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entitled 'National Park Service: Opportunities Exist to Clarify and 
Strengthen Special Uses Permit Guidance on Setting Grazing Fees and 
Cost-Recovery' which was released on February 9, 2006. 

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February 9, 2006: 

The Honorable Fran P. Mainella: 
Director, National Park Service: 

Subject: National Park Service: Opportunities Exist to Clarify and 
Strengthen Special Uses Permit Guidance on Setting Grazing Fees and 

Dear Ms. Mainella: 

In our September 2005 report, Livestock Grazing: Federal Expenditures 
and Receipts Vary, Depending on the Agency and the Purpose of the Fee 
Charged,[Footnote 1] we reported that the National Park Service (Park 
Service) allowed livestock grazing on nearly 1.6 million acres at 31 
park units.[Footnote 2] To manage grazing on their lands, the park 
units spent at least $410,000 in fiscal year 2004, which included 
activities such as fence maintenance, personnel, and monitoring 
resource conditions; they also collected about $196,000 in receipts 
from ranchers for the privilege of grazing livestock on Park Service 
lands. In fiscal year 2004, the park units retained about $192,000, or 
98 percent, of the receipts collected. During the course of our work, 
we found that the park units were not consistently implementing the 
Park Service's special uses permit guidance for fee-setting and cost- 
recovery. This letter presents the results of our further evaluation of 
the park units' efforts to manage grazing permits on their lands and 
makes recommendations to strengthen the Park Service's guidance for 
setting fees, recovering costs, and retaining funds. 

The Park Service allows limited livestock grazing on its lands as (1) 
specifically authorized by federal law; (2) required under a 
reservation of rights arising from the acquisition of land; or (3) 
designated when conducted as a necessary and integral part of a 
recreational activity or required to maintain a historic 
scene.[Footnote 3] For example, the Park Service allows grazing along 
the Blue Ridge Parkway in Virginia and North Carolina, and at the 
Appomattox Court House National Historical Park, also in Virginia, to 
help maintain a historic scene. 

Generally, different fees--cost-recovery fees, market fees, or other 
fees--are structured to achieve different purposes and have different 
advantages and disadvantages. For example, a cost-recovery fee might 
recover most or all of an agency's costs related to a program, but it 
might also be higher than a fee charged for a different purpose. In 
contrast, a market fee depends on the ability of an agency to analyze 
market rates and may not recover all of an agency's costs. 

Park Service guidance provides direction to individual park units on 
setting fees for special uses, including grazing. The Park Service has 
three levels of guidance documents: 

* Management Policies 2001, which serves as the agencywide policy 
document and is the highest of three levels of guidance documents. 
Adherence to this guidance is mandatory unless specifically waived or 
modified by the Secretary, Assistant Secretary, or Director. 

* Director's Orders, which are interim updates or amendments to 
Management Policies and which serve as a vehicle to clarify or 
supplement Management Policies to meet the needs of Park Service 

* Additional guidance, such as reference manuals, which provide the 
most detailed and comprehensive guidance on implementing agency policy. 

Management Policies states that fees to recover costs will be imposed 
for special uses permits and that, when appropriate, the Park Service 
will also include a fair charge for the use of its lands or facilities. 
Director's Order 53 and Reference Manual 53 provide more specific 
guidance to the park units about setting these fees. Specifically, 
Director's Order 53 briefly describes the fee that park units are to 
charge for special uses, including grazing, and states that charges 
should reflect the fair market value of the use requested. The order 
states that the fee should consist of two amounts: (1) the value of the 
land or facility, plus (2) the Park Service's costs for managing or 
supporting the use. Reference Manual 53 states that the fee charged for 
the use of facilities, resources, or property should be based on 
comparable prices in the area--the market price.[Footnote 4] 
Furthermore, Reference Manual 53 provides examples of costs that can be 
recovered and states that each park unit will establish and maintain a 
written record documenting how costs and charges are established for 
each permit issued. As stated in the manual, cost-recovery will be 
based on actual amounts as determined by the cost-recovery records for 
each permit; the manual also contains a sample form that park units may 
use to itemize and record estimated costs.[Footnote 5] 

As the statutory basis for the fees to be charged, Park Service 
guidance refers to both 16 U.S.C. § 3a and the Independent Offices 
Appropriations Act. Under 16 U.S.C. § 3a, the Park Service is 
authorized to recover and retain all costs of providing necessary 
services associated with special uses permits, which would include 
grazing permits. The Independent Offices Appropriations Act, codified 
at 31 U.S.C. § 9701, authorizes federal agencies to charge user fees in 
certain situations. 

This letter discusses (1) the fees that park units charge for grazing 
permits and (2) reporting and retaining of cost-recovery amounts from 
grazing permits. This letter does not address questions relating to the 
underlying legal authority for fees that park units charge under the 
above statutes. That issue is being explored separately with the 
Department of the Interior's Solicitor's Office and will be reflected 
in a separate GAO decision.[Footnote 6] As stated earlier, we 
identified inconsistencies in the cost-recovery amounts reported and 
retained by park units while conducting work for our September 2005 
study on grazing on lands managed by 10 different federal agencies, 
including the Park Service. To conduct that work, we interviewed agency 
officials about the management of their grazing programs and reviewed 
relevant agency documents, laws, and policies. In addition, we 
collected data on the extent of grazing on lands managed by the 10 
agencies, expenditures on the agencies' grazing programs, receipts 
generated by the agencies' grazing programs, and grazing fees charged 
by the agencies. At the Park Service, specifically, we worked with 
agency officials to design, pretest, distribute, review, and summarize 
a data collection instrument that reported data on livestock grazing 
activities for fiscal year 2004. We gathered data on the extent of 
grazing, expenditures, receipts, fees, and cost-recovery amounts from 
31 national park units that have grazing on the lands they manage. Cost-
recovery amounts refer to the costs of providing necessary services 
associated with grazing permits that may be recovered and retained 
under 16 U.S.C. § 3a. To analyze the data, we compared fees, receipts, 
expenditures, and cost-recovery amounts. We discussed several 
inconsistencies with both park unit and headquarters staff. In 
accordance with generally accepted government auditing standards, we 
conducted our review for the September 2005 grazing report between 
August 2004 and July 2005, and conducted follow-up work with the Park 
Service between October and December 2005 for this report. 

In summary: 

The park units use different approaches when setting grazing fees. 
Although the Park Service's special uses permit guidance directs park 
units to charge grazing fees based on two amounts--a land and facility 
fee plus an amount to recover costs--we found that none of the 31 park 
units appeared to have followed the Park Service's guidance. Some of 
the park units have not implemented the guidance on setting grazing 
fees, in part because they believe that the guidance calls for a fee 
that is higher than market value and that such a fee would discourage 
grazing. The Park Service is reviewing its guidance and the fee that it 
should charge. In reviewing Park Service guidance, we identified 
questions about the Park Service's fee structure, which we have raised 
with the Solicitor's Office of the Department of the Interior. For this 
reason, we are recommending that the Park Service revise its guidance 
to reflect the resolution we reached with the Solicitor's Office 
regarding the authority for the Park Service's fee structure. 

Many of the park units are retaining receipts in excess of what they 
reported as cost-recovery amounts for managing the grazing program. For 
example, officials at Gettysburg National Military Park and Eisenhower 
National Historic Site in Pennsylvania indicated that each location 
deposited $1,350 in grazing fees for use by the park unit; however, 
both park units reported no cost-recovery amounts and no expenditures 
for grazing permits. If park units do not calculate and document cost- 
recovery amounts, the Park Service cannot ensure that they are only 
retaining the funds they are authorized to retain. As a result, we are 
recommending that the Park Service develop strategies to better ensure 
that the park units calculate and document cost-recovery amounts. 

Park Units Use Different Approaches When Setting Grazing Fees: 

In our review of Park Service grazing permits for fiscal year 2004, we 
found that park units used different approaches when setting grazing 
fees. Park Service guidance directs park units to charge fees based on 
two amounts--a "lands and facilities" fee plus an amount to recover 
costs. None of the 31 park units with grazing programs had charged fees 
based on this fee structure. In reviewing Park Service grazing fee 
guidance, we identified questions about this fee structure, which we 
have raised with the Solicitor's Office of the Department of the 

The park units each charged a fee that, in some cases, was based on 
market value, the Bureau of Land Management (BLM) fee, or a fixed 
amount (see encl. I). For example: 

* Lake Roosevelt National Recreation Area, in Washington State, charged 
a two-part fee consisting of (1) the BLM grazing fee, plus (2) a $35 
fee to recover administrative costs. However, according to a park unit 
official, this $35 fee does not recover the park unit's full costs for 
grazing, which would be cost prohibitive and would perhaps prevent 

* Point Reyes National Seashore, in northern California, charged a fee 
for grazing based on market rates for grazing fees. The park unit 
recovered its costs from the grazing receipts generated and did not 
charge an additional fee to recover those costs. 

* Dinosaur National Monument in Colorado and Utah and the City of Rocks 
National Reserve in Idaho set fees based on the BLM rate, which was set 
at $1.35 per animal unit month (AUM--the amount of forage a cow and her 
calf can eat in a month) in fiscal year 2003. 

* Eisenhower National Historic Site and Gettysburg National Military 
Park in Pennsylvania charged a fixed amount of $25 per acre. 

* Capitol Reef National Park in Utah charged $1.35 per AUM in fiscal 
year 2004--the same price charged by BLM for grazing in fiscal year 

Some park units did not implement the fee structure in the Park Service 
guidance because they did not want to charge higher fees for grazing. 
According to the program manager of the special uses permit program, 
the fee structure described in Reference Manual 53 was established to 
charge a premium for grazing on Park Service lands by recovering costs 
in addition to a market fee charged for the lands and facilities used 
for grazing. Park unit staff told us that they did not want to charge a 
fee as described in the guidance because it would mean charging higher 
fees--perhaps fees that are higher than market value. For example, 
Point Reyes National Park already charges a market-based rate for 
grazing. If it were to add a cost-recovery amount to this current 
market-based fee, the total fee would exceed the market value of 
grazing fees in the area. Park unit staff stated that charging more 
than market value would likely reduce grazing, which they do not want 
to do because they are directed to work with local ranchers to maintain 
grazing. Other park unit officials indicated that they want to maintain 
grazing because the park unit derives benefits, such as controlling 

Currently, the Park Service is updating its special uses permit 
guidance. The Park Service is rethinking the fee structure and is 
considering alternatives. As of January 2006, the Park Service's fee 
structure in the draft guidance was the same as in the previous 
guidance.[Footnote 7] 

Park Units Retained Grazing Receipts in Excess of Reported Cost- 
Recovery Amounts: 

Many park units retained grazing permit receipts that exceeded the cost-
recovery amounts they reported. Specifically, 17 of the 25 park units 
that charged a grazing fee retained all or some portion of grazing 
receipts for park unit use but did not document full cost- recovery 
amounts.[Footnote 8] Of these 17 park units, 8 reported that they did 
not know the cost-recovery amounts, 7 reported no cost- recovery 
amounts, and 2 reported some cost-recovery amounts that were less than 
the grazing receipts they retained.[Footnote 9] For example: 

* Grand Teton National Park retained over $4,000 in grazing receipts 
for park use, but did not know its cost-recovery amounts. 

* Blue Ridge National Parkway in North Carolina and Virginia reported 
$21,068 in grazing receipts and retained the total amount for its use. 
Despite showing $30,000 in expenditures, the park unit did not report 
any cost-recovery amounts. Similarly, both Gettysburg National Military 
Park and Eisenhower National Historic Site in Pennsylvania indicated 
that each location deposited $1,350 in grazing fees for use by the 
park. Both park units reported no cost-recovery amounts and no 
expenditures for grazing permits. 

* Chesapeake and Ohio Canal National Historical Park in Maryland and 
West Virginia retained all $3,999.50 in grazing receipts, but only 
reported a cost-recovery amount of $700.00. Although the cost-recovery 
amount was significantly less than receipts and the park unit reported 
that it did not know its expenditures on grazing, the park unit 
retained all receipts for its use. 

Enclosure I contains detailed information on the 31 park units that 
allow grazing on the lands they manage. 

Under 16 U.S.C. § 3a, the Park Service is authorized to recover and 
retain all costs of providing necessary services associated with the 
special uses permits, including grazing permits. Absent additional 
authority to retain grazing receipts, any amounts retained in excess of 
cost-recovery amounts at these 17 park units should not have been 
retained by the Park Service. However, according to the Park Service 
program manager, at least some of these park units actually did have 
other costs of providing services associated with grazing permits but 
did not report the costs to us. 

Calculation and documentation of cost-recovery amounts is an important 
internal control measure because the lack of such calculation and 
documentation may lead to the improper retention of grazing receipts. 
The inconsistent responses from park unit officials indicate a lack of 
understanding of cost-recovery--how to calculate cost-recovery amounts 
or how to properly document the amounts to be retained for park unit 
use. For example, officials at two park units--Buffalo National River 
in Arkansas and Glen Canyon National Recreation Area in Arizona and 
Utah--stated that they did not understand what was meant by "cost- 
recovery." If the park units do not calculate and document cost- 
recovery amounts, the Park Service cannot ensure that they are 
retaining funds that they are authorized to retain. 

From our work, we do not fully know whether park units have maintained 
documentation of how they established their cost-recovery amounts. 
According to the program manager of the special uses permit program, 
training has increased in the last few years and about half the park 
units have received some training. However, the manager noted that 
because employee turnover is high, additional training is needed. 


The Park Service has not fully implemented its special uses permit 
guidance as it applies to setting grazing fees and cost-recovery. 
However, our review of the guidance raises questions about whether the 
guidance should be reemphasized until it is revised. With regard to 
cost-recovery, not all of the park units with grazing reported cost- 
recovery amounts for the funds they retained, indicating a potential 
lack of internal controls over these funds. In revising its guidance, 
the Park Service has an opportunity to (1) ensure that the guidance 
complies with statutory authority and (2) identify reasons for the park 
units' lack of information on cost-recovery and take steps to ensure 
park units properly calculate and document cost-recovery amounts. 


As the Park Service revises its guidance on fees for special uses 
permits, it should ensure that the guidance reflects the resolution we 
reached with the Solicitor's Office regarding the authority for the 
Park Service's fee structure. 

Furthermore, the Park Service needs to develop strategies to better 
ensure that the park units calculate and document cost-recovery 

We discussed our analysis, conclusions, and recommendations with the 
programmanager for the special uses permit program. Although the 
manager believes that some park units may have underreported cost- 
recovery amounts, she agreed with our overall findings and 
recommendations and plans to consider them as she revises the draft 

We distributed copies of this letter to appropriate congressional 
committees and other interested parties. The letter will also be 
available at no charge on our Web site at 

If you or your staff have any questions about this letter, please 
contact me at (202) 512-3841 or Contact points for 
our Offices of Public Affairs and Congressional Relations may be found 
on the last page of this letter. GAO staff who made major contributions 
to this letter include Andrea Wamstad Brown, Susan Iott, Tony Padilla, 
Lesley Rinner, Carol Herrnstadt Shulman, and Amy Webbink. 

Sincerely yours, 

Signed by: 

Robin M. Nazzaro: 
Director, Natural Resources and Environment: 

Enclosure I: 

National Parks Reporting of Their Grazing Permit Expenditures, Fees, 
Receipts, and Disbursements, Fiscal Year 2004: 

[See PDF for image] 

[A] Not known or reported. 

[B] Not applicable. 

[C] City of Rocks National Reserve in Idaho signed a cooperative 
agreement with the Idaho Department of Parks and Recreation to manage 
grazing on its lands. Fee revenues were provided to the state for its 
management services. 

[D] Grand Canyon Parashant National Monument is managed by both the 
National Park Service and the Bureau of Land Management (BLM). Grazing 
in the monument is managed under a memorandum of understanding between 
the Park Service, the Bureau of Reclamation, and BLM. They charged the 
BLM fee for grazing on these lands and deposited the funds in the U.S. 

[E] The parks reported that they used authorities other than 16 U.S.C. 
§ 3a , such as the National Historic Preservation Act, to retain 

[F] Capitol Reef had two permits, one which it managed and one which 
the BLM managed. The fees charged for the BLM permit were deposited in 
the U.S. Treasury, while the fees charged for the park permit were 
deposited in the park's accounts. 

[End of table] 



[1] GAO-05-869 (Washington, D.C.: Sept. 30, 2005). 

[2] We use park units to refer to all units in the National Park 
System, including national historic sites, memorials, monuments, parks, 
recreation areas, and other designations. 

[3] See 36 C.F.R. § 2.60. We have previously reported on management 
concerns with National Park Service special use permits. GAO, National 
Park Service: Revenues Could Increase by Charging Allowed Fees for Some 
Special Uses Permits, GAO-05-410, (Washington D.C.: May 6, 2005). In 
particular, we found that insufficient funds were being charged for 
some special park uses--special events, commercial filming, and still 

[4] The manual defines this market price as the "price for a good, 
resource, or service that is based on competition in open markets and 
creates neither a shortage nor a surplus of the good, resource, or 
service." It also states that market price can be generated by 
competitive bidding or by reference to prevailing prices in competitive 
markets, if competition exists, and, if not, can be determined by 
taking into account the prevailing prices and then making adjustments 
so that there will be neither a shortage nor a surplus. 

[5] Statement of Federal Financial Accounting Standards No. 4, 
Managerial Cost Accounting Concepts and Standards for the Federal 
Government, provides guidance for determining reliable information on 
the full cost of federal programs, activities, and outputs for purposes 
that include making managerial decisions such as setting fees and 

[6] The Department of the Interior's (Interior) Office of the Solicitor 
provides legal services to the Park Service, as well as other Interior 
agencies. These services include drafting and legal review of 
legislation, regulations, permits, and other documents, as well as 
furnishing legal advice. 

[7] The draft guidance states: "The Park Service should recover costs 
and charge a lands and facilities fee for special use permits… [and]… 
the Park Service should recover from the permittee all costs the agency 
incurs administering and monitoring the permit. The lands and 
facilities fee should reflect the market price of the use requested-- 
that is, the value of the lands or facilities used." 

[8] Of the 31 park units that managed grazing in fiscal year 2004, 6 
did not charge a fee at all. For example, in 2003, the Hawaii Volcanoes 
National Park added 116,000 acres that had been part of a working 
cattle operation. To prevent significant harm from invasive species and 
to reduce potential fire from overgrowth, the park allowed the former 
owners to temporarily continue cattle operations. The park is 
developing a recovery plan that will allow it to gradually reclaim the 
grazing areas and to phase out the cattle operation. Since the cattle 
operation has been continued for the benefit of the park, the park 
waived a fee. 

[9] Of the eight remaining park units, four reported the same cost- 
recovery amount as they retained, one reported that it did not know the 
cost-recovery amount but retained funds for a local government under a 
cooperative agreement, and three reported that they used other 
authorities to retain the funds.