Forest Service: Actions Needed to Ensure That Salvage Sale Fund Is Adequately Managed

The Forest Service concurs with GAO's finding that errors frequently occurred in the development of the Salvage Sale Fund collection plans. The Forest Service revised its Forest Service Manual and Timber Sale Preparation Handbook to require Line Officers to review and initial each Salvage Sale Fund Plan and specifies items to review prior to approving the each plan.

The Forest Service concurs with the finding that opportunities exist to communicate local findings across the Forest Service. In addition, the Forest Service believes that distributing an annual report of Salvage Sale Fund management findings to the Regional Foresters will facilitate service-wide communications by sharing findings and observations that have service wide benefits. The Forest Service revised its Forest Manual and Timber Preparation Handbook to provide for an annual report that will be prepared and distributed in the second quarter of each year. The report will identify common problems or issues noted during the previous year's administrative reviews, identify common problems or issues noted in preparing and accumulating the information from the annual balance analysis, communicate best practices identified during the annual reviews and, encourage the application of the best practices as appropriate.

The Forest Service agreed that the agency's guidance for deposits to the Salvage Sale Fund and K-V fund needs clarification. The Forest Service said that deposits to the Salvage Sale Fund will have priority on timber sales designated as salvage or totally funded from the Salvage Sale Fund and will provide for recovery of salvage sales preparation and administration costs before salvage sale receipts are further distributed. The guidance was incorporated into the Forest Service Manual and the Timber Sale Preparation Handbook.

The Forest Service acknowledged that the method chosen to estimate the salvage sale costs can have a significant impact on the amount of salvage sale funds deposited. The Forest Service said that, through its management review process, they continue to emphasize that the cost estimates need to reflect the actual experienced costs and that the assumptions used in developing these costs should be documented. The Forest Service revised its Forest Service Manual and Timber Sale Preparation Handbook to include direction that requires that Salvage Sale Plans reflect current costs and overhead rates.