Forest Service: Better Procedures and Oversight Needed to Address Indirect Expenditures
RCED-98-258
Published: Aug 28, 1998. Publicly Released: Sep 28, 1998.
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Highlights
Pursuant to a congressional request, GAO provided information on overhead costs for the Forest Service's Brush Disposal Fund, Salvage Sale Fund, Reforestation Trust Fund, Cooperative Work--Other Fund, and Cooperative Work--Knutson-Vandenberg Fund, focusing on: (1) the reasons why indirect costs rose; (2) actions taken by the Forest Service and others to control these costs; and (3) other actions that may help the Forest Service control these costs in the future.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Agriculture | To ensure that consistent and reliable cost data are available upon which to base management decisions and monitor trends, the Secretary of Agriculture should direct the Chief of the Forest Service to incorporate the Statement of Federal Financial Accounting Standards No. 4 into the Forest Service's cost accounting system. |
The Forest Service has prepared a definition of indirect costs and supporting information that was published in the fiscal year 2000 Budget Justification. Forest Service staff state that this definition, which is consistent with Federal Financial Accounting Standard No. 4, will be included in their new Foundation Financial Information System scheduled for release on October 1, 1999. However, this new definition does not now comply with other parts of SFFAS No. 4 which states that accounting data is to be allocated from within the same period of time. The Forest Service plans to use 1998 data to allocate its 2000 costs. The Forest Service Chief Financial Officer thinks that the new definition is a significant first step in improving Forest Service cost accounting.
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| Department of Agriculture | To ensure that consistent and reliable cost data are available upon which to base management decisions and monitor trends, the Secretary of Agriculture should direct the Chief of the Forest Service to ensure that all offices consistently implement guidance with respect to accounting for indirect costs and hold the offices accountable by following up to make sure that the standards are being consistently used. |
The Forest Service has prepared a definition of indirect costs and supporting information that was published in the fiscal year 2001 and 2002 Budget Justification, Budget Appendix and Budget Explanatory Notes. Forest Service staff state that this definition has also been included in the draft version of the 1900 Budget Handbook. All Forest Service offices will be required to use this Handbook which is expected to take care of the inconsistencies GAO encountered during its review. All comments on the draft have been received and reviewed, and the draft has been revised. The revised draft is currently undergoing a last review. The Handbook is expected to be released in final form sometime in 2002.
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Topics
Accounting errorsAccounting proceduresAccounting standardsCost controlFederal agency accounting systemsFinancial management systemsFinancial recordsForest managementFunds managementOverhead costs