GAO United States

General Accounting Office

Washington, D.C. 20548

Resources, Community, and

Economic Development Division

B-277452 

July 18, 1997

The Honorable Richard K. Armey

Majority Leader

House of Representatives

The Honorable John R. Kasich

Chairman

Committee on the Budget

House of Representatives

The Honorable Dan Burton

Chairman

Committee on Government Reform

 and Oversight

House of Representatives

The Honorable Bob Livingston

Chairman

Committee on Appropriations

House of Representatives

Subject: Results Act: Observations on the Department of the Interior’s

Draft Strategic Plan

On June 12, 1997, you asked us to review the draft strategic plans

submitted by the Cabinet Departments and selected major agencies for

your consultation with the Congress as required by the Government

Performance and Results Act of 1993 (the Results Act). This report is our

response to that request concerning the Department of the Interior.

Objectives, Scope,

and Methodology

Specifically, you asked us to review Interior’s draft plan and assess

(1) whether it fulfills the requirements of the Results Act and to provide

our views on its overall quality; (2) whether it reflects Interior’s key

statutory authorities; (3) whether it reflects interagency coordination for

crosscutting programs, activities, or functions that are similar or

complementary with those of other federal agencies; (4) whether it

addresses management problems that we have previously identified, and

(5) the adequacy of Interior’s data and information systems for providing

reliable information for measuring results.

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We obtained the version of the draft strategic plan that Interior provided

congressional committees with as of June 18, 1997.1

 Interior’s draft

strategic plan includes a Department-wide strategic overview as well as

eight subagency plans.2

 The eight subagencies within Interior are the

Bureau of Land Management (BLM), the Minerals Management Service

(MMS), the Office of Surface Mining (OSM), the Bureau of Reclamation

(BOR), the Geological Survey (USGS), the Fish and Wildlife Service (FWS),

the National Park Service (NPS), and the Bureau of Indian Affairs (BIA). We

reviewed the overview and the subagency plans because Interior considers

them, as a whole, to constitutes its strategic plan for purposes of the

Results Act. In addition to providing the broad framework for the agency,

the Interior’s strategic overview is intended to provide linkages between

the departmental level and the individual subagency plans.

It is important to recognize that the final plan is not due to the Congress

and the Office of Management and Budget (OMB) until September 1997.

Furthermore, the Results Act anticipated that it may take several planning

cycles to perfect the process and that the final plan would be continually

refined as future planning cycles occur. Thus, our findings reflect a

snapshot status of the plans at this time. We recognize that developing a

strategic plan is a dynamic process and that the Department of Interior,

OMB, and congressional staff are continuing to revise the draft.

Our overall assessment of Interior’s draft strategic plans was generally

based on our knowledge of agencies’ operations and programs, our

numerous reviews of Interior’s agencies, and other existing information

available at the time of our assessment. Specifically, the criteria we used

to determine whether Interior’s draft strategic plan complied with the

requirements of the Results Act were the Results Act, supplemented by

OMB’s guidance on developing the plans (Circular A-11, Part 2). To make

judgments about the overall quality of the plan and its components, we

used our May 1997 guidance for congressional review of the plans

(GAO/GGD-10.1.16). In determining whether Interior’s draft strategic plan

reflects its major statutory responsibilities, we coordinated our review

with the Congressional Research Service, reviewed material in Interior’s

1998 budget explanatory notes for an overview of the Department’s

primary functions and activities, and reviewed statutory provisions

1

There is one exception to this cutoff date. The Congress was not provided with the subagency portion

of the plan from the Fish and Wildlife Service, dated May 22, 1997, until after June 18, 1997. However,

we included the subagency portion in our analysis because it was substantially revised from the

version that the Congress received prior to June 18th.

2

As used in this report, “subagency” refers to agencies and bureaus within Interior.

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relating to Interior. To determine whether the plan contained information

on interagency coordination and addressed management problems that we

previously identified, we relied on our general knowledge of Interior’s

operations and programs and the results of our previous reports. To

determine whether Interior had adequate systems to provide reliable

information on performance, we reviewed the Department-wide plan for

financial management and the subagency plans for the Chief Financial

Officer and the Chief Information Officer. We also relied on the results of

our previous reports and those of Interior’s Office of Inspector General

(OIG). Our work was performed in June and July 1997. We obtained

comments on a draft of this report from Interior.

Background As the caretaker of the nation’s natural resources and much of our cultural

heritage and as custodian of our responsibilities to Native Americans,

Interior’s responsibilities cover a broad range of activities. For the most

part, these activities are carried out through eight subagencies within

Interior. Given this organization, Interior officials included eight

subagency plans as part of the Department’s draft strategic plan.

Interior’s Department-wide strategic overview defines the common

mission for the Department as follows: “to protect and provide access to

our nation’s natural and cultural heritage and honor our trust

responsibilities to tribes.” From this common mission, the

Department-wide strategic overview identifies 10 overarching themes

called “commitments” that guide the development of the subagency

strategic plans. Furthermore, the Department has identified two strategic

goals that crosscut subagencies’ responsibilities. These goals involve

(1) developing natural resource management partnerships with other

federal, state, local, and private entities and (2) improving departmental

management processes and functions.

The Results Act requires that an agency’s strategic plan contain the

following six critical components: (1) a comprehensive mission statement;

(2) agencywide long-term goals and objectives for all major functions and

operations; (3) approaches (or strategies) and the various resources

needed to achieve the goals and objectives; (4) a relationship between the

long-term goals and objectives and the annual performance goals; (5) an

identification of key factors, external to the agency and beyond its control,

that could significantly affect the achievement of the strategic goals; and

(6) a description of how program evaluations were used to establish or

revise strategic goals and a schedule for future program evaluations.

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In this report, we consider Interior’s draft strategic plan to be a

combination of the Department-wide strategic overview and the included

subagency plans.

Results in Brief While Interior has made progress in developing its draft strategic plan, the

plan does not yet fulfill the Results Act’s requirements. In many cases, the

plan does not include the six key elements required by the Results Act.

Interior’s Department-wide strategic overview does contain the

Department’s overall mission and goals and refers to the subagency plans

for information on the six required elements. But half of the eight

subagency plans were incomplete and lacked two or more of the six

required elements. The overall quality of Interior’s strategic plan is not yet

sufficient to achieve the purposes of the Results Act. The plan does not

include clear linkages between the agencies’ goals and objectives and the

contributions of these goals and objectives to the Department’s major

goals or commitments. In addition, some of the goals and objectives in the

subagency plans are not stated in a manner that allows for a future

assessment of whether the goals have been or are being achieved.

Interior’s draft strategic plan reflects a consideration of the key statutory

authorities authorizing Interior’s programs. However, the

Department-wide strategic overview and the subagency plans do not

generally present clear linkages between the stated goals and objectives

and Interior’s relevant statutory responsibilities. The Results Act does not

require an agency’s strategic plan to contain a statement of statutory

authorities. However, we believe that including such linkages may

facilitate a better understanding of the diversity and complexity of

Interior’s overall mission, goals, and objectives.

A number of cross-cutting issues need to be addressed in Interior’s draft

strategic plan to prevent duplication and overlap. Our past work at the

Department has identified several examples indicating where improved

coordination should have occurred. For example, while the plan points out

that coordination among Interior’s subagencies will be done for some of

the natural resource partnership initiatives identified in the plan, it does

not indicate that the kind of mission-oriented reexamination of the

processes and structures suggested by our work has or will be done.

While Interior has identified information management resource goals in its

strategic plan, how it plans to achieve and measure the success of those

goals is not clearly delineated. Traditionally, Interior has allowed its

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subagencies to independently acquire and manage information technology.

This culture has resulted in inefficiencies in technology investments and

information sharing.

Interior’s draft strategic plan states that a key to the Results Act’s

implementation will be the availability of timely and reliable financial

information that will permit decisionmakers to track progress and

evaluate the results of Interior’s programs. To achieve this overall goal,

Interior has identified specific goals of strengthening financial operations

and resource management. In this light, Interior needs to continue to

address certain accounting systems and internal control weaknesses that,

if not fully corrected, could affect the reliability of program and

performance information.

Interior’s Draft

Strategic Plan Does

Not Yet Fulfill the

Requirements of the

Results Act

While Interior has made progress in developing its draft strategic plan, a

significant amount of work still needs to be done before the plan can fulfill

the requirements of the Results Act. Interior’s draft strategic plan does not

yet contain all six elements required by the Results Act. Half of the

subagency plans (four of eight) are missing required elements.

Furthermore, even those that include all required elements need further

work and development in several key areas. In addition, the draft strategic

plan does not yet represent a comprehensive strategy to accomplish

Interior’s mission because it lacks some of the key attributes necessary for

making the strategic planning process successful.

Interior’s Draft Plan Does

Not Contain All Six

Required Elements

Interior’s Department-wide strategic overview provides a mission

statement for the Department and lays out 10 general goals referred to in

the plan as “commitments.” For example, the strategic overview

establishes a goal of restoring and maintaining the health of federally

managed lands and preserving our nation’s natural and cultural heritage

for future generations. For more information on strategies for achieving

the goals; the relationships between long-term goals and annual

performance goals; key factors external to the Department or subagency

that could affect the achievement of the goals; and the use of program

evaluations to establish goals and to modify them in the future; the

Department-wide strategic overview refers to the subagency plans.

Our review of the eight subagency plans shows that half of the plans did

not contain all six of the elements required by the Results Act. For those

agencies which did not include all required elements, each of the

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subagency plans contained information on their mission and goals and

objectives, but the information provided for the remaining four required

elements varied as follows:

• Two of the eight subagencies (BIA and FWS) did not discuss the approaches

or strategies for achieving goals and objectives.

• Four of the eight subagencies either did not sufficiently address the

relationship between long-term goals and annual performance goals (NPS

and FWS) or did not address it at all (BIA and MMS). In the case of NPS and

FWS, the subagency components did not specifically address the links

between long-term goals and annual performance measures.

• Two of the eight subagencies (NPS and FWS) did not discuss the impact that

external factors could have on their ability to achieve their goals.

• Four of the eight subagencies (NPS, BIA, FWS, and MMS) had little or no

discussion about how or whether program evaluations were used to

develop the plan and did not include schedules of future program

evaluations.

While many of the subagencies’ plans included discussions that related to

the required elements, the information provided was frequently

incomplete and often not relevant or directly linked to the goals and

objectives stated in the plans. For example, while six of the eight draft

subagency plans discussed the external environment facing them, several

of the subagencies did not address how these external factors could affect

the subagency’s ability to achieve specific goals and objectives. Similarly,

not providing a discussion of whether and how program evaluations were

used in developing the plan is important not because it is required but

because without this information, it is difficult for both the subagencies

and other users of the plan to have confidence that the former’s goals are

the correct ones and that its strategies will be effective.

Observations on the

Overall Quality of the Plan

While Interior has made progress in developing its draft strategic plan, the

plan does not yet fulfill the requirements of the Results Act. Collectively,

the Department-wide overview and the subagency plans are not yet

sufficient to provide a comprehensive strategy for Interior or achieve the

purposes of the act, such as improved program effectiveness,

management, and public accountability and confidence in the Department

or subagencies, for the following reasons:

• As stated previously, many of the subagency plans are incomplete. Until

the subagency plans are complete, they cannot provide an overall guide

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for helping agencies to set priorities and allocate resources consistent with

these priorities. Furthermore, because all of the required elements are not

included, complete information has not been available for the

congressional consultation process.

• While the subagency plans generally provided some discussion of how the

goals contained in the plans are to be achieved, most of the subagency

plans did not discuss the amount of resources—human, capital, or

information—that would be needed to implement their strategy. For

example, neither USGS, OSM, nor MMS provided details of the extent of

resources needed to implement its goals and objectives. Explaining the

amount of resources needed to carry out the plan is vital to achieving a full

understanding of the trade-offs, costs, and commitments needed to

achieve the goals and objectives in the plans.

• Most of the subagency plans did not include clear linkages between the

subagencies’ goals and objectives and the contributions of these goals and

objectives to the Department’s major goals. Furthermore, the

Department’s strategic overview does not link its Department-wide goals

or “commitments” back to the subagencies. These linkages are important

because the goals and objectives (1) set out the long-term programmatic

policy and goals of the Department as a whole and (2) provide the

subagencies’ staff with direction and guidance toward actions that fulfill

the overall mission of both the Department and the subagencies.

• Some of the goals and objectives in the subagency plans are not stated in a

manner that will allow a future assessment of whether the goals have been

or are being achieved. For example, one of BOR’s goals is to “manage the

nations western water resources wisely for present and future

generations.” While not all the goals must be stated in a quantitative

fashion, some of the goals in the subagency plans are stated so broadly

that they are inherently unmeasurable, either directly or through the use of

performance measures.

• Although several of the subagency plans provide some information on

performance measures, the information is sometimes not sufficient to

show the relationship between the subagencies’ strategic goals and the

performance goals to be included in the subagencies’ annual performance

plans.

Key Statutory

Authorities Are

Reflected in the

Strategic Plan

Interior’s draft strategic plan reflects consideration of the key statutory

authorities authorizing Interior’s programs. However, the

Department-wide strategic overview and the subagency plans do not

generally present clear linkages between their stated goals and objectives

and Interior’s relevant major statutory responsibilities. The Results Act

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does not require that a statement of major statutory responsibilities be

included with the agency’s goals and objectives.3

 Nevertheless, we believe

that including such linkages in the subagency plans may facilitate a better

understanding of the diversity and complexity of Interior’s overall mission

and the goals and objectives of its constituent agencies. For example, the

plan for BOR provides few linkages between the large number of outcome

goals and 5-year strategic goals and its many different statutory

authorities. The plan contains 18 outcome goals and over 60 5-year

strategic goals that contain few statutory references. As another example,

BIA’s subagency plan does not provide clear statutory linkages with its

performance goals and strategies. Sample performance goals related to

education, resources management, public safety and justice, and trust

services do not identify what relevant statutes authorize such activities. In

commenting on a draft of this report, Interior noted that while it may not

be necessary to include linkage between authorities’ and agencies’ goals

and objectives, the Department plans on including an attachment to its

final strategic plan that identifies these links.

Crosscutting

Activities Need to Be

Addressed in the

Interior Plan

Historically, Interior has been a highly decentralized agency. As a result,

Interior has allowed its subagencies, for the most part, to develop their

own systems and processes for managing their programs. Our past work at

the Department has identified several areas where improved coordination

should have occurred to address issues of duplication and overlap.

The federal government now owns about 30 percent (about 650 million

acres) of the nation’s total surface area. Four federal land management

agencies manage about 95 percent of these lands for a variety of

commodity uses—including hardrock mining, livestock forage, oil and gas

exploration and development, and timber harvesting—and noncommodity

uses—including fish and wildlife; natural, scenic, cultural, and historic

resources; recreation; water; and wilderness. These four agencies are the

Forest Service (FS) in the US Department of Agriculture and NPS, BLM, and

FWS in Interior.

Our work has shown that the responsibilities of these four agencies have

become similar over time.4

 Most notably, FS and BLM now provide more

noncommodity uses like recreation and protection for fish and wildlife on

3

OMB Circular A-11 suggests that an agency’s mission statement may include a brief discussion of the

agency’s enabling or authorizing legislation. This suggestion, however, does not extend to the

statement of goals and objectives.

4

Federal Land Management: Streamlining and Reorganization Issues (GAO/T-RCED-96-209, June 27,

1996).

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their lands. At the same time, managing these lands has become more

complex. Managers have to reconcile differences among a growing

number of laws and regulations, and the authority for the administration

of these laws is dispersed among several federal, state, and local agencies.

These changes have coincided with two other developments—the federal

government’s increased emphasis on downsizing and budgetary constraint

and scientists’ increased understanding of the importance and functioning

of natural systems whose boundaries may not be consistent with existing

jurisdictional and administrative boundaries of federal, state and local

agencies. Together, these conditions suggest a basis for reexamining the

processes and structure under which the federal land management

agencies—Interior and FS—currently operate. The strategic planning

process required under the Results Act and the development of the overall

Interior plan provides this opportunity. While the plan points out that

coordination with FS and among Interior’s agencies will be done for some

of the natural resource partnership initiatives identified in the plan, it does

not indicate that the kind of mission-oriented reexamination of the

processes and structures suggested by our work has been done.

In commenting on this point the Department noted in the past that this has

been a controversial issue with the Congress and that the partnership

efforts currently described in its draft strategic plan represent an effort to

deal with this kind of cross-agency situation in a seamless way without

addressing organizational structures. In its view, unless the Congress

changes Interior’s statutory responsibilities, the strategic plan must reflect

the Department’s current mission. We acknowledge that this is a difficult

and controversial issue. However, it is this type of mission-oriented issue

that needs to be addressed as part of a strategic planning process.

Addressing this issue in the draft strategic plan would facilitate a dialogue

on the issue during consultations between Interior and the Congress.

Interior has several other broad crosscutting programs where a

coordinated strategic planning process would help to provide

Department-wide information on program results as follows:

• Environmental protection and remediation programs. Interior currently

lacks a complete inventory of hazardous materials and abandoned mines

sites to support management and financial reporting. Interior’s

environmental programs are managed primarily by BLM, FWS, NPS, BIA, BOR,

and Interior’s Office of Environmental Policy Compliance. In addition,

BOR’s draft plan addresses reducing, on a site-specific basis, the sources of

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pollution that affect water quality, and USGS’ plan addresses water quality

studies.

• Stewardship assets. Interior’s BLM, FWS, and NPS have implemented early

the new federal accounting standards for reporting on stewardship land

and heritage assets (parks, recreation and wildlife areas, buildings,

monuments, and museum collections). By developing Department-wide

guidelines for stewardship reporting and adequate inventory systems in

subagencies for tracking, managing, and reporting on these assets, Interior

would ensure that consistent and reliable data are available.

• Indian Programs. Most of Interior’s subagencies (BIA, BLM, BOR, USGS, MMS,

OSM, and the Office of the Secretary, and that Office’s Office of the Special

Trustee for American Indians and Office of American Indian Trust) have a

role in helping Interior to carry out its trust responsibility to American

Indians and tribes. However, Interior lacks adequate systems and financial

and program information to effectively manage and budget for Indian

programs. The strategic plan for Indian trust fund and asset management

proposes consolidating Indian financial and asset management programs

and upgrading and acquiring new systems.

• Land and Natural Resource Management. Interior’s BLM, FWS, and NPS are

responsible for managing federal land and natural resources, and BIA is

responsible for these functions on federal Indian land. In addition,

Interior’s OSM is responsible for regulating mining activity on federal and

Indian land, MMS enforces oil and gas leases on the Outer Continental

Shelf, and USGS performs studies, investigations, and mapping services

related to land and natural resources. Interior needs to develop adequate

crosscutting information on the effectiveness of these agencies.

• Recreation programs. Interior’s BLM, BOR, FWS, and NPS manage programs

that provide numerous recreational opportunities for the public. Interior’s

plan states that Interior will continue to promote and provide these

opportunities where they are consistent with other land uses and with

maintaining the health of the land.

Interior’s plan, when completed, is to include information on its

component agencies’ mission statements and goals. However, it is not

clear in the draft strategic plan which, if any, of the issues identified in our

work were addressed. A Department-wide framework for identifying and

measuring crosscutting programs and goals will help to determine the

overall cost or effectiveness of these programs. In addition, Interior will

have reliable information for setting priorities and formulating budgets.

In commenting on a draft of this report, Interior noted that (1) a discussion

of crosscutting issues is not required by the Results Act and (2) the

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Department is involved with a number of activities that address issues of

coordination both within and outside of Interior. The Department’s

comments on both of these points are correct. However, a focus on

results, as envisioned by the Results Act, implies that federal programs

contribution to the same or similar results should be closely coordinated

to ensure that goals are consistent, and, as appropriate, program efforts

are mutually reinforcing. We believe the strategic planning process offers

an opportunity to discuss matters of overlap and duplication like, for

example, those identified in our past work. Furthermore, while the

Department is engaged in a number of coordinating activities, there is

nothing in the plan that demonstrates that these activities are linked to the

cross-cutting matters noted in this report.

Interior’s Strategic

Plan Needs to More

Fully Address

Information

Management Issues

The Paperwork Reduction Act of 1995 and the Clinger-Cohen Act of 1996

direct agencies to implement a framework of modern technology

management on the basis of practices followed by leading private and

public sector organizations that have successfully used technology to

improve performance and help meet strategic goals. Interior has identified

goals and actions needed to implement the provisions of these Acts in its

draft strategic plan. However, how Interior plans to achieve and measure

the success of these goals and actions is not clearly discussed in the draft

strategic plan.

Traditionally, Interior has allowed its subagencies to independently

acquire and manage information technology. This culture has resulted in

inefficiencies in technology investments and information sharing. For

example, in May 1997, we reported that Interior had not systematically

identified and acted on opportunities to consolidate and share

telecommunications resources within and among its bureaus or its

2,000-plus field locations.5

 Instead, the Department has relied on its

subagencies to independently identify and act on such opportunities. To

its credit, Interior has undertaken a number of telecommunications

cost-savings initiatives that have produced significant financial savings and

helped reduce the Department’s more than $62 million annual

telecommunications investment. In addition, in commenting on a draft of

this report, Interior stated that progress has been made in overcoming its

long history of component agency autonomy as it relates to information

systems, such as the successful consolidation of some of its information

5

Telecommunications Management: More Effort Needed by Interior and the Forest Service to Achieve

Savings (GAO/AIMD-97-67, May 8, 1997).

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and financial systems. We have not yet had an opportunity to fully review

and assess the Department’s progress in this area.

While the draft strategic plan sets information technology goals, it does

not describe how the Department will overcome these problems and

ensure the efficient and effective use of information resources across the

Department. Furthermore, Interior, like many agencies, will face the

emerging management challenges of implementing modern technology

and resolving the need for computer systems to be changed to

accommodate dates beyond 1999—the “year 2000” problem. Consequently,

in developing its information technology strategy, Interior needs to be sure

to explain how it plans to address the “year 2000 problem” as well as any

significant information security weaknesses—two issues that we have

identified as high risk areas across the government.6

In commenting on a draft of this report, Interior told us that because of the

level of detail required, it did not address strategies for resolving the “year

2000” problem in its draft strategic plan. Similarly, Interior did not address

information security because it regards this area as a management and

operational responsibility that needs attention on a daily basis. We believe

that it is appropriate for these items to be addressed in the plan to convey

how the Department intends to deal with them and provide linkages to its

operational and management plans. This disclosure would also help the

Congress, departmental customers, and the general public to better

understand the Department’s goals, strategies, and measures.

Interior Needs to

Continue Improving

Its Financial

Information to

Accurately Measure

Progress Toward

Achieving Strategic

and Performance

Goals

To support the implementation of the Results Act, Interior’s strategic plan

states that a key ingredient will be the availability of timely and reliable

financial and program information that will permit decisionmakers to

track progress and evaluate the results of Interior’s programs. To achieve

this overall goal, Interior has identified specific goals of strengthening

financial operations and information resource management.

Interior has made progress in addressing past problems with its

management of financial information. For fiscal year 1996, the Department

received unqualified audit opinions on all but one of its subagency

financial statements. Nonetheless, work still needs to be done in this area.

Our work and that of the Interior Inspector General has shown that

Interior needs to continue to address certain accounting and financial

management system and internal control weaknesses that could affect the

6

GAO High-Risk Series (GAO/HR-97-20, Feb. 1997).

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reliability of program level financial and performance information. For

example, OIG audits completed in the past year have identified

weaknesses in accounting for investments in fixed assets and project cost

accounting and controls that, if uncorrected, could affect the effectiveness

of Interior’s Results Act’s implementation.7

Furthermore, Interior’s and its component agencies’ draft strategic plans

could be strengthened if they addressed how financial information will be

used to support the measurement of progress toward strategic goals.

Identifying performance measures and ensuring the development of

reliable financial and program performance information will help to

ensure the effective implementation of the Results Act for Interior and its

subagencies.

Like other agencies, once Interior develops key performance measures it

will need to consider appropriate system modifications to capture data

needed for performance measurement. Key requirements of the CFO Act

are the development of cost information to enable the systematic

measurement of performance and the integration of systems—program,

accounting, and budget systems.

Agency Comments

and Our Evaluation

We provided Interior with copies of a draft of this report for review and

comment. We met with Interior’s Assistant Secretary for Policy,

Management, and Budget and other officials. The Department raised a

number of substantive concerns about the draft report including concerns

about the portion of the report dealing with the Department’s crosscutting

activities. We have addressed many of those concerns in the body of the

report. In addition to those comments already acknowledged and

discussed in the report, the Department provided us with a number of

additional comments.

With regard to our assessment of the key elements required by the Results

Act, the Department agreed that the report was an accurate assessment of

Interior’s strategic plan as it was developed in June. While they agreed that

some additional work is needed, they emphasized that the strategic

planning process is an iterative process that is evolving and that more

recent drafts of the plan are filling some of the gaps identified in our

7

Bureau of Land Management Combined Comparative Financial Statements for Fiscal Years 1995 and

1996, U.S. Department of the Interior, Office of the Inspector General (Report No. 97-I-319, Jan. 1997).

Bureau of Indian Affairs Consolidated Financial Statements for Fiscal Years 1995 and 1996, U.S.

Department of the Interior, Office of the Inspector General, (Report No. 97-I-834, May 1997).

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report. They indicated that the plan will meet all statutory requirements of

the Results Act when it is completed in September 1997.

Interior raised serious concerns that the statements in the draft report

about the reliability of its financial management systems and internal

controls were too broad and were, therefore, misleading. It was not our

intent to characterize the Department’s systems and controls as deficient

on the whole. Accordingly, we revised the appropriate sections of the

report to reflect specific areas where improvements are needed in systems

and controls to help ensure the reliability of information used in the

Results Act’s implementation and provided specific examples.

Furthermore, while acknowledging some deficiencies in its financial

management, the Department does not view these as being “major

management challenges” as characterized in the draft report. The

Department provided us with additional information to support its

comments. Because of the timing and scope of the review, we have not yet

had an opportunity to fully review and assess the Department’s progress in

addressing past deficiencies. As a result, we modified the report to reflect

these concerns. As part of our future work at Interior, we plan to review

the effectiveness of the measures taken by the Department.

As agreed with your offices, unless you publicly announce its contents

earlier, we plan no further distribution of this report until 30 days from the

date of this report. At that time, we will send copies of this report to the

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(141078) Page 14 GAO/RCED-97-207R Department of the Interior’s Draft Strategic Plan
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