The General Accounting Office has made a review of the fur seal operations and administration of the Pribilof Islands by the Bureau of Commercial Fisheries, United States Fish and Wildlife Service (FWS), Department of the Interior. The review was made pursuant to the Budget and Accounting Act, 1921 (31 U.S.C. 53), and the Accounting and Auditing Act of 1950 (31 U.S.C. 67). Our review of the fur sealing operations conducted by the Bureau of Cowercia1 Fisheries, United States Fish and Wildlife Service, was performed at the Pribilof Islands in Alaska; the Bureau's offices in Seattle, Washington, and Washington, D.C.; and at the fur processor's plant in St. Louis, Missouri. The review was made ~ principally to identify and develop matters requiring improvement. We reviewed the Federal legislation and international agreements pertaining to the fur sealing operations conducted by the Bureau. We reviewed the Bureau's programs, organization, management, financing, and staffing for conduct of the sealing and related operations. We observed the killing of seals, curing of sealskins, and manufacture of by-products, and examined controls over sealskins. We reviewed to a limited extent the utilization of manpower and native welfare activities. We reviewed the supply and disbursing activities and tested related financial transactions to the extent we deemed necessary. We observed the operations of the fur processor, including the auction sale of fur sealskins, and we tested the inventory of sealskins in the possession of the processor and those stored in a bonded warehouse.

Our review disclosed that in computing the amounts paid to the State of Alaska for fiscal years 1959 and 1960 under the provisions of section 6(e) of the act of July 7, 1958 (the Alaska Statehood Act, 72 Stat. 339), the Department of the Interior did not provide for the recovery of the Government's investment in certain facilities in use at July 1, 1958, and did not include interest on this investment in the recovery. Also, the computations for these years were made on the basis of total obligations incurred against the respective annual appropriation; however, the adjustments made during fiscal year 1960 to certain obligations incurred in fiscal year 1959 were not considered in the computation for fiscal year 1960. The Department agrees that, where differences exist between the amount deducted in settling with the State of Alaska and the actual expenditures incurred in administering the program, an adjustment should be made in the next settlement with the State. However, the Department does not agree that the Government's investment in the facilities in use at July 1, 1958 should be included in the computation of the amount to be paid to the State in view of the liberal attitude shown the State by the Congress in recent legislation. At the time of our initial review, the Bureau's accounting system was primarily on an obligational basis and did not supply management with needed cost data. The fixed assets in use in the Pribilof operations were not under accounting control, and appropriate costs had not been assigned to the inventory of sealskins in storage and in process or awaiting sale at the fur processor's plant. The continued rise in the native population of the Pribilof Islands is increasing certain economic problems because the volume of sealing operations, the only substantial source of livelihood for the natives, leveled off years ago. It is our opinion that the native manpower can be better utilized which will reduce the cost of the sealing operations by decreasing the number of employees imported each year during the sealing season.

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