Recommendations for Executive Action

1. Status: Closed - Implemented

   Comments: The Forest Service does not agree with this recommendation because it does not believe that it would be cost-effective to commit the necessary increase in audit and administrative time to undertake the fee system proposed by GAO.

   Recommendation: The Secretary of Agriculture should direct the Chief, Forest Service, to develop a fee system that calculates fees that more closely approximate the fair market value of resort permits. Such a system should consider the economic profile and profitability of individual resorts, as well as the percentage of their profit that would constitute a fair-market-value fee. In developing the system, the Service should consider the feasibility of including a procedure for reviewing sufficiently the financial records of individual permittees to verify their reported income, costs, and profits.

   Agency Affected: Department of Agriculture

2. Status: Closed - Implemented

   Comments: The Forest Service will not be implementing a new fee system. However, it is changing its current minimum GRFS threshold for calculating fees every 5 years from $3,500 to $10,000.

   Recommendation: The Secretary of Agriculture should direct the Chief, Forest Service, to determine a threshold above which it would be cost-effective to use the new fee system, and implement the fee system for those permits.

   Agency Affected: Department of Agriculture

3. Status: Closed - Implemented

   Comments: The Forest Service maintains that GRFS does obtain fair market value and it is consistent with legislation and OMB direction.

   Recommendation: The Secretary of Agriculture should direct the Chief, Forest Service, to develop and implement a new fee system. In selecting the system or systems, the Service should consider legislative and Office of Management and Budget (OMB) suggestions, the cost-effectiveness of the alternative fee systems, and the defensibility of the method used to establish the fee rates.

   Agency Affected: Department of Agriculture

4. Status: Closed - Implemented

   Comments: FS notes that considerable progress is being made in implementing fee systems for ski areas and other winter resorts, which now account for $23.5 million of the estimated $25 million collected from resorts operating on FS lands. FS will not comply with recommendations 2 and 3. Recommendation 4 is being implemented and will be recalculated when it is reviewed under the terms of the agreement.

   Recommendation: The Secretary of Agriculture should direct the Chief, Forest Service (FS), to: (1) update fee rates and break-even points; (2) discontinue the reevaluation of a resort's fixed assets only at the time the resort is sold and either use the Department of Commerce's Construction Cost Index to annually update the valuation of resorts' gross fixed assets, or retain the fixed assets' valuation at acquisition cost when a resort is sold; (3) discontinue breaking out a resort's income by business category or allocate the resort's gross fixed assets by business category; and (4) adjust the fee rates for sales above twice the break-even point so that they are all incrementally progressive.

   Agency Affected: Department of Agriculture

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