Testimony 

Before the Committee on Energy and 

Natural Resources, U.S. Senate 

United States General Accounting Office 

GAO

For Release on Delivery 

Expected at 2:30 p.m. EST 

Tuesday, March 30, 2004 NATIONAL PARK SERVICE

A More Systematic Process 

for Establishing National 

Heritage Areas and Actions 

to Improve Their 

Accountability Are Needed 

Statement of Barry T. Hill, Director 

Natural Resources and Environment 

GAO-04-593T 
www.gao.gov/cgi-bin/getrpt?GAO-04-593T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Barry T. Hill at 

(202) 512-3841 or hillbt@gao.gov. 

Highlights of GAO-04-593T, testimony

before the Committee on Energy and 

Natural Resources, U.S. Senate 

March 30, 2004

NATIONAL PARK SERVICE 

A More Systematic Process for 

Establishing National Heritage Areas and 

Actions to Improve Their Accountability 

Are Needed 

No systematic process currently exists for identifying qualified sites and 

designating them as national heritage areas. While the Congress generally 

has designated heritage areas with the Park Service's advice, it designated 10 

of the 24 areas without a thorough agency review; in 6 of these 10 cases, the 

agency recommended deferring action. Even when the agency fully studied 

sites, it found few that were unsuitable. The agency’s criteria are very 

general. For example, one criterion states that a proposed area should 

reflect “traditions, customs, beliefs, and folk life that are a valuable part of 

the national story." These criteria are open to interpretation and, using 

them, the agency has eliminated few sites as prospective heritage areas. 

According to data from 22 of the 24 heritage areas, in fiscal years 1997 

through 2002, the areas received about $310 million in total funding. Of this 

total, about $154 million came from state and local governments and private 

sources and another $156 million came from the federal government. Over 

$50 million was dedicated heritage area funds provided through the Park 

Service, with another $44 million coming from other Park Service programs 

and about $61 million from 11 other federal sources. Generally, each area’s 

designating legislation imposes matching requirements and sunset 

provisions to limit the federal funds. However, since 1984, five areas that 

reached their sunset dates had their funding extended. 

 

The Park Service oversees heritage areas’ activities by monitoring their 

implementation of the terms set forth in the cooperative agreements. These 

terms, however, do not include several key management controls. That is, 

the agency has not (1) always reviewed areas’ financial audit reports, (2) 

developed consistent standards for reviewing areas’ management plans, and 

(3) developed results-oriented goals and measures for the agency’s heritage 

area activities, or required the areas to adopt a similar approach. Park 

Service officials said that the agency has not taken these actions because, 

without a program, it lacks adequate direction and funding. 

Heritage areas do not appear to have affected property owners’ rights. In 

fact, the designating legislation of 13 areas and the management plans of at 

least 6 provide assurances that such rights will be protected. However, 

property rights advocates fear the effects of provisions in some management 

plans. These provisions encourage local governments to implement land use 

policies that are consistent with the heritage areas’ plans, which may allow 

the heritage areas to indirectly influence zoning and land use planning in 

ways that could restrict owners’ use of their property. Nevertheless, 

heritage area officials, Park Service headquarters and regional staff, and 

representatives of national property rights groups that we contacted were 

unable to provide us with any examples of a heritage area directly 

affecting—positively or negatively—private property values or use.

The Congress has established, or 

“designated,” 24 national heritage 

areas to recognize the value of their 

local traditions, history, and 

resources to the nation's heritage. 

These areas, including public and 

private lands, receive funds and 

assistance through cooperative 

agreements with the National Park 

Service, which has no formal 

program for them. They also 

receive funds from other agencies 

and nonfederal sources, and are 

managed by local entities. Growing 

interest in new areas has raised 

concerns about rising federal costs 

and the risk of limits on private 

land use. 

GAO was asked to review the (1) 

process for designating heritage 

areas, (2) amount of federal 

funding to these areas, (3) process 

for overseeing areas’ activities and 

use of federal funds, and (4) 

effects, if any, they have on private 

property rights. 

GAO recommends that the Park 

Service (1) develop consistent 

standards and processes for 

reviewing areas’ management 

plans; (2) require regions to review 

areas’ financial audit reports, and 

(3) develop results-oriented goals 

and measures for the agency’s 

activities and require areas to 

adopt a similar approach. 
Page 1 GAO-04-593T National Heritage Areas 

Mr. Chairman and Members of the Committee: 

I am pleased to be here today to discuss a number of issues concerning the 

designation, funding, and oversight of national heritage areas. As you 

know, over the past two decades, the Congress has established, or 

“designated,” 24 national heritage areas and provided them with millions 

of dollars in financial assistance through the National Park Service. By 

providing this designation, the Congress has determined that these areas’ 

local cultures, traditions, history, and resources are worthy of being 

recognized and preserved because of their contributions to the nation’s 

heritage. These areas can encompass large tracts of land and incorporate 

public as well as private property. The number of bills introduced to study 

or designate new areas has grown considerably in recent years. In the 

108th Congress alone, as of early March 2004, over 30 bills had been 

introduced to either study or establish new areas. This growing interest in 

creating new heritage areas has raised concerns that their numbers may 

expand rapidly and significantly increase the amount of federal funds 

supporting them. In addition, private property rights advocates are 

concerned that heritage area designations could increase the risk that 

federal controls or other limits will be placed on private land use. 

Once designated, heritage areas can receive funding through the National 

Park Service’s budget, although the agency has no formal heritage area 

program. The Park Service provides technical assistance to the areas, and 

the Congress appropriates the agency limited funds for these activities.1

The Park Service allocates funding to the areas through cooperative 

agreements. These funds are considered to be “seed” money to assist each 

area in becoming sufficiently established to develop partnerships with 

state and local governments, businesses, and other nonfederal 

organizations as their principal funding sources. Heritage areas also 

receive funds from other federal agencies through a variety of programs, 

primarily the Department of Transportation for road and infrastructure 

improvements. 

In this context, my testimony today focuses on the results of our work on 

national heritage areas conducted at the request of this Committee. 

 1

Although no heritage area program exists within the Park Service, the Congress has 

provided the Park Service an annual appropriation for administering its heritage area 

activities. The agency has allocated these amounts to fund a national coordinator position 

in the Park Service’s headquarters, which directs and monitors the agency’s heritage area 

activities. 
Page 2 GAO-04-593T National Heritage Areas 

Specifically, it addresses the (1) process for identifying and designating 

national heritage areas, (2) amount of federal funding provided to support 

these areas, (3) process for overseeing and holding national heritage areas 

accountable for their use of federal funds, and (4) extent to which, if at all, 

these areas have affected private property rights. 

To address these issues, we obtained information on the Park Service’s 

heritage area activities from the Heritage Area national coordinator and 

program managers in the four Park Service regions that include heritage 

areas. We also obtained funding information from 22 of the 24 existing 

areas for fiscal years 1997 through 2002, and discussed this information 

with the executive directors and staff of each area.2

 In addition, we visited 

8 of the 24 heritage areas to view their operations and accomplishments, 

and discussed various issues with their executive directors. Finally, we 

discussed concerns about private property rights with representatives of 

several organizations advocating property rights. We conducted our work 

between May 2003 and March 2004 in accordance with generally accepted 

government auditing standards. A more complete description of our 

methodology is included in app. I. 

In summary, we found the following: 

• No systematic process exists for identifying qualified candidate sites and 

designating them as national heritage areas. While the Congress generally 

has made designation decisions with the advice of the Park Service, it has, 

in some instances, designated heritage areas before the agency has fully 

evaluated them. In this regard, the Congress designated 10 of the 24 

heritage areas without a thorough Park Service review of their 

qualifications; in 6 of these 10 cases, the agency recommended deferring 

action. Furthermore, even when the Park Service fully studied prospective 

sites’ qualifications as heritage areas, it found that few of these were 

unsuitable. The Park Service’s criteria are not specific. For example, one 

criterion states that a proposed area should reflect “traditions, customs, 

beliefs, and folk life that are a valuable part of the national story.” Using 

these criteria, the agency has determined that relatively few of the sites it 

has evaluated would not qualify as heritage areas. 

 2

As of mid-March 2004, two heritage areas had not provided us with funding data. 

Summary 
Page 3 GAO-04-593T National Heritage Areas 

• According to data from 22 of the 24 heritage areas, in fiscal years 1997 

through 2002, the areas received about $310 million in total funding. Of 

this total, about $154 million came from state and local governments and 

private sources and another $156 million came from the federal 

government. About $51 million of the federal total was dedicated heritage 

area funds provided through the Park Service. An additional $44 million 

came from other Park Service programs and about $61 million from 11 

other federal sources. Generally, each area’s designating legislation 

specifies the total amount of federal funds that will be provided and 

imposes certain conditions, such as matching requirements and sunset 

provisions, to limit the amount of federal funds for each heritage area. 

However, the sunset provisions have not been effective in limiting federal 

funding: since 1984, five areas that reached their sunset dates received 

funding reauthorization from the Congress. 

 

• In the absence of a formal program, the Park Service oversees heritage 

areas’ activities by monitoring the implementation of the terms set forth in 

the cooperative agreements. These terms, however, do not include several 

key management controls. Although the Park Service has primary federal 

responsibility for heritage areas, the agency does not always review data 

that it obtains from the areas on their sources and expenditures of all 

federal funds. As a result, the agency cannot determine how much federal 

funds have been provided to the areas or whether these funds are being 

spent appropriately. Furthermore, the Park Service has not yet developed 

clear and consistent standards and processes for reviewing areas’ 

management plans, even though this review is one of the agency’s primary 

heritage area responsibilities. As a result, staff in each Park Service region 

use different approaches to review and approve areas’ plans. Finally, the 

Park Service has not yet developed results-oriented performance goals and 

measures—consistent with the requirements of the Government 

Performance and Results Act—for the agency’s heritage area activities, or 

required the areas to adopt a similar results-oriented management 

approach. Such an approach would help ensure the efficiency and 

effectiveness of the agency’s heritage area activities and enable both the 

areas and the agency to determine what is being accomplished with 

federal funds. According to Park Service officials, the agency has not 

taken these actions because, without a formal program, it does not have 

the direction or funding it needs to effectively carry out its national 

heritage area activities. 

• National heritage areas do not appear to have directly affected the rights 

of property owners. To address property concerns, the designating 

legislation of 13 of the 24 heritage areas and management plans of at least 

6 provide explicit assurances that the areas will not affect property 
Page 4 GAO-04-593T National Heritage Areas 

owners’ rights. However, some management plans encourage local 

governments to implement land use policies that are consistent with the 

heritage areas’ plans and offer to aid their planning activities through 

matching grants. Property rights advocates fear that such provisions may 

allow heritage areas to indirectly influence zoning and land use planning in 

ways that could restrict owners’ use of their property. Nevertheless, 

heritage area officials, Park Service headquarters and regional staff, and 

representatives of national property rights groups who we contacted were 

unable to provide us with any examples of a heritage area directly 

affecting—positively or negatively—private property use. 

To improve the heritage area designation process and the Park Service’s 

oversight of areas’ use of federal funds, we are recommending that the 

agency (1) develop consistent standards and processes for reviewing 

areas’ management plans; (2) require regions to review areas’ financial 

audit reports, and (3) develop results-oriented goals and measures for the 

agency’s activities and require areas to adopt a similar approach. 

To date, the Congress has designated 24 national heritage areas, primarily 

in the eastern half of the country (see fig. 1). Background 
Page 5 GAO-04-593T National Heritage Areas 

Figure 1: Locations of 24 Existing National Heritage Areas, as of March 2004 

Generally, national heritage areas focus on local efforts to preserve and 

interpret the role that certain sites, events, and resources have played in 

local history and their significance in the broader national context. For 

example, the Rivers of Steel Heritage Area commemorates the 

contribution of southwestern Pennsylvania to the development of the 

nation’s steel industry by providing visitors with interpretive tours of 

historic sites and other activities. Heritage areas share many similarities—

such as recreational resources and historic sites—with national parks and 

other park system units but lack the stature and national significance to 

qualify them as these units. 

The process of becoming a national heritage area usually begins when 

local residents, businesses, and governments ask the Park Service, within 
Page 6 GAO-04-593T National Heritage Areas 

the Department of the Interior, or the Congress for help in preserving their 

local heritage and resources. In response, although the Park Service has 

no program governing these activities, the agency provides technical 

assistance, such as conducting or reviewing studies to determine an area’s 

eligibility for heritage area status. The Congress then may designate the 

site as a national heritage area and set up a management entity for it. This 

entity could be a state or local governmental agency, an independent 

federal commission, or a private nonprofit corporation. Usually within 3 

years of designation, the area is required to develop a management plan, 

which is to detail, among other things, the area’s goals and its plans for 

achieving those goals. The Park Service then reviews these plans, which 

must be approved by the Secretary of the Interior. 

After the Congress designates a heritage area, the Park Service enters into 

a cooperative agreement with the area’s management entity to assist the 

local community in organizing and planning the area. Each area can 

receive funding through the Park Service’s budget—generally limited to 

not more than $1 million a year for 10 or 15 years. The agency allocates the 

funds to the area through the cooperative agreement. 

No systematic process is in place to identify qualified candidate sites and 

designate them as national heritage areas. In this regard, the Park Service 

conducts studies—or reviews studies prepared by local communities—to 

evaluate the qualifications of sites proposed for national heritage 

designation. On the basis of these studies, the agency advises the Congress 

as to whether a particular location warrants designation. The agency 

usually provides its advice to the Congress by testifying in hearings on 

bills to authorize a particular heritage area. The Park Services’ studies of 

prospective sites’ suitability help the agency ensure that the basic 

components necessary to a successful heritage area—such as natural and 

cultural resources and community support—are either already in place or 

are planned. Park Service data show that the agency conducted or 

reviewed some type of study addressing the qualifications of all 24 

heritage areas. However, in some cases, these studies were limited in 

scope so that questions concerning the merits of the location persisted 

after the studies were completed. As a result, the Congress designated 10 

of the 24 areas with only a limited evaluation of their suitability as heritage 

areas. Of these 10 areas, the Park Service opposed or suggested that the 

Congress defer action on 6, primarily because of continuing questions 

about, among other issues, whether the areas had adequately identified 

goals or management entities or demonstrated community support. 

Furthermore, of the 14 areas that were designated after a full evaluation, 

No Systematic 

Process Exists for 

Identifying and 

Designating National 

Heritage Areas 
Page 7 GAO-04-593T National Heritage Areas 

the Congress designated 8 consistent with the Park Service’s 

recommendations, 5 without the agency’s advice, and 1 after the agency 

had recommended that action be deferred. 

Furthermore, the criteria the Park Service uses to evaluate the suitability 

of prospective heritage areas are not specific and, in using them, the 

agency has determined that a large portion of the sites studied qualify as 

heritage areas. According to the Heritage Area national coordinator, 

before the early 1990s, the Park Service used an ad hoc approach to 

determining sites’ eligibility as heritage areas, with little in the way of 

objective criteria as a guide. Since then, however, the Park Service 

developed general guidelines to use in evaluating and advising the 

Congress on the suitability of sites as heritage areas. Based on these 

guidelines, in 1999, the agency developed a more formal approach to 

evaluating sites. This approach consisted of four actions that the agency 

believed were critical before a site could be designated as well as 10 

criteria to be considered when conducting studies to assess an area’s 

suitability. 

The four critical steps include the following: 

• complete a suitability/feasibility study; 

• involve the public in the suitability/feasibility study; 

• demonstrate widespread public support for the proposed designation; and 

• demonstrate commitment to the proposal from governments, industry, 

and private, nonprofit organizations. 

A suitability/feasibility study, should examine a proposed area using the 

following criteria: 

• The area has natural, historic, or cultural resources that represent 

distinctive aspects of American heritage worthy of recognition, 

conservation, interpretation, and continuing use, and are best managed 

through partnerships among public and private entities, and by combining 

diverse and sometimes noncontiguous resources and active communities; 

• The area’s traditions, customs, beliefs, and folk life are a valuable part of 

the national story; 
Page 8 GAO-04-593T National Heritage Areas 

• The area provides outstanding opportunities to conserve natural, cultural, 

historic, and/or scenic features; 

• The area provides outstanding recreational and educational opportunities; 

• Resources that are important to the identified themes of the area retain a 

degree of integrity capable of supporting interpretation; 

• Residents, businesses, nonprofit organizations, and governments within 

the area that are involved in the planning have developed a conceptual 

financial plan that outlines the roles for all participants, including the 

federal government, and have demonstrated support for designation of the 

area; 

• The proposed management entity and units of government supporting the 

designation are willing to commit to working in partnership to develop the 

area; 

• The proposal is consistent with continued economic activity in the area; 

• A conceptual boundary map is supported by the public; and 

• The management entity proposed to plan and implement the project is 

described. 

These criteria are broad and subject to multiple interpretations, as noted 

by an official in the agency’s Midwest region charged with applying these 

criteria to prospective areas. Similarly, according to officials in the 

agency’s Northeast region, they believe that the criteria were developed to 

be inclusive and that they are inadequate for screening purposes. The 

national coordinator believes, however, that the criteria are valuable but 

that the regions need additional guidance to apply them more consistently. 

The Park Service has developed draft guidance for applying these criteria 

but has no plans to issue them as final guidance. Rather, the agency is 

incorporating this guidance into a legislative proposal for a formal heritage 

area program. According to the national coordinator, some regions have 

used this guidance despite its draft status, but it has not been widely 

adopted or used to date. 

The Park Service’s application of these broad criteria has identified a large 

number of potential heritage areas. Since 1989, the Park Service has 

determined that many of the candidate sites it has evaluated would qualify 

as national heritage areas. 
Page 9 GAO-04-593T National Heritage Areas 

According to data from 22 of the 24 heritage areas, about half of their total 

funding of $310 million in fiscal years 1997 through 2002 came from the 

federal government and the other half from state and local governments 

and private sources. Table 1 shows the areas’ funding sources from fiscal 

years 1997 through 2002. 

Table 1: National Heritage Area Funding from All Sources, Fiscal Years 1997-2002 

Source Amount Percentage

Total Park Service funds $95,393,506 30.8

Dedicated heritage area fundsa 50,922,562 16.5

Other Park Service support fundsb 44,470,944 14.3

Total other federal funds $60,545,816 19.5

Department of Transportation 55,852,269 18.0

Department of Education 2,000,000 0.6

Department of Agriculture 547,009 0.2

Housing and Urban Development 420,183 0.1

Environmental Protection Agency 400,000 0.1

Army Corps of Engineers 266,000 0.1

Department of Commerce 96,555 0.0

National Railroad Passenger Corporation 23,800 0.0

National Endowment for the Arts 5,000 0.0

Federal earmarks and awardsc 935,000 0.3

Total nonfederal funds $154,078,203 49.7

State governments 61,404,323 19.8

Local governments 46,612,624 15.0

Nonprofit organizations 7,255,416 2.3

Private foundations 14,515,996 4.7

Corporate sponsors 2,126,870 0.7

Other nonfederal funding sources 22,163,473 7.2

Total $310,017,525 100.0

Source: GAO analysis of data obtained from 22 of the 24 heritage areas. 

a

These funds were provided through the Park Service’s Heritage Partnership Program and Statutory 

and Contractual Aid budget line items. The Heritage Partnership Program promotes the conservation 

of natural, historic, scenic, and cultural resources. Statutory and Contractual Aid provides financial 

assistance in the planning, development, or operation of natural, historical, cultural, or recreation 

areas that are not managed by the Park Service. 

b

These are funds from other Park Service budget line items—including the Land and Water 

Conservation Fund, Operation of the National Park Service, and the Construction Fund—that are not 

typically reported as part of heritage area funding, but include funding for specific projects undertaken 

by heritage areas. 

National Heritage 

Areas Annually 

Receive Millions in 

Federal Funding 
Page 10 GAO-04-593T National Heritage Areas 

c

Funds earmarked for Federal Government Pass-Through Awards ($610,000) and Hugh Moore 

Historical Park & Museums, Inc. ($325,000). 

As figure 2 shows, the federal government’s total funding to these heritage 

areas increased from about $14 million in fiscal year 1997 to about $28 

million in fiscal year 2002, peaking at over $34 million in fiscal year 2000. 

Figure 2: National Heritage Areas’ Funding, By Major Source, Fiscal Years 1997 – 

2002 

The Congress sets the overall level of funding for heritage areas, 

determining which areas will receive funding and specifying the amounts 

provided. Newly designated heritage areas usually receive limited federal 

funds while they develop their management plans and then receive 

increasing financial support through Park Service appropriations after 

their plans are established. The first heritage areas received pass-through 

grants from the Park Service and funding through the agency’s Statutory 

and Contractual Aid appropriations. However, in 1998, the Congress began 
Page 11 GAO-04-593T National Heritage Areas 

appropriating funds to support heritage areas through the Heritage 

Partnership Program. 

In addition, the Congress has placed in each area’s designating legislation 

certain conditions on the receipt of federal funds. While the legislation 

designating the earliest heritage areas resulted in different funding 

structures, generally those created since 1996 have been authorized 

funding of up to $10 million over 15 years, not to exceed $1 million in any 

single year. In conjunction with this limit, the designating legislation 

attempts to identify a specific date when heritage areas no longer receive 

federal financial or technical assistance. Although heritage areas are 

ultimately expected to become self-sufficient without federal support, to 

date the sunset provisions have not limited federal funding. Since the first 

national heritage area was designated in 1984, five have reached the sunset 

date specified in their designating legislation. However, in each case, the 

sunset date was extended and the heritage area continued to receive 

funding from the Congress. 

Finally, the areas’ designating legislation typically requires the heritage 

areas to match the amount of federal funds they receive with a specified 

percentage of funds from nonfederal sources. Twenty-two of the 24 

heritage areas are required to match the federal funds they receive. Of 

these 22 areas, 21 have a 50-percent match requirement—they must show 

that at least 50 percent of the funding for their projects has come from 

nonfederal sources—and one has a 25-percent match requirement. 

In the absence of a formal program, the Park Service oversees heritage 

areas’ activities by monitoring the implementation of the terms set forth in 

the cooperative agreements. According to Park Service headquarters 

officials, the agency’s cooperative agreements with heritage areas allow 

the agency to effectively oversee their activities and hold them 

accountable. These officials maintain that they can withhold funds from 

heritage areas—and have, in some circumstances, done so—if the areas 

are not carrying out the requirements of the cooperative agreements. 

However, regional managers have differing views on their authority for 

withholding funds from areas and the conditions under which they should 

do so. 

Although Park Service has oversight opportunities through the 

cooperative agreements, it has not taken advantage of these opportunities 

to help to improve oversight and ensure these areas’ accountability. In this 

regard, the agency generally oversees heritage areas’ funding through 

The Park Service 

Lacks an Effective 

Process for Ensuring 

that National Heritage 

Areas Are 

Accountable for Their 

Use of Federal Funds 
Page 12 GAO-04-593T National Heritage Areas 

routine monitoring and oversight activities, and focuses specific attention 

on the areas’ activities only when problems or potential concerns arise. 

However, the Park Service regions that manage the cooperative 

agreements with the heritage areas do not always review the areas’ annual 

financial audit reports, although the agency is ultimately the federal 

agency responsible for heritage area projects that are financed with 

federal funds.3

 For example, managers in two Park Service regions told us 

that they regularly review heritage areas’ annual audit reports, but a 

manager in another region said that he does not. As a result, the agency 

cannot determine the total amount of federal funds provided or their use. 

According to these managers, the inconsistencies among regions in 

reviewing areas’ financial reports primarily result from a lack of clear 

guidance and the collateral nature of the Park Service regions’ heritage 

area activities—they receive no funding for oversight, and their oversight 

efforts divert them from other mission-critical activities. 

Furthermore, the Park Service has not yet developed clearly defined, 

consistent, and systematic standards and processes for regional staff to 

use in reviewing the adequacy of areas’ management plans, although these 

reviews are one of the Park Service’s primary heritage area 

responsibilities. Heritage areas’ management plans are blueprints that 

discuss how the heritage area will be managed and operated and what 

goals it expects to achieve, among other issues. The Secretary of the 

Interior must approve the plans after Park Service review. According to 

the national coordinator, heritage area managers in the agency’s Northeast 

region have developed a checklist of what they consider to be the 

necessary elements of a management plan to assist reviewers in evaluating 

the plans. While this checklist has not been officially adopted, managers in 

the Northeast and other regions consult it in reviewing plans, according to 

the national coordinator. Heritage area managers in the Park Service 

regions use different criteria for reviewing these plans, however. For 

example, managers in the regions told us that, to judge the adequacy of the 

plans, one region uses the specific requirements in the areas’ designating 

 3

Under regulations implementing the Single Audit Act, recipients spending $500,000 or 

more of federal funds during a fiscal year are required to have an audit conducted for that 

year. They are also required to (1) maintain internal controls; (2) comply with laws, 

regulations, contracts, and grant agreements; (3) prepare appropriate financial statements; 

(4) ensure that audits are properly performed and submitted when due; and (5) take 

corrective actions on audit findings. This act is intended to, among other things, promote 

sound financial management of federally funded projects administered by state and local 

governments and nonprofit organizations. Prior to 2003, the dollar threshold for a single 

audit was $300,000 or more in expenditures in a fiscal year. 
Page 13 GAO-04-593T National Heritage Areas 

legislation, another uses the designating legislation in conjunction with the 

Park Service’s general designation criteria, and a third adapts the process 

used for reviewing national park management plans. While these 

approaches may guide the regions in determining the content of the plans, 

they provide little guidance in judging the adequacy of the plans for 

ensuring successful heritage areas. 

Finally, the Park Service has not yet developed results-oriented 

performance goals and measures—consistent with the requirements of the 

Government Performance and Results Act—that would help to ensure the 

efficiency and effectiveness of its heritage area activities. The act requires 

agencies to, among other actions, set strategic and annual goals and 

measure their performance against these goals. Effectively measuring 

performance requires developing measures that demonstrate results, 

which, in turn, requires data. According to the national coordinator, the 

principal obstacles to measuring performance are the difficulty of 

identifying meaningful indicators of success and the lack of funding to 

collect the needed data. With regard to indicators, the national coordinator 

told us that the agency has tried to establish meaningful and measurable 

goals both for their activities and the heritage areas. The agency has 

identified a series of “output” measures of accomplishment, such as 

numbers of heritage areas visitors, formal and informal partners, 

educational programs managed, and grants awarded. However, the 

national coordinator acknowledged that these measures are insufficient, 

and the agency continues to pursue identifying alternative measures that 

would be more meaningful and useful. However, without clearly defined 

performance measures for its activities, the agency will continue to be 

unable to effectively gauge what it is accomplishing and whether its 

resources are being employed efficiently and cost-effectively. 

The Park Service also has not required heritage areas to adopt a resultsoriented management approach—linked to the goals set out in their 

management plans—which would enable both the areas and the agency to 

determine what is being accomplished with the funds that have been 

provided. In this regard, the heritage areas have not yet developed an 

effective, outcome-oriented method for measuring their own performance 

and are therefore unable to determine what benefits the heritage area—

and through it, the federal funds—have provided to the local community. 

For example, for many heritage areas, increasing tourism is a goal, but 

while they may be able to measure an increase in tourism, they cannot 

demonstrate whether this increase is directly associated with the efforts of 

the heritage area. To address these issues, the Alliance of National 

Heritage Areas is currently working with Michigan State University to 
Page 14 GAO-04-593T National Heritage Areas 

develop a way to measure various impacts associated with a national 

heritage area. These impacts include, among others, the effects on tourism 

and local economies through jobs created and increases in tax revenues. 

According to Park Service officials, the agency has not taken actions to 

improve oversight because, without a formal program, it does not have the 

direction or funding it needs to effectively administer its national heritage 

area activities. 

National heritage areas do not appear to have affected private property 

rights, although private property rights advocates have raised a number of 

concerns about the potential effects of heritage areas on property owners’ 

rights and land use. These advocates are concerned that heritage areas 

may be allowed to acquire or otherwise impose federal controls on 

nonfederal lands. However, the designating legislation and the 

management plans of some areas explicitly place limits on the areas’ 

ability to affect private property rights and use. In this regard, eight areas’ 

designating legislation stated that the federal government cannot impose 

zoning or land use controls on the heritage areas. Moreover, in some 

cases, the legislation included explicit assurances that the areas would not 

affect the rights of private property owners. For example, the legislation 

creating 13 of the 24 heritage areas stated that the area’s managing entity 

cannot interfere with any person’s rights with respect to private property 

or have authority over local zoning ordinances or land use planning. While 

management entities of heritage areas are allowed to receive or purchase 

real property from a willing seller, under their designating legislation, most 

areas are prohibited from using appropriated funds for this purpose.4

 In 

addition, the designating legislation for five heritage areas requires them to 

convey the property to an appropriate public or private land managing 

agency. 

As a further protection of property rights, the management plans of some 

heritage areas deny the managing entity authority to influence zoning or 

land use. For example, at least six management plans state that the 

managing entities have no authority over local zoning laws or land use 

regulations. However, most of the management plans state that local 

governments’ participation will be crucial to the success of the heritage 

 4

The Shenandoah River Valley Battlefields National Historic District is the only heritage 

area that has received authority and appropriations to acquire land. 

National Heritage 

Areas Do Not Appear 

to Have Affected 

Individual Property 

Rights 
Page 15 GAO-04-593T National Heritage Areas 

area and encourage local governments to implement land use policies that 

are consistent with the plan. Some plans offer to aid local government 

planning activities through information sharing or technical or financial 

assistance to achieve their cooperation. Property rights advocates are 

concerned that such provisions give heritage areas an opportunity to 

indirectly influence zoning and land use planning, which could restrict 

owners’ use of their property. Some of the management plans state the 

need to develop strong partnerships with private landowners or 

recommend that management entities enter into cooperative agreements 

with landowners for any actions that include private property. 

Despite concerns about private property rights, officials at the 24 heritage 

areas, Park Service headquarters and regional staff working with these 

areas, and representatives of six national property rights groups that we 

contacted were unable to provide us with a single example of a heritage 

area directly affecting—positively or negatively—private property values 

or use. 

National heritage areas have become an established part of the nation’s 

efforts to preserve its history and culture in local areas. The growing 

interest in establishing additional areas will put increasing pressure on the 

Park Service’s resources, especially since the agency receives limited 

funding for the technical and administrative assistance it provides to these 

areas. Under these circumstances, it is important to ensure that only those 

sites’ that are most qualified are designated as heritage areas. However, no 

systematic process for designating these areas exists, and the Park Service 

does not have well-defined criteria for assessing sites’ qualifications or 

effective oversight of the areas’ use of federal funds and adherence to their 

management plan. As a result, the Congress and the public cannot be 

assured that future sites will have the necessary resources and local 

support needed to be viable or that federal funds supporting them will be 

well spent. 

Given the Park Service’s resource constraints, it is important to ensure 

that the agency carries out its heritage area responsibilities as efficiently 

and effectively as possible. Park Service officials pointed to the absence of 

a formal program as a significant obstacle to effective management of the 

agency’s heritage area efforts and oversight of the areas’ activities. In this 

regard, without a program, the agency has not developed consistent 

standards and processes for reviewing areas’ management plans, the areas’ 

blueprints for becoming viable and self-sustaining. It also has not required 

regional heritage area managers to regularly and consistently review the 

Conclusions 
Page 16 GAO-04-593T National Heritage Areas 

areas’ annual financial audit reports to ensure that the Park Service—the 

agency with lead responsibility for these areas—has complete information 

on their use of funds from all federal agencies as a basis for holding them 

accountable. Finally, the Park Service has not defined results-oriented 

performance goals and measures—both for its own heritage area efforts 

and those of the individual areas. As a result, it is constrained in its ability 

to determine both the agency’s and areas’ accomplishments, whether the 

agency’s resources are being employed efficiently and effectively, and if 

federal funds could be better utilized to accomplish its goals. 

In the absence of congressional action to establish a formal heritage area 

program within the National Park Service or to otherwise provide 

direction and funding for the agency’s heritage area activities, we 

recommend that the Secretary of the Interior direct the Park Service to 

take actions within its existing authority to improve the effectiveness of its 

heritage area activities and increase areas’ accountability. These actions 

should include 

• developing well-defined, consistent standards and processes for regional 

staff to use in reviewing and approving heritage areas’ management plans; 

• requiring regional heritage area managers to regularly and consistently 

review heritage areas’ annual financial audit reports to ensure that the 

agency has a full accounting of their use of funds from all federal sources, 

and 

• developing results-oriented performance goals and measures for the 

agency’s heritage area activities, and requiring, in the cooperative 

agreements, heritage areas to adopt such a results-oriented management 

approach as well. 

Thank you, Mr. Chairman and Members of the Committee. This concludes 

my prepared statement. I would be happy to respond to any questions that 

you or Members of the Committee may have. 

For more information on this testimony, please contact Barry T. Hill at 

(202) 512-3841. Individuals making key contributions to this testimony 

included Elizabeth Curda, Preston S. Heard, Vincent P. Price, and Barbara 

Timmerman. 

Recommendations for 

Executive Action 

Contacts and 

Acknowledgments 
Page 17 GAO-04-593T National Heritage Areas 

To examine the establishment, funding, and oversight of national heritage 

areas and their potential effect on private property rights, we (1) evaluated 

the process for identifying and designating national heritage areas, (2) 

determined the amount of federal funding provided to support these areas, 

(3) evaluated the process for overseeing and holding national heritage 

areas accountable for their use of federal funds, and (4) determined the 

extent to which, if at all, these areas have affected private property rights. 

To address the first issue, we discussed the process for identifying and 

designating heritage areas with the Park Service’s Heritage Area national 

coordinator and obtained information on how the 24 existing heritage 

areas were evaluated and designated. To determine the amount of federal 

funding provided to support these areas, we discussed funding issues and 

the availability of funding data with the national coordinator, the Park 

Service’s Comptroller, and officials from the agency’s Northeast, Midwest, 

Southeast, and Intermountain Regional Offices. We also obtained funding 

information from 22 of the 24 heritage areas for fiscal years 1997 through 

2002, and discussed this information with the executive directors and staff 

of each area. As of mid-March 2004, two heritage areas had not provided 

us with funding data. To verify the accuracy of the data we obtained from 

these sources, we compared the data provided to us with data included in 

the heritage areas’ annual audit and other reports that we obtained from 

the individual areas and the Park Service regions. We also discussed these 

data with the executive directors and other officials of the individual 

heritage areas and regional office officials. 

To evaluate the processes for holding national heritage areas accountable 

for their use of federal funds, we discussed these processes with the 

national coordinator and regional officials, and obtained information and 

documents supporting their statements. 

To determine the extent to which, if at all, private property rights have 

been affected by these areas, we discussed this issue with the national 

coordinator, regional officials, the Executive Director of the Alliance of 

National Heritage Areas—an organization that coordinates and supports 

heritage areas’ efforts and is their collective interface with the Park 

Service—the executive directors of the 23 heritage areas that were 

established at the time of our work, and representatives of several private 

property rights advocacy groups and individuals, including the American 

Land Rights Association, the American Policy Center, the Center for 

Private Conservation, the Heritage Foundation, the National Wilderness 

Institute, and the Private Property Foundation of America. In each of these 

discussions, we asked the individuals if they were aware of any cases in 

Appendix I: Scope and Methodology 
Page 18 GAO-04-593T National Heritage Areas 

which a heritage area had positively or negatively affected an individual’s 

property rights or restricted its use. None of these individuals were able to 

provide such an example. 

In addition, we visited the Augusta Canal, Ohio and Erie Canal, Rivers of 

Steel, Shenandoah Valley Battlefields, South Carolina, Southwestern 

Pennsylvania (Path of Progress), Tennessee Civil War, and Wheeling 

National Heritage Areas to discuss these issues in person with the areas’ 

officials and staff, and to view the areas’ features and accomplishments 

first hand. 

We conducted our work between May 2003 and March 2004 in accordance 

with generally accepted government auditing standards. 

Figure 3: Locations of Existing and Potential National Heritage Areas 

(360340) 
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