United States Government Accountability Office

GAO Testimony 

Before the Committee on Natural 

Resources, House of Representatives

DEPARTMENT OF THE 

INTERIOR 

Major Management 

Challenges 

Statement of Robin M. Nazzaro, Director 

Natural Resources and Environment 

For Release on Delivery

Expected at 10:00 a.m. EST 

Friday, February 16, 2007

GAO-07-502T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

February 16, 2007

DEPARTMENT OF THE INTERIOR

Major Management Challenges 

Highlights of GAO-07-502T, testimony 

before the Committee on Natural 

Resources, House of Representatives 

The Department of the Interior is 

responsible for managing much of

the nation’s vast natural resources. 

Its agencies implement an array of

programs intended to protect these 

precious resources for future 

generations while also allowing 

certain uses of them, such as oil 

and gas development and 

recreation. In some cases, Interior 

is authorized to collect royalties 

and fees for these uses. Over the

years, GAO has reported on

challenges facing Interior as it

implements its programs. In 

addition to basic program

management issues, the

department faces difficult choices 

in balancing its many

responsibilities, and in improving

the condition of the nation’s 

natural resources and the

department’s infrastructure, in light 

of the federal deficit and long-term

fiscal challenges facing the nation. 

This testimony highlights some of 

the major management challenges 

facing Interior today.

What GAO Recommends

GAO has made a number of

recommendations intended to

improve Interior’s programs by 

enhancing the information it uses

to manage its programs,

strengthening internal controls, and 

providing clearer guidance. 

Interior has agreed with most of 

the recommendations and taken 

some steps to implement them. 

However, the department has been

slow to implement other 

recommendations. 

The Department of the Interior has made progress in addressing challenges 

that GAO has identified in such areas as developing and maintaining better 

data to manage the department’s programs and strengthening internal 

controls. However, numerous important problems remain, as discussed 

below. 

• Management of resource protection efforts needs to be 

strengthened. Interior has undertaken steps to improve some of its 

resource protection efforts, but it has yet to develop a cohesive 

national strategy to address wildland fire issues, as GAO has 

recommended. In addition, Interior agencies that manage hardrock 

mining and oil and gas production on their lands have not effectively 

carried out their environmental protection responsibilities. 

• Management problems in Indian and island community 

programs persist. While Interior has implemented major reforms to 

address weaknesses in managing Indian trust funds and other assets, 

concerns remain about finalizing organizational changes and delays 

in decisions about land that the department will take into trust 

status. In addition, island community programs continue to lack 

accountability measures. 

• Land appraisals continue to fall short of standards. While 

Interior has consolidated the land appraisal function into a 

departmental office to address serious problems with the quality of 

its appraisals and the millions of dollars that had been lost as a 

result, a large portion of appraisals that GAO reviewed still did not 

comply with recognized appraisal standards. 

• Deferred maintenance backlog needs to be addressed. Interior 

has implemented improved inventory and asset management 

systems for some programs, but it is not clear how it will address the 

estimated $17 billion in deferred maintenance. Other programs 

continue to lack information required to accurately estimate needs. 

• Revenue collection needs more management attention. 

Interior may not be collecting billions of dollars of revenue from oil 

and gas royalties; geothermal royalties; and fees from individual 

recreational uses, air tour operations in and around national parks, 

and commercial filming and still photography in national parks. 

• Contract and grant management lack needed controls. 

Because it lacks adequate controls over management of grants and 

contracts, Interior cannot ensure that millions of dollars in grant and 

contract funding were used appropriately. 

www.gao.gov/cgi-bin/getrpt?GAO-07-502T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Robin Nazzaro 

at (202) 512-3841 or nazzaror@gao.gov. 
Mr. Chairman and Members of the Committee: 

I am pleased to be here today to discuss our work at the Department of the 

Interior. As the stewards for more than 500 million acres of federal land 

and 1.8 billion acres of the Outer Continental Shelf, Interior agencies are 

responsible for a wide array of programs to ensure that our nation’s 

natural resources are adequately protected and that access to and use of 

those resources is appropriately managed. Difficult choices face this 

Congress and administration in fulfilling the federal government’s 

responsibilities as a steward of these resources under increasing 

budgetary constraints. My testimony today includes findings from a 

number of reports we have issued over the past few years on some of 

Interior’s natural resource management programs. Specifically, I will 

discuss management challenges in six key areas: (1) resource protection, 

(2) Indian and insular affairs, (3) land appraisals, (4) deferred 

maintenance, (5) revenue collection, and (6) contracts and grants. 

In summary, our reports indicate that while Interior agencies have 

improved the management of some of the programs we have reported on 

over the years, some issues remain problematic. Moreover, more recent 

work has identified new problems that need to be addressed. In many 

cases, Interior agencies have work underway or planned to address our 

recommendations, but we have not evaluated these efforts. 

Summary 

• Management of resource protection efforts needs to be

strengthened. Our work on the challenges that Interior, working with the 

U.S. Department of Agriculture (USDA), faces in protecting the nation 

against the threat of wildland fires has revealed a continued need for 

several improvements. Despite concurrence with our previous 

recommendations, Interior and USDA have yet to complete a cohesive

national strategy that identifies long-term options and associated funding 

needs for responding to wildland fire issues. Nor have the departments 

developed a tactical plan to inform the Congress about the steps and time 

frames needed to develop such a strategy. And while they have undertaken 

steps to improve upon the information they use to assess and allocate 

resources for addressing wildland fire threats, it remains unclear whether 

the agencies will successfully complete these efforts. In addition, the 

Bureau of Land Management (BLM) and the Fish and Wildlife Service 

(FWS) have not been effectively carrying out their important 

responsibilities for ensuring that hardrock mining, oil, and gas operations 

occurring on their lands do not cause unnecessary environmental harm. 

Specifically, we found that BLM was not ensuring that hardrock mining 

Page 1 GAO-07-502T 
operations had sufficient financial assurances to provide for proper 

reclamation of disturbed lands and was not effectively carrying out its 

environmental mitigation responsibilities for oil and gas operations. 

Similarly, we reported that FWS was not consistently inspecting oil and

gas operations in national wildlife refuges to ensure that environmental 

standards were being met. 

• Management problems in Indian and island community programs 

persist. While Interior has taken significant steps in the last 10 years to 

address weaknesses in certain Indian programs, it is still in the process of 

implementing key trust fund reforms, and several concerns exist about the 

completion of these reforms. We have also reported on serious delays in 

the Bureau of Indian Affairs’ (BIA) program for determining whether the 

department will accept land in trust: over 1,000 land in trust applications 

from tribes and individual Indians are currently pending. In addition, the 

department could be doing more to assist seven island communities—four 

U.S. territories and three sovereign island nations—with long-standing 

financial and program management deficiencies. 

• Land appraisals continue to fall short of standards. Over the years, 

we and Interior’s Inspector General (IG) have reported on the difficulties 

BLM and other federal land management agencies have had in managing 

land appraisals and the loss of millions of federal dollars resulting from 

inadequate appraisals. While major program changes have been made, 

significant problems continue. Specifically, we found that appraisals still 

do not adhere to appraisal standards and, thus, the federal government 

risks losing millions of dollars more if land is undervalued. In addition, 

Interior does not have a process for setting and meeting realistic deadlines 

for completing appraisals, which can be particularly important for 

transactions in areas with changing land values. 

• Deferred maintenance backlog needs to be addressed. While Interior 

has made progress addressing prior recommendations to improve 

information on the deferred maintenance needs of National Park Service 

facilities and BIA schools, its maintenance backlog continues to grow 

substantially—the department’s estimate increased from between $8.1 

billion and $11.4 billion in 2003, to between $9.6 billion and $17.3 billion in 

2006. It is not clear how the department will secure needed funding to 

reduce this daunting backlog to a manageable level. In addition, we 

recently reported that better information was needed on 16 BIA irrigation 

projects with an estimated $850 million in deferred maintenance. 

Specifically, we found that some of the irrigation projects classified items 

as deferred maintenance when they were actually new construction, and 

some had incomplete information on their deferred maintenance needs. 

Page 2 GAO-07-502T 
• Revenue collection needs more management attention. Recent work 

indicates that the federal government may not be collecting all the revenue 

that it could be and that some programs that receive revenue do not have

needed controls. For example, we reported that billions of dollars in oil 

and gas royalties may be forgone because of a failure to include important 

price limitations in leases during 1998 and 1999. We also reported that 

while the department is required by law to continue to collect a certain

level of revenue from geothermal leases, it is not collecting the necessary 

information to do so. Furthermore, the National Park Service is authorized 

to collect fees from a number of different types of uses of its lands, but has 

not done so in all cases. Finally, should the Congress choose to authorize 

it to do so, BLM could be collecting more in grazing revenue, thereby 

bringing its fees more in line with the fees charged by other federal 

agencies. 

• Contract and grant management lack needed controls. Interior’s 

management of contracts and grants has been identified as a management 

challenge by Interior’s IG for a number of years. Recent work we have 

conducted echoes some of the IG’s concerns, in particular with regard to a 

lack of management controls. Specifically, we reported on weaknesses in 

(1) management of two Interior interagency contracting mechanisms that 

the Department of Defense (DOD) has used to obtain services and (2) a 

program that provides grants to nonfederal entities for activities related to

the Chesapeake Bay. 

The Department of the Interior has jurisdiction over more than 500 million 

acres of land—about one-fifth of the total U.S. landmass—and over 1.8 

billion acres of the Outer Continental Shelf. As the guardian of these 

resources, the department is entrusted to preserve the nation’s most aweinspiring landscapes, such as the wild beauty of the Grand Canyon, 

Yosemite, and Denali national parks; our most historic places, like 

Independence Hall and the Gettysburg battlefield; and such revered 

national icons as the Statue of Liberty and the Washington Monument. At 

the same time, Interior is to provide for the environmentally sound 

production of oil, gas, minerals, and other resources found on the nation’s

public lands; honor the nation’s obligations to American Indians and 

Alaskan Natives; protect habitat to sustain fish and wildlife; help manage 

water resources in western states; and provide scientific and technical 

information to allow for sound decision-making about resources. In recent

years, the Congress has appropriated about $10 billion annually to meet 

these responsibilities. With these resources, Interior employs about 73,000 

Background 

Page 3 GAO-07-502T 
people in eight major agencies and bureaus at over 2,400 locations around 

the country to carry out its mission. 

Interior’s management of this vast federal estate is largely characterized by 

the struggle to balance the demand for greater use of its resources with 

the need to conserve and protect them for the benefit of future 

generations. GAO, among others, have identified management problems 

facing the department and have made many recommendations to improve 

its agencies and programs. In some cases, Interior has made significant 

improvements; in others, progress has been slow. As a result, several 

major management challenges remain. 

Although Interior, working with USDA’s Forest Service, has taken steps to

help manage perhaps the most daunting challenge to its resource 

protection mission—protecting lives, private property, and federal 

resources from the threats of wildland fire—concerns remain. In addition, 

Interior’s programs for managing hardrock mining, oil, and gas operations 

have not adequately protected federal resources from the environmental 

effects of these activities. 

The wildland fire problems facing our nation continue to grow. The 

average number of acres burned by wildland fires annually from 2000 to 

2005 was 70 percent greater than the average number burned annually 

during the 1990s, and appropriations for the federal government’s wildland 

fire management activities tripled from about $1 billion in fiscal year 1999 

to nearly $3 billion in fiscal year 2005. Experts believe that catastrophic 

damage from wildland fire will continue to increase until an adequate longterm federal response is implemented and has had time to take effect. 

While USDA’s Forest Service receives the majority of fire management 

resources, Interior agencies—the National Park Service, BIA, FWS, and,

particularly, BLM—are key partners in responding to the threats of 

wildland fire. Consequently, most of our work and recommendations on 

wildland fire management address both departments. 

The Interior agencies and the Forest Service have not yet developed a

cohesive strategy that identifies long-term options and associated funding 

estimates for addressing wildland fire threats, as we first recommended in 

Management of 

Resource Protection 

Efforts Needs to Be 

Improved 

Wildland Fire Management 

Challenges Persist 

Page 4 GAO-07-502T 
1999;

 1 nor have they developed a tactical plan that outlines the critical 

steps and time frames needed to complete such a strategy, as we 

recommended in 2005.2 While the agencies together issued a document in 

February 2006 titled Protecting People and Natural Resources: A Cohesive 

Fuels Treatment Strategy, it does not identify long-term options or 

associated funding estimates.3 Also, although the agencies have 

undertaken some tasks over the past 7 years that they stated are important 

to developing the cohesive strategy that we recommended, we have 

concerns about when and whether such tasks will be completed as 

planned.4

 For example, the agencies began developing two modeling 

systems to help them (1) allocate resources to respond to wildland fires 

and (2) identify the extent, severity, and location of wildland fire threats to 

our nation’s communities and ecosystems; these systems are slated for 

completion in 2008 and 2009, respectively. We are concerned, however, 

that the agencies’ recent endorsement of significant, mid-course design 

changes to the resource allocation model may not fulfill key project goals, 

including determining the most cost-effective allocation of resources. In 

addition, the agencies currently have no plans to routinely update data in 

the threat modeling system—this would be necessary, for example, after 

major fires, hurricanes, or other factors have significantly altered the 

landscape. Such updated data are necessary to accurately capture the 

nature of wildland fire threats and to optimize allocation of resources over 

time. For these reasons, we continue to believe that a cohesive strategy

and tactical plan would be helpful to the Congress and the agencies in 

making informed decisions about effective and affordable long-term 

approaches to addressing the nation’s wildland fire problems. 

In addition, in 2006, we reported that the agencies needed to develop 

better guidance on sharing the costs of suppressing fires among federal

 1

GAO, Western National Forests: A Cohesive Strategy Is Needed to Address Catastrophic 

Wildfire Threats, GAO/RCED-99-65 (Washington, D.C.: Apr. 2, 1999).

2

GAO, Wildland Fire Management: Important Progress Has Been Made, but Challenges 

Remain to Completing a Cohesive Strategy, GAO-05-147 (Washington, D.C.: Jan. 14, 2005).

3

GAO, Wildland Fire Management: Update on Federal Agency Efforts to Develop a 

Cohesive Strategy to Address Wildland Fire Threats, GAO-06-671R (Washington, D.C.: 

May 1, 2006). 

4

GAO, Wildland Fire Management: Lack of a Cohesive Strategy Hinders Agencies’ Cost 

Containment Efforts, GAO-07-427T (Washington, D.C.: Jan. 30, 2007).

Page 5 GAO-07-502T 
and nonfederal entities.5

 In some cases, these entities used different costsharing methodologies for fires with similar characteristics, which 

resulted in inconsistent sharing of costs among federal and nonfederal 

entities. The cost-sharing method used can have consequences in the 

millions of dollars for the entities involved. As of January 2007, the 

agencies were updating their guidance on possible cost-sharing methods 

and when each typically would be used, but it is unclear how the agencies

will ensure that the guidance is followed. 

Finally, as we testified last month, preliminary findings from our ongoing 

work indicate that the effectiveness of the agencies’ efforts to contain 

wildfire suppression costs may be limited because the agencies have not 

clearly defined their cost-containment goals, developed a strategy for 

achieving those goals, or developed related performance measures. 6 In 

addition, for efforts to contain wildfire suppression costs to be effective, 

once the agencies have defined their cost-containment goals, they need to 

integrate them with other goals of the wildland fire program—such as 

protecting life and property—and to recognize that trade-offs will be 

needed to meet desired goals within the context of fiscal constraints. 

Under BLM regulations, hardrock mining operators who extract gold, 

silver, copper, and other valuable mineral deposits from land belonging to

the United States are required to provide financial assurances, before they

begin exploration or mining, to guarantee that the costs to reclaim land 

disturbed by their operations are paid.

7

 However, we reported in June 2005

that BLM did not have a process for ensuring that adequate assurances 

were in place.8

 As a result, some assurances may not fully cover all future 

reclamation costs, some operators do not have financial assurances, and 

some have either outdated reclamation plans and cost estimates or none at 

all. When operators with insufficient financial assurances fail to reclaim 

Hardrock Mining 

Operations Lack Needed 

Financial Assurances 

 5

GAO, Wildland Fire Suppression: Lack of Clear Guidance Raises Concerns about Cost 

Sharing between Federal and Nonfederal Entities, GAO-06-570 (Washington, D.C.: May 30,

2006). 

6

GAO-07-427T. 

7

Unlike operations that extract oil and gas from federal lands, hardrock mining operations

are not required to pay royalties on the minerals they extract.

8

GAO, Hardrock Mining: BLM Needs to Better Manage Financial Assurances to 

Guarantee Coverage of Reclamation Costs, GAO-05-377 (Washington, D.C.: June 20, 2005). 

Page 6 GAO-07-502T 
BLM land disturbed by hardrock mining operations, BLM is left with 

public land that poses risks to the environment and public health and 

safety, and requires millions of federal dollars to reclaim. For example, we 

reported that 48 hardrock operations had ceased to operate and had not 

been reclaimed since the financial assurance requirement began in 1981; 

for 43 of these sites, BLM identified a total of about $56 million in 

unfunded reclamation costs. We also reported that BLM’s system for 

managing financial assurances did not have current information or track 

certain information critical to managing the program. 

In response to our 2005 recommendations, BLM has taken substantial 

steps to correct these problems. In 2006, the agency modified its system 

for managing financial assurances to track key data. BLM also began 

requiring its state office directors to use a newly created report available 

from the system to ensure that adequate financial assurances are in place, 

and to (1) develop corrective action plans to address any financial 

assurance deficiencies with operators and (2) certify that reclamation cost 

estimates are adequate. If implemented properly, these efforts should 

ensure that appropriate financial assurances are in place to pay for 

necessary reclamation of federal lands. 

The number of oil and gas operations occurring on or under federal lands 

and private lands for which the federal government retains mineral rights 

that are permitted by BLM, has increased dramatically—more than tripling 

from fiscal year 1999 to fiscal year 2004—in part as a result of the desire to

reduce the country’s dependence on foreign sources of oil and gas. In June

2005, we reported that BLM has struggled to deal with this permitting 

workload increase while also carrying out its responsibility to mitigate the 

impacts of oil and gas development on land that it manages.9

 Overall, BLM 

officials told us that staff had to devote increasing amounts of time to 

processing drilling permits, leaving less time to ensure mitigation of the 

environmental impacts of oil and gas development. For example, two field 

offices we visited that had the largest increases in permitting activity were 

each able to meet their annual environmental inspection goals only once in

the past 6 years. BLM has authority to assess and charge fees to cover its 

expenses for processing oil and gas permits, which would enable it to 

Increases in Oil and Gas 

Permitting Activities 

Lessen BLM’s Ability to 

Meet Its Environmental 

Protection Responsibilities 

 9

GAO, Oil and Gas Development: Increased Permitting Activity Has Lessened BLM’s 

Ability to Meet Its Environmental Protection Responsibilities, GAO-05-418 (Washington,

D.C.: June 17, 2005). 

Page 7 GAO-07-502T 
supplement its program resources. While the agency had not exercised 

this authority at the time of our report, it had begun taking steps to 

develop a fee structure for these permits. To help BLM better respond to 

its increased workload, we recommended that the agency finalize and 

implement this fee structure to recover its costs for processing 

applications for oil and gas drilling permits. 

In response to our recommendation, BLM issued a proposed regulation in 

July 2005 that included a $1,600 fee for processing oil and gas permits.10

However, the next month, the Congress prohibited Interior from initiating 

the new fee in the Energy Policy Act of 2005, and the final regulation did 

not include the proposed fee.11 Nevertheless, the department has 

continued to express interest in initiating such a fee and has proposed that 

the Energy Policy Act be amended to allow the fee to move forward. 

Similar to the concerns we have about BLM’s protection of environmental 

resources from oil and gas activities, we reported in 2003 that FWS’s 

oversight of oil and gas operations on wildlife refuge lands was not 

adequate.12 For example, we found that some refuge managers took 

extensive measures to oversee operations and enforce environmental 

standards, while others exercised little or no control. We found that such 

disparities occurred for two primary reasons. First, FWS had not officially 

determined its authority to require permits—which would include 

environmental conditions to protect refuge resources—of all oil and gas 

operations in refuges; we believe the agency has such authority. Second, 

refuge managers lacked guidance, adequate staffing levels, and training to

properly oversee oil and gas activities. We also found that FWS was not 

collecting complete and accurate information on damage to refuge lands 

as a result of oil and gas operations and what steps were needed to 

address that damage. 

FWS has taken some steps to address recommendations we made to 

resolve these problems. For example, the agency has implemented training

FWS Oversight of Oil and 

Gas Activities in Wildlife 

Refuges Needs 

Improvement 

 1070 Fed. Reg. 41532, 41542 (July 19, 2005). 

11Pub. L. No. 109-58, title III, subtitle F, § 365(i), 119 Stat. 594, 725 (2005) and 70 Fed. Reg. 

58854 (Oct. 7, 2005). 

12GAO, National Wildlife Refuges: Opportunities to Improve the Management and

Oversight of Oil and Gas Activities on Federal Lands, GAO-03-517 (Washington, D.C.: 

Aug. 28, 2003). 

Page 8 GAO-07-502T 
for staff overseeing oil and gas activities and has begun collecting better 

data on the nature and extent of oil and gas activities. However, FWS has 

not implemented two key recommendations that would strengthen its 

ability to protect refuge resources. 

• First, because FWS had not formally clarified its authority to oversee all 

types of oil and gas operations on refuges, we recommended that the 

agency (1) determine its authority to oversee such operations and report 

that determination to the Congress and (2) seek from the Congress any 

additional authority that might be needed to apply a consistent and 

reasonable set of controls over all oil and gas activities occurring on 

national wildlife refuges. To date, FWS has not finalized its determination, 

but it has indicated that it does not believe it has the authority to require 

permits of all oil and gas operations that would include steps that must be 

taken to protect refuge resources. Further, FWS has indicated that it does 

not believe it needs additional authority to effectively manage oil and gas

operations on refuges. We continue to believe, however, that FWS does 

have the authority to require such permits of all operators. Moreover, 

because of the effects of oil and gas activities on refuge resources that we 

previously reported, we also continue to believe that if FWS ultimately 

determines that it does not have the authority to require permits, it should 

seek this authority from the Congress in order to adequately protect 

refuges. 

• Second, although FWS has taken steps to identify the level of staffing it 

needs to adequately oversee oil and gas activities occurring on national 

wildlife refuges, it has not—as we recommended—sought the funding to 

meet those needs through appropriations, its authority to assess fees, or 

other means. 

GAO has reported on management weaknesses in Indian programs for a 

number of years. While the department has taken significant steps in the 

last 10 years to address these weaknesses, it is still in the process of 

implementing key trust fund reforms, and several concerns exist about the 

completion of these reforms. We have also reported on serious delays in 

BIA’s program for determining whether the department will accept land in

trust. In addition, the department could be doing more to assist seven 

island communities—four U.S. territories and three sovereign island 

nations—with long-standing financial and program management 

deficiencies.

Management 

Problems in Indian 

and Island 

Community Programs 

Persist 

Page 9 GAO-07-502T 
The Secretary of the Interior administers the government’s trust 

responsibilities to tribes and individual Indians, including maintaining 

about 1,450 trust fund accounts for more than 250 tribal entities with 

assets of about $2.9 billion and about 300,000 individual Indian trust fund 

accounts with assets of about $400 million. Management of Indian trust 

funds and assets has long been plagued by inadequate financial 

management, such as poor accounting and information systems; untrained 

and inexperienced staff; backlogs in appraisals, determinations of 

ownership, and record-keeping; lack of a master lease file or accountsreceivable system; inadequate written policies and procedures; and poor 

internal controls. 

In response to these problems, the Congress enacted the American Indian 

Trust Fund Management Reform Act of 1994, which among other things, 

established the Office of the Special Trustee (OST) to oversee and 

coordinate the department’s implementation of trust fund management 

reforms.13 In December 2006, we reported that OST had made progress 

implementing reforms, and it estimated that almost all key reforms needed 

to develop an integrated trust management system and to provide 

improved trust services would be completed by November 2007. 14

However, OST also estimated that data verification for leasing activities 

would not be completed for all Indian lands until December 2009. 

Furthermore, OST’s most recent strategic plan, issued in 2003, did not 

include a timetable for implementing trust reforms or a date for OST’s 

termination, as required by the reform act. As a result, we recommended, 

among other things, that the department provide the Congress with a 

timetable for completing the trust fund management reforms. The 

department agreed with our recommendation and stated that it expects to

have a timetable for implementing the remaining trust reforms by late June

2007, including a date for the proposed termination or eventual deposition 

of OST. Although the department’s consolidated financial statements for 

the fiscal year ending September 30, 2006, received an unqualified audit 

opinion, the management of Indian trust funds continued to be reported as 

Indian Trust Funds and 

Assets Need to Be More 

Effectively Managed 

 13Pub. L. No. 103-412, 108 Stat. 4239 (1994). Also, in 1996, a class action lawsuit was filed by 

Elouise Cobell, a member of the Blackfeet Tribe, and others against the federal government 

concerning the department’s management of Indian trust fund accounts (Cobell v.

Kempthorne). The lawsuit is still ongoing and the recent attempts during the 109th 

Congress for a legislative settlement were not enacted. 

14GAO, Indian Issues: The Office of the Special Trustee Has Implemented Several Key

Trust Reforms Required by the 1994 Act, but Important Decisions about Its Future

Remain, GAO-07-104 (Washington, D.C.: Dec. 8, 2006). 

Page 10 GAO-07-502T 
a material internal control weaknesses, and information security was 

reported as an internal control weakness. 

BIA is the primary federal agency charged with implementing federal 

Indian policy and administering the federal trust responsibility for 1.9 

million American Indians and Alaska Natives. BIA provides basic services

to 561 federally recognized Indian tribes throughout the United States, 

including social services, child welfare services, and natural resources 

management on about 54 million acres of Indian trust lands. Trust status 

means that the federal government holds title to the land in trust for tribes 

or individual Indians; land taken in trust is no longer subject to state and 

local property taxes and zoning ordinances. Many Indians believe that 

having their land placed in trust status is fundamental to safeguarding it 

against future loss and ensuring their sovereignty. In 1980, the department

established a regulatory process intended to provide a uniform approach 

for taking land in trust.15 While some state and local governments support 

the federal government’s taking additional land in trust for tribes or 

individual Indians, others strongly oppose it because of concerns about 

the impacts on their tax base and jurisdictional control. 

We reported in July 2006 that while BIA generally followed its regulations 

for processing land in trust applications, it had no deadlines for making 

decisions on them.16 Specifically, the median processing time for the 87 

land in trust applications with decisions in fiscal year 2005 was 1.2 years—

ranging from 58 days to almost 19 years. We also found that while there 

was little opposition to applications with decisions in fiscal year 2005 from

state and local governments, some state and local governments we 

contacted said (1) they did not have access to sufficient information about 

the land in trust applications and (2) the 30-day comment period was not 

sufficient. We recommended, among other things, that the department 

move forward with adopting revisions to the land in trust regulations that

include (1) specific time frames for BIA to make a decision once an 

application is complete and (2) guidelines for providing state and local 

governments more information on the applications and a longer period of

time to provide meaningful comments on the applications. The department

Improvements Needed in 

BIA’s Processing of Land in 

Trust Applications 

 1525 C.F.R. pt. 151. 

16GAO, Indian Issues: BIA’s Efforts to Impose Time Frames and Collect Better Data 

Should Improve the Processing of Land in Trust Applications, GAO-06-781 (Washington,

D.C.: July 28, 2006). 

Page 11 GAO-07-502T 
agreed with our recommendations, and BIA has developed a corrective 

action plan to implement them by June 30, 2007.

The Secretary of the Interior has varying responsibilities to the island 

communities of American Samoa, Guam, the Commonwealth of the 

Northern Mariana Islands, and the U.S. Virgin Islands, all of which are U.S. 

territories—as well as to the Federated States of Micronesia, the Republic

of the Marshall Islands, and the Republic of Palau, which are sovereign 

nations linked with the United States through Compacts of Free 

Association. The Office of Insular Affairs (OIA) carries out the 

department’s responsibilities for the island communities. OIA’s mission is 

to assist the island communities in developing more efficient and effective 

government by providing financial and technical assistance and to help 

manage relations between the federal government and the island 

governments by promoting appropriate federal policies. The island 

governments have had long-standing financial and program management 

deficiencies. Specifically, island governments experience difficulties in 

accurately accounting for expenditures, collecting taxes and other 

revenues, controlling the level of expenditures, and delivering program 

services. 

In December 2006, we reported on serious economic, fiscal, and financial 

accountability challenges facing the U.S. insular areas of American Samoa, 

Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. 

Virgin Islands.17 The economic challenges stem from dependence on a few 

key industries, scarce natural resources, small domestic markets, limited 

infrastructure, shortages of skilled labor, and reliance on federal grants to 

fund basic services. To help diversify and strengthen their economies, OIA 

sponsors conferences and business opportunities missions to the areas to

attract U.S. businesses; however, there has been little formal evaluation of 

these efforts. In addition, efforts to meet formidable fiscal challenges and

build strong economies are hindered by financial reporting that does not 

provide timely and complete information to management and oversight 

officials for decision making. The insular area governments have also 

submitted required audits late, received disclaimer or qualified audit 

opinions, and had many serious internal control weaknesses identified. As

a result of these problems, numerous federal agencies have designated 

these governments as “high-risk” grantees. Interior and other federal 

Improve Effectiveness and 

Accountability for Island 

Programs 

 17GAO, U.S. Insular Areas: Economic, Fiscal, and Financial Accountability Challenges, 

GAO-07-119 (Washington, D.C.: Dec. 12, 2006). 

Page 12 GAO-07-502T 
agencies are working to help these governments improve their financial 

accountability, but more should be done. 

To increase the effectiveness of the federal government’s assistance to the 

U.S. insular areas, we recommended, among other things, that the 

department (1) increase coordination activities with officials from other 

federal grant-making agencies on issues of common concern relating to 

the insular area governments, such as single audit reports, high-risk 

designations, and deficiencies in financial management systems and 

practices and (2) conduct formal periodic evaluations of OIA’s 

conferences and business opportunities missions, assessing their impact 

on creating private sector jobs and increasing insular area income. The 

department agreed with our recommendations, stating that they were 

consistent with OIA’s top priorities and ongoing activities. We will 

continue to monitor OIA’s actions on our recommendations. 

Also in December 2006, we reported on challenges facing the Federated 

States of Micronesia and the Republic of the Marshall Islands.18 In 2003, the

United States amended a 1986 compact with the countries by signing 

Compacts of Free Association with the two governments. The amended 

compacts provide the countries with a combined total of $3.6 billion from 

2004 to 2023, with the annual grants declining gradually. We found that for 

2004 through 2006, compact assistance to the respective governments was 

allocated largely to the education, infrastructure, and health sectors, but 

that neither country has planned for long-term sustainability of the grant 

programs, taking into account the annual decreases in grant funding. In 

addition, both countries’ single audit reports for 2004 and 2005 indicated 

(1) weaknesses in their ability to account for the use of compact funds and 

(2) noncompliance with requirements for major federal programs. For 

example, the Federated States of Micronesia’s audit report for 2005 

contained 57 findings of material weaknesses and reportable conditions in

the national and state governments’ financial statements for sector grants 

and 45 findings of noncompliance. We recommended, among other things, 

that the department work with the countries to establish plans to minimize 

the impact of declining assistance and to fully develop a reliable 

mechanism for measuring progress towards program goals. The 

department concurred with our recommendations. 

 18GAO, Compacts of Free Association: Micronesia and the Marshall Islands Face 

Challenges in Planning for Sustainability, Measuring Progress, and Ensuring 

Accountability, GAO-07-163 (Washington, D.C.: Dec. 15, 2006). 

Page 13 GAO-07-502T 
Over the years, we and Interior’s IG have reported on the difficulties BLM 

and other federal land management agencies have had in managing land 

appraisals. Conducting appraisals is an important function—between 

November 2003 and May 2006, for example, Interior appraised more than 

6.5 million acres of land that was valued at over $7 billion. Land appraisals 

are needed when Interior agencies are buying, exchanging, or leasing land. 

Such transactions are an integral part of Interior’s land management in 

order to achieve specific purposes, such as consolidating existing 

holdings, acquiring land deemed important for wildlife habitat or 

recreational opportunities, and opening land to the development of energy 

and mineral resources. Interior generally requires land acquisitions to be 

based on market value and, thus, objective land appraisals are essential. 

Past reports, however, have identified serious problems with Interior 

agencies’ appraisal programs, particularly with regard to appraisal 

independence, and have identified millions of dollars that the federal 

government had lost because of inadequate appraisals. 

While Interior has made major program changes, significant problems 

continue. Specifically, to remedy decades of problems with the quality and

objectivity of its land appraisals, Interior removed the land appraisal 

function from its land management agencies and consolidated it into a 

departmental office—the Appraisal Services Directorate—in November 

2003. This was a substantial move in the right direction to help ensure the

independence of the appraisal function, and we reported in September 

2006 that the objectivity of appraisals has improved since the directorate’s

inception.19 However, we also identified two major remaining challenges. 

Land Appraisals

Continue to Fall Short 

of Standards 

• First, there is still wide variation in the quality of appraisals for land 

transactions involving potentially billions of dollars. For example, about 40 

percent of Interior’s appraisals for land transactions that we reviewed did 

not comply with recognized appraisal standards. This lack of compliance 

occurred, in large part, because appraisers appeared not to apply the 

specialized skills needed to perform their duties for certain appraisals. In 

addition, peer reviews of appraisals were cursory, with reviewers 

approving appraisals without considering property characteristics that can 

impact the value of land, such as the presence of roads. 

 19GAO, Interior’s Land Appraisal Services: Actions Needed to Improve Compliance with

Appraisal Standards, Increase Efficiency, and Broaden Oversight, GAO-06-1050 

(Washington, D.C.: Sept. 28, 2006). 

Page 14 GAO-07-502T 
• Second, the directorate does not have a system for ensuring that it sets 

and meets realistic time frames for appraisal delivery. Of the 3,500 

appraisals completed since the directorate was created, over 70 percent 

missed their deadlines, with an average delay of 4 months. Delays in 

delivery of appraisals can impact the ability of land management agencies 

to carry out land acquisition missions, and some land deals have been 

scuttled as a result. 

Since our report last fall, Interior has taken encouraging steps to address 

our recommendations. For example, Interior has stated that it has 

implemented a compliance inspection program for appraisals that are 

considered “high risk” to help ensure that such appraisals comply with 

recognized appraisal standards. We will continue to monitor the 

department’s progress in this area. In addition, we currently we have a

review under way to evaluate Interior’s management of land exchanges. 

In addition to the challenges the department faces in adequately 

maintaining the natural resources under its stewardship, it also faces a 

challenge in adequately maintaining its facilities and infrastructure. The 

department owns, builds, purchases, and contracts services for assets 

such as visitor centers, schools, office buildings, roads, bridges, dams, 

irrigation systems, and reservoirs; however, repairs and maintenance on

these facilities have not been adequately funded. The deterioration of 

facilities can adversely impact public health and safety, reduce employees’ 

morale and productivity, and increase the need for costly major repairs or 

early replacement of structures and equipment. In 2003, we reported that

the department estimated that the deferred maintenance backlog was 

between $8.1 billion and $11.4 billion. In November 2006, the department 

estimated that the deferred maintenance backlog for fiscal year 2006 was 

between $9.6 billion and $17.3 billion, an increase of between 18 to 51 

percent (see table 1). 

Deferred Maintenance 

Backlog Needs to Be 

Addressed 

Page 15 GAO-07-502T 
Table 1: Department of the Interior’s Estimate of Deferred Maintenance for Fiscal 

Year 2006 

Dollars in billions

Estimated range of deferred

maintenance

Type of structures Low estimate High estimate

Roads, bridges, and trails $4.80 $9.18

Irrigation, dams, and other water structures 1.39 1.85

Buildings (e.g., administration, education, 

housing, historic buildings) 2.12 3.70

Other structures (e.g., recreation sites and 

fish hatcheries) 1.29 2.57

Total $9.60 $17.30

Source: Department of the Interior. 

Interior is not alone in facing daunting maintenance challenges. In fact, we

have identified the management of federal real property, including 

deferred maintenance issues, as a governmentwide high-risk area since 

2003.

20 While Interior has made progress addressing prior 

recommendations to improve information on the maintenance needs of 

Park Service facilities and BIA schools, the challenge of how the 

department will secure the significant funding needed to reduce this 

maintenance backlog to a manageable level remains. 

While some programs have improved information on their deferred 

maintenance needs, in February 2006, we reported that similar information 

is still needed for 16 BIA irrigation projects with an estimated $850 million 

in deferred maintenance.21 For example, we found that some of the 

irrigation projects classified items as deferred maintenance when they

were actually new construction, and some had incomplete information on 

their deferred maintenance needs. To further refine the deferred 

maintenance estimate for the 16 irrigation projects, BIA plans to hire 

 20GAO, High-Risk Series: An Update, GAO-03-119 (Washington, D.C.: Jan. 2003); GAO,

High-Risk Series: Federal Real Property, GAO-03-122 (Washington, D.C.: Jan. 2003); GAO, 

High-Risk Series: An Update, GAO-05-207 (Washington, D.C.: Jan. 2005); GAO, High-Risk 

Series: An Update, GAO-07-310 (Washington, D.C.: Jan. 2007). 

21GAO, Indian Irrigation Projects: Numerous Issues Need to Be Addressed to Improve 

Project Management and Financial Sustainability, GAO-06-314 (Washington, D.C.: Feb.

24, 2006). 

Page 16 GAO-07-502T 
experts in engineering and irrigation to conduct thorough condition 

assessments of all 16 irrigation projects every 5 years. The first such 

assessment was completed in July 2005, with all 16 assessments expected 

to be completed by 2010. 

For many years, Interior’s IG has identified revenue collection as a top 

management challenge for the department because of the significant 

potential for underpayments given that it collects, on average, over $10 

billion annually. Work we have conducted in the past 2 years also raises 

questions about how and when Interior is collecting authorized revenues 

from oil and gas leases, geothermal leases, recreational uses, and grazing 

and whether funds are properly controlled and accounted for.

We testified in January 2007 on ongoing work investigating the Minerals 

Management Service’s (MMS) implementation of the Outer Continental 

Shelf Deep Water Royalty Relief Act of 1995 and other authorities for 

granting royalty relief for oil and gas leases.22 We reported that MMS had 

issued lease contracts in 1998 and 1999 that failed to include price 

thresholds above which royalty relief would no longer be applicable. As a 

result, large volumes of oil and natural gas are exempt from royalties, 

which significantly reduces the amount of royalty revenues that the federal

government can collect. At least $1 billion in royalties has already been 

lost because of this failure to include price thresholds. MMS has estimated 

that forgone royalties from leases issued between 1996 and 2000 under the 

act could be as high as $80 billion. However, there is much uncertainty in

MMS’s estimate as a result of, for example, the inherent difficulties in 

estimating future production and prices, as well as ongoing litigation 

addressing MMS’s authority to set price thresholds for some leases. Other 

authorities for granting royalty relief may also affect future royalty 

revenues. Specifically, under discretionary authority, the Secretary of the 

Interior administers programs granting relief for certain deep water leases 

issued after 2000, certain deep gas wells drilled in shallow waters, and 

wells nearing the end of their productive lives. In addition, the Energy 

Policy Act of 2005 mandates relief for leases issued in the Gulf of Mexico 

Revenue Collection 

Needs More 

Management 

Attention 

Substantial Revenue May 

Be Forgone Because of 

Royalty Relief 

 22In order to promote oil and gas production, the federal government has at times and in

specific cases provided “royalty relief”—the waiver or reduction of royalties that 

companies would otherwise be obligated to pay. See GAO, Oil and Gas Royalties: Royalty 

Relief Will Likely Cost the Government Billions, but the Final Costs Have Yet to Be 

Determined, GAO-07-369T (Washington, D.C.: Jan. 18, 2007).

Page 17 GAO-07-502T 
during the 5 years following the act’s passage, provides relief for some gas 

wells that would not have previously qualified for royalty relief, and would 

provide relief in certain areas of Alaska where there currently is little or no 

production.

The U.S. Comptroller General has highlighted royalty relief as an area 

needing additional oversight by the 110th Congress.23 Currently, we are 

assessing MMS’s estimate of forgone royalties in light of changing oil and 

gas prices, revised estimates of future oil and gas production, and other 

factors. We are also seeking to identify comprehensive studies that 

quantify the potential benefits of royalty relief. We intend to issue a report 

on these issues later this year. 

In May 2006, we reported that a change in how royalties on geothermal 

leases are disbursed may result in a change in the amount of royalties 

collected by the federal government.24 Specifically, while the Energy Policy 

Act of 2005 included provisions to encourage geothermal development, it 

also reduced the royalty percentage the federal government receives. 

Despite this, the act directs the Secretary of the Interior to seek, for most 

leases, to maintain the same level of royalty revenues as before the act. 

This could be accomplished by negotiating different royalty rates based on

past royalty history, provided that electricity prices remain constant. 

Although it is impossible to predict with reasonable assurance how these 

prices will change in the future, Interior must make its best effort to 

mitigate the impact of changing prices if federal royalty revenue is to 

remain the same. This mitigation can only be achieved if there is timely 

and accurate knowledge of the revenues that lessees collect when they sell 

electricity. However, we reported that MMS does not routinely collect 

revenue data from electricity sales. Without such knowledge, MMS will 

have difficulty collecting the same level of royalties from lessees under the 

new royalty process. To demonstrate its commitment to collect the same

level of royalty revenues as prior to passage of the act, we recommended 

that MMS routinely collect future sales revenues for electricity when 

royalty payments are due. MMS has plans to address these issues, and we 

will continue to monitor their efforts. 

Revenue from Geothermal 

Leases May Change 

 23GAO, Suggested Areas for Oversight for the 110th Congress, GAO-07-235R (Washington,

D.C.: Nov. 17, 2006). 

24GAO, Renewable Energy: Increased Geothermal Development Will Depend on 

Overcoming Many Challenges, GAO-06-629 (Washington, D.C.: May 24, 2006). 

Page 18 GAO-07-502T 
Interior agencies are authorized—and in some cases required—to collect 

fees for a variety of uses. For example, the Park Service collects fees from 

air tour operators at selected national parks and from individuals and 

companies conducting commercial filming. However, we found that the 

agencies were not collecting such fees in the following cases: 

Interior Has Not 

Maximized Revenue 

Collections from 

Recreational and Other 

Uses 

• In May 2006, we reported that the Park Service was not collecting all 

required fees from companies conducting air tours in or around three 

highly visited national parks because of (1) an inability to verify the 

number of air tours conducted over the three national parks and, 

therefore, to enforce compliance and (2) confusion resulting from 

differing geographic applicability of legislation governing air tours in 

national parks.25

• In May 2005, we reported that the Park Service could be collecting more 

revenue through the permits it issues for special park uses, such as special 

events, but was not doing so because park units were not consistently 

applying criteria for charging permit fees.26 In addition, the Park Service 

had not implemented a May 2000 law that required the collection of 

location fees for commercial filming and still photography, resulting in 

significant annual forgone revenues. In response to our recommendation, 

the Park Service began collecting location fees in May 2006. 

• In September 2006, we reported that Interior agencies have been slow to 

implement authorities for charging fees for recreational uses of federal 

lands and waters.27 We also reported that some agencies lacked adequate 

controls and accounting procedures for collecting fees. 

 25GAO, National Park Air Tour Fees: Effective Verification and Enforcement Are Needed

to Improve Compliance, GAO-06-468 (Washington, D.C.: May 11, 2006). 

26GAO, National Park Service: Revenues Could Increase by Charging Allowed Fees for 

Some Special Uses Permits, GAO-05-410 (Washington, D.C.: May 6, 2005). 

27Total fee collections in fiscal year 2004 were about $192 million. See GAO, Recreation 

Fees: Agencies Can Better Implement the Federal Lands Recreation Enhancement Act

and Account for Fee Revenues, GAO-06-1016 (Washington, D.C.: Sept. 22, 2006). 

Page 19 GAO-07-502T 
Ten federal agencies manage grazing on over 22 million acres, with BLM 

and the Forest Service managing the vast majority of this activity.28 In total, 

federal grazing revenue amounted to about $21 million in fiscal year 2004,

although grazing fees differ by agency. For example, in 2004, BLM and the 

Forest Service charged $1.43 per animal unit month, while other federal 

agencies charged between $0.29 and $112 per animal unit month.29 We 

reported in 2005 that while BLM and the Forest Service charged generally 

much lower fees than other federal agencies and private entities, these 

fees reflect legislative and executive branch policies to support local 

economies and ranching communities.30 Specifically, BLM fees are set by a 

formula that was originally established by a law that expired, but use of 

the formula has been extended indefinitely by Executive Order since 1986. 

This formula takes into account a rancher’s ability to pay and, therefore,

the purpose is not primarily to recover the agencies’ costs or capture the 

fair market value of forage. Instead, the formula is designed to set a fee

that helps support ranchers and the western livestock industry. Other 

federal agencies employ market-based approaches to setting grazing fees. 

Using this formula, BLM collected about $12 million in receipts in fiscal 

year 2004, while its costs for implementing its grazing program, including

range improvement activities, were about $58 million. Were BLM to 

implement approaches used by other agencies to set grazing fees, it could

help to close the gap between expenditures and receipts and more closely 

align its fees with market prices. We recognize, however, that the purpose 

and size of BLM’s grazing fee are ultimately for the Congress to decide. 

Interior’s management of contracts and grants has been identified as a 

management challenge by Interior’s IG for a number of years. Our recent 

work echoes some of the IG’s concerns, in particular with regard to 

interagency contracting and grant management for the Chesapeake Bay 

Gateways grant program. 

Additional Revenue Could 

be Generated Through an 

Adjustment to BLM 

Grazing Fees 

Contract and Grant 

Management Lack 

Needed Controls

 28The 10 agencies are the BLM, FWS, Park Service, Bureau of Reclamation, Forest Service, 

Department of Energy, Army Corps of Engineers, Army, Air Force, and Navy. In addition, a

number of other federal agencies manage some minor grazing-related activities. 

29An animal unit month is the amount of forage (vegetation such as grass and shrubs) that a 

cow and her calf eat in a month (or one bull, one steer, one horse, or five sheep).

30GAO, Livestock Grazing: Federal Expenditures and Receipts Vary, Depending on the 

Agency and the Purpose of the Fee Charged, GAO-05-869 (Washington, D.C.: Sept. 30,

2005). 

Page 20 GAO-07-502T 
The Department of Defense (DOD) has used interagency contracting to 

help support the war in Iraq, including contracting with Interior. 

Governmentwide, the use of interagency contracts to procure goods and 

services has continued to increase over the past several years. Because of 

this continued growth, limited expertise in using these contracts, and 

unclear lines of responsibility, GAO has designated interagency 

contracting as a governmentwide high-risk area.31 In our review of 11 task 

orders Interior issued on behalf of DOD—amounting to about $66 

million—we found numerous breakdowns in management controls. 32

Specifically, we found that Interior 

Interior’s Management of 

Interagency Contracting 

Activities Needs 

Improvement 

• issued task orders that were beyond the scope of the contract, in violation 

of federal competition rules; 

• did not comply with additional DOD competition requirements when 

issuing task orders for services on existing contracts; 

• did not comply with ordering procedures meant to ensure the best value 

for the government; and 

• inadequately monitored contractor performance. 

Moreover, we found that the contractor was allowed to play a role in the 

procurement process normally performed by the government because the 

officials at Interior and DOD responsible for the orders did not fully carry

out their roles and responsibilities. In response to the concerns identified, 

Interior and DOD initiated actions to strengthen management controls. In 

our report, we made recommendations to further refine their efforts. 

In 2005, we also reported on weaknesses in Interior’s GovWorks. 

GovWorks is a government-run, fee-for-service organization that provides

various services, including contracting services, on which DOD has 

relied.33 Specifically, Interior did not always ensure that GovWorks 

contracts received fair and reasonable prices and may have missed 

 31GAO, High-Risk Series: An Update, GAO-07-310 (Washington, D.C.: Jan. 31, 2007). 

32GAO, Interagency Contracting: Problems with DOD’s and Interior’s Orders to Support 

Military Operations, GAO-05-201 (Washington, D.C.: Apr. 29, 2005). 

33Such organizations are referred to as “franchise funds.” See GAO, Interagency

Contracting: Franchise Funds Provide Convenience, but Value to DOD Is Not 

Demonstrated, GAO-05-456 (Washington, D.C.: July 29, 2005.) 

Page 21 GAO-07-502T 
opportunities to achieve savings from millions of dollars in purchases. In 

addition, GovWorks added substantial work—as much as 20 times above 

the original value of a particular order—without determining that prices 

were fair and reasonable. We made recommendations to Interior to 

improve the manner in which GovWorks funds are used to ensure value 

and compliance with procurement regulations. Interior concurred with our 

recommendations and identified actions to take to address them. We will 

continue to monitor their implementation of these actions. 

In September 2006, we reported on weaknesses in the Park Service’s 

management of grants provided to nonfederal entities under its 

Chesapeake Bay Gateways Program.34 In 1998, Congress passed the 

Chesapeake Bay Initiative Act to establish (1) a network of locations 

where the public can access and experience the bay and (2) a grant 

program to accomplish this objective. From 2000 through 2005, the Park 

Service awarded 189 grants totaling over $6 million to support the 

network. However, our review revealed several accountability and 

oversight weaknesses in the Park Service’s management of these grants, 

including (1) inadequate training of Park Service staff, (2) a lack of timely

grantee reporting on progress and finances, (3) continuing awards to 

nonperforming grantees, and (4) a backlog of uncompleted grants. To 

enhance accountability and oversight, we recommended that the 

department 

Chesapeake Bay Gateways 

Grant Program Lacks 

Needed Controls 

• develop and implement a process to determine the extent to which grants 

are effectively meeting program goals; 

• ensure that staff responsible for grant management are adequately trained; 

• ensure that grantees submit progress and financial reports in a timely 

manner; and

• ensure that grants are awarded only to applicants who completed any 

previous grants they received or to applicants who have demonstrated the 

capacity for completing a grant on schedule. 

 34GAO, Chesapeake Bay Gateways Program: National Park Service Needs Better

Accountability and Oversight of Grantees and Gateways, GAO-06-1049 (Washington, D.C.:

Sept. 14, 2006). 

Page 22 GAO-07-502T 
Interior concurred with our recommendations and has plans to implement 

them. 

To conclude, Mr. Chairman, I would like to note that in 1993, GAO testified 

at a broad oversight hearing on Interior before this Committee, similar to 

today’s hearing. At that time, we testified that Interior faced serious 

challenges to addressing the declining condition of the nation’s natural 

resources and related infrastructure under its responsibility. 

Unfortunately, almost 15 years later, the message in my testimony today is 

very similar. While some of the programs we evaluated in the past have 

improved, evaluations of additional programs reveal many of the same 

persistent management problems—a lack of adequate data to understand 

the condition of its natural resources and infrastructure and the actions 

necessary to improve them, a lack of adequate controls and accountability 

to ensure federal resources are properly used and accounted for, and a 

lack of adequate strategic planning and guidance for program 

implementation. Clearly the department needs to address management 

and control gaps in its programs and ensure its activities are carried out in

the most cost-effective and efficient manner, but difficult choices remain 

for improving the condition of the nation’s natural resources and the 

department’s infrastructure in light of the federal deficit and long-term 

fiscal challenges facing the nation. Either new sources of funding need to

be identified and pursued, or the department must determine the services 

it can continue and the standards it will use for maintaining its facilities 

and lands. As we stated in our testimony nearly 15 years ago, we believe

that in reaching these decisions, policy makers should know the full extent 

of the resource shortfalls facing federal natural resource management 

agencies. In addition, it is essential for the department to identify the 

impacts on services and infrastructure that would occur should serious 

cutbacks be necessary in order to maintain a certain standard of quality.

Mr. Chairman, this concludes my prepared statement. I would be pleased

to answer any questions that you or other Members of the Committee may 

have at this time. 

For further information about this testimony, please contact me at 

(202) 512-3841 or nazzaror@gao.gov. Contact points for our Offices of 

Concluding 

Observations 

GAO Contact 

Page 23 GAO-07-502T 
Congressional Relations and Public Affairs may be found on the last page 

of this statement. 

Page 24 GAO-07-502T 
Page 25 GAO-07-502T 

Related GAO Products 

High-Risk Series: An Update. GAO-07-310. Washington, D.C.: January 

2007. 

Major Management Challenges at the Department of the Interior (2005 

Web-based Update—http://www.gao.gov/pas/2005/doi.htm). 

High-Risk Series: An Update. GAO-05-207. Washington, D.C.: January 

2005. 

Major Management Challenges and Program Risks: Department of the 

Interior. GAO-03-104. Washington, D.C.: January 2003. 

High-Risk Series: An Update. GAO-03-119. Washington, D.C.: January 

2003. 

High-Risk Series: Federal Real Property. GAO-03-122. Washington, D.C.: 

January 2003. 

Major Management Challenges and Program Risks: Department of the 

Interior. GAO-01-249. Washington, D.C.: January 2001. 

High-Risk Series: An Update. GAO-01-263. Washington, D.C.: January 

2001. 

Major Management Challenges and Program Risks: Department of the 

Interior. GAO/OCG-99-9. Washington, D.C.: January 1999. 

High-Risk Series: An Update. GAO/HR-99-1. Washington, D.C.: January 

1999. 

Wildland Fire Management: Lack of a Cohesive Strategy Hinders 

Agencies’ Cost-Containment Efforts. GAO-07-427T. Washington, D.C.: 

January 30, 2007. 

Wildland Fire Suppression: Better Guidance Needed to Clarify Sharing 

of Costs between Federal and Nonfederal Entities. GAO-06-896T. 

Washington, D.C.: June 21, 2006. 

Performance and 

Accountability Series 

Resource Protection 

Efforts

Wildland Fires 
Wildland Fire Suppression: Lack of Clear Guidance Raises Concerns 

about Cost Sharing between Federal and Nonfederal Entities. GAO-06-

570. Washington, D.C.: May 30, 2006. 

Wildland Fire Management: Update on Federal Agency Efforts to Develop 

a Cohesive Wildland Fire Strategy. GAO-06-671R. Washington, D.C.: May 

1, 2006. 

Wildland Fire Management: Timely Identification of Long-Term Options 

and Funding Needs Is Critical. GAO-05-923T. Washington, D.C.: July 14, 

2005. 

Wildland Fire Management: Important Progress Has Been Made, but 

Challenges Remain to Completing a Cohesive Strategy. GAO-05-147. 

Washington, D.C.: January 14, 2005. 

Wildland Fires: Forest Service and BLM Need Better Information and a 

Systematic Approach for Assessing the Risks of Environmental Effects. 

GAO-04-705. Washington, D.C.: June 24, 2004. 

Wildland Fire Management: Additional Actions Required to Better 

Identify and Prioritize Lands Needing Fuels Reduction. GAO-03-805. 

Washington, D.C.: August 15, 2003. 

Wildland Fire Management: Reducing the Threat of Wildland Fires 

Requires Sustained and Coordinated Effort. GAO-02-843T. Washington,

D.C.: June 13, 2002. 

Severe Wildland Fires: Leadership and Accountability Needed to Reduce

Risks to Communities and Resources. GAO-02-259. Washington, D.C.: 

January 31, 2002. 

Western National Forests: A Cohesive Strategy is Needed to Address 

Catastrophic Wildfire Threats. GAO/RCED-99-65. Washington, D.C.: April 

2, 1999. 

Endangered Species: Many Factors Affect the Length of Time to Recover 

Select Species. GAO-06-730. Washington, D.C.: September 6, 2006. 

Endangered Species: Time and Costs Required to Recover Species Are 

Largely Unknown. GAO-06-463R. Washington, D.C.: April 6, 2006. 

Other Resource Protection 

Products

Page 26 GAO-07-502T 
Wind Power: Impacts on Wildlife and Government Responsibilities for 

Regulating Development and Protecting Wildlife. GAO-05-906. 

Washington, D.C.: September 16, 2005. 

Hardrock Mining: BLM Needs to Better Manage Financial Assurances to

Guarantee Coverage of Reclamation Costs. GAO-05-377. Washington, 

D.C.: June 20, 2005. 

Oil and Gas Development: Increased Permitting Activity Has Lessened 

BLM’s Ability to Meet Its Environmental Protection Responsibilities. 

GAO-05-418. Washington, D.C.: June 17, 2005. 

Oil and Gas Development: Challenges to Agency Decisions and 

Opportunities for BLM to Standardize Data Collection. GAO-05-124. 

Washington, D.C.: November 30, 2004. 

Endangered Species: More Federal Management Attention Is Needed to 

Improve the Consultation Process. GAO-04-93. Washington, D.C.: March 

19, 2004. 

National Wildlife Refuges: Opportunities to Improve the Management 

and Oversight of Oil and Gas Activities on Federal Lands. GAO-03-517. 

Washington, D.C.: August 28, 2003. 

Invasive Species: Clearer Focus and Greater Commitment Needed to 

Effectively Manage the Problem. GAO-03-1. Washington, D.C.: October 22, 

2002. 

Office of the Special Trustee for American Indians: Financial Statement 

Audit Recommendations and the Audit Follow-up Process. GAO-07-295R. 

Washington, D.C.: January 19, 2007. 

Indian Issues: The Office of the Special Trustee Has Implemented 

Several Key Trust Reforms Required by the 1994 Act, but Important 

Decisions about Its Future Remain. GAO-07-104. Washington, D.C.: 

December 8, 2006. 

Managing Indian Trust 

Responsibilities and 

Island Communities 

Indian Trust Funds 

Page 27 GAO-07-502T 
Indian Trust Funds: Individual Indian Accounts. GAO-02-970T. 

Washington, D.C.: July 25, 2002. 

Indian Trust Funds: Tribal Account Balances. GAO-02-420T. Washington,

D.C.: February 7, 2002. 

Indian Issues: BLM’s Program for Issuing Individual Indian Allotments 

on Public Lands Is No Longer Viable. GAO-07-23R. Washington, D.C.: 

October 20, 2006. 

Indian Issues: BIA’s Efforts to Impose Time Frames and Collect Better 

Data Should Improve the Processing of Land in Trust Applications. 

GAO-06-781. Washington, D.C.: July 28, 2006. 

Indian Irrigation: Numerous Issues Need to Be Addressed to Improve 

Project Management and Financial Sustainability. GAO-06-314. 

Washington, D.C.: February 24, 2006.

Alaska Native Allotments: Conflicts with Utility Rights-of-way Have Not 

Been Resolved through Existing Remedies. GAO-04-923. Washington, 

D.C.: September 7, 2004. 

Columbia River Basin: A Multilayered Collection of Directives and Plans 

Guides Federal Fish and Wildlife Plans. GAO-04-602. Washington, D.C.: 

June 4, 2004.

Alaska Native Villages: Most Are Affected by Flooding and Erosion, but 

Few Qualify for Federal Assistance. GAO-04-142. Washington, D.C.: 

December 12, 2003. 

Compacts of Free Association: Micronesia and the Marshall Islands Face

Challenges in Planning for Sustainability, Measuring Progress, and 

Ensuring Accountability. GAO-07-163. Washington, D.C.: December 15, 

2006. 

U.S. Insular Areas: Economic, Fiscal, and Financial Accountability 

Challenges. GAO-07-119. Washington, D.C.: December 12, 2006. 

Compacts of Free Association: Development Prospects Remain Limited 

for Micronesia and Marshall Islands. GAO-06-590. Washington, D.C.: June 

27, 2006. 

Indian Land Management 

Island Communities 

Page 28 GAO-07-502T 
U.S. Insular Areas: Multiple Factors Affect Federal Health Care Funding. 

GAO-06-75. Washington, D.C.: October 14, 2005. 

Compacts of Free Association: Implementation of New Funding and 

Accountability Requirements Is Well Underway, but Planning 

Challenges Remain. GAO-05-633. Washington, D.C.: July 11, 2005. 

American Samoa: Accountability for Key Federal Grants Needs 

Improvement. GAO-05-41. Washington, D.C.: December 17, 2004. 

Compact of Free Association: Single Audits Demonstrate Accountability 

Problems over Compact Funds. GAO-04-7. Washington, D.C.: October 7, 

2003. 

Compact of Free Association: An Assessment of the Amended Compacts 

and Related Agreements. GAO-03-890T. Washington, D.C.: June 18, 2003. 

Foreign Assistance: Effectiveness and Accountability Problems Common 

in U.S. Programs to Assist Two Micronesian Nations. GAO-02-70. 

Washington, D.C.: January 22, 2002. 

Foreign Relations: Kwajalein Atoll Is the Key U.S. Defense Interest in 

Two Micronesian Nations. GAO-02-119. Washington, D.C.: January 22, 

2002. 

Interior’s Land Appraisal Services: Action Needed to Improve 

Compliance with Appraisal Standards, Increase Efficiency, and 

Broaden Oversight. GAO-06-1050. Washington, D.C.: September 28, 2006. 

Land Acquisitions: Agencies Generally Used Similar Standards and 

Appraisal Methodologies in CALFED and CVPIA Transactions. GAO-02-

278R. Washington, D.C.: January 23, 2002. 

Indian Irrigation Projects: Numerous Issues Need to Be Addressed to 

Improve Project Management and Financial Sustainability. GAO-06-314. 

Washington, D.C.: February 24, 2006.

Recreation Fees: Comments on the Federal Lands Recreation

Enhancement Act, H.R. 3283. GAO-04-745T. Washington, D.C.: May 6, 

2004. 

Managing Federal 

Land Appraisals

Deferred Maintenance 

Backlog 

Page 29 GAO-07-502T 
National Park Service: Efforts Underway to Address Its Maintenance 

Backlog. GAO-03-1177T. Washington, D.C.: September 27, 2003. 

Bureau of Indian Affairs Schools: Expenditures in Selected Schools Are 

Comparable to Similar Public Schools, but Data Are Insufficient to 

Judge Adequacy of Funding and Formulas. GAO-03-955. Washington, 

D.C.: September 4, 2003. 

Bureau of Indian Affairs Schools: New Facilities Management 

Information System Promising, but Improved Data Accuracy Needed. 

GAO-03-692. Washington, D.C.: July 31, 2003. 

National Park Service: Status of Agency Efforts to Address Its 

Maintenance Backlog. GAO-03-992T. Washington, D.C.: July 8, 2003. 

National Park Service: Status of Efforts to Develop Better Deferred 

Maintenance Data. GAO-02-568R. Washington, D.C.: April 12, 2002. 

Oil and Gas Royalties: Royalty Relief Will Likely Cost the Government 

Billions, but the Final Costs Have Yet to Be Determined. GAO-07-369T. 

Washington, D.C.: January 17, 2007. 

Recreation Fees: Agencies Can Better Implement the Federal Lands 

Recreation Enhancement Act and Account for Fee Revenues. GAO-06-

1016. Washington, D.C.: September 22, 2006. 

Renewable Energy: Increased Geothermal Development Will Depend on 

Overcoming Many Challenges. GAO-06-629. Washington, D.C.: May 24,

2006. 

National Parks Air Tour Fees: Effective Verification and Enforcement 

Are Needed to Improve Compliance. GAO-06-468. Washington, D.C.: May 

11, 2006. 

Oil and Gas Development: Increased Permitting Activity Has Lessened 

BLM’s Ability to Meet Its Environmental Protection Responsibilities. 

GAO-05-418. Washington, D.C.: June 17, 2005. 

National Park Service: Revenues Could Increase by Charging Allowed 

Fees for Some Special Uses Permits. GAO-05-410. Washington, D.C.: May 

6, 2005. 

Revenue Collection 

Opportunities 

Page 30 GAO-07-502T 
Chesapeake Bay Gateways Program: National Park Service Needs Better

Accountability and Oversight of Grantees and Gateways. GAO-06-1049. 

Washington, D.C.: September 14, 2006. 

Interagency Contracting: Franchise Funds Provide Convenience, but 

Value to DOD Is Not Demonstrated. GAO-05-456. Washington, D.C.: July 

29, 2005.

Interagency Contracting: Problems with DOD’s and Interior’s Orders to 

Support Military Operations. GAO-05-201. Washington, D.C.: April 29, 

2005. 

Page 31 GAO-07-502T 

Weaknesses in 

Contracts and Grants 

Management

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