Annual Report on

Performance and

Accountability

Fiscal Year 2006

U.S. Department of the Interior • Bureau of Land Management
PREFACE The Bureau of Land Management (BLM, or 

Bureau) is a small agency with a big mission 

and a lot of ground to cover. We administer 

more Federal lands than any other agency: 

over 258 million acres of public lands and 

their myriad resources, plus hundreds of 

millions of acres of subsurface mineral estate.

Our workforce is spread across the country in numerous state offices 

and field offices. Most of the public lands and resources we manage 

are in the western states and Alaska. Our Eastern States office in 

Virginia manages land and natural resources in 31 states east of and 

bordering the Mississippi River. We also have national centers for 

business, science and technology, human resource management, 

and information resource management in Denver; fire management 

in Boise; and training in Phoenix. Our headquarters is located in 

Washington, D.C.

In managing the Nation’s vast public land holdings for multiple 

uses, we perform many tasks: resource inventory, land use planning, 

environmental impact assessment, land surveying, road construction, 

fish and wildlife habitat restoration, and resource condition 

monitoring, to name just a few.

Public lands administered by the Bureau include millions of acres 

of open rangelands; geological formations containing the oil, gas, 

coal, and other minerals needed to sustain our economic well-being; 

recreation areas and remote landscapes with spectacular scenery and 

opportunities for solitude; fishable streams; high forested slopes; 

alpine tundra; majestic canyons; and rugged badlands.

We invite you to read our 2006 Annual Report and see what we have 

accomplished. Take a moment to reflect on the wealth of resources 

and opportunities offered by America’s public lands . . . and this year, 

think about planning a visit to your public lands! 

BLM 2006 Annual Report
BLM 2006 Annual Report

TABLE OF

CONTENTS

Director’s Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Message from the Chief Financial Officer . . . . . . . . . . . . . . . . . . . . . 3

Cooperative Conservation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Management’s Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . 6

The BLM’s Mission and Organizational Structure . . . . . . . . . . . 6

Performance Goals and Results . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Systems, Controls, and Legal Compliance . . . . . . . . . . . . . . . . 27

Management Challenges—Looking Ahead . . . . . . . . . . . . . . . . 32

Discussion and Analysis of the Financial Statements . . . . . . . . . 36

Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Principal Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . 40

Notes to Principal Financial Statements . . . . . . . . . . . . . . . . . . 46

Supplementary Statement of Budgetary Resources

 by Major Budget Accounts . . . . . . . . . . . . . . . . . . . . . . . . . 84

Stewardship Lands and Heritage Assets Report . . . . . . . . . . . . . . . . 88

Stewardship Lands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

Natural Heritage Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

Cultural Heritage Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

Museum Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

Condition of Stewardship Lands and Heritage Assets . . . . . . . . 98

Deferred Maintenance Report . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

Investment in Research and Development Report . . . . . . . . . . . . 105

Independent Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
ii BLM 2006 Annual Report

OUR VISION

To enhance the quality of life for all citizens through the balanced 

stewardship of America’s public lands and resources.

OUR MISSION

To sustain the health, diversity, and productivity of the public lands

for the use and enjoyment of present and future generations.

OUR VALUES

To serve with honesty, integrity, accountability, respect, courage, and 

commitment to make a difference.

OUR PRIORITIES

To improve the health and productivity of the land to support the 

BLM multiple-use mission.

To cultivate community-based conservation, citizen-centered 

stewardship, and partnership through consultation, cooperation, and 

communication.

To respect, value, and support our employees, giving them resources 

and opportunities to succeed.

To pursue excellence in business practices, improve accountability to 

our stakeholders, and deliver better service to our customers.
BLM 2006 Annual Report 1

DIRECTOR’S

LETTER

“To sustain the health, diversity and

productivity of the public lands.

For the use and enjoyment of present 

and future generations.”

The mission of the Bureau of Land Management (BLM) is grounded in 

a principle that dates back to the very birth of the conservation movement 

and to the inspiration of its founding father, President Theodore Roosevelt.

“Conservation,” Roosevelt said, “means development as much as it does 

protection. I recognize the right and duty of this generation to develop and 

use the natural resources of our land; but I do not recognize the right to 

waste them, or to rob, by wasteful use, the generations that come after us.”

Roosevelt’s wisdom of a century ago is surely as relevant for us today, as 

we strive to provide good stewardship of the natural resources of our land, 

for the benefit of present and future generations.

The dramatic transformation of the American West since Roosevelt’s 

time has brought urban centers, with tens of millions of citizens, in closer 

contact with their public lands. For many western communities, the 

vast and magnificent open spaces managed by our agency have become 

“America’s great backyard”—with boundless opportunities for recreation 

and adventure.

At the same time, the public lands have grown increasingly important 

to the nation for the energy and mineral wealth that sustain our economy 

and energy security and our quality of life, and for other economic activities 

such as timber production and ranching that are important to the nation 

and to the vitality of local communities.

In this context, balanced stewardship of the public lands and resources 

is more important to the interests of the nation and its citizens than ever 

before. This mission is also more complex and challenging than at any time 

in our history.

The following pages detail our progress over the past year in advancing 

this important mission. 

Recognizing the growing public interest in public land recreation, 

we are working to ensure quality recreational experiences for the tens of 

millions of citizens who visit the public lands each year. Through a broad 

national partnership, we are developing strategies such as comprehensive 

travel management that will help us meet future demands for recreation, 

while protecting the cultural, natural, and scenic resources of the land. 

In 2006 we completed another milestone in this effort that will improve 

management of some of our most popular recreation venues: a 10-year plan 

for management of National Scenic and Historic Trails.

We have successfully completed a four-year effort to institute 

fundamental changes in the management of public rangelands. These 

changes will give us greater flexibility to work in partnership with the 

ranching community in conservation measures to improve forage, improve 

the health of watersheds and habitat for fish and wildlife, and ultimately 

help preserve the great open spaces of the West.

Kathleen Clarke

Director,

Bureau of Land 

Management
BLM 2006 Annual Report

We have honored the 100th anniversary of the Antiquities Act with 

a renewed dedication to the preservation of the priceless heritage and 

cultural treasures that are part of America’s public land legacy.

We have continued to implement the National Fire Plan to 

improve the management of wildifires that can threaten environmental 

resources and communities, particularly along the growing wildland 

urban interface. Through the Healthy Forest Restoration Act, we are 

expanding partnership efforts at the local level to promote healthy 

forests and healthy forest communities.

We have assumed a leadership role in implementing the 

bipartisan National Energy Policy adopted by Congress and signed 

by the President last year. The BLM’s efforts will make a significant 

contribution to the central goals of that legislation—promoting 

responsible development of domestic energy from both traditional and 

alternative sources and improving protection of the environment.

Our guiding principle in all of these endeavors is balanced 

management that recognizes, as Teddy Roosevelt said, the dual 

obligations of our stewardship: to both use the land and its resources 

and to conserve these resources for the benefit of future generations.

We accomplish this through the principle of Cooperative 

Conservation—an approach that harnesses the pride and volunteer 

spirit of individual citizens and communities, the leadership and 

vision of private organizations, the entrepreneurial creativity and 

civic dedication of business, and the common purpose of agencies of 

government at the federal, tribal, state, and local level.

To all our partners in Cooperative Conservation who have 

contributed to the progress of the past year, and who will help 

us advance our mission into the future, we extend our deepest 

appreciation.

 
BLM 2006 Annual Report 3

MESSAGE FROM

THE CHIEF

FINANCIAL

OFFICER

Michael A. Fergusen

Chief Financial Officer

This FY 2006 Performance and Accountability Report summarizes our 

efforts in the Bureau of Land Management (BLM) to successfully carry out 

our mission to “sustain the health, diversity, and productivity of the public 

lands . . . .” Through this report, we share with you our efforts to improve 

our accountability and performance consistent with the Department of 

the Interior’s Performance Plan, provide a discussion of our programs and 

accomplishments, and present our audited financial statements.

The BLM is keenly aware of the important role that sound business 

and financial management practices play in executing its natural resource 

mission. We are proud of our past record, and we continue to strive for 

excellence. The following table shows highlights of some of our 2006 

achievements:

❑ Financial statement audit 

opinion

The BLM has received unqualified audit opinions on its financial 

statements for 12 consecutive years, thus demonstrating our 

accountability for the public resources entrusted to us.

❑ Reporting deadlines Financial statement reporting deadlines are consistently met.

❑ Financial systems compliance Financial systems comply with core financial systems 

requirements.

❑ Anti-Deficiency Act violations The agency has no anti-deficiency violations.

❑ Material internal control 

weaknesses

Auditors have reported no material internal control weaknesses. 

The BLM successfully implemented Appendix A of Office of 

Management and Budget (OMB) Circular A-123 in 2006 in 

accordance with Departmental guidelines and provided an 

unqualified assurance statement to the Department relating to 

financial reporting.

❑ Non-compliance with law/

regulation

All noncompliance (FFMIA) issues for 2005 and prior have been 

cleared.

❑ Material weaknesses/nonconformance under Sections 2 and 

4 of FMFIA

Auditors have found no FMFIA Sections 2 or 4 material 

weaknesses or nonconformances that impact internal controls 

over financial reporting or financial systems, with the exception of 

Required Supplementary Stewardship Information for “Condition 

of Museum Collections.”

❑ Accurate/timely financial 

information

The BLM implemented its Management Information System 

(MIS) in 1999. The MIS is a data warehouse containing multiple 

interactive modules, including both summary and transactional 

level financial information; billing and collections; labor cost; cost 

management (activity based costing/ management); workload 

measures (outputs); performance measures (outcomes); budget 

planning / formulation; customer survey results; property, space, 

and vehicle data; and other information. The data contained in 

the MIS is updated nightly and is available to all BLM employees 

on the Bureau’s Intranet. The financial and detailed labor cost 

data spans ten years—six years for cost management. 

Integral components of the MIS are financial data from our Cost 

Management System that enables us to track actual costs by work 

activity and a Performance Management System that facilitates 

the collection and reporting of performance information. 

Together, these provide accurate and timely information for 

assessing performance and for reallocating resources to achieve 

Bureau priorities and strategic performance goals.

These systems provide a disciplined approach to resource 

management for improving performance, service quality, and 

customer satisfaction. Through it, we define what is important, 

establish the level of work and outputs to be accomplished, 

and determine the budget resources necessary to accomplish 

the specific activities (outputs) that when aggregated, measure 

performance in terms of strategic outcomes/results.
BLM 2006 Annual Report

❑ Plan to expand scope of routine 

data used to inform decisions

The BLM has presented to OMB its plan to continuously expand 

the scope of routine data that is used to assist BLM decisionmakers. The BLM continues to implement its plan and has 

completed three of the four initiatives presented in the plan. The 

BLM also continues to seek out other ways to improve its financial 

information.

The BLM continues to strive for excellence in other management 

areas as well. In fiscal year 2006, the BLM met or exceeded most of the 

nearly 100 performance measures for which it reports performance data. 

The Bureau also made considerable progress in implementing all aspects 

of the President’s Management Agenda (PMA). In fiscal year 2006, 

we implemented our asset management plan and continued to expand 

E-Government initiatives. To improve service and accessibility to our 

customers, we now make available to the public our most-used forms on 

the Internet through an E-Forms initiative, as well as allowing the public to 

review and comment on environmental impact statements and other land 

use planning documents via the Internet. 

In addition, we have earned a “green” score card rating (all 

commitments met) in human resource management and made giant strides 

in competitive sourcing and budget and performance integration. We are 

now seeing meaningful results emanating from the use of the management 

“toolkit” that we began to implement at the turn of the decade. 

Although we are proud of the progress we have made so far, we 

recognize that more is still needed to reach the pinnacle of management 

excellence and then to remain in that position. We hope you enjoy reading 

about our programs and accomplishments and encourage you to join with 

us in our efforts to “enhance the quality of life for all citizens through the 

balanced stewardship of America’s public lands and resources.”
BLM 2006 Annual Report

COOPERATIVE

CONSERVATION

The Bureau of Land Management (BLM) works with numerous 

partners—states, counties, local communities, other agencies, 

organizations, businesses, and individuals—to meet its stewardship 

responsibilities for our Nation’s vast public land holdings. This 

partnership approach promotes citizen involvement and stewardship, 

known as Cooperative Conservation.

Aldo Leopold, noted 20th century conservationist, envisioned a 

Nation of citizen stewards. Simply put, each of us needs to care for 

local landscapes and environments. Our individual actions in our 

own backyards, at our places of work, on our farms and ranches, 

and in our communities can make a crucial difference. Cooperative 

Conservation seeks to recognize and take full advantage of the 

knowledge, wisdom, talents, and enthusiasm that local people, 

communities, and governments bring to the table.

Cooperative Conservation is far more than just a clever catch 

phrase or slogan. The Department of the Interior has already made 

over $500 million available in conservation grants for a variety of 

Cooperative Conservation programs. Two of these, the Private 

Stewardship Grant and Landowner Incentive programs, provide 

assistance to private landowners in their voluntary efforts to protect 

threatened, imperiled, and endangered species.

Almost $13 million was given to the BLM in Cooperative 

Conservation challenge cost-share grants to fund 573 projects. These 

range from eradicating invasive species to restoring wildlife habitat, 

providing stable water supplies for elk, and providing new and 

improved recreation and educational opportunities. The grants cover 

40 states, involve 749 partners, and leverage $26 million in partnered 

dollars.

Everyone benefits from Cooperative Conservation—especially our 

environment. The voices of local people and communities are heard 

and their actions count. The BLM’s efforts and expenditures are 

multiplied though partnerships and cost sharing. Everyone benefits 

as we work together to sustain the health, diversity, and productivity 

of the public lands for the use and enjoyment of both present and 

future generations.
BLM 2006 Annual Report

MANAGEMENT’S 

DISCUSSION 

AND ANALYSIS

The BLM’S Mission

and Organizational Structure

The BLM’s Mission and History

The Bureau of Land Management’s (BLM) vision is to enhance 

the quality of life for all citizens through the balanced stewardship of 

the resources on America’s public lands. Its mission is to sustain the 

health, diversity, and productivity of the Nation’s public lands for the 

use and enjoyment of present and future generations.

The BLM manages over 258 million acres of surface estate 

on public land, about one-eighth of the land in the United States. 

The BLM also administers hundreds of millions of acres of onshore Federal mineral estate on or underlying both Federal surface 

ownerships and some privately owned surface. In addition, the BLM 

has trust responsibilities on 56 million acres of Indian trust lands for 

approval and supervision of mineral operations and cadastral (land) 

survey.

The BLM administers some of the most ecologically and 

culturally diverse, and scientifically important, lands belonging to the 

Federal government. Among its varied responsibilities for managing 

and protecting our Nation’s priceless natural and cultural legacy is 

stewardship for:

• Commercial activities

• Conventional energy sources (oil, natural gas, coal, etc.)

• Renewable energy (wind, solar, geothermal, biomass, etc.)

• Minerals (gold, zinc, uranium, copper, mineral materials, 

gypsum, etc.)

• Public land survey system plats and field notes

• Rights-of-way

• Transportation systems (roads, trails and bridges) 

• Fish and wildlife habitat 

• Range management and grazing 

• Wild free-roaming horses and burros 
BLM 2006 Annual Report 

Management‘s Discussion and Analysis

• Rare, vulnerable and representative habitats, 

plant communities, and ecosystems

• Threatened, endangered, and special status 

species

• Invasive and noxious weeds

• Wildland fire activity and the wildlandurban interface

• Paleontological resources and archaeological 

and historical sites, including museum 

collections derived from those areas

• Interpretive activities to meet scientific and 

educational needs 

• Wild and scenic rivers

ALASKA STATE OFFICE

State Director Tom Lonnie

222 West 7th Avenue, #13

Anchorage, AK 99513-7599

(907) 271-5080

Public Room: (907) 271-5960

ARIZONA STATE OFFICE

State Director Elaine Zielinski

One North Central Ave.

Phoenix, AZ 85004

(602) 417-9500

Public Room: (602) 417-9300

CALIFORNIA STATE OFFICE

State Director Mike Pool

2800 Cottage Way, 

Room W-1834

Sacramento, CA 95825

(916) 978-4600

Public Room: (916) 978-4400

COLORADO STATE OFFICE

State Director Sally Wisely

2850 Youngfield Street

Lakewood, CO 80215-7093

(303) 239-3700

Public Room: (303) 239-3600

EASTERN STATES OFFICE

State Director Mike Nedd

7450 Boston Blvd.

Springfield, VA 22153

(703) 440-1711

Public Room: (703) 440-1600

IDAHO STATE OFFICE

State Director Tom Dyer

1387 S. Vinnell Way

Boise, Idaho 83709-1657

(208) 373-4001

Public Room: (208) 373-3889

MONTANA STATE OFFICE

State Director Gene Terland

5001 Southgate Drive

Billings, MT 59101

(406) 896-5012

Public Room: (406) 896-5004

NEVADA STATE OFFICE

State Director Ron Wenker

1340 Financial Way

Reno, NV 89502

(775) 861-6590

Public Room: (775) 861-6500

NEW MEXICO STATE OFFICE

State Director Linda Rundell

1474 Rodeo Rd.

P.O. Box 27115

Santa Fe, NM 87502-0115

(505) 438-7501

Public Room: (505) 438-7471

OREGON STATE OFFICE

State Director Ed Shepard

P.O. Box 2965

Portland, OR 97208-2965

(503) 808-6026

Public Room: (503) 808-6001

UTAH STATE OFFICE

State Director Selma Sierra

440 West 200 South, Ste 500

P.O. Box 45155

Salt Lake City, UT 84145-0155

(801) 539-4010

Public Room: (801) 539-4001

WYOMING STATE OFFICE

State Director Bob Bennett

5353 Yellowstone Road

P.O. Box 1828

Cheyenne, WY 82003

(307) 775-6001

Public Room: (307) 775-6256

NATIONAL BUSINESS CENTER 

(NBC)

Director Thomas Boyd, BC-600

Denver Federal Center, Building 50

P.O. Box 25047

Denver, CO 80225-0047

(303) 236-8857

NATIONAL SCIENCE and 

TECHNOLOGY CENTER (NSTC)

Director Don Hinrichsen (acting), 

ST-100

P.O. Box 25047

Denver Federal Center, Building 50

Denver, CO 80225-0047

(303) 236-6454

NATIONAL HUMAN RESOURCES 

MANAGEMENT CENTER 

(NHRMC)

Director Annette Martinez, HR-200

P.O. Box 25047

Denver Federal Center, Building 50

Denver, CO 80225-0047

(303) 236-6503

NATIONAL INFORMATION 

RESOURCES MANAGEMENT

CENTER (NIRMC)

Director Ken Wilbert

NI-100 (Bldg. 40)

P.O. Box 25047

Denver Federal Center, Building 50

Denver, CO 80225-0047

(303) 236-6965

NATIONAL INTERAGENCY FIRE 

CENTER (NIFC)

Director Tim Murphy (Acting)

3833 South Development Ave.

Boise, ID 83705-5354

(208) 387-5446

NATIONAL TRAINING CENTER 

(NTC)

Director Don Charpio

9828 North 31st Avenue

Phoenix, AZ 85051

(602) 906-5500

• Wilderness and wilderness study areas

• National monuments and national 

conservation areas

• Recreation opportunities

The BLM was created in 1946, when the 

Grazing Service was merged with the General 

Land Office to form the Bureau of Land 

Management within the Department of the 

Interior. When the BLM was initially created, 

there were hundreds of unrelated and often 

conflicting laws for managing the public lands. 

The Bureau had no unified legislative mandate 

until Congress enacted the Federal Land Policy 

and Management Act of 1976 (FLPMA).

In FLPMA, Congress recognized the value 

of the remaining public lands and declared that 

these lands would remain in public ownership. 

BLM’s Headquarters and Field Organization
BLM 2006 Annual Report

Management‘s Discussion and Analysis

FLPMA also gave us the term “multiple 

use management.” This is defined as “the 

management of the public lands and their 

various resource values so they are utilized in 

the combination that will best meet the present 

and future needs of the American people.”

The needs of a growing and changing West 

are increasing. The American West, home to 

most of our BLM-managed public lands, is now 

the fastest growing region of the Nation. Eight 

of the 12 fastest-growing states are in the West, 

and the rate of growth in these western states 

averaged 30 percent from 1990 to 2000—more 

than twice the national average of 13 percent 

during the same period. Millions of people in 

rapidly growing western communities are now 

within an hour’s drive of formerly remote public 

lands. 

We rely on help from many diverse partners 

to meet the ever-increasing demands for goods 

and services from BLM-administered public 

lands. Various constituent groups, other 

agencies and levels of government, and citizens 

from all walks of life have all eagerly joined the 

BLM in collaborative decision-making and onthe-ground projects. These cooperative efforts 

continue to greatly benefit the public lands and 

everyone who relies on them. We are grateful 

for their many contributions and valuable help.

A researcher from the Northern Arizona University/Ecological Restoration Institute collects data for an ongoing pinyon-juniper research 

project within the Grand Canyon-Parashant National Monument.
BLM 2006 Annual Report

Management‘s Discussion and Analysis

Performance Goals and Results

Implementing the Government Performance 

and Results Act in the BLM

The Government Performance and Results Act requires Federal 

agencies to set priorities and goals, determine strategies for reaching 

those goals, measure their performance, and report on progress each 

year. In 1997, the BLM developed and published its first strategic 

plan. Regular reviews and updates to the strategic plan have occurred 

over time.

In 2006, the BLM revised its Fiscal Year (FY) 2004 – 2008 

strategic plan, referred to as an operating plan, for the period FY 2007 

– 2012. The BLM’s operating plan is tiered from the Department 

of the Interior’s strategic plan. Currently, the Department’s strategic 

plan is undergoing public review 

(http://www.doi.gov/ppp). The BLM is revising its operating 

plan to incorporate new Departmental and Bureau measures.

The BLM’s annual performance reporting requirements under the 

Government Performance and Results Act are now handled as part of 

the Department of the Interior’s Annual Report on Performance and 

Accountability. This report shows planned and actual performance 

levels for the current year, as well as actual performance in recent 

years to show trends. A discussion section gives background 

information and explains how and why goals were met, not met, or 

exceeded.

In addition to the annual performance reporting noted above, we 

publish this Annual Report at the end of each fiscal year to assist the 

Department of the Interior in complying with the Chief Financial 

Officers Act of 1990 and the Governmental Management Reform Act 

of 1994. Our BLM Annual Report is designed to:

• Provide a management discussion and analysis of performance 

goals and results, systems and controls in place to ensure legal 

compliance, and future effects of current risks and uncertainties.

• Present our financial statements and notes, along with an 

overview of the information presented.

• Present a Required Supplementary Information section, which 

consists of three components:

- Stewardship Land and Heritage Assets (describes the 

fulfillment of our stewardship responsibilities for public 

lands/resources, natural heritage assets, cultural heritage 

properties, and museum collections).
10 BLM 2006 Annual Report

Management‘s Discussion and Analysis

- Condition of Stewardship Land and 

Heritage Assets (describes the condition 

of stewardship lands, natural heritage 

assets, cultural properties, and museum 

collections).

- Deferred Maintenance (discusses 

deferred maintenance issues for the 

BLM’s buildings, roads, bridges, 

recreation facilities, and other 

infrastructure assets).

• Provide a Required Supplementary 

Stewardship Information section that 

addresses the BLM’s investment in research 

and development. 

The “Overview of Performance Goals and 

Results” narrative presented later in this section 

serves as a general overview and discussion of 

the BLM’s performance goals and results for 

FY 2006.

Evaluations to assess performance are 

an important aspect of complying with the 

Government Performance and Results Act. We 

are responding to this need by implementing 

a new approach to conducting evaluations for 

our offices and programs. By implementing 

the revised Office of Management and Budget 

(OMB) Circular A-123 requirements for 

assessing management controls of all our 

programs, we are building on our efforts to 

assess risk, prevent problems, and ensure that 

our programs are carried out efficiently and 

effectively.

Overview of Performance Goals 

and Results

The Bureau has aligned its goals and 

outcome measures under four mission areas:

• Resource Protection

• Resource Use

• Recreation

• Serving Communities

The following paragraphs present selected 

performance information for the BLM’s longterm goals and highlight some important 

milestones used for measuring our performance.

Resource Protection

The health of resources on BLMadministered public lands continues to be of 

paramount importance. Healthy resources are 

more resilient to environmental fluctuation and 

disturbance, and can better sustain increased 

use by the public. Based on data in the BLM’s 

Consolidated Statements of Net Cost of 

Operations, the Bureau expends approximately 

16.5 percent of its total funding on its resource 

protection mission. 

The BLM’s resource protection mission is 

divided into three areas:

• Improving, restoring, and maintaining the 

health of watersheds and landscapes.

• Sustaining biological communities.

• Protecting cultural and natural heritage 

resources.

The public lands contain exceptional 

geologic formations; rare and vulnerable plant 

and animal communities; wild free-roaming 

horse and burro herds; wilderness areas and 

wild and scenic rivers; and innumerable 

paleontological, archaeological, and historic 

sites. These resources are important 

economically, particularly in light of Executive 

Order 13287 on Preserve America, which 

encourages Federal agencies to use their cultural 

resources to promote economic development, 

in particular heritage tourism. These resources 

are also scientifically, ecologically, educationally, 

culturally, and recreationally important, 

representing a significant part of our Nation’s 

natural and cultural heritage.
BLM 2006 Annual Report 11

Management‘s Discussion and Analysis

The BLM carries out myriad activities on 

a day-to-day basis to ensure the protection and 

health of public land resources. These activities 

include the following examples:

• Developing ground-water monitoring plans 

to monitor shallow ground-water resources 

in areas of natural gas development.

• Developing water quality/riparian 

improvement projects, restoration actions, or 

monitoring studies.

• Drilling water wells for livestock to protect 

nearby riparian vegetation areas.

• Increasing the number of forest health 

restoration treatments and updating forest 

inventories to better track forest condition 

and identify insect and disease infestations.

• Reducing hazardous fuels to protect 

communities and the environment.

• Controlling soil erosion through watershed 

maintenance work; for example, riverbank 

stabilization projects, tamarisk removal 

coupled with seed plantings of perennial 

grasses and forbs, and other activities.

• Conducting multistate regional analyses 

to support species conservation, wildlife 

program planning, and land use planning 

activities.

• Cooperating with partners to protect, 

restore, and enhance habitat that sustains 

healthy fish populations.

• Stabilizing abandoned mine tailings 

to prevent surface and ground water 

contamination as well as the airborne spread 

of toxic dust.

• Conducting soil surveys using advanced 

technology and developing predictive 

models using Landsat 7 satellite images, 

10-meter digital elevation models, etc.

• Completing gathers in Wild Horse and 

Burro Herd Management Areas to maintain 

herds at appropriate management levels and 

ensure healthy rangelands.

• Encouraging public participation in 

protecting archaeological and historical 

resources through an umbrella program 

promoting public education and awareness 

called “Adventures in the Past.”

• Managing numerous properties for their 

paleontological values and promoting the 

use of fossils in research, education, and 

recreation.

Day-to-day management activities 

continue for wilderness areas, wilderness study 

areas, national wild and scenic rivers, herd 

management areas (for wild free-roaming horses 

and burros), national natural landmarks, and 

numerous other special management areas. The 

BLM also manages national monuments and 

congressionally designated national conservation 

areas in the western states. Please refer to the 

Required Supplementary Information section 

(presented after the financial statements in this 

Annual Report) for more specific information.

National monuments and national 

conservation areas, along with wilderness 

and wilderness study areas, national wild and 

scenic rivers, national historic/scenic trails, the 

Steens Mountain Cooperative Management 

and Protection Area, the White Mountains 

National Recreation Area, the Yaquina Head 

Outstanding Natural Area, and the Headwaters 

Forest Reserve in California, make up the 

BLM’s National Landscape Conservation 

System.
12 BLM 2006 Annual Report

Management‘s Discussion and Analysis

The BLM will continue to promote citizenbased stewardship of our public lands. Resource 

managers will look for opportunities to work 

with ranchers, conservationists, and other 

partners to achieve healthier western rangelands 

while providing for sustainable resource uses. 

Initiatives the BLM has undertaken also harness 

the power of partnerships in restoring and 

protecting our resources. Using the Challenge 

Cost Share and Application of Science Initiative, 

the BLM will be able to leverage funding to 

benefit the public lands.

Table 1 portrays selected goals/targets 

and actual accomplishments for the resource 

protection mission area.

Resource Use

America’s public lands provide myriad 

resources that provide opportunities for 

commercial activities. Commercially valuable 

natural resources include energy and mineral 

commodities, forest products, grazing forage, 

and special uses such as rights-of-way for 

pipelines and transmission lines. Recognizing 

the Nation’s need for a domestic source of 

minerals, food, timber and fiber from the public 

lands, the BLM expends approximately 18.2 

percent of its funding to carry out its resource 

use mission.

The BLM’s resource use programs fall under 

four primary headings that seek to balance the 

use of renewable resources with nonrenewable 

resources:

• Managing the use of energy resources; for 

example, oil and gas, coal, and oil shale, as 

well as renewable resources (wind, solar, and 

biomass).

• Managing the use of non-energy mineral 

resources; for example, gold, potassium, 

sodium, potash, sand, gravel, and other 

construction materials.

• Managing the use of forage resources; for 

example, domestic livestock grazing. 

• Managing the use of forest and woodland 

products; for example, timber, Christmas 

trees, posts, and poles.

The BLM also manages a significant helium 

operations program.

Managing the Use of Energy Resources 

In recent years, the on-shore Federal mineral 

lands have produced about 35 to 40 percent 

of the Nation’s coal, 18 percent of its natural 

gas, and 5 percent of its oil. Coal and natural 

gas production has been increasing, while oil 

production from on-shore Federal lands has 

experienced a slight decline.

Coal mined from the public lands is 

primarily used for the generation of electricity 

and is the source for 16 to 18 percent of the 

electricity used in the United States. This is 

equal to about one household in five obtaining 

their electricity from coal mined on public 

lands.

The BLM continues to implement all 

aspects of the Energy Policy Act of 2005 related 

to oil shale, including provisions for research, 

demonstration and development leasing, 

preparation of a programmatic environmental 

impact statement, and development of 

regulations for commercial leasing.

The BLM has approximately 46,000 oil 

and gas leases, 400 geothermal leases, 300 coal 

leases, 440 other solid leasable mineral leases, 

and about 220,000 mining claims in effect. 

Applications for permit to drill (APDs) have 

increased in recent years; in FY 2006, a total 

of 7,124 APDs had been processed as of midAugust, compared to 4,266 for all of FY 2001 

and 7,736 in FY 2005.

Renewable energy resources on the public 

lands include wind, geothermal, biomass, 
BLM 2006 Annual Report 13

Management‘s Discussion and Analysis

Table 1. Resource Protection: Selected Goals and Accomplishments

FY 2006 Annual Goal Target Actual Discussion/Analysis

Percent of wetland areas achieving 

desired conditions

98% 98% There are 12.6 million acres of wetlands 

meeting desired condition. In 2006, a total 

of 43,484 additional acres were restored to 

desired condition.

Percent of riparian areas (stream miles) 

achieving desired conditions

90% 90% There are 128,829 miles of riparian areas 

achieving desired conditions. 

Percent of upland areas achieving desired 

conditions

58% 58% Integrated program teams perform Land 

Health Assessments to evaluate the desired 

conditions of uplands.

Percent of surface waters (stream miles) 

that meet Environmental Protection 

Agency (EPA) approved (State) water 

quality standards

87% 87% Surface waters include acres of lakes, 

reservoirs, estuaries, and seas managed by the 

BLM.

Cumulative percent of acres degraded by 

wildland fire with post-fire rehabilitation 

treatments underway, completed, and 

monitored

20% 35% All acres degraded by fire require immediate 

action; due to the severe fire season in 2006, 

more acres were treated.

Total number of acres treated that are in 

condition classes 2 or 3 in fire regimes 

1–3, outside of the wildland-urban 

interface

238,289 

acres

126,491

acres

Due to the severity of the fire season, a 

significant amount of prescribed burning was 

cancelled, resulting in fewer acres treated in 

this area.

Percent change in baseline in the number 

of acres infested with invasive plant 

species

0.9% 1.0% An annual inventory is done to determine the 

number of acres infested with invasive plant 

species.

Number of acres restored or enhanced 

to achieve habitat conditions to support 

species conservation

10,000 10,000 More than one species may benefit from each 

acre restored.

Number of stream/shoreline miles 

restored or enhanced to achieve 

habitat conditions to support species 

conservation

1,300 1,308 More than one species may benefit from each 

stream/shoreline mile restored

Cumulative percent of cultural properties 

on the Department of the Interior (DOI) 

inventory in good condition

80% 82% * There are 41,860 BLM cultural properties in 

good condition.

Percent of museum collections in BLM 

facilities in good condition

100% 100% The BLM maintains three collections. 

Collections include assemblages of objects, 

works of art, and/or historic documents.

Percent of paleontology localities in good 

condition

90% 98% There are 14,980 paleontological localities 

maintained in good condition. 

Percent of acres of designated wilderness 

achieving wilderness character objectives 

as specified by statute

85% 84% The total acreage for Wilderness Areas 

changed in 2005 and 2006 when Congress 

designated additional Wilderness Areas.

* Based on the subset of cultural properties that are monitored.
14 BLM 2006 Annual Report

Management‘s Discussion and Analysis

solar, and hydropower resources. The 

BLM administers wind energy right-of-way 

authorizations for wind energy production 

on public lands in California and Wyoming. 

Additional right-of-way authorizations have 

been issued for wind energy site testing and 

monitoring activities in Idaho, Nevada, Oregon, 

California, Washington, Wyoming, and 

Montana.

The BLM currently manages geothermal 

leases that provide geothermal energy to power 

plants. In addition, the BLM manages a small 

number of direct-use leases, which provide an 

alternative source of energy for greenhouses, 

spas, warm-water fish farms, and other 

commercial uses.

Solar energy is the most cost-effective 

approach to supplying power to most of the 

BLM’s remote facilities, which operate only in 

the summers when longer days provide plenty of 

sunshine. Photovoltaics (solar panels) provide 

power for water pumping, outdoor lighting, 

communication sites, weather and water 

monitoring, remote field stations, visitor centers, 

and other uses. Photovoltaics have typically 

replaced fossil-fueled engine generators at these 

sites.

Managing the Use of 

Non-Energy Mineral Resources 

The number of leases in the “other 

solid leasable minerals” category (combined 

hydrocarbons, phosphate, sodium, potassium, 

gilsonite, asphalt, some hardrock, and some 

sand and gravel) has declined slightly in recent 

years.

The public lands produce a large portion of 

the Nation’s fertilizer minerals and soda ash, as 

well as mineral materials and other construction 

aggregates used for buildings, roads, pipelines, 

and powerline construction. Mineral 

materials are essential for the exploration 

and development of energy resources and for 

the growth of rapidly expanding urban areas 

throughout the West. About 20 million cubic 

yards of sand and gravel and other mineral 

materials were extracted during FY 2006, with 

a combined value of $18 million. Almost 4 

million cubic yards of this production, with a 

value of about $3 million, were provided free of 

charge to government agencies to support their 

work in developing the Nation’s infrastructure 

at low cost.

The Bureau administers approximately 

220,000 mining claims located and held under 

the 1872 General Mining Law and FLPMA. In 

2005, the owners of these mining claims paid 

a total of $32.6 million to the Treasury to hold 

and maintain these mining claims. In surface 

management, the BLM received 71 Plans of 

Operations for both predevelopment and actual 

production of hard rock minerals and 308 

Notices for exploration activities. Most were 

filed for gold, copper, and uranium.

The BLM’s surface management program 

regulates mining operations on public lands that 

contribute to the economies of the western states 

in terms of jobs, commerce, taxes, improvements 

to infrastructure, and lowering of the U.S. 

trade deficit. Domestic gold mine production 

in 2005 was estimated to be $3.4 billion, about 

3 percent less than the level of 2004 but high 

enough to make the U.S. the third-largest goldproducing nation in the world. Domestic mine 

output continued to be dominated by Nevada, 

where production accounted for more than 83 

percent of the U.S. total.

Managing the Use of Vegetation Resources and 

Products

Livestock grazing is an important use of the 

public lands, central to the economic livelihood 

and culture of many rural communities. A 

significant portion of the cattle and sheep 

produced in the West graze on public rangeland. 

Among all commodities, livestock grazing has 

the highest indirect effect as dollars recirculate 

through local communities, resulting in an 

economic multiplier effect of 4.3. In FY 2006, 

permittees and lessees were billed for about 
BLM 2006 Annual Report 15

Management‘s Discussion and Analysis

Implementing the Energy Policy Act of 2005

The Energy Policy Act of 2005 (P.L. 109-58), signed by the President on 

August 8, 2005, is the most significant Federal legislation addressing 

energy issues in over a decade.

The BLM, as manager of more Federal land than any other Federal 

agency, plays a key role in implementing the Energy Policy Act. The 

BLM established an Implementation Team in the Washington Office 

in 2005 to organize implementation efforts. Many aspects of the Act 

require the BLM to prepare regulations and reports to Congress. The 

BLM is also required to implement a variety of improved business 

practices and work even more closely than it already has with other 

agencies that also regulate energy development activities on Federal 

land. The Implementation Team provides leadership and support to the 

agency as these various tasks required by the Act are completed.

The BLM is expending a great deal of time responding to Section 365 

of the Act, which identifies seven BLM Field Offices as part of a Pilot 

Office project to improve oil and gas permitting and administration. 

An Interagency Memorandum of Understanding (MOU) for the Pilot 

Office project was signed on October 24, 2005, by the Secretary of 

the Interior, the Secretary of Agriculture, the Administrator of the 

Environmental Protection Agency, and the Army Corps of Engineers to 

implement this section of the Act. The BLM has hired additional staff 

and provided funding for employees from other Federal and state 

agencies in these offices so that permitting can be streamlined. The 

Act provides additional funding to the BLM to facilitate implementing 

the Pilot Office project. 

The BLM has established a webpage on its National website 

(www.blm.gov) devoted to public information and BLM

implementation actions related to the Energy Policy Act.
16 BLM 2006 Annual Report

Management‘s Discussion and Analysis

7.0 million animal unit months (AUMs) of 

forage out of the 12.6 million AUMs that 

are permitted/leased; the BLM collected 

approximately $14.8 million in grazing fees. 

These figures have been running significantly 

lower than in past years because of a severe 

drought throughout the western United States.

The BLM’s forests and woodlands are 

managed to sustain, maintain, and restore 

ecosystem integrity, diversity, and productivity, 

thus providing long-term ecological and 

economic benefits. Forest products are an 

important economic component in western 

Oregon, which contains some of the most 

productive forest lands in Federal ownership. 

Many communities in California, eastern 

Oregon, Idaho, Montana, Wyoming, and 

Colorado also rely on the steady flow of public 

sawtimber.

Woodland products are another important 

component of the BLM’s forest management 

program. Woodland management is a primary 

component in Arizona, Nevada, Utah, New 

Mexico, and Colorado. The BLM continues to 

respond to the local demand for firewood, posts, 

poles, and other wood or vegetative products.

The BLM developed a biomass utilization 

strategy in 2004 and updated this strategy in 

2005. The strategy addresses forest health 

and restoration concerns from the President’s 

Healthy Forests Initiative, reduces hazardous 

fuels identified in the National Fire Plan, 

and diversifies the Nation’s energy portfolio 

consistent with the Energy Policy Act of 2005.

Congress has enacted legislation expanding 

stewardship contracting authority with 

communities, the private sector, and others, 

allowing the BLM to enter into long-term 

contracts (up to 10 years) to meet land 

management objectives (for example, to reduce 

wildland fire risk and improve forest and 

rangeland health). Stewardship contracts focus 

on producing desirable results on the ground 

that improve forest and rangeland health and 

provide benefits to communities. Among 

other things, the new stewardship contracting 

authority allows forest products to be exchanged 

for ecological restoration services, which may 

include thinning and removing brush.

Helium Operations Program

The 1996 Helium Privatization Act directs 

the Secretary of the Interior to commence 

offering for sale 30.5 billion standard cubic feet 

(bscf) of the Federal Helium Reserve no later 

than January 1, 2005, and to complete offering 

it for sale no later than January 1, 2015. The 

Act requires that the amount to be sold annually 

be determined by dividing the amount in 

storage as of the first sale by the number of years 

sales will be conducted and then adjusting the 

amount by expected Federal usage.

 Using the Act’s formula, about 2 bscf of 

helium is offered for sale annually. Ninety 

percent of that amount is allocated to the 

refiners along the crude helium pipeline, while 

10 percent is apportioned to other qualified 

buyers. If the refiners do not request the full 

amount of helium allocated to them, the excess 

can be sold to other qualified buyers; conversely, 

if other qualified buyers do not request the 

full amount allocated to them, the refiners 

can purchase the excess. Purchasers obtain a 

bid right for $1,000 and specify to the BLM 

the amount of helium they would like to buy 

for the year. The total purchase is distributed 

and paid for in quarterly increments. The first 

open-market helium sale was conducted during 

March 2003.

The legislation also stipulates that all 

pure helium bought by government agencies 

must derive from government-owned crude 

helium. Since the BLM’s refining facilities have 

been dismantled in response to the Helium 

Privatization Act, suppliers of helium to Federal 

agencies are required to purchase an equivalent 

amount of helium from Federal storage. The 

BLM calls this type of sale an in-kind sale.

Studies have shown that because of the 

complexity of the helium storage field, the 
BLM 2006 Annual Report 17

Management‘s Discussion and Analysis

30-plus bscf of helium in storage cannot be 

completely recovered at helium concentration 

levels required by contract with private industry 

companies. By 1999, the helium concentrations 

from the injection wells were already showing 

deterioration. A private industry partnership 

in cooperation with the BLM decided that a 

helium enrichment unit (HEU) was needed at 

the Cliffside location to process gas from the 

field and enrich it to pipeline quality crude 

helium. The HEU was completed in 2003. As 

part of the enrichment process, hydrocarbon 

gases are extracted and sold.

The BLM has entered into agreements with 

El Paso Natural Gas to transport the gas and 

pays a small fee to the Minerals Management 

Service (MMS) to market the gas. Currently, 

the gas is sold to Cinergy Corporation. 

Additionally, the enrichment process produces 

some liquid hydrocarbons that are sold under a 

separate contract to SemCrude.

The BLM also adjudicates helium 

ownership rights, collects fees and royalties from 

Federal lands where the helium is produced and 

sold, and audits those revenues for compliance. 

Federal oil and gas leases contain a clause that 

excludes helium from the lease. Therefore the 

BLM enters into an agreement, separate from 

the oil and gas lease, for the sale of helium 

from Federal lands and collects those revenues 

under 50 USC 167. The BLM is also in charge 

of tracking where helium reserves are located 

throughout the nation and to a lesser extent the 

world, quantifying those reserves, and keeping 

up with the status of the reserves (depleting or 

nondepleting).

Other Commercial Uses

Rights-of-way actions are processed and 

grants or leases are issued to companies so 

they can use public lands for roads, pipelines, 

transmission lines, and communication 

sites. Many of these provide for the basic 

infrastructure of society, meeting the needs of 

local cities and towns.

Table 2 presents goals/targets and actual 

accomplishments for the resource use mission 

area.

Table 2. Resource Use: Selected Goals and Accomplishments

FY 2006 Annual Goal Target Actual Discussion/Analysis

Number of onshore acres available for 

energy mineral exploration/development

590 million 

acres

590 million 

acres

There are 224 surface and 366 subsurface 

acres available. The BLM has reserved mineral 

rights on some lands either administered 

by other Federal agencies or held in private 

ownership. The amount of land in this 

category is not known. 

Number of pending permits/lease 

applications in backlog status for fluid 

energy minerals

1,226 2,237 The BLM continues to process more permits 

every year. However, permits in backlog 

continue to increase due to an increase in 

applications.

Number of pending permits/lease 

applications in backlog status for solid 

energy minerals

33 33 The BLM has continued to experience a high 

demand for Federal coal leases.

Number of pending permits/lease 

applications in backlog status for rightsof-way

1,127 1,350 The BLM continues to process more rightsof-way every year. However, rights-of-way 

in backlog continue to increase due to an 

increase in rights-of-way actions related to 

energy development.
18 BLM 2006 Annual Report

Management‘s Discussion and Analysis

Table 2. Resource Use: Selected Goals and Accomplishments (concluded)

FY 2006 Annual Goal Target Actual Discussion/Analysis

Number of acres available for nonenergy mineral resource exploration and 

development

570.7 million 

acres

570.7 million 

acres

The 570.7 million acres includes the Federal 

mineral estate under lands where the surface 

estate is not administered by a Federal agency.

Number of acres reclaimed to 

appropriate land condition and water 

quality standards

8,000 4,151 The actual number of acres reclaimed each 

year depends on several interrelated variables, 

including commodity price, deposit grade, 

worldwide supply and demand for the 

commodity. In 2006, demand for mineral 

materials was high; therefore, not as many 

mined sites were closed and reclaimed as 

anticipated.

Percent of acres with Department of 

the Interior (DOI) range improvements 

resulting in sustainable grazing

7.0% 8.0% The BLM manages 160 million acres for 

grazing. Range improvements occurred on 

12.6 million acres. 

Percent of permitted acres maintained 

at appropriate land conditions and 

water and air standards

58% 58% Appropriate land conditions and water and air 

standards are establish in an approved mining 

plan.

Volume of wood products offered for 

sale in millions of board feet (MMBF)

270 243 The volume of wood products includes public 

domain and Oregon and California Grant 

Lands. 

Cumulative percent of original helium 

debt repaid at end of fiscal year

35% 34% The 34% represents $439 million paid in 2006.

Percent of time the Crude Helium 

Enrichment Unit (CHEU) was operating 

during the fiscal year

92% 92% The Crude Helium Enrichment Unit is scheduled 

to operate approximately 350 days each year.

The BLM generates over $2 billion annually 

in Federal revenue from commercial activities 

(excluding land sales) on the public lands, much 

of it collected by another Interior bureau, the 

Minerals Management Service. The market 

value of production occurring on the public 

lands runs between $10 billion and $20 billion 

annually. Typically, 98 to 99 percent of revenue 

and production resulting from commercial 

activities are derived from energy and minerals, 

including helium; livestock grazing, timber 

sales, right-of-way fees, and other revenue 

sources make up the balance.

Recreation

Recreation and leisure activities are major 

contributors to a healthy lifestyle for millions 

of Americans as well as international visitors. 

BLM-administered public lands play an 

important role in providing these outdoor 

recreational experiences. The Bureau expends 

about 6.9 percent of its funding to contribute 

to the Department of the Interior’s goals for 

recreation, including special area management 

and the management of National Landscape 

Conservation System areas such as wilderness 

and National Monuments.

BLM-administered public lands and waters 

provide visitors with a vast array of recreational 

opportunities. While most of the visits to BLMmanaged public lands involve camping in either 

developed recreation sites or dispersed-use areas, 

many visitors come simply to view landscapes 

and other unique natural or cultural heritage 

features of public lands. Other important 

activities include hunting, fishing, wildlife 
BLM 2006 Annual Report 19

Management‘s Discussion and Analysis

viewing, hiking and backpacking, motorized 

and non-motorized boating, off-highway vehicle 

(OHV) driving, and mountain bicycling. 

Unlike lands managed by other Department of 

the Interior bureaus, BLM-administered lands 

are used for both traditional outdoor recreation 

activities and the emerging array of new extreme 

sports and recreation technologies.

The BLM’s recreation mission encompasses 

two primary areas of emphasis:

• Enhancing the quality of recreational 

opportunities and improving access.

• Providing value in recreation and promoting 

quality services.

Most recreational activity on public lands 

occurs in dispersed non-fee areas. While 

public lands represent a place to have quality 

recreational experiences at a relatively low 

cost to visitors, the economic impact is still 

significant, especially to gateway communities.

Recreation on BLM public lands provides 

significant benefits to local, regional, and state 

economies. The total economic impact of 

travel-related expenditures for recreation on 

BLM lands is estimated to run into the billions 

of dollars. These travel-related expenditures 

for recreation on public lands support tens of 

thousands of jobs and contribute significantly 

to the viability of thousands of small businesses, 

especially outfitting, guiding, and tourismrelated companies and community service 

providers that depend on both access to, and the 

availability of, the public lands.

The BLM focuses on providing quality 

recreation opportunities and adventures on 

the Nation’s vast western landscapes. The 

public has the freedom to pursue unstructured 

recreation opportunities, but people are asked 

to respect other visitors and local cultures, and 

to practice stewardship principles and ethics, 

while using and enjoying the public lands. The 

BLM, in turn, focuses on preserving natural 

and cultural resources, resolving user conflicts, 

and providing for public health, education, and 

safety.

Leave No Trace is an outdoor ethics 

program centered on ways and means to 

minimize impacts on natural resources, 

wildlife, and other users. The BLM is a major 

supporter and sponsor of the program, which 

is just one of several of the Bureau’s public land 

stewardship partnerships. BLM publications 

and staff taught the principles of Leave No 

Trace to numerous public land users during 

the year. The Leave No Trace program has 

been embraced by recreation users across the 

spectrum, from wilderness to OHV enthusiasts. 

It is the only program of its kind that has been 

universally adopted, administered, and used 

in a unified, joint effort by the BLM, U.S. 

Department of Agriculture Forest Service 

(USDA-FS), National Park Service (NPS), and 

U.S. Fish and Wildlife Service (USFWS).

Tread Lightly! is another program supported 

by the BLM. Through education, restoration 

and research, this program aims to empower 

outdoor enthusiasts to recreate responsibly. The 

BLM is a major supporter and sponsor of the 

program, along with the USDA-FS, Bureau 

of Reclamation (BOR), NPS, and Corps of 

Engineers. Originally geared toward responsible 

use of motorized and mechanized use on public 

and private lands, the principles of the program 

have been expanded to provide an outdoor 

ethics message for a wide variety of user groups.

The Bureau collects recreation fees under 

the authority of the Federal Lands Recreation 

Enhancement Act (REA), which allows public 

land visitors to be charged a fee to use many of 

the Bureau’s campgrounds, day-use areas, other 

developed recreation sites, and permitted special 

recreation uses. All of the money collected is 

reinvested at the site of collection to improve its 

physical infrastructure and enhance customer 

satisfaction, directly benefiting those who pay 

for and use the site.
20 BLM 2006 Annual Report

Management‘s Discussion and Analysis

Table 3. Recreation: Selected Goals and Accomplishments

FY 2006 Annual Goal Target Actual Discussion/Analysis

Percent of recreation users satisfied with 

the quality of their recreation experience 

on the public lands

94% 97% The BLM has been able to increase visitor 

satisfaction by focusing on increased 

environmental education and improved 

facilities.

Number of acres made available for 

recreation through management actions 

and partnerships

258 million 258 million Thousands of volunteers and community 

partnerships help the BLM manage recreation 

sites and recreation activities each year.

Number of river and shoreline miles 

made available for recreation through 

management actions and partnerships

14,500 14,500 The BLM manages 38 Wild and Scenic Rivers 

in five states. 

Percent of universally accessible facilities 10% 8% The number of universally accessible facilities 

continues to increase each year, although the 

target has not yet been reached. 

Percent of recreation areas with 

community partnerships

24% 24% The BLM was able to increase the number of 

community partnership by 3% over 2005.

Number of visitors served by facilitated 

programs

12 million 13.5 million The response to BLM-facilitated programs 

continued to grow in 2006 by over 1.5 million 

visitors

The BLM Recreation Program also 

participates in National Trails Day activities and 

National Public Lands Day (NPLD) projects, 

which draw thousands of volunteers to BLM 

sites across the Nation. Each year, NPLD 

events promote environmental awareness and 

ethical outdoor behavior, as well as enhancing 

BLM recreation sites by providing needed 

maintenance and improvements. Volunteers 

typically build trails, transform sites into 

universally accessible areas, renovate buildings, 

and make numerous other contributions to 

recreation opportunities and amenities on the 

public lands.

The BLM’s interpretive program fosters 

an appreciation for public land resources and 

an understanding of the relationships between 

people and the public lands. Interpretation tells 

the story of how the BLM manages resources 

and provides opportunities for public use. 

The Bureau’s interpretive program gives the 

public the information they need to be more 

environmentally responsible while enjoying their 

public lands. 

The BLM takes advantage of interpretive 

opportunities along nationally designated 

Byways, making use of brochures and wayside 

exhibits. BLM staff, volunteers, and partners 

(such as interpretive associations) interact with 

both individual visitors and community groups 

through such activities as special events, tours, 

temporary exhibits, and interpretive planning.

One issue for the Bureau is finding 

opportunities to reach out to widely dispersed 

recreational visitors. To meet this challenge, 

the BLM is increasing the number of wayside 

exhibits on public lands to provide interpretive 

information.

In 2006, the BLM assessed its recreation 

workforce for effectiveness as directed by the 

Office of Management and Budget’s Circular 

A-76. This review found that the BLM has an 

extremely efficient and most effective recreation 

and visitor services program. Similarly, other 

audits of the recreation fee program found high 

levels of accountability and value.

Table 3 portrays selected goals/targets and 

actual accomplishments for the recreation 

mission area.
BLM 2006 Annual Report 21

Management‘s Discussion and Analysis

Serving Communities

The BLM expends approximately 58.4 

percent of its funding to serve the Nation’s 

citizens and communities and to ensure that 

people and property are protected from hazards 

associated with the BLM’s land management 

programs. To achieve these goals, the BLM 

collaborates with many constituents throughout 

the year. 

The BLM’s goals under this mission have 

been organized into three main areas:

• Improving fire management and safety.

• Improving public safety and security and 

protecting public resources.

• Improving information management.

Providing Fire Protection

The Bureau provides fire protection on 

388 million acres of public and state lands. 

The BLM’s fire and aviation program works 

cooperatively with its Federal and state land 

management partners to suppress and manage 

wildland fire, conduct prescribed fires, and 

promote fire safety awareness through education 

and prevention programs. The Bureau’s fire 

program also works closely with the BLM’s 

other resource programs to improve the health 

of the land, reduce the risks of hazardous 

buildup of fuels, protect communities at risk, 

and improve wildlife habitat.

The BLM’s National Office of Fire and 

Aviation is headquartered at the National 

Interagency Fire Center in Boise, Idaho, 

where fire experts develop policy, conduct 

wildland fire research, and coordinate with fire 

managers from other firefighting organizations, 

both nationally and internationally. Because 

wildland firefighting is a demanding and 

hazardous profession, the BLM takes every 

measure to ensure firefighter safety and protect 

life, property, and natural resources.

The public lands and their myriad resources 

—soil, vegetation, wildlife habitat, and human 

structures/improvements—are frequently at 

risk, particularly during a drought year. Much 

of the western United States is experiencing a 

multi-year drought, which has caused the fire 

danger to be much higher than normal.

Funding for the wildland fire program 

is managed centrally by the Department 

of the Interior, and performance measures 

and results are also reported centrally in the 

Department’s Annual Report on Performance and 

Accountability.

Reducing Threats to 

Public Health, Safety, and Property

The BLM addresses a wide range of 

public land situations posing risks to public 

land users. BLM-owned facilities represent a 

substantial public investment in roads, bridges, 

dams, administrative sites, campgrounds, 

and firefighting stations. Maintaining these 

facilities in a safe condition and operating 

them in compliance with all safety, health, and 

environmental requirements is a key goal.

Historic and documented public land uses 

such as mining and milling operations; oil and 

gas production; landfills; military operations; 

and rights-of-way for powerlines, pipelines, 

and other commercial activities have resulted 

in environmental contamination from spills, 

leachate, emissions, exposure to the elements, 

and other types of releases. More recently, toxic 

releases have come from unlawful activities such 

as wire burning, illegal dumping of highly toxic 

wastes from drug production, and intentional 

dumping of toxic materials. Collectively, these 

activities represent a substantial potential for 

soil, water, and air pollution as well as threats to 

public health, safety, and property.

The BLM works to reduce environmental 

threats and to protect employees, visitors, and 

other public land users in many ways. The 

Bureau evaluates safety concerns, identifies 

hazards and risks, studies past experiences and 
22 BLM 2006 Annual Report

Management‘s Discussion and Analysis

responses, trains employees, and educates the 

public. Regular inspections, maintenance, and 

repairs are completed for BLM-owned facilities, 

including administrative sites, campgrounds, 

other recreation sites, buildings, roads, bridges, 

trails, and dams. The BLM annually pursues 

funding for these response and cleanup activities 

through appropriate avenues.

The BLM performs Compliance Assessment—Safety, Health, and the Environment 

(CASHE) audits at all of its facilities on a 

recurring basis to identify facility compliance 

issues and assist the field’s efforts to provide safe 

visits for the public. Audits were completed at 

29 organizational units in FY 2006, the vast 

majority of which were third-round audits. 

The audits have resulted in the BLM making 

significant improvements in drinking water 

systems and hazardous materials storage. 

Actions to achieve the goals under the 

Energy Management and Environmental 

Stewardship scorecards were initiated in FY 

2006. Policy was issued and pilot efforts 

to implement Environmental Management 

Systems in the Washington Office and 

Wyoming State Office were initiated. The 

BLM is incorporating energy efficiency 

technologies and renewable energy into BLM 

installations and facilities. This work will be 

accomplished primarily by using an Energy 

Savings Performance Contract (ESPC).

BLM law enforcement officers work with 

partners both inside and outside the Bureau 

to protect lives, resources, and property. 

Initiatives to protect delicate and irreplaceable 

resources, safeguard visitors and employees, 

and recover losses to the government have been 

implemented.

Improving Land, 

Resource, and Title Information

The BLM holds extensive historical records 

and maintains current land title information 

for determining land ownership, condition, 

location, rights, and authorized uses on most 

of the private, public, and tribal lands in the 

United States. The agency performs cadastral 

surveys and completes land transactions, 

producing voluminous amounts of information 

that supports land management and scientific 

activities for many government agencies, as 

well as the private sector. Historical data on 

patented lands, along with current information 

on the mineral estate, resource conditions, and 

permits or leases on Federal lands, is updated 

and provided on a daily basis. 

The BLM responds to thousands of 

requests for information every year and has 

improved customer access to and use of this 

information. Cadastral survey information for 

over 31,000 townships and over 4.2 million 

General Land Office (GLO) land title records 

has been converted to digital form; over 3 

million of these records have also been scanned 

and imaged for viewing on the GLO website. 

These records are now more readily accessible 

to decision makers as well as the public, thanks 

to Internet and Geographic Information System 

(GIS) technologies.

In recent years, township data has been 

downloaded into multiple databases across the 

country to support applications ranging from 

wilderness, open space, planning, recreation, 

and commercial activities (oil and gas, timber, 

coal, etc.), to developing data bases for tax 

assessment and 911 emergency dispatch. The 

BLM’s cadastral and land records provide 

a critical foundation for addressing energy 

development and urban growth throughout the 

United States.

As part of the BLM’s responsibility defined 

in OMB Circular A-16 to support the National 

Data Infrastructure, cadastral data profiles have 

been developed for emergency management 

for hurricanes and wildland fires. These 

profiles will assist with the transfer of data 

from Federal, state, and local organizations to 

emergency management personnel. In 2006, 

cadastral data was assembled in western states 

for fire planning, deployment of fire support 
BLM 2006 Annual Report 23

Management‘s Discussion and Analysis

personnel, and recovery efforts; information 

on property and structures was provided. 

Similar efforts are being facilitated to support 

hurricane preparedness in the Southeast. 

Additionally, at the request of the State Oil 

and Gas Commissioners, a draft energy data 

profile and standard Geographic Coordinate 

Data Base/Public Land Survey System data sets 

are being implemented to support oil and gas 

development.

The public is performing on-line Internet 

searches for information and subsequently 

downloading digital data (counted as a 

“request”), or filing requests for historical 

information directly with BLM offices. One 

example is the Bureau’s General Land Office 

Records website, http://www.glorecords.blm.

gov. Since going on-line in May 1998, this site 

has filled more than 100 million requests for 

land records.

The BLM has the lead responsibility for 

the National Integrated Land System (NILS). 

This system is a collaborative project with the 

USDA Forest Service, states, counties, tribes, 

and other Federal agencies to provide a business 

solution for land managers. These individuals 

face an increasingly complex environment of 

complicated transactions, legal challenges, 

deteriorating and difficult-to-access records, and 

a deteriorating system of property boundaries. 

NILS provides the tools needed to collect, 

manage, and share survey data, cadastral data, 

and land records information.

Updating Land Use Plans

Accurate, up-to-date land use plans are 

integral to the effective management of the 

Nation’s public lands because planning decisions 

form the basis for most of the BLM’s on-theground management actions. Over the past 

two decades, the magnitude and the complexity 

of resource issues relating to the management of 

public lands have grown. Dramatic population 

growth in the West has resulted in increasing 

demands on the approximately 258 million 

acres of surface lands and hundreds of millions 

of acres of mineral estate managed by the 

BLM. Changing demands and conditions 

have included a recent emphasis on the need 

to develop renewable and nonrenewable 

domestic energy supplies; additions to the 

National Landscape Conservation System; 

new Endangered Species Act listings; and new 

regulations and policies that require the BLM 

to invite other Federal, state, and local agencies 

to participate in the BLM’s land use planning 

activities. 

Land use planning helps the Department of 

the Interior achieve its mission of protecting and 

managing the Nation’s natural resources and 

cultural heritage, providing scientific and other 

information about those resources, and honoring 

its trust responsibilities or special commitments 

to American Indians and Alaska Natives. The 

land use planning process is community based 

and requires cooperation with Federal, state, 

tribal, and local governments; the general public; 

user and environmental groups; and industry. 

Through close collaboration and partnerships, 

the BLM determines how best to manage 

public lands to meet the needs both of local 

communities and of the Nation as a whole.

The BLM uses a cyclical planning process to 

ensure that land use plans and implementation 

decisions remain consistent with applicable laws, 

regulations, orders, and policies. In addition 

to public participation, the process involves 

resource assessment and analysis to make plan 

decisions, followed by plan implementation, 

monitoring, and evaluation. This process allows 

for continuous adjustments to respond to new 

issues and changed circumstances and to amend 

or revise plans based on ongoing monitoring and 

evaluation activities.

The BLM is continuing to develop and 

amend land use plans and to address priority 

and emerging issues, such as conservation of 

sagebrush communities for sage grouse and 

other sagebrush-dependent wildlife and plant 

species, the Healthy Forests Initiative, recreation, 
24 BLM 2006 Annual Report

Management‘s Discussion and Analysis

and travel management (including off-highway 

vehicle use).

Providing Economic and Technical Assistance

The BLM carries out the Secretary’s trust 

responsibility for several Indian programs, 

including approving and supervising postlease mineral operations on Indian trust lands; 

conducting the cadastral survey of Indian lands; 

and issuing, or providing support to the Bureau 

of Indian Affairs (BIA) for, trust patents in the 

lower 48 states and Native allotments in Alaska. 

The BLM coordinates with tribes, the BIA, 

the Minerals Management Service, and the 

Office of Surface Mining in order to supervise 

post-lease mineral operations on 56 million acres 

of Indian trust lands. These operations generate 

royalty incomes for Indian mineral owners and 

economic impacts for communities, as well as 

providing local employment to Tribal members.

Under the Act of April 8, 1864 (25 USC § 

176), the General Land Office, now the BLM, 

is charged with the statutory responsibility for 

surveying any Indian lands or reservations as 

nearly as may be in conformity to the rules 

and regulations under which other public lands 

are surveyed. In addition to conducting field 

surveys, the BLM provides other cadastral 

services, such as preparing or reviewing legal 

descriptions, consulting on ownership and 

jurisdictional boundary issues, improving the 

condition of reservation boundaries, developing 

a Cadastral Geographic Information System 

(CGIS), developing a training program designed 

to increase the pool of qualified surveyors to 

meet the immediate survey needs of owners and 

managers, and providing training opportunities 

to the BIA and tribal entities. The BLM also 

assists in the fee-to-trust process, assists in the 

development of long-term plans to meet future 

survey needs, collects Geographic Coordinate 

Data Base information, and provides expert 

technical support for appeals, protests, and 

litigation on all Indian land issues.

The BLM provides essential cadastral 

surveys and services requested and funded 

by the BIA, tribal entities, and individuals. 

BLM surveyors also work with BIA and 

tribal employees, in concert with contractors, 

to populate and enhance the Geographic 

Coordinate Data Base in an effort to create the 

base layer of the CGIS. This CGIS will provide 

managers of Indian lands with an interactive 

tool to better utilize, develop, and promote 

Indian lands and resources

The BLM has a long history of providing 

support for community and statewide economic 

needs through land disposal and conveyance 

for many purposes under several authorities 

and programs. One of the BLM’s most 

innovative land conveyance authorities is the 

Southern Nevada Public Land Management 

Act (SNPLMA), enacted in October 1998, as 

amended. This Act encourages the BLM to sell 

land in an open, competitive process, ensuring 

that the Federal government receives fair market 

value and generates the greatest return for the 

taxpayer.

Under SNPLMA, public land tracts 

within a congressionally designated disposal 

boundary that are interspersed with or adjacent 

to private land in the Las Vegas Valley (the 

fastest-growing urban area in the United 

States) are sold to the highest bidder and may 

not be sold for less than their appraised fair 

market value. A total of 85 percent of the land 

sale revenue collected is deposited into the 

SNPLMA Special Account and then invested 

in interest-bearing Treasury securities. These 

land sale proceeds and interest revenues can be 

used for eight specified purposes, including the 

acquisition of environmentally sensitive land in 

the State of Nevada; capital improvements at 

selected areas; development of a multi-species 

habitat conservation plan in Clark County, 

Nevada; development of parks, trails, and 

natural areas in Clark and Lincoln Counties; 

Federal Environmental Restoration Projects 
BLM 2006 Annual Report 25

Management‘s Discussion and Analysis

under the Lake Tahoe Restoration Act; and 

costs associated with the disposal of lands and 

implementation of the Act.

The revenues generated under SNPLMA 

enable the BLM and other government entities 

to acquire and preserve environmentally sensitive 

lands and to build or maintain trails, day-use 

areas, campgrounds, or other facilities to benefit 

public land visitors. 

As of September 30, 2006, the BLM’s 

SNPLMA land sales Treasury account had 

$2.3 billion invested; interest earned during 

the year totaled $81.5 million. From the 

program’s inception, the BLM has conveyed 

34,137 acres under SNPLMA, with SNPLMA 

Special Account receipts of approximately 

$2.5 billion from all conveyances and interest 

earned. The Directors of the BLM, U.S. Fish 

and Wildlife Service, and National Park Service, 

in partnership with the Chief of the USDA 

Forest Service, have recommended and received 

approval from the Secretary of the Interior for 

the expenditure of almost $2.2 billion in the 

first six expenditure categories listed above, 

based both on revenues received and on revenues 

projected from land sales through September 30, 

2006.

Another recently enacted bill, the Federal 

Land Transaction Facilitation Act, provides 

the authority to sell public lands and use sale 

proceeds to purchase other lands to benefit 

the BLM or other Federal land management 

agencies. The Act also permits the BLM to 

retain exchange equalization payments (often 

made by land exchange proponents to equalize 

values between Federal and private lands). 

Lands sold or exchanged must already be 

identified for disposal in an existing Federal land 

use plan approved before July 25, 2000.

Under this Act, which applies nationally and 

not just to southern Nevada, 4 percent of sales 

or exchange receipts are distributed to the state 

in which the sale occurred. These are to be used 

for educational purposes or for the construction 

of public roads and improvements.

Of the remaining receipts, the BLM can 

retain up to 20 percent to cover administrative 

costs of sales and exchanges under the Act. 

The remainder (that is, at least 80 percent) 

must be used to purchase inholdings or lands 

with exceptional resources adjacent to federally 

designated areas. Inholdings are any nonFederal lands located within specially designated 

areas managed by the BLM, National Park 

Service, U.S. Fish and Wildlife Service, or 

USDA Forest Service, including the Wild and 

Scenic River System, the National Trail System, 

Wilderness Areas, or Wilderness Study Areas.

Not less than 80 percent of the acquisition 

funds must be used for land acquisitions in 

the same state in which sales occurred; the 

remaining 20 percent of acquisition funds may 

be used in the same state or in the 11 western 

states and Alaska. The Act does not mandate 

any sales or establish quotas for sale or purchase. 

As of September 30, 2006, sales proceeds under 

the Federal Land Transaction Facilitation 

Act totaled approximately $88.9 million and 

exchange proceeds amounted to approximately 

$3.2 million, for a cumulative total of $92.1 

million. 

A memorandum of understanding among 

the applicable Federal agencies to implement 

the Act was signed on May 5, 2003. This 

agreement provides the guidelines on how fund 

disbursements are to be determined in the 

future.

Table 4 portrays selected goals/targets 

and actual accomplishments for the serving 

communities mission area.
26 BLM 2006 Annual Report

Management‘s Discussion and Analysis

Table 4. Serving Communities: Selected Goals and Accomplishments

FY 2006 Annual Goal Target Actual Discussion/Analysis

Percent of unplanned and unwanted 

wildland fires controlled during 

initial attack

95% 92% The severe fire season resulted in less effective 

initial attack and a greater number of escape fires.

Total number of acres treated that 

are in the wildland-urban interface 

(WUI) and identified as high priority 

through collaboration

197,931

acres

240,598 

acres

As a result of the severe fire season, the BLM 

cancelled some prescribed burning outside the 

WUI and redirected the funds toward mechanical 

accomplishments within the WUI, resulting in 

increased accomplishment.

Percent of buildings (for example, 

administrative sites and employee 

housing) in fair to good condition

90% 92% Increased emphasis on condition assessment and 

follow-up actions has resulted in an increase in 

buildings in fair to good condition.

Percent of other facilities (roads, 

dams, bridges, and trails) in fair to 

good condition

69% 92% Increased emphasis on condition assessment 

resulted in the reappraisal of BLM roads in 2006. 

An increased number of roads were found to be in 

fair to good condition. 

Cumulative percent of Alaska lands 

conveyed to the State of Alaska and 

Alaska Native Corporations

44.9% 45% New provisions provided by the Alaska Land 

Transfer Acceleration Act, Public Law 108-452, will 

allow the BLM to streamline land conveyances.

Number of public land title records 

posted on the Internet to assist title, 

survey, historical, and genealogical 

research and retrieval

200,000 260,397 The BLM was able to post 110,246 additional 

records on the internet in 2006.

Number of acres of land disposals 

and conveyances completed outside 

of Alaska

105,000 121,788 An increased number of disposals and conveyances 

are completed outside of Alaska each year.

Percent of total land within SNPLMA 

boundary offered for sale or disposal 

under the Recreation and Public 

Purposes Act

Establish 

New 

Baseline

13% There were 4,412 acres within the SNLPMA 

boundary offered for sale in 2006.

Percent of SNPLMA parcels offered 

for sale within 12 months of 

nomination

Establish 

New 

Baseline

12% There were 3,907 SNPLMA parcels offered for sale 

within 12 months of nomination in 2006.

Percent of parcels offered by a 

willing seller for acquisition by 

the BLM that are acquired under 

SNPLMA

Establish 

New 

Baseline

1.92% There were 1,115 parcels acquired under SNPLMA 

in 2006.

Percent of funds expended on 

acquisitions by the BLM from willing 

sellers within two years of approved 

SNPLMA funding availability

Establish 

New 

Baseline

19% A total of $13,590,000 was expended on 

acquisitions within two years of approved SNPLMA 

funding availability.
BLM 2006 Annual Report 27

Management‘s Discussion and Analysis

Systems, Controls, And Legal Compliance

Managerial, Administrative, and Financial Controls

The Bureau of Land Management completed an assessment of 

its systems of managerial, administrative, and financial controls in 

September 2006 in accordance with the standards, objectives, and 

guidelines prescribed by the Federal Managers’ Financial Integrity 

Act (FMFIA) and the Office of Management and Budget (OMB). 

The objectives of this assessment were to ensure that:

• Programs achieved their intended results;

• Resources were used consistent with the agency’s mission;

• Resources were protected from waste, fraud, and mismanagement;

• Laws and regulations were followed; and

• Reliable and timely information was maintained, reported, and 

used for decision making.

In performing its assessment, the BLM management relied on 

its knowledge and experience gained from the daily operation of 

Bureau programs and systems of accounting and administrative 

controls. The BLM’s assessment was based on information obtained 

as of September 30, 2006, from sources such as internal management 

control assessments, Office of Inspector General (OIG) and 

Government Accountability Office (GAO) audits, KPMG’s prioryear audit of the Bureau’s financial statements, various program 

evaluations/studies, and performance plans and reports. 

Based on all of the above, as well as the results of the BLM’s 

independent financial statement audit for FY 2005, the Bureau can 

conclude the following:

• The BLM’s systems of management, administrative and financial 

controls provide reasonable assurance that the objectives of the 

FMFIA have been achieved.

• The BLM is in compliance with the U.S. Government Standard 

General Ledger at the transaction level, and with Federal 

accounting standards as required by the Federal Financial 

Management Improvement Act (FFMIA). In KPMG’s opinion, 

the BLM did not comply with accounting standards relating to 
28 BLM 2006 Annual Report

Management‘s Discussion and Analysis

condition reporting for museum collections; 

however, the BLM and the Department of 

the Interior believe that the BLM’s reporting 

is in compliance.

• The BLM’s information technology 

systems provide reasonable assurance that 

the objectives of OMB’s Circulars A-127, 

Financial Systems, and A-130, Management 

of Federal Information Resources, have been 

achieved. 

Table 5 outlines the specific management 

control assessments and audits on which the 

Bureau relied for its annual assurance statement.

Table 5: FY 2006 Assessments and Audits

Assessment Audit Scope Date Completed Results

Law Enforcement Arizona August 2006 No material weaknesses identified.

Procurement Alaska August 2006 No material weaknesses identified.

Procurement California August 2006 No material weaknesses identified.

Procurement National Fire 

Center (NIFC)

August 2006 No material weaknesses identified.

Procurement Montana August 2006 No material weaknesses identified.

Procurement Oregon August 2006 No material weaknesses identified.

Property & Fleet Management Alaska July 2006 No material weaknesses identified.

Property & Fleet Management California July 2006 No material weaknesses identified.

Property & Fleet Management Oregon July 2006 No material weaknesses identified.

General Management Utah November 2005 No material weaknesses identified.

General Management Montana August 2006 No material weaknesses identified.

General Management Headquarters 

Renewable 

Resources Group

March 2006 No material weaknesses identified.

Program Invasive & noxious 

weeds

August 2006 No material weaknesses identified.

Program Range August 2006 No material weaknesses identified.

Program Challenge cost 

share

August 2006 No material weaknesses identified.

Program Forestry 

stewardship 

contracting

August 2006 No material weaknesses identified.

Program Helium August 2006 No material weaknesses identified.

Program Environmental 

Cleanup Liabilities

August 2006 No material weaknesses identified.
BLM 2006 Annual Report 29

Management‘s Discussion and Analysis

Table 5: FY 2006 Assessments and Audits (continued)

Assessment Audit Scope Date Completed Results

Program Land & Water 

Conservation Fund

August 2006 No material weaknesses identified.

Program Oil & Gas surface 

management

August 2006 No material weaknesses identified.

Program Eastern States 

lands & realty

August 2006 No material weaknesses identified.

Program Assessment Rating Tool 

(PART)

Resource 

protection & 

performance 

measures

August 2006 No material weaknesses identified.

GAO & OIG Audits:

Assessment/

Audit Scope Title Date Issued Results

GAO-06-294 Rural Economic 

Development

More Assurance is Needed 

That Grant Information Is 

Accurately Reported

April 2006 No “open” recommendations for 

fiscal year 2006 applicable to this 

audit.

GAO-06-304 Public Service 

Announcement 

Campaigns

Activities and Financial 

Obligations for Seven 

Federal Departments

February 

2006

No “open” recommendations for 

fiscal year 2006 applicable to this 

audit.

GAO-06-336 Natural Resources Woody Biomass Users’ 

Experiences Offer Insights 

for Government Efforts 

Aimed at Promoting Its Use

March 2006 No “open” recommendations for 

fiscal year 2006 applicable to this 

audit.

GAO-06-353 Invasive Forest Pests Lessons Learned from Three 

Recent Infestations May Aid 

in Managing Future Efforts

May 2006 No “open” recommendations for 

fiscal year 2006 applicable to this 

audit.

GAO-06-379 Workplace Safety 

and Health

OSHA Could Improve 

Federal Agencies’ Safety 

Programs with a More 

Strategic Approach to Its 

Oversight

April 2006 No “open” recommendations for 

fiscal year 2006 applicable to this 

audit.

GAO-06-476 Telecommunications Full Adoption of Sound 

Transition Planning 

Practices by GSA at 

Selected Agencies Could 

Improve Planning Efforts

June 2006 No “open” recommendations for 

fiscal year 2006 applicable to this 

audit.

GAO-06-570 Wildland Fire 

Suppression

Lack of Clear Guidance 

Raises Concerns about Cost 

Sharing between Federal 

and Nonfederal Entities

May 2006 No “open” recommendations for 

fiscal year 2006 applicable to this 

audit.

GAO-06-624 Wood Utilization Federal Research and 

Development Activities, 

Support and Technology 

Transfer

April 2006 No “open” recommendations for 

fiscal year 2006 applicable to this 

audit.
30 BLM 2006 Annual Report

Management‘s Discussion and Analysis

Table 5: FY 2006 Assessments and Audits (concluded)

GAO & OIG Audits:

Assessment/

Audit Scope Title Date Issued Results

GAO-06-629 Geothermal Energy Increased Geothermal 

Development Will Depend 

on Overcoming Many 

Challenges

April 2006 No “open” recommendations for 

fiscal year 2006 applicable to this 

audit.

OIG

W-IN-MOA0002-2005

Hazardous Fuels 

Reduction 

Hazardous Fuels Reduction April 2006 Existing BLM wildland fire 

measures incorporated into the 

BLM’s performance management 

system 

The BLM completed its FY 2006 Improper 

Payments risk assessment as required by the 

Improper Payments Information Act of 2002, 

P.L. 107-300. The Bureau reassessed programs 

exceeding $100 million in annual outlays. This 

assessment did not identify any “high” risk 

programs based on the criteria defined by OMB. 

Additionally, none of the BLM’s programs and 

activities required reporting to the President and 

the Congress or required a progress report on 

actions to reduce improper payments.

Business and Financial Systems 

Integration and Controls

The Bureau’s accounting system, the 

Federal Financial System (FFS), is composed 

of a number of interrelated subsystems that 

handle the BLM’s complex financial processing 

needs. FFS capabilities include recording 

the BLM’s budget authority at various levels 

(appropriations, apportionments, allotments, 

allocations, etc.) and tracking the execution of 

the budget at each of these levels. FFS records 

the amounts billed and collected for services 

rendered by the BLM; this information is used 

to prepare bills and dunning notices.

The system also supports buying goods 

and services and paying vendors, including 

complying with prompt payment requirements 

and maintaining relationships with various 

purchasing documents, such as commitments, 

obligations, requisitions, receiving reports, 

and payment vouchers. FFS supports travel 

document and payroll processing, cost 

allocation, and cost accumulation, as well as the 

application of indirect support rates to calculate 

the full costs of projects. All transactions 

recorded to various tables in each FFS subsystem 

support accounting functions that update the 

general ledger.

The system accounts for every type of 

Federal appropriated and nonappropriated fund 

within the BLM’s budget authority, including 

annual, multi-year, and no-year appropriations. 

Nonappropriated funds include revolving and 

working capital funds, budget clearing accounts, 

and deposit and receipt accounts.

Payments to commercial vendors are 

generally subject to the Prompt Payment Act, as 

implemented under OMB Circular A-125. FFS 

automatically determines if a payment is subject 

to prompt payment based on the type of vendor 

and the type of transaction. If a payment 

is subject to prompt payment, FFS ensures 

compliance in terms of scheduling the payment, 

automatically evaluating discount terms, paying 

any interest due if the payment is late, and 

taking into account any payment terms unique 

to the order or vendor.

FFS distinguishes numerous collection 

types: revenue (billed and unbilled), vendor 
BLM 2006 Annual Report 31

Management‘s Discussion and Analysis

refund, advance received from a customer, and 

repayment of a travel advance. Collections 

and disbursements can involve either a cash or 

noncash transaction.

Strict edits on all input data ensure the 

validity of data entered into the system. Editing 

logic includes a verification of valid accounting 

distribution and spending controls, along with 

the completion of required data elements. 

Once a transaction passes all edits, all relevant 

tables and the general ledger are simultaneously 

updated.

FFS also includes a number of processes 

to ensure the integrity of the database and to 

assist in administering the system. Processing 

routines include system assurance programs 

that verify the header and line tables are in 

agreement, all journal postings are in balance, 

and all budget records are properly posted. To 

detect any out-of-balance conditions that might 

occur due to equipment or system software 

failures, the system assurance programs verify 

that components of the online system (reference 

and inquiry tables, including the General 

Ledger and budget tables) balance with the 

historical sequential journal that is the official 

audit trail.

The Fixed Assets subsystem of FFS allows 

tracking of all capitalized real and personal 

property, as well as items designated as “Bureausensitive” or “Field-sensitive.” Bureau-sensitive 

items include personal computers, firearms, 

surveying equipment, and Global Positioning 

System (GPS) equipment valued at more than 

$500. Field-sensitive items include property 

that a BLM field office might want to track 

regardless of the acquisition cost, such as 

binoculars.

The Fixed Assets subsystem reconciles 

property items actually received and accounted 

for with items purchased. Once a property 

item is officially documented as “received,” 

a custodial officer and property number are 

assigned, and the item is then inventoried every 

year. The Fixed Assets subsystem also records 

when an item is disposed of through public 

sale, transfer to another agency, or donation to a 

school or college.

The Bureau was one of the first agencies 

in the Department of the Interior to establish 

an interface between the Interior Department 

Electronic Acquisition System (IDEAS) and 

FFS. With this interface, once an obligation 

document (a purchase order, task order, delivery 

order, contract, or modification) is created in 

IDEAS, the obligation can be electronically 

posted to FFS. If the obligation passes 

successfully to FFS, a confirmation is posted in 

IDEAS. In addition, IDEAS can pass a funding 

commitment document to FFS so that funds 

can be set aside pending actual obligation.

With the level of integration and crosschecking in place among the BLM’s acquisition, 

accounting, and property management/

accounting systems, the Bureau has fulfilled the 

requirement to establish sound management 

controls and ensure legal compliance.
32 BLM 2006 Annual Report

Management‘s Discussion and Analysis

Management Challenges—Looking Ahead

Natural and Human-Caused Disasters

Most of the Bureau’s facilities are located in the western states and 

Alaska. These facilities are susceptible to typical risks for buildings 

and structures such as fire, power outages, and natural disaster threats 

resulting from local conditions such as flooding, tornados, winter 

storms, and earthquakes.

BLM facilities, personnel, and resources are also subject to 

security-related risks. The threats and acts of terrorism that occurred 

in 2001 reinforced the need for government agencies review and 

revise business continuity and related contingency plans to ensure 

that essential services can be provided during emergency conditions.

Possible Future Effects: Natural and human-caused disasters 

could range from minor damage or disruption to large-scale 

catastrophes resulting in extensive employee injuries and destruction 

of property. The BLM’s contingency plans are designed to save lives, 

prevent damage, and minimize adverse consequences. However, 

no amount of planning and preparation can prevent disasters from 

striking. 

Wildland Fires

As noted in a previous section, the Bureau provides fire protection 

on 388 million acres of public and state lands. The BLM’s fire and 

aviation program works cooperatively with its Federal and state land 

management partners to suppress and manage wildland fire, conduct 

prescribed fires, and promote fire safety and fire ecology awareness 

through education and prevention programs. The Bureau’s fire 

program also works closely with the BLM’s other resource programs 

to improve the health of the land, reduce the risks of hazardous 

buildup of fuels, protect communities at risk, and improve wildlife 

habitat.

The public lands and their myriad resources—soil, vegetation, 

wildlife habitat, human structures/improvements and more—are 

frequently at risk from wildfire, particularly during drought years. 

Much of the western United States has been experiencing a multi-year 

drought cycle, meaning we are in an era where high fire danger and 

an increased potential for large fires are the norm.

Possible Future Effects: While the BLM is taking steps to 

reduce the number of human-caused fires, natural fire causes (such as 

lightning) mean fire will continue to present a threat to public lands 

and resources. The Bureau’s professional firefighting workforce will 
BLM 2006 Annual Report 33

Management‘s Discussion and Analysis

continue to respond quickly to fire starts to keep 

them from becoming large, catastrophic events.

Crime and Unauthorized Use

Two-thirds of BLM-administered lands are 

within an hour’s drive of major urban areas. In 

these interface areas, illegal activities endanger 

public health and safety and result in damage 

to resources and property. With nearly 93 

percent of public lands open to some form of 

off-highway vehicle (OHV) use, violations 

such as operating vehicles outside designated 

areas and trails and operating OHVs while 

under the influence of alcohol or in violation of 

safety-related regulations make up over half the 

workload of the law enforcement program. 

Illegal drug activity, including marijuana 

cultivation and drug labs, is an increasing 

problem. The BLM is working cooperatively 

with other agencies to eradicate marijuana 

plants found growing on public lands, and to 

investigate and seek prosecution of crimes to 

discourage illegal use.

There are numerous prehistoric and 

historic sites on public lands, including ancient 

dwellings, burial sites, historic trails, cabins, 

forts, and mines. Despite laws authorizing 

severe penalties, illegal collecting and vandalism 

are common. 

The trafficking of drugs and illegal 

immigrants through BLM lands on the border 

with Mexico has resulted in heavy resource 

damage, including discarded trash, discarded 

vehicles, off-road travel by smugglers, and the 

illegal setting of fires. 

Possible Future Effects: Crime and 

unauthorized use will continue to be a problem 

as visitation increases at many BLM recreational 

sites. This will continue to cause the loss 

of resources; significant sums of money will 

be needed to rehabilitate and restore public 

lands and resources to former levels of health 

and productivity. Perhaps the most dramatic 

examples are the looting of cultural and 

paleontological resources, which in some cases 

have been sold to collectors, and the millions of 

dollars in lost resources and funds expended for 

the suppression of human-caused fires.

Deferred Maintenance 

Deferred maintenance occurs when regularly 

scheduled repairs, preventive maintenance, 

and replacements of parts and components are 

not performed when they should have been 

and are, therefore, delayed until a future time. 

The problem is compounded by the fact that 

maintenance costs are increasing, especially 

for work using petroleum-based products or 

involving extensive travel.

The trend has been for the BLM’s inventory 

of fixed capital assets (buildings, roads, 

recreation sites, etc.) to increase over time. 

Adequate funding and staffing for repairs 

and maintenance is essential if the Bureau is 

to maintain its facilities in good functioning 

condition and reduce its accumulated deferred 

maintenance workload. The Deferred 

Maintenance section presented later in this 

document provides more detailed information 

on the extent of the BLM’s constructed assets 

(buildings, administrative sites, recreation 

sites, roads, bridges, trails, and dams) and 

accumulated deferred maintenance.

Possible Future Effects: Funding 

is needed for normal repairs, preventive 

maintenance, component renewal, and other 

activities needed to preserve the BLM’s portfolio 

of constructed assets so they continue to 

provide acceptable service, safety, and quality 

experiences for public users. The estimated and 

reported cost of regularly scheduled repairs and 

preventive maintenance must accurately reflect 

the BLM’s true annual maintenance needs.

Preservation of capital investments is 

contingent on the BLM’s ability to perform 

preventive maintenance and make timely 

repairs. Maintenance that is deferred becomes 

more costly over time. If delayed long enough, 
34 BLM 2006 Annual Report

Management‘s Discussion and Analysis

the result is severe deterioration or even a total 

loss of facilities. This, in turn, could result in 

resource damage. For example, not maintaining 

a hiking trail on steep terrain could result in 

soil erosion, the formation of gullies, loss of 

vegetation, sedimentation of nearby streams, 

and degradation of aquatic and riparian habitat. 

In some instances, critical health and safety 

problems could be created for both BLM 

employees and the public.

Contingent Liabilities: 

Judgments and Claims

The BLM is a party to a number of 

lawsuits where the plaintiff is seeking monetary 

damages. The lawsuits can involve a variety 

of issues, including lost revenues when 

timber contracts are suspended because of 

environmental concerns; injuries or death that 

occur on BLM-managed public land or roads; 

takings and suspension of mining claims; and 

other issues.

Possible Future Effects: The outcomes 

of lawsuits will not materially affect the BLM’s 

future financial condition or operations. The 

U.S. Treasury’s judgment fund would likely bear 

most of the costs incurred to pay any judgments 

or settlements.

Contingent Liabilities: 

Environmental Cleanup

The Comprehensive Environmental 

Response, Compensation, and Liability Act of 

1980, the Clean Water Act of 1977, and the 

Resource Conservation and Recovery Act of 

1976 require Federal agencies to report sites 

where (1) hazardous substances have been 

released or (2) hazardous wastes are or have 

been stored, treated, or disposed of. These 

Acts also require responsible parties, including 

Federal agencies, to clean up releases of 

hazardous substances, to restore injured natural 

resources, and to manage hazardous wastes.

The BLM faces major challenges in cleaning 

up hazardous substance releases on public land. 

Virtually all of these releases arise from nonBLM uses of the lands, such as illegal dumping, 

transportation spills, landfills, mineral 

development operations, pipelines and airstrips. 

The BLM is working aggressively to identify 

and prioritize sites posing a danger to humans 

or natural resources, and to seek funding to 

remediate those with the highest risk. Also, it is 

the BLM’s policy to seek cost avoidance and/or 

cost recovery from responsible parties to cover 

the cleanup costs whenever possible.

Possible Future Effects: Undetected or 

unmitigated releases of hazardous substances 

on public lands could result in resource damage 

(soil or water contamination, vegetation loss, 

wildlife habitat destruction, etc.). Loss of 

human life, harm to human health, and damage 

to property are also possible, especially in 

the rapidly growing wildland-urban interface 

areas of the West and in the more heavily 

used recreation areas. The presence of large, 

undeveloped rural tracts of public land may help 

minimize the odds of impacts to the public.

Contingent Liabilities: 

Abandoned Mine Lands

The Bureau maintains an inventory of 

known abandoned mine land (AML) sites that 

may pose an environmental or public safety 

hazard on the public lands. BLM personnel 

conduct targeted field validations of potential 

AML sites and hazards, with the primary focus 

on priority watersheds and high-use areas. State 

agencies and the public often identify AML 

hazards they encounter on public lands.

The BLM works in partnership with other 

government agencies and private landowners 

to target and leverage funding and coordinate 

projects. Watershed projects are typically 

complex, multi-year efforts.

Possible Future Effects: Given the large 
BLM 2006 Annual Report 35

Management‘s Discussion and Analysis

number of abandoned mine sites believed to 

exist on BLM-administered public lands, there 

is a significant potential for serious injuries or 

death for people who wander across these sites 

or who explore old mine tunnels and buildings. 

The BLM faces exposure to lawsuits or claims 

for damages resulting from deaths or injuries 

at these sites. As population sprawl continues 

across the West, and as more visitors come to 

the public lands to enjoy recreation activities 

and experience open space, more people will 

come into contact with what once were remote 

abandoned mine sites. The BLM has no basis 

for estimating the future financial impact of 

abandoned mine hazards.

An unstable structure at the abandoned Kelly Mine in California.
36 BLM 2006 Annual Report

Management‘s Discussion and Analysis

Discussion and Analysis of 

the Financial Statements

This Annual Report presents the BLM’s financial statements. 

There are four basic objectives for financial reporting in the Federal 

government:

• Budgetary integrity (accounting for resources obtained and 

resources spent),

• Operating performance (the cost of programs and the results 

achieved for the dollars spent),

• The government’s stewardship over government assets such as 

land and heritage assets (improvement or deterioration in these 

assets over the reporting period), and

• Systems and controls (the presence of cost-effective systems and 

controls to adequately safeguard assets).

To meet these reporting objectives, the BLM is presenting the 

following financial reports in this Annual Report:

• Consolidated Balance Sheets: These statements report on the 

operating assets and liabilities related to the delivery of goods 

and services. They display the dollar value of unspent funds, 

assets (such as accounts receivable; inventory; investments; and 

property, plant, and equipment), and liabilities (such as accounts 

payable and various accrued liabilities).

• Consolidated Statements of Net Cost of Operations and 

Consolidated Statements of Changes in Net Position: These 

statements report the costs of providing government goods, 

services, and benefits, and provide information on the changes in 

financial position from one year to the next. They contain the 

total cost of operations, revenue generated from operations, and 

appropriations (dollars) used to fund the net cost of operations.

• Combined Statements of Budgetary Resources and Consolidated 

Statements of Financing: The Combined Statements of 

Budgetary Resources show the budgetary resources made 

available through appropriations and other sources, obligations 

incurred against those resources, and the dollar amount of cash 

outlays. The Consolidated Statements of Financing explain and 

reconcile the relationship of budgetary obligations to the net cost 

of operations.
BLM 2006 Annual Report 37

Management‘s Discussion and Analysis

• Consolidated Statements of Custodial 

Activity: These statements report on the 

collection and disposition of custodial 

revenue for first-year rents and bonuses on 

lease agreements related to oil and gas, coal, 

and other leasable minerals.

• Required Supplementary Information—

Stewardship Lands and Heritage Assets 

Report: This report displays the nature and 

condition (not dollar values) of stewardship 

assets. Stewardship assets are property 

entrusted to or owned by the Federal 

government for the long-term benefit of 

the Nation (such as public land). The 

government is charged with safeguarding 

and maintaining these assets. Valuation 

would be extremely difficult in most 

cases. Expenditures for stewardship assets 

are included as part of net cost on the 

Consolidated Statements of Net Cost of 

Operations.

• Required Supplementary Information—

Deferred Maintenance Report: This 

report displays the estimated dollar value of 

maintenance that was not performed when 

scheduled, and that has been delayed to a 

future period, for general property, plant, 

and equipment and for stewardship assets. 

Deferred maintenance includes preventive 

maintenance, normal repairs, replacement of 

parts and structural components, and other 

activities needed to preserve the asset so that 

it continues to provide acceptable services 

and achieves its expected life.

• Required Supplementary Stewardship 

Information—Investment in Research and 

Development Report: This report provides 

an overview of the BLM’s investment in 

research and development activities that 

support the management of our Nation’s 

public lands and resources. It details 

both new and continuing research and 

development activities.

The BLM believes the financial statements 

are a fair and accurate presentation of its 

financial position, net cost of operations, 

changes in net position, budgetary resources, 

and custodial activity, as well as details 

regarding financing. This is reflected in the 

unqualified (clean) audit opinion rendered 

on the BLM’s financial statements by its 

independent auditors. Sound financial 

management is a top priority for the BLM at all 

levels of the organization.

Limitations of the Financial Statements

The financial statements have been 

prepared pursuant to the requirements of 

the Chief Financial Officers Act of 1990. 

While the financial statements have been 

prepared from the BLM’s books and records 

in accordance with guidance issued by the 

Federal Accounting Standards Advisory Board 

(FASAB) and guidelines provided by the Office 

of Management and Budget, the financial 

statements may differ from financial reports 

used to monitor and control budgetary resources 

that are prepared from the same BLM books 

and records.

The financial statements should be read with 

the realization that they are for a component 

of a sovereign entity, that liabilities not covered 

by budgetary resources cannot be liquidated 

without enactment of an appropriation, and that 

payment of all liabilities other than for contracts 

can be abrogated by the sovereign entity.

Significant Financial Statement Events 

The BLM was involved in financial 

transactions during the year that resulted in 

significant changes in various line items on the 

financial statements between Fiscal Year (FY) 

2006 and FY 2005:

• The Southern Nevada Public Land 

Management Act (SNPLMA), enacted 
38 BLM 2006 Annual Report

Management‘s Discussion and Analysis

in October 1998, authorizes the BLM to 

sell public land tracts that are interspersed 

with or adjacent to private land in the Las 

Vegas Valley. The BLM is authorized to 

invest 85 percent of the sales in interestbearing Treasury securities, while 10 

percent of the proceeds go to the Southern 

Nevada Water Authority and 5 percent 

goes to the State of Nevada’s Education 

Fund. The revenues generated from the 

land sales and investments enable the BLM 

and other government entities to acquire 

environmentally sensitive lands and build or 

maintain trails, day-use areas, campgrounds, 

etc., to benefit public land visitors. Each 

year, the revenue generated from these land 

sales has significantly increased. As of the 

end of FY 2005, the BLM maintained $1.7 

billion in investments related to SNPLMA 

land sales. During FY 2006, the Bureau 

collected $783 million in cash receipts 

related to land sales and interest revenue. 

These collections, less expenses within the 

fund, created a $2.3 billion investment 

balance related to the SNPLMA at the end 

of FY 2006.

• When the BLM conducts SNPLMA 

land sales, a 20 percent down payment is 

collected from each successful bidder to hold 

a land parcel. These collections are reported 

as deferred revenue until the sale becomes 

final. Successful bidders typically have 

180 days from the sale date to finalize the 

land transaction and pay the remaining 80 

percent. All SNPLMA land sales during FY 

2005 were finalized prior to the end of the 

fiscal year; therefore, there was no deferred 

revenue. Land sales during the second half 

of FY 2006 resulted in the BLM reporting 

$1.8 million in deferred revenue as of 

September 30, 2006. 

• The BLM sells oil and gas leases, coal 

leases, and other types of minerals leases. 

The BLM receives bid deposits on these 

lease sales and records them as a liability 

while they await adjudication. Once 

the adjudication process is complete, the 

deposits are either refunded or combined 

with additional receipts, which represents 

custodial activity, and transferred to the 

Minerals Management Service (MMS). 

During FY 2005, the BLM transferred 

$610 million to the MMS and as of 

September 30, 2005, had recorded a 

liability of $57.6 million for leases not yet 

adjudicated. During FY 2006, the BLM 

transferred $293 million to the MMS and 

as of September 30, 2006, had recorded 

a liability of $441,000 for leases not yet 

adjudicated.

• The Department of the Interior’s FY 2006 

appropriation bill moved the management 

of the HAZMAT fund from the BLM to 

the Department’s Office of the Secretary 

(OS) effective October 1, 2005. As a result, 

the BLM removed financial records related 

to the parent account of HAZMAT from 

its accounting system, including FY 2006 

beginning balances. Conversely, the Office 

of the Secretary placed these records into its 

accounting system and began managing the 

HAZMAT fund on October 1, 2005.

The BLM’s Net Position at the end of 

FY 2006 was approximately $2.7 billion, 

an increase of approximately $900 million 

compared to FY 2005. The BLM’s Net Position 

consists of two components: (1) Unexpended 

Appropriations of approximately $505 million 

and (2) Cumulative Results of Operations of 

approximately $2.2 billion. The increase in the 

BLM’s overall Net Position can be attributed 

mostly to the SNPLMA land sales, as noted 

above.
BLM 2006 Annual Report 39

FINANCIAL

STATEMENTS
40 BLM 2006 Annual Report

Financial Statements

2006 2005

Assets (Note 2):

 Intragovernmental:

 Fund Balance with Treasury (Note 3) $1,200,472 $1,064,535 

 Investments, Net (Note 4) 2,361,520 1,749,803

 Accounts Receivable (Note 5) 16,081 15,388 

 Other:

 Advances and Prepayments 718 1,277

 Total Intragovernmental 3,578,791 2,831,003

 Cash in Imprest Funds 54 56 

 Accounts Receivable, Net (Note 5) 10,570 10,367

 Inventory and Related Property (Note 6) 279,425 304,378 

 General Property, Plant, and Equipment, Net (Note 7) 410,097 388,933

 Other:

 Travel Advances 108 77

Total Assets (Note 8) $4,279,045 $3,534,814 

 Stewardship Land and Heritage Assets (Note 9)

Liabilities and Net Position:

Liabilities (Note 10):

 Intragovernmental:

 Accounts Payable $ 48,387 $ 38,981

 Debt to Treasury (Note 11) 914,204 1,074,204 

 Other:

 Accrued Payroll and Benefits 3,305 3,208 

 Custodial Liabilities 279 57,519 

 Undistributed Collections 108,989 93,802 

 Deferred Revenue 7,530 9,949

 Unfunded Payroll Liabilities (Note 12) 23,082 22,129 

 Due to Treasury Judgment Fund 12,253 12,253

 Total Intragovernmental 1,118,029 1,312,045 

 Accounts Payable 36,353 37,365 

 Environmental and Disposal Liabilities (Note 13) 1,721 3,491

 Federal Employee Benefits - FECA Actuarial Liability 94,915 94,971

 Other:

 Accrued Payroll and Benefits 30,307 29,466 

 Custodial Liabilities 162 65

 Secure Rural Schools Act Payable 106,719 106,810 

 Deposit Funds (Note 14) 131,401 102,889

 Deferred Revenue 1,802 – 

 Unfunded Annual Leave 56,695 57,466 

 Contingent Liabilities (Note 13) 2,465 1,465 

Total Liabilities 1,580,569 1,746,033

 Commitments and Contingencies (Notes 13 and 15)

Net Position:

 Unexpended Appropriations - Earmarked Funds (Note 16) 6,268 471,557

 Unexpended Appropriations - Other Funds 498,309 –

 Cumulative Results of Operations - Earmarked Funds (Note 16) 1,848,762 1,317,224

 Cumulative Results of Operations - Other Funds 345,137 –

 Net Position 2,698,476 1,788,781

Total Liabilities and Net Position $4,279,045 $3,534,814

The accompanying notes are an integral part of these financial statements.

Consolidated Balance Sheets 

as of September 30, 2006 and 2005

(dollars in thousands)
BLM 2006 Annual Report 41

Financial Statements

Consolidated Statements of Net Cost of Operations 

for the Fiscal Years Ended September 30, 2006 and 2005

(dollars in thousands)

2006 2005

Resource Protection

 Total Cost $ 345,807 $ 363,292 

 Less: Total Earned Revenue 846,960 1,225,722 

 Net (Revenue) (501,153) (862,430)

Resource Use

 Total Cost 383,135 346,186 

 Less: Total Earned Revenue 299,518 220,234 

 Net Cost 83,617 125,952 

Recreation

 Total Cost 144,800 184,000 

 Less: Total Earned Revenue 27,749 16,909 

 Net Cost 117,051 167,091

Serving Communities

 Total Cost 1,226,209 1,292,316 

 Less: Total Earned Revenue 166,719 264,935 

 Net Cost 1,059,490 1,027,381

Total

 Total Cost (Note 17) 2,099,951 2,185,794 

 Less: Total Earned Revenue 1,340,946 1,727,800 

 Net Cost of Operations (Notes 18) $ 759,005 $ 457,994 

The accompanying notes are an integral part of these financial statements.
42 BLM 2006 Annual Report

Financial Statements

Consolidated Statements of Changes in Net Position 

for the Fiscal Years Ended September 30, 2006 and 2005

(dollars in thousands)

Earmarked

(Note 16) All Other 2006 2005

Unexpended Appropriations:

Balances, Beginning of Year $ 7,414 $ 464,143 $ 471,557 $ 461,141

Change in Central HAZMAT Ownership 

 (Note 19) - (1,789) (1,789) - 

Balances, Beginning of Year, as Adjusted 7,414 462,354 469,768 461,141

Budgetary Financing Sources:

Appropriations Received, General Funds 105,974 1,854,350 1,960,324 1,931,631

Appropriations Used (107,120) (1,523,257) (1,630,377) (1,541,145)

Appropriations Transferred In/(Out), Net - (268,872) (268,872) (354,432)

Other Adjustments - (26,266) (26,266) (25,638)

Total Budgetary Financing Sources (1,146) 35,955 34,809 10,416 

Balances, End of Year $6,268 $ 498,309 $ 504,577 $ 471,557

Cumulative Results of Operations:

Balances, Beginning of Year $1,013,264 $ 303,960 $1,317,224 $ 189,694 

Change in Central HAZMAT Ownership 

 (Note 19) - (4,401) (4,401) - 

Change in Accounting Principle (Note 20) (2,765) - (2,765) - 

Balances, Beginning of Year, as Adjusted $1,010,499 $ 299,559 $1,310,058 $ 189,694 

Budgetary Financing Sources:

Appropriations Used 107,120 1,523,257 1,630,377 1,541,145 

Royalties Retained 68,609 3,210 71,819 81,409 

Transfers In/(Out) Without Reimbursement, Net (16,285) (121,434) (137,719) (115,127)

Other Budgetary Financing Sources (10) 33 23 (152)

Other Financing Sources:

Imputed Financing from Costs Absorbed by 

Others (Note 20 and 21) 5,916 73,750 79,666 79,870 

Transfers In/(Out) Without Reimbursement, Net 19,046 (20,366) (1,320) (1,621)

Total Financing Sources 184,396 1,458,450 1,642,846 1,585,524 

Net Cost of Operations 653,867 (1,412,872) (759,005) (457,994)

Net Change in Cumulative Results of 

Operations 838,263 45,578 883,841 1,127,530 

Balances, End of Year $1,848,762 $ 345,137 $2,193,899 $1,317,224 

The accompanying notes are an integral part of these financial statements.
BLM 2006 Annual Report 43

Financial Statements

2006 2005

(Note 22)

Budgetary Resources:

Unobligated Balance, Beginning of Year $ 1,224,088 $ 877,799 

Change in Central HAZMAT Ownership (Note 19) (4,286) - 

Recoveries of Prior Year Unpaid Obligations 127,895 72,282 

Budget Authority:

Appropriations Received 3,031,047 3,307,411

Spending Authority from Offsetting Collections:

Earned:

Collected 329,397 266,032 

Receivable from Federal Sources 1,775 3,765 

Change in Unfilled Customer Orders:

Advance Received (2,404) (6,625)

Without Advance from Federal Sources 4,754 (5,113)

Total Budget Authority 3,364,569 3,565,470 

Nonexpenditure Transfers, Net 92,482 (6,963)

Permanently Not Available Pursuant to Public Law (26,395) (25,795)

Total Budgetary Resources $ 4,778,353 $ 4,482,793

Status of Budgetary Resources:

Obligations Incurred:

Direct $ 2,776,452 $ 3,175,597

Reimbursable 86,352 83,108 

Total Obligations Incurred 2,862,804 3,258,705 

Unobligated Balance Available, Apportioned 1,915,549 1,224,069 

Unobligated Balance Not Available - 19 

Total Status of Budgetary Resources $ 4,778,353 $ 4,482,793

Change in Obligated Balance:

Obligated Balance, Net:

Obligations, Beginning of Year $ 1,506,737 $ 914,884 

Change in Central HAZMAT Ownership (Note 19) (20,073) - 

Less: Uncolleted Customer Payments from Federal Sources,

 Beginning of Year (41,634) (42,983)

Total Obligated Balances, Net, Beginning of Year (Note 19) 1,445,030 871,901

Obligations Incurred, Net 2,862,804 3,258,705 

Less: Gross Outlays (2,672,615) (2,594,569)

Less: Recoveries of Prior Year Unpaid Obligations (127,896) (72,282)

Change in Uncollected Customer Payments from Federal Sources (6,529) 1,348 

Total Obligated Balance, Net, End of Year $ 1,500,794 $ 1,465,103

Obligated Balance, Net, End of Year:

Unpaid Obligations $ 1,548,957 $ 1,506,737

Less: Uncollected Customer Payments from Federal Sources (48,163) (41,634)

Total Obligated Balance, Net, End of Year $ 1,500,794 $ 1,465,103

Net Outlays:

Net Outlays

Gross Outlays $ 2,672,615 $ 2,594,569 

Less: Offsetting Collections (326,993) (259,407)

Less: Distributed Offsetting Receipts (1,371,828) (1,478,385)

Net Outlays $ 973,794 $ 856,777

The accompanying notes are an integral part of these financial statements.

Combined Statements of Budgetary Resources 

for the Fiscal Years Ended September 30, 2006 and 2005

(dollars in thousands)
44 BLM 2006 Annual Report

Financial Statements

Consolidated Statements of Financing 

for the Fiscal Years Ended September 30, 2006 and 2005

(dollars in thousands)

2006 2005

Resources Used to Finance Activities:

Budgetary Resources Obligated:

Obligations Incurred $ 2,862,804 $ 3,258,705

Spending Authority from Offsetting Collections and Recoveries (461,418) (330,341)

Obligations Net of Offsetting Collections and Recoveries 2,401,386 2,928,364 

Offsetting Receipts (1,371,828) (1,478,385)

Net Obligations 1,029,558 1,449,979 

Other Resources:

Transfers In/(Out) Without Reimbursement, Net (1,320) (1,621)

Imputed Financing From Costs Absorbed by Others (Note 21) 79,666 79,870 

Net Other Resources Used to Finance Activities 78,346 78,249 

Total Resources Used to Finance Activities 1,107,904 1,528,228 

Resources Used to Finance Items Not Part of the Net Cost of Operations:

Change in Budgetary Resources Obligated for Goods and

Services Ordered But Not Yet Provided (47,936) (575,780)

Resources That Fund Expenses Recognized in Prior Periods (160,446) (65,176)

Offsetting Receipts Not Part of the Net Cost of Operations 306,048 (47,892)

Resources That Finance the Acquisition of Assets (27,900) (48,669)

Allocation Transfer Reconciling Item, Parent Accounts (Note 23) (406,972) (347,611)

Other Resources That Did Not Affect Net Cost of Operations (35,507) (23,084)

Total Resources Used to Finance Items Not Part of the Net Cost of Operations (372,713) (1,108,212)

Total Resources Used to Finance the Net Cost of Operations 735,191 420,016 

Components of the Net Cost of Operations That Did Not Require or

Generate Resources in the Current Period:

Components Requiring or Generating Resources in Future Periods:

Increase in Annual Leave Liability - 1,206 

Increase in Environmental Cleanup Liability - 1,628 

Increase in Other Unfunded Liabilities 1,807 6,643

(Increase)/Decrease in Exchange Revenue Receivable from the 

Public (724) - 

Total Components Requiring or Generating Resources in Future Periods 1,083 9,477

Components Not Requiring or Generating Resources:

Depreciation and Amortization 15,659 22,872 

Revaluation of Assets or Liabilities (242) (187)

Allocation Transfer Reconciling Item, Child Accounts (Note 23) 6,407 2,855 

Bad Debt Expense 907 2,961

Total Components Not Requiring or Generating Resources 22,731 28,501

Total Components of the Net Cost of Operations That Did Not Require or

Generate Resources in the Current Period 23,814 37,978 

Net Cost of Operations $ 759,005 $ 457,994

The accompanying notes are an integral part of these financial statements.
BLM 2006 Annual Report 45

Financial Statements

Consolidated Statements of Custodial Activity 

for the Fiscal Years Ended September 30, 2006 and 2005

(dollars in thousands)

2006 2005

Mineral Lease Revenue:

Rents and Bonuses $241,133 $597,024 

Total Revenue $241,133 $597,024 

Disposition of Revenue:

Distribution to Department of the Interior:

Minerals Management Service $292,714 $610,078 

Bureau of Reclamation 2,747 1,082 

Distribution to Other Federal Agencies:

Department of the Treasury 679 274 

Distribution to States 2,135 1,382 

Change in Untransferred Revenue (57,142) (15,792)

Total Disposition of Revenue $241,133 $597,024 

The accompanying notes are an integral part of these financial statements.
46 BLM 2006 Annual Report

Financial Statements

Note 1 - Summary of Significant Accounting Policies

A. Reporting Entity

The Bureau of Land Management (BLM or Bureau), a bureau of 

the Department of the Interior (DOI or Department), was established 

on July 16, 1946, through the consolidation of the General Land 

Office and the Grazing Service in accordance with the provisions of 

Sections 402 and 403 of the President’s Reorganization Plan No. 3 

of 1946 (60 Stat. 1097). The BLM’s functions are set forth in the 

Federal Land Policy and Management Act of 1976 (P.L. 94-579).

On March 12, 1996, the Department’s Helium Operations were 

transferred from the U.S. Bureau of Mines to the BLM. This was 

done under the authority of Section 2 of Reorganization Plan No. 3 

of 1950 (64 Stat. 1262), as amended. The helium production fund 

was established by the Helium Act (50 U.S.C. 10), enacted March 3, 

1925, and amended by the Helium Act Amendments of 1960 (P.L. 

86-777).

In fulfilling its mission, the BLM administers a variety of funds:

1. General Funds: These funds consist of expenditure accounts 

used to record financial transactions arising from Congressional 

appropriations as well as receipt accounts. The principal general fund 

expenditure accounts maintained are:

a. Management of Lands and Resources

b. Wildland Fire Management

c. Oregon and California Grant Lands

2. Special Funds: The BLM maintains both special fund 

receipt accounts and special fund expenditure accounts. Collections 

made into special fund expenditure accounts are available receipts 

and are considered to be the BLM’s revenue. Collections made into 

special fund receipt accounts are earmarked by law for a specific 

purpose but are not generated from a continuing cycle of operations. 

Receipts are deposited as collected. Funds deposited into special 

fund receipt accounts typically arise from sales of public lands and 

materials, sales of timber, fees and commissions, mineral leases, and 

other charges for services provided by the BLM to users of the public 

lands. Amounts deposited into special fund receipt accounts are 

subject to various distribution formulas as specified by law.

NOTES TO

PRINCIPAL

FINANCIAL

STATEMENTS
BLM 2006 Annual Report 47

Financial Statements

3. Revolving Funds: This type of fund 

is used to finance and manage a continuous 

cycle of business-type operations. The BLM 

maintains a Working Capital Fund (WCF) as a 

single administrative unit established to finance 

and account for services and commodities 

furnished to various program activities. The 

WCF was established in 1978 under Section 306 

of the Federal Land Policy and Management 

Act of 1976 (Public Law 94-579) with an 

initial investment of $2 million in appropriated 

funds. Since that time, additional equity has 

been provided through intragovernmental 

transfers or donations of inventories, capital 

equipment, and other assets. Transfers or 

donations are made without reimbursement to 

the donating activity. All additional income to 

the WCF has been generated through charges 

to the BLM’s programs or other government 

agencies. The services provided by the WCF 

include motor vehicles, stores, a sign shop, a 

Departmental forms center, and the collection 

and disbursement of receipts from surface 

management of the Naval Oil Shale Reserve 

under an October 2, 1987, memorandum of 

understanding with the Department of Energy. 

In addition, the WCF provides funding for 

travel advances and change-making funds held 

by imprest fund cashiers.

In addition to the WCF, Helium Operations 

are funded through a public enterprise revolving 

fund. This fund was established with monies 

from the U.S. Treasury to manage the Federal 

helium program, which includes helium 

production, storage, conservation, and sales 

activities. Funding for current management 

of this program is provided by sales of 

helium. Helium production and refining were 

discontinued on April 1, 1998, pursuant to the 

Helium Privatization Act of 1996 (P.L. 104-

273). However, crude helium storage and sales 

from the helium stockpile will continue through 

January 1, 2015.

4. Trust Funds: The BLM maintains two 

trust accounts to carry out specific programs 

under trust agreements and statutes. The 

Land and Resource Management Trust Fund 

contains monies contributed by non-Federal 

organizations for resource development, 

protection, and management; conveyance of 

lands omitted in original surveys; and public 

surveys requested by individuals. The Alaska 

Townsite Trustee Fund receives money from the 

sale of town lots to non-Natives and is available 

to cover the expenses involved in selling and 

maintaining town sites.

5. Deposit Funds: These funds are 

maintained to account for receipts awaiting 

proper classification or receipts held in escrow 

until ownership is established, at which time 

proper distribution can be made. Refer to 

Note 14.

B. Basis of Accounting and Presentation

These financial statements have been 

prepared to report the financial position, net 

cost of operations, changes in net position, 

budgetary resources, reconciliation of 

budgetary resources to net costs, and custodial 

activity of the BLM in accordance with the 

Chief Financial Officers Act of 1990 and 

the Government Management Reform Act 

of 1994. The financial statements have been 

prepared from the BLM’s financial records 

in accordance with Generally Accepted 

Accounting Principles (GAAP) in the United 

States of America using guidance issued by the 

Federal Accounting Standards Advisory Board 

(FASAB) and the Office of Management and 

Budget (OMB); the BLM accounting policies 

that are summarized in this note have also been 

followed. These financial statements include all 

funds and accounts under the BLM’s control, 

as well as allocations from other Federal agency 

appropriations transferred to the BLM under 

specific legislative authority.
48 BLM 2006 Annual Report

Financial Statements

OMB reporting guidelines require that 

all of the financial statements, and the related 

footnotes, be presented on a comparative basis, 

including balances and amounts for the current 

year and prior year. Certain prior year amounts 

have been reclassified to conform to the currentyear presentation.

The accounting structure of Federal 

Government agencies is designed to reflect both 

accrual and budgetary accounting transactions. 

Under the accrual method of accounting, 

revenues are recognized when earned and 

expenses are recognized when incurred, without 

regard to the receipt or payment of cash. The 

budgetary accounting principles, on the other 

hand, are designed to recognize the obligation 

of funds according to legal requirements, which 

in many cases occurs before an accrual-based 

transaction takes place. The recognition of 

budgetary accounting transactions is essential 

for compliance with legal constraints and 

controls over the use of Federal funds. 

Intragovernmental assets and liabilities arise 

from transactions with other Federal agencies. 

Except for the Statements of Budgetary 

Resources and portions of the Statements of 

Financing, all statements are presented on a 

consolidated basis and use eliminating entries 

to avoid overstatement of balances caused 

by intrabureau transactions. Significant 

intrabureau balances and transactions have been 

eliminated in consolidation.

The financial statements should be 

read with the realization that they are for a 

component of the United States Government, 

a sovereign entity. One implication of this is 

that liabilities cannot be liquidated without 

legislation that provides the resources and legal 

authority to do so.

C. Revenues and 

Other Financing Sources

The BLM receives most of the funding 

needed to support its programs through 

appropriations authorized by Congress. 

The Bureau receives annual and no-year 

appropriations that may be used, within 

statutory limits, for operating and capital 

expenditures. Additional amounts are obtained 

through reimbursements for services performed 

for other Federal agencies, state and local 

governments, and the private sector. These 

revenues may be used to offset the cost of 

producing products or furnishing services, and 

to recover overhead costs. Finally, the BLM 

receives imputed financing from the Office of 

Personnel Management (OPM) for current and 

future pension and retirement benefits paid 

by OPM on behalf of the BLM; the DOI for 

costs incurred by its Solicitor’s Office; and the 

U.S. Department of the Treasury (Treasury) 

Judgment Fund for payment of any settlements 

resulting from litigation against the BLM.

Receipts either are available to the BLM 

for expenditure or are received by the BLM on 

behalf of others and then passed on to Treasury 

or distributed to other governmental agencies. 

Transfers of receipts to Treasury and others are 

reported on the accrual basis. That portion 

of the transfers that will not be disbursed 

until subsequent fiscal years is included in 

undistributed collections.

The Southern Nevada Public Land 

Management Act (SNPLMA), enacted in 

October 1998, authorizes the BLM to sell public 

land tracts that are interspersed with or adjacent 

to private land in the Las Vegas Valley. The 

BLM is authorized to invest 85 percent of the 

sales in interest-bearing Treasury securities, 

while 10 percent of the proceeds are forwarded 

to the Southern Nevada Water Authority and 

5 percent to the State of Nevada’s Education 

Fund. The revenues generated from the land 

sales and investments enable the BLM and other 

government entities to acquire environmentally 

sensitive lands and build or maintain trails, dayuse areas, campgrounds, etc., to benefit public 

visitors.
BLM 2006 Annual Report 49

Financial Statements

Helium fund sales are authorized by 

Chapter 10 of Title 50 of the United States 

Code, enacted March 3, 1925, as amended by 

Public Law 86-777, dated September 13, 1960, 

entitled “Helium Act Amendments of 1960.” 

Amounts accumulating in the fund in excess of 

amounts the Secretary deems necessary to carry 

out the Helium Act and contracts negotiated 

thereunder are paid to Treasury and credited 

against any amounts borrowed from Treasury.

The Helium Privatization Act of 1996 

(Public Law 104-273), enacted October 9, 1996, 

directs the privatizing of the Department of the 

Interior’s Federal Helium Refining Program. 

Under this law, Interior ceased producing, 

refining, and marketing refined helium as of 

April 1, 1998. However, Interior is authorized 

to store, transport, and withdraw crude helium 

and maintain and operate crude helium storage 

facilities in existence on the date of enactment. 

The Department may also enter into agreements 

with private parties for the recovery and disposal 

of helium on Federal lands and may grant 

leasehold rights to this helium. The sale of 

stockpile crude helium began in March of 2003 

and will continue until January 1, 2015.

The helium fund is authorized to retain all 

receipts, which include, but are not limited to, 

the sale of inventory, penalties, interest, and 

administrative charges on past due receivables 

and proceeds from the sale of its assets. Fees, 

penalties, interest, and administrative charges 

are credited to a revenue account and are 

recorded as a financing source.

D. Fund Balance with Treasury and Cash

The BLM’s receipts and disbursements 

are processed by Treasury. Fund Balance with 

Treasury includes appropriated, revolving, and 

trust funds that are available to pay current 

liabilities and finance authorized purchase 

commitments. Also included are various other 

receipt and expenditure funds. Cash balances 

held outside of Treasury are imprest funds. 

No cash is held in commercial bank accounts. 

Further details on Fund Balance with Treasury 

are contained in Note 3.

E. Investments

The BLM is authorized to invest in special 

non-marketable par value and market-based 

book entry Treasury securities. These securities 

include U.S. Treasury bills, notes, bonds, and 

one-day certificates that may be purchased 

and sold as necessary to meet operating needs 

and legislated requirements. The BLM invests 

in securities of the U.S. Treasury pursuant to 

authorizing legislation for three accounts: the 

proceeds of certain land sales as authorized 

by either the Southern Nevada Public Land 

Management Act enacted in October 1998, 

or the Lincoln County Land Act enacted in 

October 2000; and the proceeds of certain oil 

and gas lease sales authorized by the Alaska 

Native Claims Settlement Act and the Alaska 

National Interest Lands Conservation Act, 

as amended July 17, 2000. Note 4 provides 

investment details.

F. Accounts Receivable

Accounts receivable consist of amounts 

owed to the BLM by other Federal agencies 

and the public. Amounts due from the 

public are stated net of an allowance for 

uncollectible accounts that is based on an 

analysis of outstanding receivable balances and 

past collection experience. No allowance is 

established for intragovernmental receivables, as 

they are considered fully collectible from other 

Federal agencies. See Note 5 for additional 

information concerning accounts receivable.
50 BLM 2006 Annual Report

Financial Statements

G. Inventory, Gas and Storage Rights, 

and Stockpile Materials

The helium inventory is stored in a partially 

depleted natural gas reservoir and is valued 

at cost. The cost to purchase the helium was 

$12.058 per Mcf (one thousand standard cubic 

feet). The volume of helium is accounted for 

on a perpetual inventory basis. Each year, 

the amount of helium is verified by collecting 

reservoir data and using generally accepted 

petroleum engineering principles to calculate 

the volume. The calculated volumes support 

the volume carried in the inventory. At a 

reservoir abandonment pressure of 100 psia 

(pounds per square inch absolute), 85 percent of 

the helium reserve is deemed recoverable. The 

amount of helium that is eventually recovered 

will depend on the future price of helium and 

the ability to control the mixing of native gas 

and helium. The values shown for helium are 

net of the estimated unrecoverable amount, so 

no allowance is required. Gas and storage rights 

for the storage of helium are recorded at cost. 

The Working Capital Fund inventory 

consists of items that will be consumed in future 

operations. This inventory is held for use in the 

BLM’s resource management programs and is 

also maintained for sign construction, employee 

uniforms, and the DOI forms function. 

Inventory is stated at cost using the weighted 

average cost method.

Except for Helium Operations, which 

includes helium and natural gas, the BLM’s 

inventory is not held for sale, nor is any of the 

inventory balance held in reserve for future 

use or sale. There is no excess, obsolete, or 

unserviceable inventory, nor is there any 

inventory held for repair. The BLM does not 

hold any other related property, including 

forfeited property, foreclosed property, seized 

property, commodities, or stockpile materials. 

Note 6 provides more information on the BLM’s 

inventory and related property.

H. General Property, Plant, and 

Equipment

This category consists of land and land 

improvements; buildings; other structures and 

facilities; leasehold improvements; construction 

in progress; equipment and vehicles; and 

internal use software.

Statement of Federal Financial Accounting 

Standards (SFFAS) No. 6, Accounting for 

Property, Plant, and Equipment; SFFAS No. 

8, Supplementary Stewardship Reporting; and 

SFFAS No. 29, Heritage Assets and Stewardship 

Land recommend different accounting 

treatments for different types of property, 

plant, and equipment (PP&E), and provide 

for a distinction between general PP&E and 

stewardship PP&E. The former are PP&E 

used to provide general government services 

or goods. The latter include stewardship 

land—all land held by the Federal government 

that is not acquired for or in connection with 

an item of general PP&E—and heritage assets, 

including PP&E that have historical or natural 

significance.

SFFAS No. 10, Accounting for Internal Use 

Software, provides accounting standards for 

internal use software utilized by each agency. 

Internal use software includes purchased 

commercial off-the-shelf software, contractordeveloped software, and internally developed 

software using agency employees.

The standards provide for capitalized 

property to continue to be reported on 

the Balance Sheets. PP&E that are not 

capitalized—because they are under the 

capitalization threshold, or because they are 

stewardship PP&E—are expensed in the year of 

acquisition. The standards require a disclosure 

in the notes to the principal financial statements 

(see Note 9), as well as a separate stewardship 

report, to provide relevant information 

regarding stewardship PP&E. The stewardship 

report can be found following the section on 

Financial Statements.
BLM 2006 Annual Report 51

Financial Statements

Capitalized property and equipment are 

recorded as follows:

1. The Department established a 

Departmentwide capitalization threshold 

effective October 1, 2003. As a result, 

general PP&E real property is capitalized 

at cost if the aggregate cost of the building, 

structure, or facility is $100,000 or more. 

An administrative site may contain more 

than one building, structure, or facility, but 

it is always bounded by a defined perimeter 

or an established boundary.

Acquired land associated with capitalized 

assets is recorded separately from the 

structures, facilities, and improvements. 

Structures such as buildings that are used by 

the BLM but administered by the General 

Services Administration or other Federal 

agencies are not recognized as BLM assets.

2. Leasehold improvements consist of costs 

incurred in building structures on land 

owned by third parties, subject to long-term 

lease arrangements. Facilities are capitalized 

at cost if the aggregate cost is $100,000 or 

more and the remaining term of the lease is 

2 years or more.

3. Costs are accumulated in a constructionin-progress account for capitalized general 

PP&E under construction or being acquired 

in incremental stages until the property is 

completed or totally acquired. At that time, 

the property is transferred to the appropriate 

asset account(s).

4. Equipment and vehicles are capitalized at 

cost if the acquisition cost is $15,000 or 

more and the estimated useful life is 2 years 

or more.

5. Software is capitalized at cost if the 

acquisition cost is $100,000 or more and the 

estimated useful life is 2 years or more.

Depreciation of general PP&E real property 

is based on a useful life of 15 to 30 years for 

land improvements, 30 years for buildings, 

and 20 years for structures. The salvage 

value of general PP&E real property is zero.

Amortization of leasehold improvements is 

calculated based on the remaining term of 

the lease, with zero salvage value.

Depreciation of WCF vehicles and heavy 

equipment is based on useful lives ranging 

from 2 to 20 years and a 20 to 60 percent 

salvage value.

Depreciation of non-WCF equipment is 

based on useful lives of up to 20 years, with 

a salvage value of 10 to 20 percent.

Amortization of software is based on a 

useful life of 5 years, with zero salvage value.

Depreciation and amortization of all general 

property, plant, and equipment is calculated 

on the straight-line method.

The basis for capitalization of donated 

property and equipment is the estimated fair 

market value.

Information on general property, plant, and 

equipment values is found in Note 7.

I. Liabilities

Liabilities represent the amount of monies 

or other resources that are likely to be paid 

by the BLM as the result of transactions or 

events that have already occurred. However, 

no liability can be paid by the BLM absent 

an appropriation. Liabilities for which an 
52 BLM 2006 Annual Report

Financial Statements

appropriation has not been enacted are, 

therefore, classified in these notes as liabilities 

not covered by budgetary resources, with 

no certainty that the appropriations will be 

enacted. See Note 10. In addition, BLM 

liabilities arising from sources other than 

contracts can be abrogated by the Government, 

acting in its sovereign capacity.

Accrued payroll and benefits represent 

salaries and benefits earned by employees but 

not yet paid at the close of the fiscal year. The 

portion of this liability representing accrued 

employer benefit and payroll tax expense payable 

to other governmental agencies is shown as an 

intragovernmental liability; the remainder is the 

amount owed to employees.

Undistributed collections are amounts 

held in unavailable special receipt funds 

at year-end. Amounts collected into these 

funds and reported as revenue are subject to 

distribution based on formulas specified in 

various authorizing pieces of legislation. The 

distributions occur at various times during the 

year or in subsequent years, in accordance with 

the terms of the legislation. The undistributed 

collections, which are principally due to 

Treasury, are considered a current liability.

Congress has established the Department 

of the Treasury Judgment Fund, a permanent, 

indefinite appropriation, to pay certain judicially 

and administratively ordered monetary awards 

against the United States. The Judgment Fund 

may also pay amounts owed under compromise 

agreements negotiated by the Department of 

Justice in settlement of claims arising under 

actual or imminent litigation. The Judgment 

Fund bills agencies for amounts paid under 

the Contract Disputes Act, while it pays other 

amounts without expectation of reimbursement. 

The BLM records a liability for the former and 

records an imputed cost and financing source 

for the latter. See Note 21 for further discussion 

of imputed amounts.

Debt to Treasury is a liability of the helium 

fund. Borrowings occurred at various dates. 

Amounts borrowed became due 25 years from 

the date the funds were borrowed and are now 

past due. The debt to Treasury was composed 

of two categories: net worth debt and additional 

borrowing from Treasury. Net worth debt 

was completely repaid in FY 2003; the only 

remaining principal due to Treasury is the 

additional borrowing from Treasury.

Net worth debt was the amount due for 

the net capital and retained earnings of the 

helium fund established under 50 U.S.C. 10, 

Section 164, enacted March 3, 1925 (prior to 

amendment by the Helium Act Amendments 

of 1960), as determined by the Secretary of 

the Interior as of September 13, 1960, plus any 

monies expended thereafter by the Department 

of the Interior from funds provided in the 

Supplemental Appropriation Act, 1959, for 

construction of a helium plant at Keyes, 

Oklahoma.

Additional borrowing from Treasury 

referred to funds borrowed under 50 U.S.C. 

10, Section 167j, which authorized borrowings 

to acquire and construct helium plants and 

facilities and for other related purposes 

including the purchase of helium. 

Interest on the helium debt that has not 

been repaid to Treasury is compounded. While 

the debt was current, interest was calculated 

annually at rates determined by the Secretary 

of the Treasury, taking into consideration the 

current average market yields of outstanding 

marketable obligations of the United States 

having maturities comparable to the investments 

authorized. The interest rate on the net capital 

and retained earnings was determined as of 

September 13, 1960, and the interest rate on 

additional borrowing was determined as of the 

time of each borrowing. The U.S. Treasury 

short-term borrowing rate was used to calculate 

the annual interest expense while the debt was 

past due. Since the passage of the Helium 

Privatization Act of 1996, Public Law 104-273, 

enacted October 9, 1996, no further interest 

expense has been incurred. The Act defines 
BLM 2006 Annual Report 53

Financial Statements

the amount repayable to the United States as 

all funds required to be repaid as of October 1, 

1995, with no further interest accruing on the 

debt.

Additional information on debt to Treasury 

appears in Note 11.

The Secure Rural Schools and Community 

Self Determination Act of 2000 was passed 

during FY 2001. The Act provides for increased 

payments to eligible states as compensation 

for the deprivation of revenue they would 

otherwise receive if BLM-owned lands were 

held in private ownership. Prior to this Act, 

payments to eligible states were based on a 

percentage of revenue that the BLM earned on 

these lands, which has been steadily decreasing. 

The difference between the new, increased 

payments and the prior legislated payments is 

compensated for by an appropriation from the 

Treasury General Fund. The BLM records 

an unfunded liability at each year-end for the 

amount to be appropriated in the following 

fiscal year for these payments.

Non-intragovernmental deferred revenue 

consists primarily of deposits received from 

prospective purchasers of land pursuant to the 

Southern Nevada Public Land Management 

Act. These deposits are classified as a liability 

until the sales are consummated. 

J. Accrued Leave

Amounts associated with the payment of 

annual leave are accrued while leave is being 

earned by employees, and this accrual is reduced 

as leave is taken. Each year the balance in 

the accrued annual leave account is adjusted 

to reflect current pay rates. To the extent 

that current or prior year appropriations are 

not available to finance annual leave, future 

financing sources will be used.

An accrual is also provided for the amount 

that would be due under the Federal Insurance 

Contributions Act (FICA) related to this annual 

leave. See Note 12.

Sick leave and other types of leave are 

expensed as taken because they are nonvesting 

in nature.

K. Contingent Liabilities

The BLM is a party to various 

administrative proceedings, legal actions, 

environmental suits, and claims brought by or 

against it. Contingent liabilities are recorded 

in the accounting records when losses are 

determined to be probable and a reasonable 

estimate of the scope of the potential liability 

is available. In accordance with Federal 

accounting guidance, the liability for future 

cleanup of environmental hazards is “probable” 

only when the government is legally responsible 

for creating the hazard or is otherwise related to 

it in such a way that it is legally liable to clean 

up the contamination. Thus, expected future 

payments for the cleanup of environmental 

hazards caused by others are generally classified 

as government acknowledged, which means 

they are not recognized as liabilities by the 

BLM. Instead, any BLM payments related to 

these environmental hazards are recognized in 

the financial statements as remediation work is 

performed. Further information on contingent 

liabilities is found in Note 13.

L. Federal Employee Benefits - FECA 

Actuarial Liability

The Federal Employees’ Compensation 

Act (FECA) provides income and medical 

cost protection to covered Federal civilian 

employees injured on the job, to employees 

who have incurred work-related occupational 

diseases, and to beneficiaries of employees whose 

deaths are attributable to job-related injuries 

or occupational diseases. The FECA program 

is administered by the Department of Labor 

(DOL).

The FECA actuarial liability is the 

estimated liability for future benefit payments 
54 BLM 2006 Annual Report

Financial Statements

resulting from past events. This liability 

includes death, disability, medical, and 

miscellaneous costs. The DOL determines 

this component annually, using a method that 

considers historical benefit payment patterns, 

wage inflation factors, medical inflation factors, 

and other variables. The projected annual 

benefit payments are discounted to present 

value using OMB’s economic assumptions for 

10-year Treasury notes and bonds. To provide 

for the effects of inflation on the liability, wage 

inflation factors (i.e., cost of living adjustments) 

and medical inflation factors (i.e., consumer 

price index medical adjustments) are applied 

to the calculation of projected future benefit 

payments. These factors are also used to 

adjust historical benefit payments to currentyear constant dollars. A discounting formula 

is also used to recognize the timing of benefit 

payments as 13 payments per year instead of one 

lump sum payment per year.

The DOL also evaluates the estimated 

projections to ensure that the estimated future 

benefit payments are appropriate. The analysis 

includes three tests: (1) a comparison of the 

current-year projections to the prior-year 

projections; (2) a comparison of the prior-year 

projected payments to the current-year actual 

payments, excluding any new case payments 

that had arisen during the current year; and 

(3) a comparison of the current-year actual 

payment data to the prior-year actual payment 

data. Based on the outcome of this analysis, 

adjustments may be made to the estimated 

future benefit payments.

M. Retirement Plan

The BLM’s employees participate in one 

of two retirement programs, either the Civil 

Service Retirement System (CSRS) or the 

Federal Employees Retirement Systems (FERS), 

which became effective on January 1, 1987. 

Most employees hired after December 31, 1983, 

are automatically covered by FERS and Social 

Security. Employees hired prior to January 

1, 1984, could elect to either join FERS and 

Social Security or remain in CSRS. Employees 

covered by CSRS are not subject to Social 

Security taxes, nor are they entitled to accrue 

Social Security benefits for wages subject to 

CSRS.

For FERS employees, the BLM contributes 

an amount equal to 1 percent of the employee’s 

basic pay to the tax-deferred Thrift Savings Plan 

and matches employee contributions up to an 

additional 4 percent of pay. CSRS employees 

receive no matching contributions from the 

BLM. Both FERS and CSRS employees may 

contribute any dollar amount or percentage of 

their basic pay however, the annual dollar total 

cannot exceed the Internal Revenue Code limit, 

which is $15,000 for 2006. 

The OPM is responsible for reporting assets, 

accumulated plan benefits, and unfunded 

liabilities applicable to CSRS participants and 

FERS employees governmentwide. The BLM 

has recognized an imputed cost and imputed 

financing source for the difference between the 

estimated service cost and the contributions 

made by the BLM and covered CSRS 

employees. Further information on imputed 

financing is available in Note 21.

N. Net Position

The components of Net Position are defined 

as follows:

1. Unexpended appropriations include 

undelivered orders and unobligated 

balances; the latter may include both 

available and unavailable amounts.

2. Cumulative results of operations are 

composed of (1) the difference between 

revenues and expenses, (2) the net amount 

of transfers of assets in and out without 

reimbursement, and (3) other financing 

sources, all since inception of the fund(s).
BLM 2006 Annual Report 55

Financial Statements

In accordance with SFFAS No.27, 

Identifying and Reporting Earmarked Funds, 

within each component there is an additional 

breakdown to identify earmarked funds from all 

other funds. Earmarked funds are financed by 

specifically identified revenues. These revenues 

are required by statute to be used for designated 

activities or purposes and must be accounted for 

separately from the Federal government’s other 

funds. Further details on earmarked funds are 

contained in Note 16.

O. Budgetary Collections and Offsetting 

Receipts

The BLM’s offsetting receipts are collections 

that are credited to general funds or special 

funds and that offset gross outlays. Unlike 

offsetting collections, which are credited to 

expenditure funds and offset outlays at the 

fund level, offsetting receipts are credited to 

receipt funds and offset outlays at the agency 

or governmentwide level. Offsetting receipts 

may be either distributed or undistributed to 

agencies. Distributed offsetting receipts offset 

the outlays of the BLM, while undistributed 

offsetting receipts offset governmentwide 

outlays.

P. Use of Estimates

The preparation of financial statements in 

accordance with GAAP requires management to 

make estimates and assumptions that affect the 

reported amounts of assets and liabilities and 

disclosure of contingent liabilities at the date of 

the financial statements, as well as the reported 

amounts of revenue and expenses during the 

reporting period. Actual results could differ 

from those estimates.
56 BLM 2006 Annual Report

Financial Statements

Note 2 - Entity and Non-Entity Assets

Entity assets are those that the BLM has 

the authority to use in its operations and are 

September 30, 2006: (dollars in thousands) Entity Non-Entity Total

Intragovernmental:

 Fund Balance with Treasury $ 971,364 $229,108 $1,200,472

 Investments, Net 2,322,249 39,271 2,361,520

 Accounts Receivable 16,081 - 16,081

 Other:

 Advances and Prepayments 718 - 718

Total Intragovernmental 3,310,412 268,379 3,578,791

Cash in Imprest Funds 54 - 54

Accounts Receivable, Net 8,754 1,816 10,570

Inventory and Related Property 279,425 - 279,425

General Property, Plant, and Equipment, Net 410,097 - 410,097

Other:

 Travel Advances 108 - 108

Total Assets $4,008,850 $270,195 $4,279,045

September 30, 2005: (dollars in thousands) Entity Non-Entity Total

Intragovernmental:

 Fund Balance with Treasury $ 834,224 $230,311 $1,064,535

 Investments, Net 1,712,719 37,084 1,749,803

 Accounts Receivable 15,388 - 15,388

 Other:

 Advances and Prepayments 1,277 - 1,277

Total Intragovernmental 2,563,608 267,395 2,831,003

Cash in Imprest Funds 56 - 56

Accounts Receivable, Net 8,802 1,565 10,367

Inventory and Related Property 304,378 - 304,378

General Property, Plant, and Equipment, Net 388,933 - 388,933

Other:

 Travel Advances 77 - 77

Total Assets $3,265,854 $268,960 $3,534,814

 

considered unrestricted. Non-entity assets are 

currently held by, but not available to, the BLM 

and will be forwarded to Treasury, other Federal 

agencies, or the public at a future date. Nonentity assets are considered restricted.
BLM 2006 Annual Report 57

Financial Statements

Note 3 - Fund Balance with Treasury

U.S. Government cash is accounted for on 

an overall consolidated basis by Treasury. The 

amounts shown on the Balance Sheets represent 

the BLM’s right to draw on Treasury for valid 

expenditures. The amounts consist of general 

fund receipt accounts, general fund expenditure 

accounts, special fund receipt accounts, special 

fund expenditure accounts, deposit funds, 

revolving funds, and trust funds. Refer to Note 

1(A). The fund balance as shown on the BLM’s 

records is reconciled monthly with Treasury’s 

records.

Obligated and unobligated balances 

reported for the Status of Fund Balance with 

Treasury do not agree with obligated and 

unobligated balances reported on the Statement 

of Budgetary Resources because (1) the 

budgetary balances include amounts supported 

by other than Fund Balance with Treasury, 

such as investments and allocation transfers 

(providing agency), and (2) the Fund Balance 

with Treasury amounts include items for which 

budgetary resources are not recorded, such 

as deposit funds, unavailable collections, and 

allocation transfers (receiving agency).

Additional discussion of Fund Balance with 

Treasury is presented in Note 1(D).

Fund Balances: (dollars in thousands) 2006 2005

General Funds $ 621,585 $ 583,934

Special Funds 372,834 242,344

Deposit Funds 89,841 121,491

Revolving Funds 86,824 90,201

Trust Funds 29,388 26,565

Total Fund Balance with Treasury $1,200,472 $1,064,535

Status of Fund Balance with Treasury: (dollars in thousands) 2006 2005

Fund Balance with Treasury Covered by Budgetary Resources: 

 Unobligated:

 Available $ 491,472 $ 357,356

 Unavailable - 20

 Obligated Balance Not Yet Disbursed 482,331 478,653

Total Fund Balance with Treasury Covered by Budgetary Resources 973,803 836,029

Fund Balance with Treasury Not Covered by Budgetary Resources:

 Unavailable Special Receipts 136,967 108,397

 Clearing and Deposit Accounts 89,702 120,109

Total Fund Balance with Treasury Not Covered by Budgetary Resources 226,669 228,506

Total Fund Balance with Treasury $1,200,472 $1,064,535
58 BLM 2006 Annual Report

Financial Statements

Note 4—Investments, Net

Investments consist of U.S. Treasury 

Bills that mature within six months and U.S. 

Treasury Notes that mature within two years. 

Amounts shown on the Balance Sheets are at 

cost, net of discounts and premiums that are 

amortized using the effective interest method. 

Additionally, accrued interest receivable is 

included in the net investment amount. All 

of the BLM’s investments consist of nonmarketable market-based Treasury securities. 

(dollars in thousands) 2006 2005

Cost $2,332,347 $1,734,975 

Amortized (Premiums) 

 and Discounts, Net 25,503 10,791

Net Book Value 2,357,850 1,745,766 

Accrued Interest 3,670 4,037

Investments, Net $2,361,520 $1,749,803

The market value of investments was 

$2,357,290 as of September 30, 2006, 

and $1,739,828 as of September 30, 2005. 

Additional information regarding investments 

may be found in Note 1(E).

Note 5 - Accounts Receivable, Net

The reported amount for accounts receivable 

consists of amounts owed to the BLM by other 

Federal agencies (intragovernmental), or by the 

public. All of the BLM’s intragovernmental 

accounts receivable consist of amounts that have 

not yet been billed. Accounts receivable from 

the public are summarized in the following 

table.

(dollars in thousands) 2006 2005

Accounts Receivable from 

 the Public: 

Billed:

 Current $ 7,745 $ 7,020

 1-180 Days Past Due 2,228 1,630

 181-365 Days Past Due 653 766

 1 to 2 Years Past Due 855 712

 Over 2 Years Past Due 188 258

Total Billed Accounts 

Receivable 11,669 10,386

Unbilled Accounts 

Receivable 404 750

Total Accounts Receivable 12,073 11,136

Allowance for 

Uncollectible Accounts (1,503) (769)

Accounts Receivable from 

the Public, Net $10,570 $10,367

See Note 1(F) for additional discussion 

regarding accounts receivable.
BLM 2006 Annual Report 59

Financial Statements

Note 6 - Inventory and Related Property

(dollars in thousands) 2006 2005

Stockpile Materials: 

 Recoverable Below-Ground Crude Helium: 

 Held for Sale 

 Held in Reserve 

$271,065

7,235

$295,782

7,235

Inventory:

 Gas and Storage Rights, Held for Sale

 

926 1,055

Operating Materials: Working Capital Fund Inventory, Held for Use 199 306

Total Inventory and Related Property $279,425 $304,378

The recoverable below-ground crude helium, held for sale, current amount, as of September 30, 

2006 was $25,321,800 and the future amount was $245,743,184. Valuation methods and other 

information regarding inventories are presented in Note 1(G).

Note 7 - General Property, Plant, and Equipment, Net

September 30, 2006: (dollars in thousands) Acquisition Cost Accumulated

Depreciation Net Book Value

Land and Land Improvements $114,356 $ (40,922) $ 73,434 

Buildings 196,710 (71,840) 124,870

Other Structures and 

 Facilities 43,224 (28,979) 14,245

Leasehold Improvements 5,769 (960) 4,809

Construction in Progress 45,388 - 45,388

Equipment and Vehicles 265,405 (129,516) 135,889

Internal Use Software:

 In Use 13,846 (5,260) 8,586

 In Development 2,876 - 2,876 

Total $687,574 $(277,477) $410,097

September 30, 2005: (dollars in thousands) Acquisition Cost Accumulated

Depreciation Net Book Value

Land and Land Improvements $ 94,766 $ (37,622) $ 57,144

Buildings 178,475 (66,775) 111,700

Other Structures and 

 Facilities 41,595 (28,003) 13,592

Leasehold Improvements 6,270 (798) 5,472

Construction in Progress 52,565 - 52,565

Equipment and Vehicles 263,387 (126,603) 136,784

Internal Use Software:

 In Use 8,471 (4,317) 4,154

 In Development 7,522 - 7,522

Total $653,051 $(264,118) $388,933

Capitalization criteria and other information regarding property, plant, and equipment are 

discussed in Note 1(H). 
60 BLM 2006 Annual Report

Financial Statements

Note 8 - Total Assets

For financial reporting purposes, the BLM 

has not recognized the value of negotiable 

securities or certificates of deposit pledged to 

guarantee performance of contracts. These 

instruments are accepted in lieu of bond 

coverage in the following programs: solid 

or fluid energy minerals extraction (oil, gas, 

coal, etc.), rights-of-way on the public or other 

lands, and certain contracts (performance 

bonds). Interest earned is paid to the owner of 

the security or certificate of deposit and is not 

available to the BLM. At September 30, 2006, 

the value of these securities was $10 million; 

at September 30, 2005, the value was $102 

million. Since these instruments are not available 

to the BLM unless a customer defaults on an 

agreement, they are not recognized as BLM’s 

assets or liabilities.

Note 9 - Stewardship Land and 

Heritage Assets

The BLM implemented the provisions of 

SFFAS No. 29, Heritage Assets and Stewardship 

Land, effective July 7, 2005. It is the mission 

of the BLM to sustain the health, diversity, and 

productivity of the public lands for the use and 

enjoyment of present and future generations. 

These public lands are all stewardship lands, 

the management of the resources related to the 

land is the essence of the BLM’s mission. The 

BLM has stewardship responsibility for the 

multiple-use management of natural resources 

on and beneath America’s public lands as 

legislated through the Federal Land Policy 

and Management Act (FLPMA) of 1976 

(43 U.S.C. 1701 et seq., Public Law 94-579, 

Sec.103(e)). Guided by the principles of 

multiple use and sustained yield, the BLM 

manages all of its public lands including 

natural heritage assets for one or more of its 

stated multiple uses. 

The BLM also has oversight authority over 

collectible and noncollectible cultural heritage 

assets that are located on the public lands. 

These noncollectible heritage assets have been 

Presidentially, Congressionally, or Secretarially 

designated. The BLM also reports on museum 

collections housed in both Interior and nonInterior facilities that contain items originating 

from the public lands.

The overarching goals and principles 

by which the public lands are managed are 

contained in FLPMA, which provides the basis 

for planning and managing the uses of resources 

on the public lands for the American people. In 

Sec. 102, FLPMA declares that the policy of the 

United States is as follows:

• Goals and objectives be established by law as 

guidelines for public land use planning, and 

that management be on the basis of multiple 

use and sustained yield unless otherwise 

specified by law . . . ;

• The public lands be managed in a manner 

that will protect the quality of scientific, 

scenic, historical, ecological, environmental, 

air and atmospheric, water resources, 

and archeological values; that, where 

appropriate, will preserve and protect certain 

public lands in their natural condition; that 

will provide food and habitat for fish and 

wildlife and domestic animals; and that will 

provide for outdoor recreation and human 

occupancy and use . . . ;

• The public lands be managed in a manner 

which recognizes the Nation’s need for 

domestic sources of minerals, food, timber, 

and fiber from the public lands including 

implementation of the Mining and Minerals 

Policy Act of 1970 . . . as it pertains to the 

public lands . . . .

There are many other laws and Executive 

Orders that provide guidance on how specific 
BLM 2006 Annual Report 61

Financial Statements

uses are managed (refer to Table 2 in the 

Stewardship Lands and Heritage Assets Report 

section of this report). The BLM develops 

policy and guidance based on the abovereferenced laws and Executive Orders, and 

reviews the adequacy of policy through Program 

Evaluations, Technical Reviews, and General 

Management Evaluations. These evaluations 

and reviews are performed to ensure that the 

BLM at all levels (Field Office, State Office, 

and National Office) is operating in compliance 

with law, regulation, and policy. Evaluations 

also allow the BLM to identify where policy 

needs to be amended to achieve the intended 

purposes of those laws.

The BLM carries out these laws and 

regulations at the administrative management 

areas within each of the BLM’s broadly defined 

“states.” These areas are the management 

level units at which specific land use plans are 

developed and implemented to manage the land 

and its resources for both present and future 

periods.

Note 10 - Liabilities Covered or Not 

Covered by Budgetary Resources

Liabilities covered by budgetary resources 

and liabilities not covered by budgetary 

resources are combined in the Balance Sheets 

presentation. Liabilities covered by budgetary 

resources are liabilities to be paid with existing 

appropriation authority. Liabilities not covered 

by budgetary resources represent those liabilities 

for which Congressional action is needed 

before budgetary resources can be provided. 

Current liabilities are expected to be liquidated 

during the subsequent fiscal year. Additional 

information regarding liabilities may be found 

in Note 1(I).

The Liabilities Not Covered by Budgetary 

Resources sections in the following tables do 

not necessarily correlate to the increase in 

certain unfunded liabilities in the Components 

Requiring or Generating Resources in Future 

Years section of the Statements of Financing. 

The Components Requiring or Generating 

Resources in Future Years section of the 

Statements of Financing only includes increases 

in certain unfunded liabilities; the decreases 

are included in the Resources Used to Finance 

Items Not Part of the Net Cost of Operations

section of the Statements. Additionally, some 

liabilities not covered by budgetary resources are 

not included in the Consolidated Statements of 

Financing as they have no budgetary accounting 

impact nor do they affect the net cost of 

operations.
62 BLM 2006 Annual Report

Financial Statements

Covered by

Budgetary Resources

Not Covered by

Budgetary Resources

September 30, 2006: 

(dollars in thousands) Current Non-Current Current Non-Current Total

Intragovernmental:

 Accounts Payable $ 48,387 $ - $ - $ - $ 48,387

 Debt to Treasury 50,000 864,204 - - 914,204

 Other: 

 Accrued Payroll and Benefits 3,305 - - - 3,305

 Custodial Liabilities - - 279 - 279

 Undistributed Collections - - 108,989 - 108,989

 Deferred Revenue 7,530 - - - 7,530

 Unfunded Payroll Liabilities - - 7,478 15,604 23,082

 Due to Treasury Judgment Fund - - - 12,253 12,253

Total Intragovernmental 109,222 864,204 116,746 27,857 1,118,029

Accounts Payable 36,353 - - - 36,353

Environmental and Disposal Liabilities - 60 - 1,661 1,721

Federal Employee Benefits - 

 FECA Actuarial Liability - - - 94,915 94,915

Other:

 Accrued Payroll and Benefits 30,307 - - - 30,307

 Custodial Liabilities - - 162 - 162

 Secure Rural Schools Act Payable - - 106,719 - 106,719

 Deposit Funds - - 131,401 - 131,401

 Deferred Revenue 1,802 - - - 1,802

 Unfunded Annual Leave - - - 56,695 56,695

 Contingent Liabilities - - - 2,465 2,465 

Total Liabilities $177,684 $864,264 $355,028 $183,593 $1,580,569

Note 10 - Liabilities Covered or Not Covered by Budgetary Resources
BLM 2006 Annual Report 63

Financial Statements

Covered by

Budgetary Resources

Not Covered by

Budgetary Resources

September 30, 2005:

(dollars in thousands) Current Non-Current Current Non-Current Total

Intragovernmental:

 Accounts Payable $ 38,981 $ - $ - $ - $ 38,981

 Debt to Treasury 50,000 1,024,204 - - 1,074,204

 Other:

 Accrued Payroll and Benefits 3,208 - - - 3,208

 Custodial Liabilities - - 57,519 - 57,519

 Undistributed Collections - - 93,802 - 93,802

 Deferred Revenue 9,949 - - - 9,949

 Unfunded Payroll Liabilities - - 7,200 14,929 22,129

 Due to Treasury Judgment Fund - - - 12,253 12,253

Total Intragovernmental 102,138 1,024,204 158,521 27,182 1,312,045

Accounts Payable 37,365 - - - 37,365

Environmental and Disposal Liabilities - 1,540 - 1,951 3,491

Federal Employees Benefits – 

 FECA Actuarial Liability - - - 94,971 94,971

Other:

 Accrued Payroll and Benefits 29,466 - - - 29,466

 Custodial Liabilities - - 65 - 65

 Secure Rural Schools Act Payable - - 106,810 - 106,810

 Deposit Funds - - 102,889 - 102,889

 Unfunded Annual Leave - - - 57,466 57,466

 Contingent Liabilities - - - 1,465 1,465 

Total Liabilities $168,969 $1,025,744 $368,285 $183,035 $1,746,033
64 BLM 2006 Annual Report

Financial Statements

Note 11 - Debt to Treasury

The helium fund’s debt to Treasury is as 

follows:

(dollars in thousands) 2006 2005

Principal $ 251,650 $ 251,650

Interest:

 Balance, Beginning of Year 822,554 887,554

 Repayments (160,000) (65,000)

 Balance, End of Year 662,554 822,554

Total Debt to Treasury $914,204 $1,074,204

The sale of helium began in March 2003 

and will continue until January 1, 2015. These 

sales have significantly increased the BLM’s 

helium fund revenue. Given this increased 

revenue, the BLM is planning to repay at least 

$50 million each year, with exact amounts 

depending on annual revenues collected. The 

repayments will continue until the debt is repaid 

or until the helium sales cease, in which case the 

repayment plan may be revised.

Refer to Note 1(I) for additional 

information about debt to Treasury.

Note 12 - Intragovernmental 

Unfunded Payroll Liabilities

Liabilities for workers’ compensation and 

unemployment compensation are amounts that 

will be paid to the Department of Labor, when 

billed, through the Department of the Interior’s 

Office of the Secretary. An accrual is also 

provided for the amount which would be due 

under the Federal Insurance Contributions Act 

(FICA) related to unfunded annual leave. See 

Note 1(J).

(dollars in thousands) 2006 2005

Workers’ Compensation Payable $18,696 $18,000

Unemployment Compensation 

 Payable 1,417 1,312

Accrued FICA on Unfunded 

 Annual Leave 2,969 2,817

Total Intragovernmental 

 Unfunded Payroll 

 Liabilities $23,082 $22,129
BLM 2006 Annual Report 65

Financial Statements

Note 13 - Environmental and Disposal 

Liabilities and Other Contingent 

Liabilities

Environmental and Disposal. The 

Comprehensive Environmental Response, 

Compensation, and Liability Act of 1980; 

the Clean Water Act; and the Resource 

Conservation and Recovery Act require Federal 

agencies to identify sites where (1) hazardous 

substances have been released or (2) hazardous 

wastes are or have been stored, treated, or 

disposed of. These Acts also require responsible 

parties, including Federal agencies, to clean up 

releases of hazardous substances and to manage 

hazardous wastes.

The BLM faces major challenges in 

cleaning up hazardous substance releases on 

the public lands. Virtually all of these releases 

arise from non-BLM uses of the lands, such as 

illegal dumping, transportation spills, landfills, 

mineral development operations, pipelines, and 

airports. Significant portions of the costs of 

cleanup will be incurred by, or recovered from, 

responsible parties external to the BLM.

The BLM typically has a number of 

time-critical removal actions in progress as 

of the end of the fiscal year that will require 

future funding. This type of action is usually 

mitigated using only a preliminary engineering 

study and, generally, no viable responsible party 

is found, which results in the BLM bearing the 

expense.

Larger sites require one or more studies to 

determine the scope of the contamination and 

the cleanup strategy and techniques. Cleanup 

costs cannot be estimated until these studies 

are completed. Several cleanup options are 

generally suggested, along with the approximate 

range of cost of each, and BLM management 

determines the most appropriate course of 

action.

For these larger sites, commensurately 

greater efforts are made to identify and locate 

potentially responsible parties who can be held 

liable for the cost of the studies and cleanup. 

Litigation or enforcement is usually required 

to obtain payment or cleanup from potentially 

responsible parties.

The BLM has recognized an estimated 

liability of $1.7 million and $3.5 million for 

FY 2006 and FY 2005, respectively, for sites 

where the BLM either caused contamination 

or is otherwise involved in such a way that it 

may be legally liable for some portion of the 

cleanup, and the environmental cleanup liability 

is probable and reasonably estimable. These 

estimates include the expected future cleanup 

costs and, for those sites where future liability 

is unknown, the cost of a study necessary to 

evaluate cleanup requirements.

In accordance with Federal accounting 

guidance, if an estimated liability is a range of 

amounts and no amount within the range is 

a better estimate than any other amount, the 

minimum amount in the range is recognized. 

The amounts recognized in the previous 

paragraph are the minimum amounts within the 

range noted for these estimated liabilities. The 

upper limits on the ranges of these liabilities are 

$3.5 million and $7.4 million for FY 2006 and 

FY 2005, respectively.

In addition to the limited number of 

cases discussed above where the BLM may be 

involved, other hazardous conditions exist on 

public lands for which the BLM might fund 

cleanup. Those cases where the BLM has at 

least a reasonable possibility of incurring a 

liability, but where the liability does not meet 

the criteria to be recognized, range from $99.9 

million to $250.8 million for FY 2006 and 

$22.9 million to $61.7 million for FY 2005.

Judgments and Claims. The BLM is a 

party to a number of lawsuits where the plaintiff 

is seeking monetary damages. The lawsuits 

can involve a variety of issues, including lost 

revenues when timber contracts are suspended 

because of environmental issues, injuries or 

death that occur on BLM-managed land or 
66 BLM 2006 Annual Report

Financial Statements

roads, issues regarding takings and suspension 

of mining claims, and other issues. In the 

opinion of the BLM’s management and legal 

counsel, a reasonable estimate of the potential 

outcome or liability of most of these claims 

cannot be made. The resultant outcomes will 

not materially affect BLM’s future financial 

condition. The U.S. Treasury’s Judgment Fund 

would likely bear most of the costs incurred to 

pay any judgments or settlements.

At the end of FY 2006, ten cases which 

were probable had reasonably estimable 

liabilities of $2.5 million; at the end of FY 

2005 there were eight cases totaling $1.5 

million. These liabilities have been accrued in 

the accompanying financial statements as of 

September 30, 2006, and September 30, 2005.

In accordance with Federal accounting 

guidance, if an estimated liability is a range of 

amounts and no amount within the range is 

a better estimate than any other amount, the 

minimum amount in the range is recognized. 

The amounts recognized in the previous 

paragraph are the minimum amounts within 

the range noted for these estimated liabilities. 

The upper limits on the ranges of these 

liabilities are $3.1 million and $1.7 million for 

FY 2006 and FY 2005, respectively.

In addition to these probable cases, at the 

end of FY 2006 there were 29 other cases where 

the likelihood of an outcome unfavorable to 

the BLM was reasonably possible. Of these 29 

cases, those with reasonably estimable liabilities 

ranged from $70,000 to $911.6 million. At 

the end of FY 2005 there were 20 such cases 

ranging from $70,000 to $909.1 million.

Additional discussion of contingent 

liabilities is presented in Note 1(K).

The accrued and potential environmental 

cleanup costs and contingent liabilities as of 

September 30, 2006 and 2005, are summarized 

in the following table:

September 30,2006

Total Range of Potential Liabilities

(dollars in thousands) Accrued Liabilities Lower End of Range Upper End of Range

Environmental and Disposal Liabilities:

 Probable $1,721 $ 1,721 $ 3,481

 Reasonably Possible - 99,939 250,776

Contingent Liabilities:

 Probable 2,465 2,465 3,080

 Reasonably Possible - 70 911,567

September 30,2005 Total Range of Potential Liabilities

(dollars in thousands) Accrued Liabilities Lower End of Range Upper End of Range

Environmental and Disposal Liabilities:

 Probable $3,491 $ 3,491 $ 7,441

 Reasonably Possible - 22,940 61,735

Contingent Liabilities:

 Probable 1,465 1,465 1,680

 Reasonably Possible - 70 909,091
BLM 2006 Annual Report 67

Financial Statements

Note 14 - Deposit Funds

The BLM processes collections from 

various sources for activities related to public 

land administration. These collections 

include mining claim fees, natural resource 

sales, and various other fees and payments. 

These amounts are held as deposits pending 

adjudication, resolution, or further classification. 

Deposit funds are considered a current liability.

Oil and Gas Leases consist primarily of lease 

deposits awaiting adjudication, but they can also 

include lease security deposits. Alaska Mineral 

Leases consist of money for the Kuukpik Village 

Corporation and interest on the investment 

of those funds. Mining and Other Mineral 

Materials include locatable minerals, leasable 

minerals, coal, and various leasing fees. Lands 

and Realty Management includes, but is not 

limited to, land sales, leases, timber sales, 

and vegetative material sales. Other includes 

overpayments waiting for refund, declining 

deposit accounts, recreation, geothermal leases, 

and all other miscellaneous categories.

The BLM, on behalf of the Minerals 

Management Service (MMS), collects first-year 

rent and bonus deposits on lease agreements 

related to oil and gas, coal, and other leasable 

minerals. The BLM also collects lease security 

deposits related to this activity. These deposits 

are recorded not as revenue but as liabilities. 

Once the adjudication process is completed, 

the deposits are either refunded, or they are 

combined with additional receipts (which 

represents custodial activity) and transferred to 

the MMS. Lease security deposits are generally 

returned to the lessor upon the expiration of 

a lease. However, in certain circumstances, 

particularly if contamination cleanup is 

necessary, the BLM will keep a portion of the 

security deposit and record it as revenue.

(dollars in thousands) 2006 2005

Oil and Gas Leases $ 68,499 $ 39,096

Alaska Mineral Leases 39,272 37,084

Mining and Other Mineral 

 Materials 13,958 19,650

Lands and Realty 

 Management 9,511 6,553

Other 161 506

Total Deposit Funds $131,401 $102,889

Note 15 - Leases

The BLM has operating leases for various 

types of space (real property) acquired through 

the General Services Administration (GSA) and 

directly from commercial sources, as well as 

operating leases for vehicles and miscellaneous 

equipment (personal property).

GSA charges rent that is intended to 

approximate commercial rental rates. For 

federally owned property, the Bureau generally 

does not execute an agreement with GSA, nor 

is there a formal expiration date. These leases 

typically have terms up to 20 years, and most 

contain provisions for cancellation prior to the 

full term of the lease. GSA space leases are 

cancellable with 120 days notice. The Bureau 

is normally required to give notice to vacate, 

and the amount of these leases remains constant 

from year to year.

For non-federally owned property, an 

occupancy agreement is executed, and again the 

Bureau may normally cancel these agreements 

with 120 days notice.

Both the Federal and Non-Federal Real 

Property amounts for 2007 are based on the 

actual annual rent for all property within these 

categories. For 2008 and subsequent years, the 

amounts are inflated each year at 2.4 percent 

over the previous year. As leases expire, they are 

not included in the following years’ calculations.

Government vehicle and equipment rentals 

are included in personal property. Government 
68 BLM 2006 Annual Report

Financial Statements

Real Property Personal Property

Fiscal Year Ending September 30:

 (dollars in thousands) Federal Non-Federal Federal Non-Federal Total

2007 $18,729 $ 19,102 $11,961 $ 2,990 $ 52,782

2008 14,976 16,183 12,248 3,062 46,469

2009 14,937 15,919 12,542 3,135 46,533

2010 13,404 15,327 12,843 3,211 44,785

2011 13,658 14,403 13,151 3,288 44,500

Thereafter 23,567 94,907 - - 118,474

Total Future Lease 

 Payments $99,271 $175,841 $62,745 $15,686 $353,543

vehicles are leased from GSA for indefinite 

periods of time, frequently exceeding one 

year. For 2007 through 2011, the amounts are 

inflated at 2.4 percent over the previous year. 

The Thereafter amounts are indeterminable 

through this process.

The aggregate of the Bureau’s estimated 

real property rent payments to GSA for FY 

2007 through FY 2011 and future years and the 

Bureau’s future payments due to other parties 

under operating leases for real property and 

personal property is as follows:

Note 16 - Earmarked Funds

The BLM implemented the provisions 

of SFFAS No. 27, Identifying and Reporting 

Earmarked Funds, effective October 1, 2005. 

Earmarked funds are specifically identified 

nonexchange revenues and other financing 

sources, including appropriations, and net cost 

of operations, required by statute to be used 

for designated activities, benefits, or purposes, 

and must be accounted for separately from the 

Government’s general revenues. These funds are 

reported separately on the Consolidated Balance 

Sheet and on the Consolidated Statement of 

Changes in Net Position.

The BLM is responsible for the management 

of 30 earmarked funds with a variety of 

purposes. The 5 funds presented on an 

individual basis within the following table 

represent the majority of the BLM’s activity 

within its earmarked funds with assets totaling 

$2.8 billion. The other 25 earmarked funds 

with assets totaling $178 million have been 

aggregated in accordance with SFFAS No. 27, 

Identifying and Reporting Earmarked Funds.

The BLM was not required to and did not 

apply the new requirements of SFFAS No. 27 to 

the fiscal year 2005 Consolidated Balance Sheet, 

Consolidated Statement of Changes in Net 

Position, and Earmarked Funds note disclosure. 

The SFFAS was implemented effective October 

1, 2005. These specific statements and 

disclosure are not comparable to the fiscal year 

2006 Consolidated Balance Sheet, Consolidated 

Statement of Changes in Net Position, and 

Earmarked Funds note disclosure.

Investments in Treasury Securities. The 

BLM invests funds in securities in the Southern 

Nevada Public Land Management Act and the 

Lincoln County Land Act. The BLM does 

not set aside assets to pay future expenditures 

associated with earmarked funds. The cash 

generated from earmarked funds is used by the 

U.S. Treasury for general government purposes. 

Treasury securities issued to the earmarked 

funds are an asset to the earmarked funds 
BLM 2006 Annual Report 69

Financial Statements

and are presented as Investments. The U.S. 

Treasury will finance any future redemption of 

the securities by an earmarked fund in the same 

manner that all other government expenditures 

are financed.

Southern Nevada Public Land 

Management Act (SNPLMA). SNPLMA, 

enacted in October 1998, authorizes the BLM 

to sell public land tracts that are interspersed 

with or adjacent to private land in the Las Vegas 

Valley. The BLM is authorized to invest 85 

percent of the sales in interest-bearing Treasury 

securities, while 10 percent of the proceeds 

are distributed to the Southern Nevada Water 

Authority and 5 percent to the State of Nevada’s 

Education Fund. The revenues generated 

from the land sales and investments enable the 

BLM and other government entities to acquire 

environmentally sensitive lands and build or 

maintain trails, day-use areas, campgrounds, 

etc., to benefit public land visitors.

Helium Management. Helium fund 

sales are authorized by Chapter 10 of Title 

50 of the United States Code, enacted March 

1925, as amended by Public Law 86-777, dated 

September 13, 1960. The Helium Privatization 

Act of 1996 directed the Department of the 

Interior to cease producing, refining, and 

marketing helium. However, the Department 

is authorized to store, transport, and withdraw 

crude helium and maintain and operate crude 

helium storage facilities. The helium fund is 

also authorized to retain all receipts, however 

amounts accumulated in excess of amounts the 

Secretary, Department of the Interior, deems 

necessary to carry out the Helium Act are 

paid to the Treasury and credited against any 

amounts borrowed from the Treasury. 

Federal Land Transaction Facilitation 

Act (FLTFA). FLTFA, enacted July 2000, 

authorizes the BLM to sell or exchange specific 

public lands. Receipts are used for the purchase 

of lands adjacent to federally designated areas. 

Not less than 80 percent of the amounts from 

the sales must be expended within the state in 

which the funds were generated. The remaining 

20 percent may be used by the Secretary for 

administrative and other expenses necessary to 

carry out the program. 

Naval Oil Shale Reserve Restoration. 

The Naval Oil Shale Reserve Restoration, 

enacted December 2002, authorizes the 

BLM to lease public land for the purpose 

of exploration for, and development and 

production of, petroleum located on public 

lands. Receipts are used for reimbursement of 

environmental restoration, waste management, 

and environmental compliance costs incurred by 

the United States. 

Lincoln County Conservation, 

Recreation, and Development Act. The 

Lincoln County Land Act, enacted November 

2004, authorizes the BLM to sell specific tracts 

of land in Lincoln County, Nevada. The BLM 

is authorized to invest 85 percent of the sales 

in interest-bearing Treasury securities, while 

10 percent of the proceeds are distributed to 

Lincoln County for support of their schools 

and 5 percent to the State of Nevada’s 

Education Fund.
70 BLM 2006 Annual Report

Financial Statements

(in thousands)

 Southern Nevada 

Public Land 

Management Act 

Helium 

Management

Assets:

Fund Balance with Treasury $ 673 $ 21,023 

Investments, Net 2,277,571 - 

Accounts Receivable, Net - 6,072 

General Property, Plant, and Equipment, Net 9,386 2,220 

Inventory - 279,227 

Total Assets $2,287,630 $ 308,542 

Liabilities:

Accounts Payable $ 24,630 $ 748 

Debt to Treasury - 914,204 

Other Liabilities 1,889 628 

Total Liabilities 26,519 915,580 

Net Position:

Unexpended Appropriations - - 

Cumulative Results of Operations 2,261,111 (607,038) 

Total Net Position 2,261,111 (607,038) 

Total Liabilities and Net Position $2,287,630 $ 308,542 

COST/REVENUE

Gross Costs $ 42,233 $ 50,011 

Earned Revenue (745,529) (169,197) 

NET COST OF OPERATIONS (703,296) (119,186) 

NET POSITION

Net Position, Beginning Balance $1,657,537 $ (731,194) 

Change in Accounting Principle (Note 20) - - 

Net Position, Beginning Balance, As Adjusted 1,657,537 (731,194) 

Appropriations Received - - 

Royalties Retained - - 

Transfers In/(Out) without Reimbursement (100,097) 4,420 

Imputed Financing from Costs Absorbed by Others 375 564 

Other Budgetary Financing Sources - (14) 

Net Cost of Operations 703,296 119,186 

Change in Net Position 603,574 124,156 

NET POSITION, ENDING BALANCE $2,261,111 $ (607,038) 

Earmarked Funds Note
BLM 2006 Annual Report 71

Financial Statements

Federal Land 

Transaction 

Facilitation Act

Naval Oil 

Shale Reserve 

Restoration

Lincoln County 

Land Act

Other Earmarked 

Funds FY 2006

 $86,159 $63,564 $ 54 $176,228 $ 347,701

- - 44,678 - 2,322,249 

- - - 1,812 7,884 

- - - - 11,606 

 - - - - 279,227

$86,159 $63,564 $44,732 $178,040 $2,968,667

$ - $ 1 $ - $ 635 $ 26,014 

- - - - 914,204 

30 56,890 1 113,981 173,419 

30 56,891 1 114,616 1,113,637

- - 6,268 6,268 

 86,129 6,673 44,731 57,156 1,848,762 

 86,129 6,673 44,731 63,424 1,855,030 

$86,159 $63,564 $44,732 $178,040 $2,968,667

$ 1,176 $ 89 $ 47 $349,287 $ 442,843

 - - (1,903) (180,081) (1,096,710)

1,176 89 (1,856) 169,206 (653,867)

 $28,655 $ 421 $42,921 $22,338 $1,020,678 

- - - (2,765) (2,765)

 28,655 421 42,921 19,573 1,017,913

- - - 105,974 105,974 

- 27,674 - 40,935 68,609 

58,580 (21,337) (49) 61,244 2,761

70 4 3 4,900 5,916 

 - - - 4 (10)

(1,176) (89) 1,856 (169,206) 653,867

57,474 6,252 1,810 43,851 837,117

 $86,129 $ 6,673 $44,731 $ 63,424 $1,855,030 
72 BLM 2006 Annual Report

Financial Statements

Note 17 - Total Cost

Total cost as reported in the Consolidated Statements of Net Cost is detailed as follows:

(dollars in thousands) 2006 2005

Personnel Services and Benefits $ 996,986 $ 962,727

Contractual Services 408,696 387,515

Contributions to States 330,722 474,316 

Supplies, Materials, and Nondepreciable Assets 117,633 85,562

Travel and Transportation 76,179 64,901

Rental, Communication and Utilities 74,833 70,779

Depreciation 30,347 30,864

Cost of Goods Sold 25,053 17,058

Stewardship Asset Costs 21,840 67,210

Settlement of Claims 10,387 11,187

Printing and Reproduction 3,626 2,981

Heritage Asset Costs 1,617 2,457

Bad Debt Expense 907 2,961

Loss on Disposition of Assets, Net 243 187

Interest Expense 47 35

Change in Unfunded Liabilities:

 Contingent Liabilities 1,000 (2,185)

 Workers’ Compensation 696 (279)

 FICA on Unfunded Annual Leave 152 10

 Unemployment Compensation 105 181

 Treasury Judgment Fund - 29

 Federal Employee Benefits - FECA Actuarial Liability (57) 4,464

 Environmental and Disposal (290) 1,628

 Unfunded Annual Leave (771) 1,206

Total Cost $2,099,951 $2,185,794
BLM 2006 Annual Report 73

Financial Statements

Note 18 - Net Cost of Operations by 

Responsibility Segment

Statement of Federal Financial Accounting 

Standards No. 4, Managerial Cost Accounting 

Concepts and Standards for the Federal 

Government, requires agencies to report 

the full cost of programs, activities, and 

outputs. This standard includes requirements 

for accumulating and reporting costs on a 

regular basis for management use, establishing 

responsibility segments to match costs 

with outputs, determining the full cost of 

government goods and services, recognizing 

the costs of services provided between agencies 

within the government, and using appropriate 

costing methodologies to accumulate and assign 

costs to outputs.

In FY 1998, the BLM selected Activity 

Based Costing (ABC) as the agency’s 

methodology to accumulate cost data for 

effective management use and to assign costs 

to outputs. The accumulated cost data is 

aggregated by program activity to reflect the 

following four Departmental Government 

Performance and Results Act (GPRA) Mission 

Areas:

Resource Protection – Protect the Nation’s 

natural, cultural, and heritage resources.

Resource Use – Manage resources to 

promote responsible use and sustain a

dynamic economy.

Recreation – Provide recreation 

opportunities for America.

Serving Communities – Safeguard

lives, property, and assets, advance scientific

knowledge, and improve the quality of life

for communities we serve.

Direct costs are reported under the 

appropriate GPRA program activity, while 

administrative costs and various indirect costs 

are allocated to program activities in a manner 

appropriate for each type of cost.

In addition to reporting costs and revenue 

by the Departmental GPRA Mission Areas, the 

BLM aggregates program costs and revenue by 

responsibility segment. These responsibility 

segments closely correspond with the Bureau’s 

programs as set forth in the Budget of the 

United States Government.

The tables on the following pages 

present the BLM’s net cost of operations by 

responsibility segment and GPRA Mission 

Area.
74 BLM 2006 Annual Report

Financial Statements

(dollars in thousands)

Management 

of Lands and 

Resources

Wildland Fire 

Management

Miscellaneous 

Permanent Payment 

Accounts

Resource Protection

Intragovernmental Cost $ 55,285 $ 19,777 $ 278 

Public Cost 167,115 67,489 3,189 

Total Cost 222,400 87,266 3,467 

Intragovernmental Earned Revenue 8,472 431 1,902 

Public Earned Revenue - 26 - 

Total Earned Revenue 8,472 457 1,902 

Net Cost /(Revenue) 213,928 86,809 1,565 

Resource Use

Intragovernmental Cost 65,412 770 160 

Public Cost 169,373 4,115 829 

Total Cost 234,785 4,885 989 

Intragovernmental Earned Revenue 1,372 - - 

Public Earned Revenue 54,762 - 15,158 

Total Earned Revenue 56,134 - 15,158 

Net Cost /(Revenue) 178,651 4,885 (14,169) 

Recreation

Intragovernmental Cost 22,369 2,050 62 

Public Cost 71,896 3,581 739 

Total Cost 94,265 5,631 801 

Intragovernmental Earned Revenue 6,205 6 - 

Public Earned Revenue - - - 

Total Earned Revenue 6,205 6 - 

Net Cost 88,060 5,625 801 

Serving Communities

Intragovernmental Cost 64,900 218,102 5,298 

Public Cost 216,765 404,501 238,878 

Total Cost 281,665 622,603 244,176 

Intragovernmental Earned Revenue 38,995 17,379 - 

Public Earned Revenue - 5,626 116,626 

Total Earned Revenue 38,995 23,005 116,626 

Net Cost 242,670 599,598 127,550 

Totals

Intragovernmental Cost 207,966 240,699 5,798 

Public Cost 625,149 479,686 243,635 

Total Cost 833,115 720,385 249,433 

Intragovernmental Earned Revenue 55,044 17,816 1,902 

Public Earned Revenue 54,762 5,652 131,784 

Total Earned Revenue 109,806 23,468 133,686 

Net Cost/(Revenue) of Operations $723,309 $696,917 $115,747 

Consolidated Statement of Net Cost of Operations 

for the Fiscal Year Ended September 30, 2006
BLM 2006 Annual Report 75

Financial Statements

Permanent 

Operating Funds

Oregon and 

California Grant 

Lands Other

Elimination of 

Intra-Bureau Activity FY 2006

$ 1,775 $ 4,406 $ 2,132 $ (3,485) $ 80,168 

4,640 11,832 11,374 - 265,639 

 6,415 16,238 13,506 (3,485) 345,807

81,521 - - (3,485) 88,841

664,040 - 94,053 - 758,119 

745,561 - 94,053 (3,485) 846,960 

(739,146) 16,238 (80,547) - (501,153)

6,819 12,383 5,915 - 91,459 

18,447 38,344 60,568 - 291,676 

25,266 50,727 66,483 - 383,135 

- - 65 - 1,437

20 1 228,140 - 298,081

20 1 228,205 - 299,518 

 25,246 50,726 (161,722) - 83,617

3,607 2,926 1,383 - 32,397

19,920 8,053 8,214 - 112,403

 23,527 10,979 9,597 - 144,800 

- - - - 6,211

15,415 - 6,123 - 21,538 

15,415 - 6,123 - 27,749 

 8,112 10,979 3,474 - 117,051

23,404 8,951 8,492 (59,526) 269,621

14,993 25,710 55,741 - 956,588 

38,397 34,661 64,233 (59,526) 1,226,209 

- - 38,842 (59,526) 35,690 

2,544 - 6,233 - 131,029 

2,544 - 45,075 (59,526) 166,719 

35,853 34,661 19,158 - 1,059,490 

35,605 28,666 17,922 (63,011) 473,645 

58,000 83,939 135,897 - 1,626,306 

 93,605 112,605 153,819 (63,011) 2,099,951

81,521 - 38,907 (63,011) 132,179 

682,019 1 334,549 - 1,208,767

763,540 1 373,456 (63,011) 1,340,946 

$(669,935) $112,604 $(219,637) $ - $ 759,005 
76 BLM 2006 Annual Report

Financial Statements

Consolidated Statement of Net Cost of Operations 

for the Fiscal Year Ended September 30, 2005

(dollars in thousands)

Management 

of Lands and 

Resources

Wildland Fire 

Management

Miscellaneous 

Permanent Payment 

Accounts

Resource Protection

Intragovernmental Cost $ 54,615 $ 18,591 $ 217 

Public Cost 174,161 57,236 4,094 

Total Cost 228,776 75,827 4,311 

Intragovernmental Earned Revenue 5,742 430 330 

Public Earned Revenue – 11 42,834 

Total Earned Revenue 5,742 441 43,164 

Net Cost /(Revenue) 223,034 75,386 (38,853) 

Resource Use

Intragovernmental Cost 65,769 484 75 

Public Cost 182,693 2,087 339 

Total Cost 248,462 2,571 414 

Intragovernmental Earned Revenue 2,468 – – 

Public Earned Revenue 51,893 – 10,256 

Total Earned Revenue 54,361 – 10,256 

Net Cost /(Revenue) 194,101 2,571 (9,842) 

Recreation

Intragovernmental Cost 22,112 1,046 62 

Public Cost 70,757 3,547 515 

Total Cost 92,869 4,593 577 

Intragovernmental Earned Revenue 5,512 – – 

Public Earned Revenue – – – 

Total Earned Revenue 5,512 – – 

Net Cost 87,357 4,593 577 

Serving Communities

Intragovernmental Cost 68,100 181,641 5,355 

Public Cost 234,031 348,669 351,187 

Total Cost 302,131 530,310 356,542 

Intragovernmental Earned Revenue 55,094 13,361 – 

Public Earned Revenue – 23,128 198,519 

Total Earned Revenue 55,094 36,489 198,519 

Net Cost 247,037 493,821 158,023 

Totals

Intragovernmental Cost 210,596 201,762 5,709 

Public Cost 661,642 411,539 356,135 

Total Cost 872,238 613,301 361,844 

Intragovernmental Earned Revenue 68,816 13,791 330 

Public Earned Revenue 51,893 23,139 251,609 

Total Earned Revenue 120,709 36,930 251,939 

Net Cost/(Revenue) of Operations $751,529 $576,371 $109,905 
BLM 2006 Annual Report 77

Financial Statements

Permanent 

Operating Funds

Oregon and 

California Grant 

Lands Other

Elimination of 

Intra-Bureau Activity FY 2005

$ 3,599 $ 7,680 $ 2,038 $ (880) $ 85,860 

11,398 24,126 6,417 – 277,432 

14,997 31,806 8,455 (880) 363,292 

34,016 – – (880) 39,638 

1,097,175 – 46,064 – 1,186,084 

1,131,191 – 46,064 (880) 1,225,722 

 (1,116,194) 31,806 (37,609) – (862,430)

796 11,025 4,894 – 83,043

2,001 35,139 40,884 – 263,143

2,797 46,164 45,778 – 346,186 

– – – – 2,468 

– – 155,617 – 217,766 

– – 155,617 – 220,234 

 2,797 46,164 (109,839) – 125,952 

3,325 2,397 1,385 (3,783) 26,544 

67,679 6,987 7,971 – 157,456 

71,004 9,384 9,356 (3,783) 184,000 

– – – (3,783) 1,729 

13,251 – 1,929 – 15,180 

13,251 – 1,929 (3,783) 16,909 

 57,753 9,384 7,427 – 167,091

39,578 5,724 8,152 (65,416) 243,134 

13,909 16,868 84,518 – 1,049,182 

53,487 22,592 92,670 (65,416) 1,292,316 

– – 34,081 (65,416) 37,120 

3,235 – 2,933 – 227,815 

3,235 – 37,014 (65,416) 264,935 

 50,252 22,592 55,656 – 1,027,381

47,298 26,826 16,469 (70,079) 438,581

94,987 83,120 139,790 – 1,747,213

142,285 109,946 156,259 (70,079) 2,185,794 

34,016 – 34,081 (70,079) 80,955 

1,113,661 – 206,543 – 1,646,845 

1,147,677 – 240,624 (70,079) 1,727,800 

$(1,005,392) $109,946 $ (84,365) $ – $ 457,994 
78 BLM 2006 Annual Report

Financial Statements

Note 19 - Change in HAZMAT 

Ownership

Since 1995, the BLM has managed the 

Department’s Central Hazardous Materials 

(HAZMAT) fund. This meant the BLM 

received the annual appropriation from 

Congress and transferred dollars, via allocation 

transfers (parent/child relationship), to 

other DOI bureaus. The Department of the 

Interior’s FY 2006 appropriation bill moved 

the management of the HAZMAT fund from 

the BLM to the Department of the Interior’s 

Office of the Secretary (OS), effective October 

1, 2005. As a result, the BLM removed 

financial records related to the parent account 

of HAZMAT from its accounting system, 

including FY 2006 beginning balances. 

Conversely, the OS placed these records into 

its accounting system and began managing the 

HAZMAT fund on October 1, 2005. 

When the management of the HAZMAT 

fund became the responsibility of the 

Department, the BLM became a child to 

the DOI for the fund. As a result, the BLM 

established a new HAZMAT fund to account 

for the allocation transfers it receives from 

OS. Note 23 provides more information on 

allocation transfers.

 Note 20 – Change in Accounting 

Principle for Federal Highway Trust 

Fund

In July 2006, OMB Circular A-136 was 

updated delineating federal financial reporting 

requirements. In prior versions of this guidance, 

federal agencies (child) who received allocated 

budget authority through another federal agency 

(parent) were permitted to report proprietary 

activity in their financial statements, if material 

to them. However, beginning in FY 2007, 

child agencies will be required to provide parent 

agencies with all of their financial activity. 

Only parent agencies will report this financial 

activity in their financial statements. Early 

implementation is allowed if both the parent 

and child agency agree.

In FY 2006, Interior and the Department 

of Transportation agreed to use the Highway 

Trust Fund as a pilot for this new reporting 

requirement. The cumulative effect of this 

change in accounting principle resulted in a 

$2.8 million decrease to the beginning balance 

of cumulative results of operations on the 

Consolidated Statement of Changes in Net 

Position. This also resulted in a $76 thousand 

decrease to the Imputed Financing from Costs 

Absorbed by Others; this will affect the Total 

Imputed Financing from Costs Absorbed by 

Others (see Note 21).

Note 21 - Imputed Financing from 

Costs Absorbed by Others

SFFAS No. 5, Accounting for Liabilities of the 

Federal Government, establishes accounting and 

reporting standards for liabilities relating to the 

Federal employee benefit programs, including 

retirement, health benefits, and life insurance. 

The Office of Personnel Management (OPM) is 

responsible for paying the cost of these benefits.

Under the provisions of SFFAS No. 5, 

employer agencies must recognize the cost of 

pensions and other retirement benefits during 

their employees’ active years of service. Agencies 

must also recognize the current annual cost of 

the Federal Employee Health Benefit (FEHB) 

program and the Federal Employee Group Life 

Insurance (FEGLI) program.

OPM actuaries have provided the employer 

agencies with rates for calculating the estimated 

cost of pension and other retirement benefits. 

They have also provided rates for use in 

calculating the cost of FEHB and FEGLI. 

The Department provided labor cost data for 

the BLM to use in applying the OPM rates to 

calculate the total imputed cost of these benefits. 

While the BLM’s funds are not used to pay 

the cost of these personnel benefits, they are a 
BLM 2006 Annual Report 79

Financial Statements

BLM operating expense that must be reported 

to accurately reflect the cost of doing business. 

The use of OPM funds for this purpose is an 

imputed source of financing for the BLM.

The Solicitor’s Office of the Department of 

the Interior incurs expenses for attorneys’ time 

and related non-attorney costs on behalf of all 

DOI bureaus. The Department provided a 

calculation of the amount of imputed financing 

sources for each bureau, based on the number of 

employees and legal cases at each bureau. 

The Department of the Treasury Judgment 

Fund is another imputed source of financing. 

The BLM is a party to numerous lawsuits where 

the plaintiff is seeking monetary damages. In 

many cases, when the BLM is required to pay 

the plaintiff either as a result of settlement or 

adjudication, payment is actually made from 

the Judgment Fund rather than the BLM’s 

appropriations. Treasury provides agencies with 

information regarding the month and amount 

of payments actually made, at which time the 

BLM recognizes the imputed financing source 

and cost.

(dollars in thousands) 2006 2005

Imputed Financing from 

OPM:

 Retirement Benefits $23,458 $24,651

 Health Benefits and Life 

 Insurance 46,334 44,732

69,792 69,383

Imputed Financing from 

DOI

 Solicitor’s Office 9,411 10,012

Imputed Financing from 

Treasury

 Department’s Judgment 

 Fund 539 475

Total Imputed Financing 

 from Costs Absorbed 

 by Others $79,742 $79,870

The FY 2006 “Total Imputed Financing 

from Costs Absorbed by Others” amount does 

not agree with the Consolidated Statements of 

Changes in Net Position FY 2006 “Imputed 

Financing from Costs Absorbed by Others” 

amount due to a change in accounting principle 

(see Note 20).

Note 22 - Combined Statements of 

Budgetary Resources

Apportionment Categories of 

Obligations Incurred

All of the BLM’s FY 2006 and FY 2005 

funds were appropriated under Category B and 

were subject to annual apportionment by OMB.

Permanent Indefinite Appropriations

Permanent indefinite appropriations 

result from provisions in permanent public 

laws that authorize the BLM to retain certain 

receipts. These funds do not require annual 

appropriation action by Congress; they are 

subject to the authorities of permanent public 

law and are available until expended. As 

of September 30, 2006, the Bureau had 31 

permanent indefinite appropriations, which 

are primarily used for special programs and 

projects. Some examples include the Southern 

Nevada Public Land Management Act, Federal 

Land Transaction Facilitation Act, Recreation 

Fee Demonstration Program, and Timber Sale 

Pipeline Restoration Fund.

Appropriations Received

The Appropriations Received line item on 

the Consolidated Statements of Changes in 

Net Position differs from that reported on the 

Combined Statements of Budgetary Resources 

because Appropriations Received on the 

Consolidated Statements of Changes in Net 

Position do not include appropriated, dedicated 

and earmarked receipts. Dedicated and 

earmarked receipts are accounted for as either 

exchange or non-exchange revenue.
80 BLM 2006 Annual Report

Financial Statements

specific and general authorizations are integral 

components of all legislation, the BLM does not 

view them as restrictions or legal encumbrances 

on its available funding. 

Differences between Amounts Reported 

in the Statements of Budgetary 

Resources and Amounts Reported in the 

Budget of the U.S. Government

The Combined Statements of Budgetary 

Resources have been prepared to coincide with 

the amounts shown in the Budget of the United 

States Government (President’s Budget). The 

actual amounts for FY 2005 in the President’s 

Budget had not been published at the time 

these financial statements were prepared. The 

President’s Budget containing the actual FY 

2005 amounts was released in February 2006, 

and the FY 2006 amounts are estimated to 

be released in February 2007. The President’s 

Budget can be located at the OMB website 

(http://www.whitehouse.gov/omb). 

Budgetary Resources and the Status of 

Budgetary Resources presented in the Combined 

Statement of Budgetary Resources for the 

fiscal year ended September 30, 2005, differ 

from the amounts presented in the FY 2005 

column of the FY 2007 Budget of the United 

States Government because of rounding and 

publication timing differences. Rounding 

differences are the result of the President’s 

Budget being rounded in millions of dollars 

while the Statement of Budgetary Resources is 

rounded in thousands of dollars. A publication 

timing difference occurred when an adjustment 

was made to the Wildland Fire Management 

appropriation and was included in the President’s 

Budget but did not appear in the BLM’s FY 

2005 Annual Report because the BLM’s report 

was published prior to the adjustment being 

made. The specific line items affected by 

this adjustment are annotated with asterisks 

and presented in the following table. The 

unannotated differences are due to rounding. 

Total Undelivered Orders

The BLM’s total undelivered orders balances 

as of September 30, 2006 and 2005 were $1.4 

billion and $1.4 billion, respectively.

Total Obligated Balance, Net, End of 

Year

Net obligated balances contain amounts 

related to undelivered orders. The total net 

obligated balances for the end of fiscal years 

2006 and 2005 were approximately $1.5 billion 

and $1.5 billion, respectively.

Legal Arrangements Affecting the Use 

of Unobligated Balances of Budget 

Authority

All of the Bureau’s funding needs are 

authorized in a number of appropriation 

laws, which are a combination of current 

and permanent authority. Current authority 

includes funding that is legislatively reauthorized each fiscal year, while permanent 

authority is issued once and remains in effect 

in future fiscal years until revised or rescinded. 

Most of the BLM’s Treasury accounts are 

classified as no-year, which signifies that 

the Bureau may utilize its fiscal year-end 

unobligated resources to execute its operating 

programs in subsequent fiscal years. 

All appropriation language contains 

specific and/or general authorizations. These 

authorizations may be defined as legislative 

parameters that frame the funding and Federal 

agency policy for executing programs. For 

example, Public Law 109-54, the appropriation 

law that was the major source of funding for 

the BLM’s operating programs in FY 2006, 

directs that a definite sum of the Bureau’s 

wildland firefighting authority be applied 

to the construction of fire facilities. These 

authorizations also direct how the Bureau must 

treat other assets it may acquire as a result of 

executing its operating programs. Since both 
BLM 2006 Annual Report 81

Financial Statements

September 30, 2005

(dollars in millions)

Amount per 

Statement

of Budgetary 

Resources

Amount per 

President’s 

Budget Difference

Budgetary Resources:

 Unobligated Balance, Beginning of Year $878 $879 (1)

 Recoveries of Prior Year Obligations 72 71 1

 Budget Authority:

 Appropriations Received 3,307 3,306 1

 Spending Authority From Offsetting Collections 258 258 -

 Nonexpenditure Transfers, Net (7) (6) (1)

 Permanently Not Available (26) (26) -

Status of Budgetary Resources:

 Obligations Incurred 3,259 3,259 -

 Unobligated Balance Available 1,224 1,223 1

Change in Obligated Balance:

 Obligated Balance, Net, Beginning of Year 872 876 (4)*

 Obligations Incurred, Net 3,259 3,259 -

 Less: Gross Outlays (2,595) (2,601) 6*

 Less: Recoveries of Prior Year Unpaid Obligations (72) (71) (1)

 Change in Uncollected Customer Payments from Federal Sources 1 1 -

Net Outlays:

 Gross Outlays 2,595 2,601 (6)*

 Less: Offsetting Collections (259) (259) -
82 BLM 2006 Annual Report

Financial Statements

Note 23 - Allocation Transfer 

Reconciling Items

Allocation transfers are the amounts of 

budgetary resources transferred between 

agencies or bureaus to carry out the purposes of 

the parent account. The BLM is both a parent 

agency and a recipient, or child, agency of 

allocation transfers. 

OMB requires parent agencies to report 

their child agencies’ transactions as part of their 

Statements of Budgetary Resources, while the 

child agencies report the proprietary activity on 

their Balance Sheets, Statements of Net Cost 

of Operations, and Statements of Changes in 

Net Position. This process creates a reconciling 

difference on the Statements of Financing.

During FY 2005, the BLM was the parent 

agency for the Wildland Fire Management 

Fund and the Central Hazardous Materials 

Fund. All allocation transfers made from these 

funds were distributed to other Department of 

the Interior bureaus. Also during FY 2005, the 

BLM was a child agency of the Department of 

Agriculture’s National Forest System Fund, the 

Department of the Interior’s Natural Resources 

Damage Assessment and Restoration Fund, and 

the Department of Transportation’s Highway 

Trust Fund.

During FY 2006, the BLM was a parent 

agency for the Wildland Fire Management 

Fund; the Southern Nevada Public Land 

Management Act Fund (which began using 

allocation transfers during FY 2006); and the 

Rent From Mineral Leases, Permit Processing 

Fund (a new fund to the BLM for FY 2006). 

As of October 1, 2005, the management of the 

Central Hazardous Materials Fund changed 

from the BLM to the OS (see Note 19), making 

the BLM a child agency during FY 2006. Also 

during FY 2006, the BLM was a child agency of 

the Department of Agriculture’s National Forest 

System Fund, the Department of the Interior’s 

Natural Resources Damage Assessment and 

Restoration Fund, and the Department of 

Transportation’s Highway Trust Fund.

 The recipient of allocation transfers is not 

generally required to obligate or spend those 

funds in the year of transfer and in many cases 

uses a portion of that funding in subsequent 

years. As a result, the reconciling items 

created on the Statements of Financing are not 

generated solely by the current year transfers, 

but also consist of current year activity related 

to prior year transfers. Therefore, the amounts 

in the table below reflect the amounts included 

in cost of operations for FY 2006 and FY 2005, 

not the actual dollars transferred during the 

year.
BLM 2006 Annual Report 83

Financial Statements

(dollars in thousands) 2006 2005

The BLM as the Providing Agency (Parent): Nature and Purpose of Transfer

 Department of the Interior: 

 Wildland Fire Management Fund To fund Fire programs $(392,664) $(339,618)

 Central Hazardous Material Fund Clean-up of Environmental Sites - (7,993)

 Department of Agriculture:

 Southern Nevada Public 

 Land Management Act Fund

 Rent From Mineral Leases, Permit Processing Fund

To fund SNPLMA Projects 

Coordination and processing of 

oil and gas use

(13,543)

(765)

-

-

Allocation Transfer Reconciling Item $(406,972) $(347,611)

(dollars in thousands) 2006 2005

The BLM as the Recipient Agency (Child):

 Department of the Interior: 

 Central Hazardous Materials

 Natural Resource Damage Assessment

Clean-up of Environmental Sites

Restoration Activities

 $3,579

 295

$ -

 228

 Department of Agriculture:

 National Forest System Fund Forest Protection and Utilization 2,533 2,469

 Department of Transportation:

 Highway Trust Fund

Maintenance of Highway on 

Interior Land - 158

Allocation Transfer Reconciling Item $6,407 $2,855
84 BLM 2006 Annual Report

Financial Statements

(dollars in thousands)

Wildland Fire 

Management

Management of Lands 

and Resources

Budgetay Resources:

Unobligated Balance, Beginning of Year $ 128,310 $ 33,192 

Change in Central HAZMAT Ownership - - 

Recoveries of Prior Year Unpaid Obligations 24,927 24,327 

Budget Authority:

Appropriations Received 866,564 860,791 

Spending Authority from Offsetting Collections:

Earned:

Collected 27,813 89,295 

Receivable from Federal Sources (104) 1,674 

Change in Unfilled Customer Orders:

Advance Received (2,400) - 

Without Advance from Federal Sources (2,450) 7,208 

Total Budget Authority 889,423 958,968 

Nonexpenditure Transfers, Net 97,366 - 

Permanently Not Available Pursuant to Public Law (11,278) (13,194) 

Total Budgetary Resources $1,128,748 $1,003,293 

Status of Budgetary Resources:

Obligations Incurred:

Direct $951,287 $ 899,949 

Reimbursable 24,184 62,168 

Total Obligations Incurred 975,471 962,117 

Unobligated Balance Available, Apportioned 153,277 41,176 

Total Status of Budgetary Resources $1,128,748 $1,003,293 

Change in Obligated Balance:

Obligated Balance, Net:

Obligations, Beginning of Year $ 298,214 $ 237,296 

Change in Central HAZMAT Ownership - - 

Less: Uncolleted Customer Payments from Federal Sources,

Beginning of Year (11,705) (22,978) 

Total Obligated Balances, Net, Beginning of Year 286,509 214,318 

Obligations Incurred, Net 975,471 962,117 

Less: Gross Outlays (973,525) (937,226) 

Less: Recoveries of Prior Year Unpaid Obligations (24,926) (24,327) 

Change in Uncollected Customer Payments from Federal Sources 2,554 (8,883) 

Total Obligated Balance, Net, End of Year $ 266,083 $ 205,999 

Obligated Balance, Net, End of Year:

Unpaid Obligations $ 275,234 $ 237,859 

Less: Uncollected Customer Payments from Federal Sources (9,151) (31,860) 

Total Obligated Balance, Net, End of Year $ 266,083 $ 205,999 

Net Outlays:

Net Outlays

Gross Outlays $ 973,525 $ 937,226 

Less: Offsetting Collections (25,413) (89,296) 

Less: Distributed Offsetting Receipts - - 

Net Outlays $ 948,112 $ 847,930 

Supplementary Statement of Budgetary Resources by Major Budget Accounts 

for the Fiscal Year Ended September 30, 2006
BLM 2006 Annual Report 85

Financial Statements

Miscellaneous 

Permanent Payment 

Accounts

Permanent Operating 

Funds

Oregon and California 

Grant Lands Other Combined

$ 3,871 $ 892,762 $1,719 $ 164,234 $1,224,088 

- - - (4,286) (4,286)

 418 71,721 1,669 4,833 127,895 

 8,868 862,343 110,070 322,411 3,031,047

- - - 212,289 329,397

- - - 205 1,775 

- - - (4) (2,404)

- - - (4) 4,754 

8,868 862,343 110,070 534,897 3,364,569 

- 116 - (5,000) 92,482 

 - - (1,619) (304) (26,395)

 $13,157 $1,826,942 $111,839 $ 694,374 $4,778,353

$ 8,325 $ 266,547 $109,655 $ 540,689 $2,776,452 

- - - - 86,352 

 8,325 266,547 109,655 540,689 2,862,804 

4,832 1,560,395 2,184 153,685 1,915,549 

 $13,157 $1,826,942 $111,839 $ 694,374 $4,778,353

$ 5,419 $ 877,885 $ 28,461 $ 59,462 $1,506,737

- - - (20,073) (20,073)

 - - - (6,951) (41,634)

5,419 877,885 28,461 32,438 1,445,030 

 8,325 266,547 109,655 540,689 2,862,804 

 (7,682) (131,888) (104,134) (518,160) (2,672,615)

 (418) (71,721) (1,669) (4,835) (127,896)

 - - - (200) (6,529)

$ 5,644 $ 940,823 $ 32,313 $ 49,932 $1,500,794 

$ 5,644 $ 940,823 $ 32,313 $ 57,084 $1,548,957

 - - - (7,152) (48,163)

$ 5,644 $ 940,823 $ 32,313 $ 49,932 $1,500,794 

$ 7,682 $ 131,888 $104,134 $ 518,160 $2,672,615 

 - - - (212,285) (326,994)

- (753,009) - (618,818) (1,371,827)

$ 7,682 $ (621,121) $104,134 $(312,943) $ 973,794 
86 BLM 2006 Annual Report

Financial Statements

(dollars in thousands)

Wildland Fire 

Management

Management of Lands 

and Resources

Budgetay Resources:

Unobligated Balance, Beginning of Year $ 89,403 $ 34,750 

Recoveries of Prior Year Unpaid Obligations 27,983 21,979 

Budget Authority:

Appropriations Received 843,099 848,939 

Spending Authority from Offsetting Collections:

Earned:

Collected 42,320 97,434 

Receivable from Federal Sources (3,642) 6,916 

Change in Unfilled Customer Orders:

Advance Received (8,599) 4 

Without Advance from Federal Sources (6,727) 1,614 

Total Budget Authority 866,451 954,907 

Nonexpenditure Transfers, Net - 7,500 

Permanently Not Available Pursuant to Public Law (11,804) (12,113) 

Total Budgetary Resources $972,033 $1,007,023 

Status of Budgetary Resources:

Obligations Incurred:

Direct $831,011 $ 903,436 

Reimbursable 12,711 70,397 

Total Obligations Incurred 843,722 973,833 

Unobligated Balance Available, Apportioned 128,311 33,171 

Unobligated Balance Not Available - 19 

Total Status of Budgetary Resources $972,033 $1,007,023 

Change in Obligated Balance:

Obligated Balance, Net:

Obligations, Beginning of Year $294,088 $ 239,305 

Less: Uncolleted Customer Payments from Federal Sources,

Beginning of Year (22,074) (14,449) 

Total Obligated Balances, Net, Beginning of Year 272,014 224,856 

Obligations Incurred, Net 843,722 973,833 

Less: Gross Outlays (811,613) (953,862) 

Less: Recoveries of Prior Year Unpaid Obligations (27,983) (21,979) 

Change in Uncollected Customer Payments from Federal Sources 10,369 (8,530) 

Total Obligated Balance, Net, End of Year $286,509 $ 214,318 

Obligated Balance, Net, End of Year:

Unpaid Obligations $298,214 $ 237,296 

Less: Uncollected Customer Payments from Federal Sources (11,705) (22,978) 

Total Obligated Balance, Net, End of Year $286,509 $ 214,318 

Net Outlays:

Net Outlays

Gross Outlays $811,613 $ 953,862 

Less: Offsetting Collections (33,722) (97,438) 

Less: Distributed Offsetting Receipts - - 

Net Outlays $777,891 $ 856,424 

Supplementary Statement of Budgetary Resources by Major Budget Accounts 

for the Fiscal Year Ended September 30, 2005 (dollars in thousands)
BLM 2006 Annual Report 87

Financial Statements

Miscellaneous 

Permanent Payment 

Accounts

Permanent Operating 

Funds

Oregon and California 

Grant Lands Other Combined

$ 5,517 $ 565,892 $ 2,615 $179,622 $ 877,799 

119 15,840 1,453 4,908 72,282 

356,306 1,068,874 109,057 81,136 3,307,411

- - - 126,278 266,032 

- - - 491 3,765 

- - - 1,970 (6,625)

- - - - (5,113)

356,306 1,068,874 109,057 209,875 3,565,470 

- 36 - (14,499) (6,963)

 - - (1,560) (318) (25,795)

 $361,942 $1,650,642 $111,565 $379,588 $4,482,793

$355,692 $ 757,879 $109,846 $217,733 $3,175,597

 - - - - 83,108 

355,692 757,879 109,846 217,733 3,258,705 

 6,250 892,763 1,719 161,855 1,224,069 

- - - - 19 

 $361,942 $1,650,642 $111,565 $379,588 $4,482,793

$ 5,249 $ 277,758 $ 27,778 $ 70,706 $ 914,884 

 - - - (6,460) (42,983)

5,249 277,758 27,778 64,246 871,901

355,692 757,879 109,846 217,733 3,258,705 

 (355,403) (141,912) (107,710) (224,069) (2,594,569)

 (119) (15,840) (1,453) (4,908) (72,282)

 - - - (491) 1,348 

$ 5,419 $ 877,885 $ 28,461 $ 52,511 $1,465,103

$ 5,419 $ 877,885 $ 28,461 $ 59,462 $1,506,737

 - - - (6,951) (41,634)

$ 5,419 $ 877,885 $ 28,461 $ 52,511 $1,465,103

$355,403 $ 141,912 $107,710 $224,069 $2,594,569 

 - - - (128,247) (259,407)

(279,880) (1,043,478) (155,027) (1,478,385)

$ 75,523 $ (901,566) $107,710 $ (59,205) $ 856,777
88 BLM 2006 Annual Report

STEWARDSHIP

LANDS AND

HERITAGE

ASSETS

REPORT

Stewardship Lands 1

The BLM has been entrusted with stewardship responsibility for 

the multiple-use management of natural resources on and beneath 

millions of acres of America’s “public lands.” The Federal Land 

Policy and Management Act (FLPMA) of 1976 (43 U.S.C. 1701 

et seq., Public Law 94-579, Sec.103(e)) defines public lands as “... 

any land and interest in land owned by the United States within 

the several States and administered by the Secretary of the Interior 

through the Bureau of Land Management, without regard to how 

the United States acquired ownership, except: (1) lands located on 

the Outer Continental Shelf; and (2) lands held for the benefit of 

Indians, Aleuts, and Eskimos.” 

Most of the public lands for which the BLM serves as steward 

were once a part of the approximately 1.8 billion acres of “public 

domain” lands acquired by the Nation between 1781 and 1867. 

Lands managed by the BLM represent about one-eighth of America’s 

land surface, or approximately 42 percent of the lands under Federal 

ownership. The BLM manages lands in 30 states, but most of 

the public lands are located in Alaska and the 11 western states, 

encompassing Arizona, California, Colorado, Idaho, Montana, New 

Mexico, Nevada, Oregon, Utah, Washington, and Wyoming.

Relationship of Stewardship Lands 2 to BLM’s Mission

It is the mission of the BLM to sustain the health, diversity, and 

productivity of the public lands’ resources for the use and enjoyment 

of present and future generations. These public lands are all 

stewardship lands; 3 the management of the resources related to the 

land is the essence of the BLM’s mission.

1

 The Federal Accounting Standards Advisory Board (FASAB) defines “Stewardship Land” as “land 

and land rights owned by the Federal Government but not acquired for or in connection with items of 

general PP&E [Property, Plant, and Equipment].” “Acquired for or in connection with” means “land 

acquired with the intent to construct general PP&E and land acquired in combination with general 

PP&E, including not only land used as the foundation but also adjacent land considered to be the 

general PP&E’s common grounds.”

2

 The FASAB defines “‘[l]and’ as the solid part of the surface of the earth. Excluded from the definition 

are the natural resources (that is, depletable resources, such as mineral deposits and petroleum; 

renewable resources, such as timber; and the outer-continental shelf resources) related to land.”

3

 The FASAB presently has an active project to address standards for natural resources, for which they 

are considering developing individual standards for each type of natural resources separately. To begin 

the project, FASAB will be addressing oil and gas resources. The framework for the oil and gas resource 

phase of the project will be used as a model when addressing the other types or logical sets of natural 

resources (e.g., timber, grazing land, and solid leasable minerals) in subsequent phases of the project.
BLM 2006 Annual Report 89

Stewardship Lands and Heritage Assets Report

4

 The term “multiple use” is defined in Section 103(c) of FLPMA as “. . . the management of the public lands and their various resource values so 

that they are utilized in the combination that will best meet the present and future needs of the American people; making the most judicious use of 

the land for some or all of the resources or related services over areas large enough to provide sufficient latitude for periodic adjustments in use to 

conform to changing needs and conditions; the use of some land for less than all of the resources; a combination of balanced and diverse resource 

uses that takes into account the long-term needs of future generations for renewable and nonrenewable resources, including, but not limited to, 

recreation, range, timber, minerals, watershed, wildlife and fish, and natural scenic, scientific and historical values; and harmonious and coordinated 

management of the various resources without permanent impairment of the productivity of the land and the quality of the environment with 

consideration being given to the relative values of the resources and not necessarily to the combination of uses that will give the greatest economic 

return or the greatest unit output.”

5 Domestic Livestock Grazing: The BLM issues grazing permits primarily for cattle and sheep, but also issues permits for domestic horses, goats, 

bison, and reindeer. Livestock grazing is managed on millions of acres of the public lands—about 90 percent of the public lands in the 11 western 

states and about 6 percent in Alaska. Livestock grazing is managed in a way that allows the harvest of forage resources while maintaining wildlife 

habitat, meeting the requirements of the Clean Water Act, and providing for scenic values and recreational activities. Permits are issued that 

authorize appropriate grazing levels, season of use, and duration of use by livestock in the multiple use context.

Fish and Wildlife Development and Utilization: Wildlife and fish habitat spans all of the public lands and waterways. The BLM’s wildlife and 

fisheries management program works to maintain and restore fish and wildlife and their habitats by conserving and monitoring habitat conditions, 

conducting inventories of fish and wildlife resources, and developing cooperative management plans, while providing for environmentally responsible 

recreation and commercial uses. The BLM works closely with state wildlife management agencies that are responsible for managing fish and wildlife 

populations that occur on BLM lands. The BLM lands support habitat for all North American big game species, waterfowl, shorebirds, upland game 

birds, and a large number of nongame birds, mammals, reptiles, amphibians, and fish. 

Mineral Exploration and Production: Energy and mineral resources generate the highest economic production values among commercial uses 

of both BLM-administered public lands (surface) and Federal minerals (subsurface) estates. The BLM provides for the American people’s use of 

the minerals that reside on or under the surface area of the public lands, including both fluid and solid minerals. Fluid Minerals: The BLM is the 

Federal agency responsible for the regulating the extraction of oil and gas from the Federal mineral estate. This includes the approval of geophysical 

operations, leasing of lands for oil and gas development, the drilling of oil and gas wells, oil and gas pipelines, and the abandonment of oil and gas 

wells. After approval of an operation is granted, the BLM inspects all aspects of these operations to ensure compliance with all laws and approved 

requirements. The BLM also ensures that oil and gas resources are not drained from federal lands. Solid Minerals: There are three basic types of solid 

minerals on Federal lands: (1) locatable (subject to the General Mining Law of 1872, as amended); (2) leasable (subject to various mineral leasing 

acts, such as the Mineral Leasing Act of 1920, as amended); and (3) salable (subject to mineral materials disposed of under the Materials Act of 1947, 

as amended).

Rights-of-Way: Rights-of-way include an easement, lease, permit, or license to occupy, use, or traverse public lands. The BLM has been granted the 

authority to grant, issue, or renew rights-of-way over, upon, under, or through the public lands for various purposes.

Outdoor Recreation: The multiple use mission of the BLM is to serve the diverse outdoor recreation demands of visitors while helping them to 

maintain the sustainable conditions needed to conserve their lands and their recreation choices. The BLM’s vision is to provide the stewardship that 

will open up new opportunities for people to recreate responsibly in their great outdoors. The goal is to provide opportunities for environmentally 

responsible recreation.

Timber Production: Timber production is the art and science of culturing (cultivating, planting, fertilizing, protecting, thinning, and ultimately 

harvesting) trees to use them for the production of lumber or paper. Timber production is just one aspect of the Bureau’s overall forest management 

program. It is practiced only on those lands deemed suitable to produce timber on a sustained yield basis (i.e., commercial forest lands) and where it 

is compatible with other land management objectives as outlined in the applicable land use plan. 

Use of Stewardship Lands

The BLM is guided by the principles of 

multiple use 4 and sustained yield in managing 

the natural resources on the public lands. All 

of the public lands, including those described 

in the Natural Heritage Assets section of this 

report, are managed for multiple use and are, in 

fact, used for multiple (more than one) resource 

values.

Land use plans, developed with public 

involvement, are the mechanism by which the 

multiple-use concept is put into practice. The 

BLM is required to develop, maintain, and, 

when appropriate, revise land use plans that 

provide by tracts or areas for the use of the 

public lands. The BLM is also required to “use 

and observe the principles of multiple use and 

sustained yield” in the developing and revising 

of land use plans.

The multiple uses of BLM-managed 

lands include one or more of the following 

uses: domestic livestock grazing, fish and 

wildlife development and utilization, mineral 

exploration and production, rights-of-way, 

outdoor recreation, and timber production.5
90 BLM 2006 Annual Report

Stewardship Lands and Heritage Assets Report

The BLM reports its stewardship land by 

12 “administrative” states whose boundaries 

largely follow one or more political state lines. 

Each administrative state is further divided 

into administrative management areas. Specific 

land use plans are developed and implemented 

to manage the land’s resources for both present 

and the future periods at the administrative 

management area level. Table 1 below provides 

the numbers of administrative management 

areas for 2006.

Table 1 – Stewardship Lands Managed by the BLM

Category

By Use

BLM

Administrative

States1

Administrative Management Areas

2005

Balance

2006

Additions2 2006Withdrawals2 2006Net Change

2006

Balance

Multiple Alaska 5 0 0 0 5

Multiple Arizona 8 0 0 0 8

Multiple California 15 0 0 0 15

Multiple Colorado 14 0 0 0 14

Multiple

Eastern States (consisting 

of Alabama, Arkansas, 

Florida, Illinois, Indiana, 

Iowa, Louisiana, Maryland, 

Michigan, Minnesota, 

Mississippi, Missouri, Ohio, 

Virginia, and Wisconsin)

2 0 0 0 2

Multiple Idaho 12 0 0 0 12

Multiple Montana (including North 

Dakota and South Dakota) 11 0 0 0 11

Multiple Nevada 6 0 0 0 6

Multiple

New Mexico (including 

Kansas, Oklahoma, and 

Texas)

8 0 0 0 8

Multiple Oregon (including 

Washington) 24 0 0 0 24

Multiple Utah 11 0 0 0 11

Multiple Wyoming (including 

Nebraska) 10 0 0 0 10

Total 126 0 0 0 126

1

 In some cases the BLM administrative states extend partly into one or more adjoining state(s) as follows:

- The BLM administrative state of Arizona consists of the legal boundaries of the state of Arizona plus areas in Imperial, Riverside, and San 

Bernardino Counties, California.

- The BLM administrative state of California consists of the legal boundaries of the state of California except areas in Alpine, Lassen, Sierra, 

Imperial, Riverside, and San Bernardino Counties; plus areas in Humboldt and Washoe Counties, Nevada.

- The BLM administrative state of Colorado consists of the legal boundaries of the state of Colorado plus areas in Grand County, Utah.

- The BLM administrative state of Idaho consists of the legal boundaries of the state of Idaho plus areas in Elko County, Nevada, and areas in 

Malheur County, Oregon.

- The BLM administrative state of Nevada consists of the legal boundaries of the state of Nevada, except areas in Humboldt, Washoe, and Elko 

Counties; plus areas in Alpine, Lassen, and Sierra Counties, California.

- The BLM administrative state of Oregon consists of the legal boundaries of Oregon and Washington except areas in Malheur County, Oregon.

- The BLM administrative state of Utah consists of the legal boundaries of the state of Utah except areas in Grand County.

2

 Changes in administrative management units may occur as a result of the division of one administrative management unit into two or more 

administrative management units, or the merging of two or more administrative management units into one. In some years, such as FY 2006, 

there may not be changes in the number of administrative management units. Changes in the number of administrative management units do not 

necessarily correlate to changes in the number of acres managed by the BLM. Changes in acreage managed by the BLM result from acquisitions of 

lands through purchase, donation, or exchange, and from the disposal of lands through exchange and various public land laws (including sales). 

More accurate mapping using improved technology, periodic audits, and/or reviews of BLM records may also result in decreases or increases in 

BLM’s acreage data.
BLM 2006 Annual Report 91

Stewardship Lands and Heritage Assets Report

Goals and Principles for Managing 

Stewardship Lands

The overarching goals and principles 

by which the public lands are managed are 

contained in FLPMA, which provides the basis 

for planning and managing the uses of resources 

on the public lands for the American people. In 

Sec. 102, FLPMA declares that the policy of the 

United States is as follows:

•	 [G]oals and objectives be established by law 

as guidelines for public land use planning, 

and that management be on the basis of 

multiple use and sustained yield unless 

otherwise specified by law . . . ;

•	 [T]he public lands be managed in a manner 

that will protect the quality of scientific, 

scenic, historical, ecological, environmental, 

air and atmospheric, water resources, 

and archeological values; that, where 

appropriate, will preserve and protect certain 

public lands in their natural condition; that 

will provide food and habitat for fish and 

wildlife and domestic animals; and that will 

provide for outdoor recreation and human 

occupancy and use . . . ;

•	 [T]he public lands be managed in a manner 

which recognizes the Nation’s need for 

domestic sources of minerals, food, timber, 

and fiber from the public lands including 

implementation of the Mining and Minerals 

Policy Act of 1970 . . . as it pertains to the 

public lands . . . .

Other laws and Executive Orders that 

provide guidance on how specific uses are 

managed include, but are not limited to, those 

shown in Table 2 below.

2 – Guidance for the Management and Use of 

Resources on the Public Lands

Table 2 – Guidance for the Management and Use of Resources on the Public Lands

- The Oregon and California Grant Lands Act of 1937 (43 U.S.C. 1181)

- The Alaska National Interest Lands Conservation Act of 1980, 

(16 U.S.C. 3101 et seq.),

- The Naval Petroleum Reserves Production Act

- The Reindeer Act

- The Taylor Grazing Act of 1934, as amended, (43 U.S.C. 315 et seq.), 

- The Public Rangelands Improvement Act of 1978, (43 U.S.C. 1901

et seq.) 

- The National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321

et seq.)

- The Endangered Species Act of 1973, as amended (16 U.S.C. 1531

et seq.), 

- The Wild and Scenic Rivers Act of 1968 as amended (16 U.S.C. 1271

et seq.), 

- The National Historic Preservation Act of 1966, as amended (16 U.S.C. 

470 et seq.), 

- The Safe Drinking Water Act (42 U.S.C. 300f), 

- The Soil and Water Resources Conservation Act of 1977 (16 U.S.C. 

2001), 

- The Clean Air Act of 1990 as amended (42 U.S.C. 7401 et seq.), 

- The Clean Water Act of 1987 as amended (33 U.S.C. 1251), 

- The American Indian Religious Freedom Act, 1966 (42 U.S.C 1996 

et seq.), 

- Executive Order 13007 (“Indian Sacred Sites”), (61 FR 104, 

May 29, 1966),

- Executive Order 11990, Protection of Wetlands, May 25, 1977

(42 FR 26961), 

- Executive Order 12088, Federal Compliance with Pollution Control 

Standards, October 17, 1978 (43 FR 47707), 

- Executive Orders 10046, 10175, 10234, 10322, 10787, 10890, 

- The Migratory Bird Conservation Act of 1929, as amended 

(16 U.S.C. 715) and treaties pertaining thereto, 

- The Mineral Leasing Act for Acquired Lands of 1947 as amended 

(30 U.S.C. 351-359 et seq.),

- The Mineral Leasing Act of 1920, as amended (30 U.S.C. 181 et seq.)

- The Federal Oil and Gas Royalty Management Act of 1982,

- The Federal Onshore Oil and Gas Leasing Reform Act of 1987,

- The Surface Mining Control and Reclamation Act of 1977

(30 U.S.C. 1201 et seq.),

- The Multiple Mineral Development Act of 1954 (30 U.S.C. 521-531

et seq.),

- The Materials Act of July 31, 1947, as amended (30 U.S.C. 601

et seq.),

- The Federal Coal Leasing Amendments Act of 1976, as amended 

(90 Stat. 1083-1092),

- Section 402 of Reorganization Plan No. 3 of 1946 (5 U.S.C. Appendix),

- The Mining and Minerals Policy Act of 1970,

- The National Materials and Minerals Policy, Research and 

Development Act of 1980,

- The National Energy Policy report of May 2001,

- Executive Order 13211, Actions Concerning Regulations that 

Significantly Affect Energy Supply, May 2001,

- Executive Order 13212, Actions to Expedite Energy-Related Projects, 

May 2001,

- The Land and Water Conservation Fund Act of 1965, as amended, 

(16 U.S.C. 460 (1-6a) et seq.),

- The Wilderness Act of 1964 (16 U.S.C. 1131),

- The National Trails System Act of 1968, as amended (16 U.S.C. 1241

et seq.),

- The Sikes Act of 1974 (16 U.S.C. 670 et seq.),

- The Federal Lands Recreation Enhancement Act of 2004 (16 U.S.C. 

6803(c)).
92 BLM 2006 Annual Report

Stewardship Lands and Heritage Assets Report

The BLM develops policy and guidance 

based on the above-listed laws and executive 

orders, and reviews the adequacy of policy 

through program evaluations, technical reviews, 

and general management evaluations. These 

evaluations and reviews are performed to 

ensure that the BLM at all levels (field, state, 

national, and Washington offices) is operating 

in compliance with law, regulation, and policy. 

Evaluations also allow the BLM to identify 

where policy needs to be amended to achieve the 

intended purposes of those laws and executive 

orders.

Natural Heritage Assets

Protecting and Enhancing the Natural 

and Human Environment

Guided by the principles of multiple use and 

sustained yield in managing the public lands, 

the BLM has recognized the need to protect and 

enhance the natural and human environment. 

Special management areas have been designated 

by Presidential, Congressional, and Secretarial 

action. Presidential action has established 

14 BLM national monuments. Congress has 

established one BLM national monument and 

numerous national conservation and protection 

areas, wilderness areas, wild and scenic rivers, 

national trails, and other designations. Areas 

designated by the Secretary of the Interior 

include national recreation trails and national 

natural landmarks.

Types of Special Management Areas

Although the BLM manages natural 

heritage assets that are not in specifically 

designated areas, significant portions of 

the public lands have been presidentially, 

congressionally, or secretarially designated 

as special management areas. These special 

management areas have been designated to 

preserve their natural heritage values. Table 

3 provides a summary of the number of 

designated special management areas, including 

any changes in fiscal year 2006. These special 

management areas are found on the BLMmanaged stewardship lands described above.

Table 3 - Designated Special Management Areas

Special Management Area Type1

Number

2005

Balance

2006

Increase2 2006Decrease 2 2006 Net Change

2006

Balance

National Monuments [p -14 and c-1] 15 - - - 15

National Conservation Areas [c] 13 - - - 13

Cooperative Management and Protection Area [c] 1 - - - 1

White Mountains National Recreation Area [c] 1 - - - 1

Yaquina Head Outstanding Natural Area [c] 1 - - - 1

Wilderness Areas [c] 175 2 - 2 177

National Wild and Scenic Rivers [c] 38 - - - 38

Headwaters Forest Reserve [c] 1 - - - 1

National Historic Trails [c] 10 - - - 10

National Scenic Trails [c] 2 1 - 1 3

National Recreation Trails [s] 33 1 - 1 34

Lake Todatonten Special Management Area [c] 1 - - - 1

National Natural Landmarks [s] 45 1 - 1 46

1

 Congressional designations are identified by [c], Presidential proclamation designations are identified by [p], and Secretarial designations are identified 

by [s].

2

 An increase results from a new designation action or a transfer from a different entity, while a decrease results from a previous designation being 

revoked, reclassified, or transferred to a different entity. In FY 2006, new designations increased wilderness areas by 2, National Recreation Trails by 1, and 

National Natural Landmarks by 1.
BLM 2006 Annual Report 93

Stewardship Lands and Heritage Assets Report

Figure 2 - BLM-Managed Public Lands, including National Monuments and National Conservation Areas
94 BLM 2006 Annual Report

Stewardship Lands and Heritage Assets Report

National Monuments: National 

monuments can be designated by Congress 

to protect historic landmarks, historic and 

prehistoric structures, or other objects of 

historic or scientific interest on the public 

lands. Monuments can also be designated by 

Presidential proclamation under the Antiquities 

Act of 1906 to protect objects of scientific or 

historic interest. The BLM manages 15 national 

monuments.

National Conservation Areas: Congress 

designates national conservation areas (NCAs) 

so that present and future generations of 

Americans can benefit from the conservation, 

protection, enhancement, use, and management 

of these areas and enjoy their natural, 

recreational, cultural, wildlife, aquatic, 

archeological, paleontological, historical, 

educational, and/or scientific resources and 

values. The BLM manages 13 NCAs.

Cooperative Management and Protection 

Area: The BLM manages one congressionally 

designated cooperative management and 

protection area, the Steens Mountain 

Cooperative Management and Protection Area, 

located in southeastern Oregon. Cooperative 

and innovative management projects will be 

maintained and enhanced by the BLM, private 

landowners, tribes, and other public interests.

National Recreation Area: A national 

recreation area is an area designated by Congress 

to assure the conservation and protection of 

natural, scenic, historic, pastoral, and fish 

and wildlife values and to provide for the 

enhancement of recreational values. The BLM 

manages one such area, the White Mountains 

National Recreation Area in Alaska, which is 

named for its unusual, jagged, white limestone 

ridgeline.

Outstanding Natural Area: An 

outstanding natural area consists of protected 

lands designated either by Congress or 

administratively by an agency to preserve 

exceptional, rare, or unusual natural 

characteristics and to provide for the protection 

or enhancement of natural, educational, or 

scientific values. These areas are protected 

by allowing physical and biological processes 

to operate, usually without direct human 

intervention. The BLM manages one such 

area, the Yaquina Head Outstanding Natural 

Area, located in Newport, Oregon. Yaquina 

Head also has been designated as a Globally 

Important Bird Area by the American Bird 

Conservancy and the National Audubon 

Society.

Wilderness Areas: The BLM administers 

177 wilderness areas. The locations of these 

wilderness areas ensure that these lands 

represent the wide diversity of resources found 

on the public lands. Protective management 

helps ensure the protection and integrity of 

natural and biological processes on all public 

lands. 

Wilderness areas are designated by 

Congress and are defined by the Wilderness 

Act of 1964 as a place “where the earth and its 

community of life are untrammeled by man, 

where man himself is a visitor who does not 

remain.” Designation is aimed at ensuring 

that these lands are preserved and protected 

in their natural condition. Wilderness areas, 

which are generally at least 5,000 acres in size, 

offer outstanding opportunities for solitude or 

a primitive and unconfined type of recreation. 

They may also contain ecological, geological, 

or other features that have scientific, scenic, or 

historical value.

National Wild and Scenic Rivers: The 

BLM administers some 20 percent of all 

rivers in the National Wild and Scenic Rivers 

System, a total of 38 rivers in five states. 

These nationally recognized rivers encompass 

some of the Nation’s greatest diversity and 

concentrations of recreational, natural, and 

cultural resources. Included among the BLMmanaged wild and scenic rivers is the Fortymile 

River in Alaska, which is the longest designated 

river in the National Wild and Scenic Rivers 

System.
BLM 2006 Annual Report 95

Stewardship Lands and Heritage Assets Report

Rivers designated in the National Wild and 

Scenic Rivers System are classified in one of 

three categories (wild, scenic, and recreational), 

depending on the extent of development and 

accessibility along each section. In addition 

to being free flowing, these rivers and their 

immediate environments must possess at least 

one outstandingly remarkable value—scenic, 

recreational, geologic, fish and wildlife, historic, 

cultural, or other similar values.

Headwaters Forest Reserve: The 

Headwaters Forest Reserve, located in central 

Humboldt County, California, was acquired 

from private owners by the BLM and the State 

of California. While title is held by BLM, this 

area is co-managed by the BLM and the State 

of California to protect the stands of old-growth 

redwoods that provide habitat for a threatened 

seabird, the marbled murrelet, as well as the 

headwaters that serve as a habitat for the 

threatened coho salmon and other fisheries.

National Trails System: Since the passage 

of the National Trail System Act in 1968, the 

BLM has assumed responsibility for sections of 

13 national historic or scenic trails designated 

by Congress. These long-distance trails are 

among BLM’s “Great American Landscapes,” 

showcasing the exploration, westward 

migration, historic events, and scenic splendor 

of our country. The BLM manages well over 85 

percent of all of the Federal miles along national 

historic trails. National recreation trails are also 

a part of the National Trail System Act, and 

are designated each year by the Departmental 

Secretary having jurisdiction over the particular 

trail area.

The BLM’s national trails program includes 

signing, maintenance, protection, coordination 

of volunteers, planning, interagency 

coordination, patrol, monitoring, visitor 

information, and interpretation. Partnerships 

with many trail organizations enhance the 

BLM’s management efforts. The BLM works 

closely with the Partnership for the National 

Trails System and affiliated organizations on 

many volunteer projects and related conferences.

The BLM manages sections of ten National 

Historic Trails. These ten trails are the 

Iditarod, Juan Bautista De Anza, California, 

Nez Perce, Lewis and Clark, El Camino Real de 

Tierra Adentro, Oregon, Mormon Pioneer, Pony 

Express, and the Old Spanish National Historic 

Trail. 

The BLM manages sections of three 

National Scenic Trails—the Continental 

Divide National Scenic Trail, the Pacific 

Crest National Scenic Trail, and the Potomac 

Heritage Trail.

National Recreation Trails do not require 

congressional or presidential approval; they 

are designated by the Secretary of the Interior. 

These trails provide a variety of outdoor 

recreation uses and opportunities in both 

remote and urban areas. The BLM manages 

34 national recreation trails. 

Lake Todatonten Special Management 

Area: The U.S. Congress authorized the 

creation of the Lake Todatonten Special 

Management Area located in the interior of 

Alaska. Lake Todatonten, the central feature 

of this special management area, is particularly 

important to waterfowl, which use the area for 

migration, staging, molting, and nesting. The 

lake and its surrounding hills are also home to 

moose, bear, and furbearers.

National Natural Landmarks: The BLM 

manages 46 national natural landmarks, which 

are designated by the Secretary of the Interior. 

To qualify as a national natural landmark, the 

area must contain an outstanding representative 

example(s) of the Nation’s natural heritage, 

including terrestrial communities, aquatic 

communities, landforms, geological features, 

habitats of native plant and animal species, or 

fossil evidence of the development of life on 

earth.
96 BLM 2006 Annual Report

Stewardship Lands and Heritage Assets Report

Cultural Heritage Assets

The BLM manages 13 national historic 

landmarks. These items were designated by the 

Secretary of the Interior. Table 4 summarizes 

the number of national historic landmarks 

under BLM’s stewardship.

Table 4 - Number of Cultural Assets

Type of 

Asset

Number 

2005

Balance

2006

Increase1 2006Decrease1

2006

Net 

Change

2006

Balance2

National 

Historic 

Landmarks

21 - 8 -8 13

1

 An increase results from a new designation action or transfers from 

a different entity, while a decrease results from a previous designation 

being revoked, reclassified, or transferred to a different entity. In addition, 

one decrease resulted from a resurvey of the land in FY 2006.

2

 In addition to the 13 NHLs listed above, the BLM manages some 

portion of the land contained within 5 NHL districts, but either there 

are no historic structures on the BLM portion of this land or the historic 

structures are not owned by the BLM.

Museum Collections

Museum collections under BLM’s 

stewardship consist principally of archaeological, 

historical, and paleontological materials that 

are managed to professional standards in 

compliance with applicable laws, and that are 

accessible to the public.

• Archaeological and Historical Collections: 

Millions of museum objects have originated 

from the BLM’s archaeological and 

historical resources. Resources include 

trails, sites, buildings, structures, and objects 

from past human life and activities that are 

significant to American history, architecture, 

archaeology, engineering, and culture, and 

that contribute to our understanding of the 

historical and cultural foundations of our 

Nation.

• Paleontological Collections: Paleontological 

materials—the fossilized remains or traces 

of dinosaurs, extinct plants, mammals, 

fish, insects, and other organisms from the 

distant past—are another important source 

of museum collections that originate from 

BLM-managed lands. Many of the earliest 

described and most widely known dinosaurs 

were excavated from BLM-managed lands. 

Public lands continue to yield new fossil 

finds and exciting discoveries that shed light 

on the history of life.

Collections are used to teach museum 

visitors about life in the past. Researchers value 

the collections from public lands as a source 

of material for scientific data that becomes a 

permanent part of study and display collections. 

Scientific publications, textbooks, and articles 

for the general public are based on information 

taken from these collections.

Table 5 summarizes the number of facilities 

holding collections from BLM public lands. 

Table 5 - Number of Facilities 

Location

Number

2005

Balance

2006

Increase1 2006Decrease1

2006

Net 

Change

2006

Balance

NonFederal 

(External) 

Facilities

155 - (24) (24) 131

BLM 

Facilities 3 - - - 3

1

 An increase results from a collection being placed in a new facility, 

while a decrease results from a collection being withdrawn from a facility. 

Either an increase or a decrease may result from an administrative 

correction of records. The number of BLM curation facilities was 

unchanged in FY 2006 while the net number of non-Federal facilities 

identified as holding BLM collections decreased from 155 to 131. 

Additional research into facility holdings resulted in 24 facilities being 

deleted.
BLM 2006 Annual Report 97

Stewardship Lands and Heritage Assets Report

Collections in Non-Federal Facilities

Since Europeans first inhabited America, 

cultural and paleontological objects have been 

collected from the vast acreage of Federal land. 

However, it was not until 1906, when the 

Antiquities Act mandated that permits be issued 

for excavations, that any control was exercised 

by the Federal government over the excavation 

of these materials. In the Department of the 

Interior, permitting authority was delegated to 

the Departmental Consulting Archaeologist of 

the National Park Service, the Department’s 

lead for cultural resource issues. The BLM was 

created in 1946, but it was not until the mid1970s that the first Bureau archaeologists were 

hired. Permitting authority was not delegated 

to the BLM until September 28, 1984, by 

Secretarial Order 3104.

Most collections originating from BLMmanaged land are housed in non-Federal 

facilities throughout the country. To date, the 

Bureau has identified 131 professional facilities 

in the U.S. and Canada where millions of 

objects originating from the public lands reside.

These cultural and paleontological objects 

have been gathered not for the Bureau’s use but 

for the benefit of the public. The BLM has 

gathered data for all of the non-Federal facilities 

(type of collection, location, website, year 

established, attendance figures, collection type, 

professional organization membership, academic 

accreditation, museum accreditation and 

assessments, etc.). This data demonstrates that 

the facilities are professional institutions capable 

of caring for Federal collections; however, the 

BLM does not directly manage the material in 

the collections.

Since most of the collections originating 

from BLM-managed land are housed in nonFederal facilities, the BLM’s relationship 

with these curatorial facilities is crucial to the 

continued management and protection of these 

collections. Non-Federal facilities provide access 

to researchers and scientists as well as developing 

public displays utilizing the collections. 

Collections in external repositories thus fulfill 

their mission and are being curated and fully 

used for public benefit, all at little or no cost to 

the American public.

Collections in Federal Facilities

Outside of the millions of objects residing in 

non-Federal facilities, the BLM curates objects 

in three BLM facilities: the Anasazi Heritage 

Center (AHC) in Dolores, Colorado, transferred 

to BLM management in 1988; the Billings 

Curation Center (BCC) in Billings, Montana, 

established in 1984; and the National Historic 

Oregon Trail Interpretive Center (NHOTIC) 

on Flagstaff Hill, Oregon, opened in 1992. It is 

the BLM’s policy that museum collections will 

not be housed in the Bureau’s field offices.

Anasazi Heritage Center (AHC)

The AHC is the Bureau’s only collections 

facility and museum. It features the Anasazi 

(ancestral Puebloan) culture as well as other 

cultures of the Four Corners region. The 

museum has permanent exhibits, archaeological 

sites, special exhibits and events, traveling 

exhibits, educational resources for teachers, 

archaeological research collections, and an 

excellent interactive website. AHC collections 

are principally archaeological materials, 

along with some historic and paleontological 

materials.

Billings Curation Center (BCC)

A much smaller entity, the BCC was 

established to curate artifacts collected from 

public lands in Montana and North and South 

Dakota. The primary objectives of the BCC are 

to assist these three BLM states in complying 

with the Native American Graves Protection 

and Repatriation Act (NAGPRA), and to ensure 

that collections (which are representative of 

nearly 12,000 years of prehistory and history 

in the Northern Plains) and associated records 
98 BLM 2006 Annual Report

Stewardship Lands and Heritage Assets Report

serve scientific researchers, the BLM, and other 

Federal agency personnel. The center has no 

gallery spaces, but it does host researchers and 

interns.

National Historic Oregon Trail 

Interpretive Center (NHOTIC)

The NHOTIC features exhibits, living 

history areas (including pioneer encampment 

and mining), a theater, an outdoor 

amphitheater, interpretive trails, and a picnic 

area. It provides majestic scenery and unique 

vistas of the historic ruts of the Oregon Trail. 

The center’s goal is to interpret the story of 

the Oregon Trail and its impact on western 

American history. This is achieved, in large 

part, through the use of artifacts. Artifacts, 

along with artwork, text, videos, sound effects, 

and dioramas, present well-rounded, fact-filled 

exhibits and programs.

Condition of Stewardship Lands and 

Heritage Assets

Condition of Stewardship Lands

The Federal Accounting Standards Advisory 

Board (FASAB) defines “‘[l]and’ as the solid 

part of the surface of the earth. Excluded 

from the definition are the natural resources 

(that is, depletable resources, such as mineral 

deposits and petroleum; renewable resources, 

such as timber; and the outer-continental shelf 

resources) related to land.” 1 Based on this 

definition, it is the policy of the BLM and 

the Department of the Interior to consider 

stewardship land to be in acceptable condition 

unless an environmental contamination or 

liability is identified and the land cannot be 

used for its intended purpose(s). Information 

regarding the financial liabilities identified as 

probable or reasonably possible and that affects 

the condition of stewardship land are located in 

Financial Statements Note 13, “Environmental 

and Disposal Liabilities and Other Contingent 

Liabilities,” found earlier in this report. See also 

the Deferred Maintenance section later in this 

report. With the exception of an immaterial 

quantity of land with contamination, the 

stewardship lands managed by the BLM are in 

acceptable condition.

Condition of Natural Heritage Assets

The condition of natural heritage assets 

such as national monuments, wilderness areas, 

etc., corresponds to that of the condition of the 

lands on which they are located as these are an 

integral component of the stewardship lands. 

Further information is found under Condition 

of Stewardship Lands above.

Condition of Cultural Properties 

The BLM’s cultural resource management 

program was developed in the 1970s to respond 

to the National Historic Preservation Act of 

1966 and Executive Order 11593 of 1971. The 

most important known properties, including 

national historic landmarks, are afforded the 

highest attention.

Each year the Secretary provides the 

Congress with a listing of damaged or 

threatened national historic landmarks, as 

required by Section 8 of Public Law 94-458. 

This listing does not differentiate according 

to ownership when any portion of a landmark 

is judged to be subject to threat. Of the 

landmarks identified in the current listing where 

there are some BLM-managed lands involved, 

the BLM-managed portions of the landmarks 

are not actively at risk. Landmark condition 

is carefully monitored by BLM field offices. 

When active threats are present, appropriate 

physical or administrative protective measures 

are applied promptly.

1 

Statement of Federal Financial Accounting Standards 29, paragraph 34.
BLM 2006 Annual Report 99

Stewardship Lands and Heritage Assets Report

The BLM’s cultural resource management 

program does not specifically include an 

element called “condition assessment survey.” 

However, historic properties are evaluated 

continuously. In the past two years, the cultural 

resource management program has worked 

with the BLM’s Protection and Response 

Staff to obtain funding to conduct condition 

assessments at specifically threatened historic 

properties. Monitoring the rate of natural and 

human-caused deterioration, and adjusting 

protection methods and priorities accordingly, is 

the most commonly applied protection measure 

where significant properties are known to exist.

Condition of Museum Collections

Background

The museum collections and the associated 

records under the BLM’s stewardship are stored 

in professional facilities whose mission, among 

other things, is to preserve them. Generally, 

museums and facilities preserve museum 

objects in a manner that is appropriate to the 

nature of the materials; that protects them from 

breakage and possible deterioration from diverse 

temperatures and relative humidity, visible light, 

ultraviolet radiation, dust, soot, gases, mold, 

fungus, insects, rodents, and general neglect; 

that preserves data so it can be studied in future 

analyses; and that protects collections from fire 

and theft. It is unavoidable that all museum 

objects will ultimately deteriorate over time 

with use. The goal of safeguarding museum 

objects is to preserve them for as long as possible 

and to manage their condition during their 

intended use so as not to unduly hasten their 

deterioration.

Condition Assessment

The condition of museum collections in 

BLM facilities is good. These three internal 

facilities have management and accountability 

policies, procedures, and systems in place (i.e., 

governance, finance, security, interpretation, 

outreach, care or “curation,” scope of collections, 

acquisitions, deaccessioning, legal and safety 

issues, documentation, and risk management).

The BLM has not conducted inspections of 

the 131 non-Federal facilities. The Department 

of the Interior has created a scheme for facilitylevel condition standards in which one of 

four standards may be used to assess facility 

condition. Only one standard is necessary to 

rate any one particular facility.

• American Association of Museums (AAM) 

Accreditation: If the facility has received 

accreditation by the AAM, a “fair” rating 

was assessed for facility condition.

• Army Corps of Engineers (COE) scores: 

The U.S. Army Corps of Engineers 

Mandatory Center of Expertise for the 

Curation and Management of Archeological 

Collections scores was used if an assessment 

was performed for the facility in question.

- Good Facility Condition: 70 percent 

or higher score assigned by COE for a 

facility. 

- Fair Facility Condition: between 50 

and 70 percent score assigned by COE 

for a facility. 

- Poor Facility Condition: less than 50 

percent score assigned by COE for a 

facility.

• Evaluation scores determined by onsite assessments by agency staffs using a 

Department of the Interior Manual (411 

DM) checklist.

- Good Facility Condition: 70 percent or 

more of the applicable DOI standards 

are met at a facility. 

- Fair Facility Condition: between 50 

and 70 percent of the applicable DOI 

standards are met at a facility. 

- Poor Facility Condition: less than 50 
100 BLM 2006 Annual Report

Stewardship Lands and Heritage Assets Report

percent of the applicable DOI standards 

are met at a facility.

• Self-certifications by facility staffs: The 

Department distributed requests for selfcertification to facilities for which other onsite assessment data were not yet available. 

Facility staffs certified whether or not their 

institution protects Interior collections 

against risk of damage or loss due to 

security and environmental risk factors. 

The self assessment focused on these factors 

(and associated procedures and controls) 

because they determine whether or not a 

collection is in stable condition as measured 

against 58 professional standards defined in 

Departmental policy (411DM3.2). If the 

facility provided a positive self-certification, 

a “fair” rating was assessed for facility 

condition.

Using a combination of the standards above, 

the BLM can state that 81 facilities are in good 

condition, 19 facilities are in fair condition, and 

1 facility is in poor condition. The remaining 

30 facilities are deemed to be in unknown 

condition since they have not been rated 

according to the above standards.

The Ward Charcoal Ovens are located near Ely, Nevada.
BLM 2006 Annual Report 101

DEFERRED

MAINTENANCE

REPORT

This report displays the estimated dollar value of maintenance 

not performed when scheduled that has been delayed to a future 

period. It encompasses general property, plant, and equipment items, 

as well as stewardship assets. Stewardship assets, as defined in this 

section, consist of constructed infrastructure such as roads, trails, 

bridges, major culverts, and dams on BLM land; they do not include 

land and natural resources on the land or heritage assets. Deferred 

maintenance includes preventative maintenance, normal repairs, 

replacement of parts and structural components, and other activities 

needed to preserve an asset so that it continues to provide acceptable 

services and achieves its expected life.

The BLM’s capital assets include developed recreation sites and 

administrative facilities such as fire control facilities, wild horse 

corrals, and radio communications towers. Roads, trails, bridges, and 

associated improvements constitute the BLM’s transportation system. 

Currently, the BLM maintains 4,616 buildings, 711 administrative 

sites, 2,558 recreation sites, 76,088 miles of roads, 856 bridges, 

18,420 miles of trails, and 515 hazard-rated dams. These assets 

support the management, use, and enjoyment of the public lands for 

commercial, recreational, and other purposes.

The trend has been for the BLM’s inventory of fixed capital 

assets (buildings, roads, recreation sites, etc.) to increase over time. 

However, as the BLM implements its new Asset Management Plan 

(AMP), which was developed in 2006, it will begin compiling a 

list of real property assets that are candidates for disposition. Any 

asset that is no longer critical to the mission, or that is in such poor 

condition that it is no longer cost effective to maintain, will be 

identified for possible disposal. The AMP provides the framework 

for the BLM to streamline its portfolio of assets and optimize the 

maintenance of those assets that contribute most significantly to its 

mission and strategic goals.

The methodology used to determine the 2006 deferred 

maintenance information first groups capital assets into major 

asset classes and then uses baseline comprehensive condition 

assessment surveys performed by expert inspection teams composed 

of government and contractor personnel. The methodology 

consists of using field-collected data to (1) develop conceptual cost 

estimates based on square footage or other units of measure for 

corrective actions noted in the condition assessment reports, and 

(2) extrapolate estimates for assets that have not yet had baseline 

condition assessments. The combination of field-collected data and 

extrapolation provides the methodology for measuring the total 

deferred maintenance for each major asset class.

The BLM determines an asset’s current replacement value as part 

of the comprehensive condition assessment survey process. Knowing 
102 BLM 2006 Annual Report

Deferred Maintenance Report

the current replacement value allows the BLM 

to use the industry-standard Facilities Condition 

Index (FCI) as a method of measuring the 

condition and change in condition of facilities. 

The FCI is the ratio of accumulated deferred 

maintenance to the current replacement 

value (FCI = Deferred Maintenance/Current 

Replacement Value). It is an indicator of the 

depleted value of capital assets. The general rule 

is that FCI should be below 0.10 for a facility to 

be considered in good condition.

As of September 1, 2006, the total 

accumulated deferred maintenance was 

estimated to range from $387 million to 

$473 million. The first accompanying 

table shows deferred maintenance by asset 

category. The asset categories correspond to 

the “roll up” format in the Department of the 

Interior’s Annual Report on Performance and 

Accountability.

A portion of the maintenance backlog 

has been developed into specific projects and 

included in the BLM’s Five-Year Deferred 

Maintenance and Capital Improvement Plan. 

The total deferred maintenance component 

in the FY 2007–2011 Plan is $193 million; 

this is shown by future funding year and 

subactivity (funding source) in the second 

accompanying table. The $193 million includes 

project-specific work, along with project and 

contract management, condition assessments, 

information technology, and other work directly 

related to deferred maintenance.

Unlike buildings, structures, or machinery, 

land, defined by the Federal Accounting 

Standards Advisory Board (FASAB) as the solid 

part of the earth (i.e., rocks and sediment), 

is not subject to periodic and/or recurring 

maintenance. There is no deferred maintenance 

to be reported for land, including natural 

heritage assets. All land is considered to be in 

acceptable condition except for those areas with 

environmental contamination. Information 

regarding the financial liabilities identified as 

probable or reasonably possible and that affects 

the condition of stewardship land are located in 

Financial Statements Note 13, “Environmental 

and Disposal Liabilities and Other Contingent 

Liabilities,” found earlier in this report. There 

is also no deferred maintenance to report 

for national historic landmarks, since these 

structures are rated as being in acceptable 

condition. The three BLM facilities holding 

museum collections are in good condition, and 

no deferred maintenance is reported for them.
BLM 2006 Annual Report 103

Deferred Maintenance Report

Estimated Range Of Deferred Maintenance By Asset Category (Dollars In Thousands)

Estimated Range of Deferred Maintenance for 2006

General PP&E Stewardship PP&E Total

Asset 

Category

Items 

Covered

Note (1)

Condition 

Category

Note (2)

Low High Low High Low High

Roads, 

Bridges, Major 

Culverts,

and Trails

A,B,C,D G, F, P - - $228,067 $278,749 $228,067 $278,749

Dams A,B,C,D G, F, P - - $21,594 $26,393 $21,594 $26,393

Buildings on 

Administrative 

and Recreation 

Sites

A,B,C,D G, F, P $59,571 $72,809 - - $59,571 $72,809

Other 

Structures on 

Administrative 

and Recreation 

Sites

A,B,C,D G, F, P $77,837 $95,134 - - $77,837 $95,134

Total $137,408 $167,943 $249,661 $305,142 $387,069 $473,085

Note (1) Items Covered:

A – Critical Health and Safety Deferred Maintenance: A facility deferred maintenance need that poses a serious threat to public or employee safety.

B – Critical Resource Protection Deferred Maintenance: A facility deferred maintenance need that poses a serious threat to natural or cultural 

resources.

C – Critical Mission Deferred Maintenance: A facility deferred maintenance need that poses a serious threat to a bureau’s ability to carry out its 

assigned mission.

D – Compliance and other Deferred Maintenance: A facility deferred maintenance need that will improve public or employee safety, health, or 

accessibility; compliance with codes, standards, laws, complete unmet programmatic needs and mandated programs; and protection of natural 

or cultural resources to enhance a bureau’s ability to carry out its assigned mission.

Note (2) Condition Assessment:

Good – Facility/equipment condition meets established maintenance standards, operates efficiently, and has a normal life.

Fair – Facility/equipment condition meets minimum standards but requires additional maintenance or repair to prevent further deterioration, increase 

operating efficiency, and achieve normal life expectancy.

Poor – Facility/equipment does not meet most maintenance standards and requires frequent repairs to prevent accelerated deterioration and provide a 

minimal level of operating function. In some cases that includes condemned or failed facilities.

Based on periodic condition assessments, an indicator of condition is the percent of facilities and items of equipment in each of the good, fair, or poor 

categories.
104 BLM 2006 Annual Report

Deferred Maintenance Report

Deferred Maintenance By Future Funding Year And Subactivity (Funding Source)

(Dollars In Thousands)

Planned Deferred Maintenance Work 1

Funding Source FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Total

MLR Deferred Maintenance 2$34,756 $36,428 $36,357 $37,457 $38,007 $183,005

O&C Deferred Maintenance 3$1,059 $1,059 $1,059 $1,059 $1,059 $5,295

Construction $685 $572 $32 $449 $155 $1,893

Wildland Fire 4$2,280 $651 $0 $0 $308 $3,239

Total $38,780 $38,710 $37,448 $38,965 $39,529 $193,432

1

 This table shows the deferred maintenance that has been developed into specific projects and included in the BLM’s Five-Year Deferred Maintenance 

and Capital Improvement Plan. The $193 million total for FY 2007–2011 includes other costs for project and contract management, condition 

assessments, information technology, and other work directly related to managing and reducing the maintenance backlog. The table does not include 

the capital improvement work associated with the projects.

2

 Management of Lands and Resources (MLR) is the major appropriation category in the BLM’s annual budget.

3

 Oregon and California Grant Lands (O&C) is a minor appropriation category that covers certain counties in western Oregon.

4

 Deferred maintenance for BLM projects only. The BLM’s Five-Year Plan includes Wildland Fire projects for the Bureau of Indian Affairs, Fish and 

Wildlife Service, and National Park Service. Wildland Fire funding for these other bureaus comes through the BLM’s appropriation for Wildland Fire 

Management.
BLM 2006 Annual Report 105

INVESTMENT

IN RESEARCH

AND

DEVELOPMENT

REPORT

Table 1 – Investment in Research and Development

(Outlays in Millions of Dollars)

Category 2002 2003 2004 2005 2006 1TOTAL

 Applied Research 12.0 10.9 14.0 13.6 15.9 66.4

 Development .4 1.5 2.6 7.0 7.1 18.6

 Total 12.4 12.4 16.6 20.6 23.0 85.0

1

 Outlays are estimated for 2006.

Program Overview

The primary objective of the BLM’s research and development 

program is to make better use of new data, information, and 

knowledge to improve the management of our Nation’s public lands 

and resources. The BLM’s research and development program 

focuses on working with partners to identify scientific information 

needs and then communicating these needs to research agencies, 

universities, and other non-governmental organizations. Outlays 

for BLM’s research and development program are shown above in 

Table 1. Applied research refers to a study to gain the knowledge or 

understanding needed to determine how a recognized and specific 

need can be met. Development refers to using knowledge and 

understanding gained from research to produce useful materials, 

devices, systems, or methods, including the design and development 

of prototypes and processes.

The BLM has developed a formal science strategy that includes a 

process for identifying high-priority science needs and then meeting 

these needs either internally or in collaboration with science partners, 

such as the United States Geological Survey (USGS), other agency 

science providers, and universities. The strategy also includes 

identifying and cataloging scientific opportunities on the public 

lands, such as those found within national monuments, national 

conservation areas, and research natural areas. The BLM is currently 

preparing management plans for several national monuments and 

national conservation areas that will highlight science opportunities 

and research needs.

The USGS serves as the primary research science bureau for the 

Department of the Interior, addressing the scientific questions and 

research needs of the land management bureaus. The BLM relies on 

the science capabilities within the USGS as its largest single source 

of scientific research support, although the BLM also works with 

other Federal agencies, state agencies, and other organizations to meet 

its overall science needs. The USGS geologic, water resources, and 

geography disciplines support the BLM’s mineral assessment, mining-
106 BLM 2006 Annual Report

Investment in Research and Development Report

related hydrologic studies, and abandoned mine 

land efforts. The USGS biological resources 

discipline addresses most of the BLM’s science 

needs relating to the management of biological 

resources.

The BLM is a founding partner in the 

network of Cooperative Ecosystem Studies 

Units (CESUs) that has been established 

recently at several of the Nation’s leading 

universities by a number of Federal agencies. 

The BLM is increasingly making use of these 

CESU partnerships both to meet its own science 

needs and to involve U.S. universities and 

colleges to a greater extent in providing sound 

science for managing the public lands and 

resources.

Research and Development Activities

In 2006, the BLM began new and 

continued past research and development 

efforts, including:

• Initiating new study treatments to develop 

and test new options for young stand 

management to meet Northwest Forest Plan 

objectives in western Oregon.

• Laying the foundation for future 

management actions for protection. Projects 

will include establishing baselines for 

resources in BLM’s National Monuments 

and National Conservation Areas, 

Scientists from the Museum of Western Colorado work at a paleontology dig at Mygatt-Moore Quarry in Rabbit Valley, located in the 

McInnis Canyons National Conservation Area in western Colorado.
BLM 2006 Annual Report 107

Investment in Research and Development Report

understanding and evaluating the effects 

of energy development in the Rocky 

Mountain and Alaskan regions, improving 

management of western forests, controlling 

exotic species and weeds, and restoring 

shrub-steppe and arid desert habitats.

• Continuing a multi-agency partnership 

studying the dynamics of Alaska’s Bering 

Glacier, focusing on the evolution of the 

glacier’s terminal regions and the effects on 

the surrounding ecosystem, describing and 

understanding the areas flora and fauna, 

evaluating potential flood hazards associated 

with ice-dammed lakes, and understanding 

the glacier’s response to ongoing climate 

change.

• Conducting research and monitoring the 

effects of prescribed fire in the California 

sequoia forests for the purpose of using 

prescribed fire most effectively as a means to 

maintain giant sequoia grove health while 

reducing fuel hazards.

• Analyzing Mancos shale landscapes in the 

Gunnison Gorge Conservation Area for 

salt and sediment contributions in relation 

to plant populations, soil chemistry and 

erosion properties to better understand how 

salinity and selenium affect surface and 

ground water.

• Developing a Geographic Information 

System risk assessment for wildland fire and 

hazardous fuel treatments to improve the 

protection of cultural resource sites.

Moose can be found throughout public lands in Alaska.
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Investment in Research and Development Report

• Studying the effects of fragmented habitats 

and energy development on sage grouse 

ecology and behavior in the Great Basin and 

adjacent areas.

• Expanding the Native Plant Materials 

Development Project, a program of seed 

collections and genetic and seed germination 

research efforts directed at developing seed 

bank and plant cultivars for restoring native 

plant populations and degraded ecosystems 

in several western states. This project is a 

combined effort of the BLM and nonprofit 

organizations, universities, Federal, state, 

and local government agencies to address 

continued habitat deterioration and restore 

biodiversity in western ecosystems.

• Understanding and promoting forest 

diversity and protecting riparian and aquatic 

resources through the Cooperative Forest 

Ecosystem Research project in the Pacific 

Northwest. Most of the research related to 

the Northwest Forest Plan is long-term in 

scope and is expected to continue for several 

years.

A BLM range technician counts cottonwood saplings near Pablo Rapids in Montana as part of the Cooperative Cottonwood Study being 

conducted by the BLM and the U.S. Geological Survey in the Upper Missouri River Breaks National Monument.
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BLM/WO/GI-07/002+1694

Cover photo:

Yellowstone River near Pompeys Pillar

National Monument in Montana.

Design and production by Jennifer Kapus, BLM’s National Science and Technology Center Publishing Staff.