action: 

To help further the Trust's efforts toward becoming a financially self- 
sustaining government corporation, we recommend that the Trust's 
Chairman of the Board and Executive Director work with the relevant 
congressional committees to seek legislative remedies, as appropriate, 
for the legal challenges confronting the Trust. 

Agency Comments and Our Evaluation: 

We provided the Valles Caldera Board of Trustees with a draft of this 
report for review and comment. The Board generally agreed with our 
findings and conclusions but did not comment on our recommendation. In 
its written comments, the Trust said it found our assessment of its 
accomplishments to date accurate, although it provided additional 
details about infrastructure, forestry work, the livestock program, and 
science and education. In addition, the Board agreed with our finding 
that the Trust has failed to put in place an effective management 
program, saying "there is no excuse for these plans and controls to be 
lacking" and "top priority will be given to reaching prompt compliance 
with the law." The Board also noted that we aptly described the current 
and future challenges the Trust is facing and stated that financial 
self-sustainment by 2015 is not a possibility under the current 
provisions of the Preservation Act. Without agreeing or disagreeing 
with our recommendation that the Trust work with Congress to seek 
legislative remedies for its legal challenges, the Trust stated that 
changes to the law are needed. 

We are sending copies of this report to the Board Chairman, Valles 
Caldera Trust and other interested parties. In addition, the report 
will be available at no charge on the GAO Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staff members have any questions about this report, 
please contact me at (202) 512-3841 or nazzaror@gao.gov. Contact points 
for our Offices of Congressional Relations and Public Affairs may be 
found on the last page of this report. GAO staff who made major 
contributions to this report are listed in appendix II. 

Signed by: 

Robin M. Nazzaro: 

Director, Natural Resources and Environment: 

[End of section] 

Appendix I: Comments from the Valles Caldera Trust: 

Valles Caldera National Preserve: 
"An Experiment in Public Land Management": 

Valles Caldera Trust: 
18161 State Highway 4: 
P.O. Box 359: 
Jemez Springs, NM 87025: 

T 505-661-3333: 
F 575-829-4614: 

[hyperlink, http://www.vallescaldera.gov]: 
 info@vallescaldera.gov: 

Date: October 9, 2009: 

File Code:ADMIN6: 

Robin M. Nazzaro: 
Government Accountability Office: 
441 G Street NW: 
Washington, DC 20548: 

Dear Ms. Nazzaro:

Valles Caldera Trust (VCI) is in receipt of your audit draft report and 
the Trustees and staff are most appreciative of the opportunity to 
submit a response to the GAO on this second audit performed as 
prescribed in the Valles Caldera Preservation Act. 

Your draft addresses the audit formatted into three sections and we 
will follow this format for comments: 

1. Accomplishments to date; 
2. Key elements for an effective management program; 
3. Current and future challenges; 

Accomplishments To Date: 

We find your assessment to be accurate but would like to make 
additional comments in some operational areas. 

Regarding infrastructure, the Trust has continually tried to make 
improvements as you have stated and significant work and investments 
are underway on the Preserve. Approximately 14.5 miles of the Preserve 
"loop" have been upgraded to a level "3" road and the remaining 18.5 
miles are currently being worked on at a cost of $900,000 utilizing 
Trust revenue rather than appropriated dollars. An additional 6 miles 
in the upper San Antonio are currently being upgraded under a joint 
effort between VCT, the New Mexico Environment Department (NMED), New 
Mexico Gas Company and the Los Amigos de Valles Caldera. The majority 
of funding is through a grant received by the NMED and funds provided 
by the Gas Company of New Mexico. The Trust also allocated $855,000 
from revenue in 2009 for repairs to buildings that generate revenue for 
or are utilized in operations of the Preserve including the Lodge, the 
Bunkhouse, and the two A-frame structures in the Headquarters area. 

The "grazing" program has undergone a conversion from just fattening 
animals to a scientific research program in collaboration with New 
Mexico State University. NMSU has partnered with the New Mexico Beef 
Cattle Performance Association to provide registered breeding stock to 
forage on the Preserve while undergoing tests and observations for the 
incidence of genetically related hypertension in cattle that can result 
in animal mortality. The goal of this program is to provide mountain 
state cattle ranchers with a genetic line of breeding stock that can 
prosper in higher elevations, a great benefit to the producers in 
northern New Mexico and the other ten mountain states. Additionally, 
NIVISU has partnered with the Pueblo of Jemez and other local livestock 
producers to provide foraging alternatives for cow/calf pairs while 
range improvements are made on their lands. This overall livestock 
program allows for a great deal of extension work to be performed by 
the university to the benefit of ranchers in the region and will 
culminate in a breeding bull and heifer auction October 10th on the 
Preserve to sell a number of the animals found suitable for high 
elevation production. The program has also proven to be environment and 
visitor friendly. 

We would like to mention that the Preserve has been granted $750,000 in 
stimulus money for forestry work. This money will allow for thinning 
and prescribed burning projects on approximately 750 acres of Preserve 
forest, providing work and forest product utilization for the benefit 
of the area. 

In science and education, the VCT continues to develop formal and 
informal educational programs that will serve the American public, from 
public school children through senior citizen programs. In support of 
these expanding programs, the Trust has acquired (with revenue funds, 
not appropriations) an existing facility in Jemez Springs for an 
education and training center. The facility has 25 bedrooms (50 person 
capacity), dining hall and institutional kitchen, classroom space, 
teaching laboratory space, and offices, and is only 15 minutes from the 
Preserve's southwest corner. This facility will provide overnight 
lodging for students, teachers, scientists, and other program 
participants nationwide, and provide needed classroom/laboratory 
facilities to support field programs. 

The overall education program continues to focus on science-related 
aspects of the Valles Caldera National Preserve (including geology, 
ecology, wildlife and fisheries management, range management and 
livestock husbandry, forestry, biodiversity, climate change, hydrology, 
archeology), but will also include a wide range of other disciplines 
(art, photography, history, literature, poetry, music) for which the 
Valles Caldera provides an inspirational environment. Numerous 
preliminary programs in both formal and informal education activities 
have been conducted since 2003, and the Trust is now moving ahead with 
permanent programs. The "clientèle" of these programs fall into four 
main groups: 

1. Public school students and teachers (elementary through high school) 
and college/university students in formal educational classes. The 
Trust currently collaborates with the 29 rural public school districts 
in the Northern New Mexico Network for Rural Education (NNMN), hosting 
summer environmental training courses for high school science teachers. 
In August 2009, scientists and educators from NM Tech, the NNMN and the 
Valles Caldera Trust submitted a grant proposal to the National Science 
Foundation (NSF) to establish a 5-year, $12.5 million science education 
program for the northern New Mexico public schools, and the summer 
teacher and student field education programs will be based at the 
Valles Caldera. Other public school educational programs include 
environmental science camps for the Santa Fe Indian School, the 
Northern New Mexico Pueblos (in collaboration with Los Alamos National 
Laboratory), and the Pajarito Environmental Education Center (PEEC) in 
Los Alamos. Additionally, recent university-level educational 
activities hosted by the Preserve include those from Johns Hopkins 
University, Virginia Tech, University of New Mexico, New Mexico State 
University, New Mexico Tech, Northern New Mexico College, Highlands 
University, University of Colorado, University of Texas (Austin), and 
The Colorado College. 

2. Scientific research programs including faculty, staff, graduate and 
undergraduate students conducted on the Preserve. These projects are 
generally funded through extramural grants, and take advantage of the 
extensive scientific inventory and monitoring activities conducted on 
the Preserve by Trust science staff. In 2008, there were 32 permitted 
research projects with an annual cumulative budget of —$1.6 million. In 
addition, two new major NSF-funded grants that use the Preserve for 
study areas began in 2009: The 5-year, $15 million Experimental Program 
to Stimulate Competitive Research grant to the universities in New 
Mexico (administered through the University of New Mexico) and a 5-
year, $4.35 million grant to the University of Arizona for the 
establishment of a "Critical Zone Observatory" on the Preserve. 

3. Organized volunteer groups that participate in ongoing science 
projects on the Preserve, along with general public participants in 
informal workshops and theme-oriented or special-topic classes. These 
include such volunteer groups as the Sierra Club, who provide volunteer 
field personnel to sample vegetation for ecosystem production and 
herbivore utilization (elk and livestock), and environmental groups 
that perform beneficial volunteer work on the Preserve. For example, we 
have hosted WildEarth Guardians, the Albuquerque Wildlife Federation, 
and the Boy Scouts of America for weekends of old livestock fence 
removal on the Preserve. 

4. Private, corporate, non-governmental organization, or government 
retreats and training programs. Businesses and agencies often need 
secluded facilities to run employee training programs, planning 
workshops, and special-topic seminars, and the VC-1" center will be 
ideal for this type of activity. The Trust has developed a financial 
plan for operating the proposed facilities and the programs. Overnight 
lodging and food service revenues will allow the educational program to 
achieve 100% cost-recovery when the facilities reach 45% capacity. 
School program expenses can be defrayed via grants, and such grants are 
being prepared in cooperation with New Mexico universities and 
colleges. 

The Trust believes that the continued development and expansion of 
Valles Caldera public education programs, now with suitable support 
facilities, will provide an outstanding experience for the American 
people and ensure that the Preserve becomes a sustainable national 
resource in research and educational programs for science, natural 
resource management, and other academic disciplines. 

We concur that the Trust is behind schedule and that as of September 
2009, your statement would be correct. However, it would appear to us 
that phase 2 is not over until the end of 2010 and that an assessment 
at that time might result in additional programs and activities 
completed on schedule. For example, in summer 2009, the Trust initiated 
the Environmental Impact Statement (EIS) for Public Access and Use 
Planning, and this large-scale planning effort will be completed in 
2010. In addition, the Trust is well along in its Landscape Restoration 
and Management Plan — Existing Condition Report, which also will lead 
in 2010 to the EIS for the management of Preserve forests and use of 
natural/prescribed fire in restoring the extensive second-growth 
forests on the Valles Caldera. 

As to factors delaying progress, you make some interesting points. 
Trustee turnover has undoubtedly been a factor but to our knowledge, 
the turnover has been all legislated. We do not recall any resignations 
and only one vacancy due to the unfortunate death of a member. As to 
decision making, we might suggest that when you have seven trustees of 
differing specializations interpreting a vague piece of legislation 
containing dueling goals and objectives, discord can result. Staff 
turnover would be an expected result. 

An objective of the Valles Caldera Preservation Act was to provide an 
experiment in alternative public land management by utilizing a trust 
to provide management and policy oversight. The appointed Trustees were 
intended to bring varied expertise to this endeavor and the Trust was 
intended to streamline management decision making. At the time of its 
establishment, the Trust was hailed as an experiment in alternative 
land management. Hopefully, one that could run more efficiently, be 
self supporting, and not be mired down by litigation as so often 
happens with the Forest Service and BLM.

After nine years, the jury is still out as to whether this experiment 
in public enterprise has viability. Clearly, management progress has 
been made in resource protection and many public expectations have been 
met. For example, our management activities have not generated 
litigation. However, flaws in the Valles Caldera Preservation Act 
itself prevent a true test of the Trust's viability. 

The Act presents conflicting goals of resource protection, resource 
utilization, and financial self- sustaining. Simply stated, the Valles 
Caldera Trust can never achieve financial independence under this legal 
regime. The land presents relatively few revenue opportunities, and 
long range options for revenue generation are precluded under the law. 
There is an inherent cost in managing a federal workforce and a 
government corporation. Thus we are compelled to annually budget by 
appropriation "earmarks". 

Congress has thus far been silent in addressing some of our real 
practical needs such as providing a governmental safety net to cover 
potential tort liabilities. Currently we are forced to buy private 
insurance which is expensive, largely unavailable and of limited 
coverage. If Congress assured the same liability coverage as it 
provides all federal agencies and employees, we could protect the Trust 
from potential judgments that would put us out of business and also 
save money now wasted on private insurance. 

Financial sustainment cannot be achieved without unacceptable resource 
damage. We speculate that if the GAO were to investigate any unit of 
the National Park System or the National Forest System with a 
comparable resource management mission, they would find none that could 
ever be financially self-sustaining, particularly when administrative 
overhead is applied. In this regard, we believe the model of the 
Presidio is clearly not comparable in resources or market potential. 

Key Elements Of An Effective Management Program: 

You are correct in your comments and there is no excuse for these plans 
and controls to be lacking. Top priority will be given to reaching 
prompt compliance with the law and we will report our progress in the 
Annual Report to Congress and through our annual financial audits. 

Current And Future Challenges: 

We believe that you have aptly described our situation. The law by 
which we are governed is dysfunctional and will not allow us the tools 
necessary to accomplish the goals and objectives set forth for the 
Trust. Financial self-sustainment by 2015 is not a possibility under 
the current provisions of the Valles Caldera Preservation Act. 
Additionally, it appears that Senators Bingaman and Udall have doubts 
as to whether or not the Trust should continue and have requested the 
National Park Service to look into the possibility of making the 
Preserve a unit of the National Park System (NPS). 

We believe that a determination should be made now as to the general 
public's desired purpose for the Preserve. The Valles Caldera is 
surrounded by 1.6 million acres of forest and adjoins the Bandelier 
National Monument. It would appear that ample hiking trails and 
campgrounds are available in the surrounding region, but if the public 
wants open gates and cost-free admission, then the NFS or the Forest 
Service might be a good fit. 

However, if it is the desire of the Congress and a majority of the 
general public to maintain a National Preserve with structured access 
providing a multitude of activities, a working ranch concept, 
reasonable activity and access fees to help offset operating costs, 
environmental restoration to pristine natural conditions, and a science 
and education program that contributes significantly to the region and 
the nation, then the Trust may yet be the best management regime. 
However, this can only be fairly tested if Congress amends the Act. If 
relieved of the financial self - sustainability mandate, we believe the 
Trust can function more efficiently than comparable Forest Service or 
Park Service operations. And freeing us from generating revenues for an 
unachievable sufficiency goal will allow us to reorganize our 
management priorities to allow us to focus on resource protection 
within the context of modest livestock operations, hunting programs, 
timber management and other resource activities. Without a deadline of 
2015, the Trust would not be required to pursue some developmental 
activities opposed by many. Without a deadline and given time to reach 
maturity, the expansion of activities and the science and education 
programs might demonstrate the viability of the Trust as a highly cost 
efficient and publicly responsive steward of the land. 

It is ultimately up to the Congress to give this experiment in public 
enterprise a chance to succeed. If the Act is made functional the Trust 
has more to offer than any other form of management. 

Sincerely yours, 

Signed by: 

Stephen E. Henry: 
Chairman, Board of Trustees: 

cc: Valles Caldera Board of Trustees: 
Gary Bratcher, Executive Director:  

[End of section] 

Appendix II: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Robin M. Nazzaro, (202) 512-3841 or nazzaror@gao.gov: 

Staff Acknowledgments: 

In addition to the person named above, David P. Bixler, Assistant 
Director; Lisa Brownson; Ellen W. Chu; Elizabeth Curda; Richard P. 
Johnson; Mehrzad Nadji; James M. Rebbe; Dawn Shorey; Jena Sinkfield; 
and Maria Vargas made key contributions to this report. 

[End of section] 

Footnotes:  

[1] Pub. L. No. 106-248, Title I. 

[2] Until the Trust could be organized, the preserve came under 
jurisdiction of the U.S. Forest Service, within the Department of 
Agriculture. 

[3] 31 U.S.C. § 9101 et seq. (GCCA); Pub. L. No. 103-62 (1993) (GPRA). 

[4] GAO, Valles Caldera: Trust Has Made Some Progress but Needs to Do 
More to Meet Statutory Goals, [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-06-98] (Washington, D.C.: Nov. 16, 2005). 

[5] Los Amigos de Valles Caldera and Caldera Action are nonprofit 
organizations interested in the preserve. 

[6] To determine the number of livestock grazing on the preserve or 
otherwise managed by the Trust, we compared the Trust's own documents 
with counts obtained by Agriculture and by owners of livestock 
participating in the grazing program. For financial data, we compared 
audited financial statements of the Trust for fiscal years 2005-2008 
with data from the Trust's own annual reports. 

[7] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-98]. 

[8] Valles Caldera Trust, Valles Caldera National Preserve: Framework 
and Strategic Guidance for Comprehensive Management (Los Alamos, 
N.Mex., 2005). This document sets out the framework for decision making 
that the Trust proposed to apply as it developed programs and policies 
for the management and use of the preserve. 

[9 Under NEPA, federal agencies are to evaluate the likely 
environmental effects of projects they are proposing, using an 
environmental assessment or, if the projects likely would significantly 
affect the environment, a more detailed environmental impact statement. 
The Trust published its own NEPA procedures in the Federal Register in 
2003. 68 Fed. Reg. 42460-42472 (July 17, 2003). 

[10] The focus of research in 2009 was to develop a livestock resistant 
to high-altitude diseases. 

[11] The Multiple Use and Sustained Yield Act of 1960 defines multiple 
use to mean "the management of all the various renewable surface 
resources of the national forests so that they are utilized in the 
combination that will best meet the needs of the American people." 16 
U.S.C. § 531(a). Sustained yield means "the achievement and maintenance 
in perpetuity of a high-level annual or regular periodic output of the 
various renewable resources of the national forests without impairment 
of the productivity of the land." 16 U.S.C. § 531(b). 

[12] We omitted data for 2002, 2003, and 2004 because fewer revenue- 
generating recreational activities were under way in those years. 

[13] Entrix, A Plan for Revenue Enhancement on the Valles Caldera 
Preserve: Opportunities and Alternatives (Vancouver, Wash., 2009). 

[14] Valles Caldera Trust, Framework and Strategic Guidance, appendix 
B. 

[15] In 2009, the Trust renamed its grazing program "livestock 
operation." 

[16] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-98]. 

[17] Among other things, a budget report reconciliation essentially 
reconciles actual expenditures with budgeted amounts. 

[18] Pub. Law No. 106-248, Title I, § 106(e)(2). 

[19] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-98]. 

[20] Valles Caldera Trust, Framework and Strategic Guidance, 101, 11. 

[21] The Trust's November 2006 strategic planning document revised the 
deadline for completing the transportation plan to fiscal year 2009. 

[22] Valles Caldera Trust, State of the Preserve 2002-2007 (Jemez 
Springs, N.Mex., 2007). 

[23] According to the Board, moving accounting services for the Trust 
back to the Forest Service has achieved annual cost savings of about 
$225,000 over the cost of using Interior's system. 

[24] A material weakness is a significant deficiency, or combination of 
significant deficiencies, that results in more than a remote likelihood 
that a material misstatement of the financial statements will not be 
prevented or detected. A significant deficiency is a control 
deficiency, or combination of control deficiencies, that adversely 
affects the entity's ability to initiate, authorize, record, process, 
or report financial data reliably in accordance with generally accepted 
accounting principles such that there is more than a remote likelihood 
that a misstatement of the entity's financial statement that is more 
than inconsequential will not be prevented or detected. A control 
deficiency exists when the design or operation of a control does not 
allow management or employees, in the normal course of performing their 
assigned functions, to prevent or detect misstatements on a timely 
basis. 

[25] According to this Senate committee report, the Department of 
Justice opposed the provision that would have made the Trust eligible 
to pay claims, judgments, and settlements from the judgment fund. In 
general, according to an administration statement contained in the 
Senate report, government corporations like the Trust should pay 
judgments and settlements out of their own funds. The administration 
stated that because the Trust is an autonomous corporation with its own 
funds and an entity whose liabilities are properly charged to corporate 
funds, it is appropriate for the Trust to continue to satisfy judgments 
and settlements against it out of Trust funds. S. Rep. No. 108-269 at 6 
(2004). 

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