GAO 

United States Government Accountability Office

Report to Congressional Committees

VALLES CALDERA

The Trust Has Made 

Progress but Faces 

Significant Challenges 

to Achieve Goals of 

the Preservation Act 

October 2009 

GAO-10-84 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

October 2009

VALLES CALDERA

The Trust Has Made Progress but Faces Significant 

Challenges to Achieve Goals of the Preservation Act 

Highlights of GAO-10-84, a report to 

congressional committees 

In creating the Valles Caldera 

National Preserve from a unique 

parcel of land in north-central New 

Mexico, and by creating the Valles 

Caldera Trust as a wholly owned 

government corporation to manage 

the preserve, the Valles Caldera 

Preservation Act of 2000 

established a 20-year public-private 

experiment to operate the preserve 

without continued federal funding. 

The Trust is charged with achieving 

a number of goals, including 

becoming financially self-sustaining 

by the end of fiscal year 2015. 

This report, GAO’s second and last 

mandated by the Preservation Act, 

examines (1) the Trust’s progress 

since 2000; (2) the extent to which 

the Trust has fulfilled certain of its 

obligations as a government 

corporation; and (3) the challenges 

the Trust faces to achieve the 

Preservation Act’s goals. GAO 

analyzed documents, financial 

records, and other Trust 

information and interviewed 

current and former members of the 

Trust’s Board and staff, as well as 

representatives of local interest 

groups and stakeholders. 

What GAO Recommends

To further the Trust’s efforts to 

become financially self-sustaining, 

GAO recommends that the Trust 

work with relevant congressional 

committees to seek legislative 

remedies, as appropriate, for the 

legal challenges it faces. In 

commenting on a draft of this 

report, the Trust generally agreed 

with GAO’s findings and 

conclusions but did not comment 

on the recommendation. 

The Trust has taken steps to establish and implement a number of programs 

and activities to achieve the goals of the Preservation Act. It has rehabilitated 

roads, buildings, fences, and other infrastructure; created a science program; 

experimented with a variety of grazing options; taken steps to manage its 

forests; expanded recreational opportunities; and taken its first steps toward 

becoming financially self-sustaining. Nevertheless, it is at least 5 years behind 

the schedule it set for itself in 2004. According to Trust officials, a number of 

factors—including high turnover among Board members and key staff and 

cultural and natural resources and infrastructure that were not as healthy or 

robust as originally believed—have delayed its progress. 

Through fiscal year 2009, the Trust had yet to develop and put in place several 

key elements of an effective management control program for a government 

corporation. Specifically, the Trust lacked a strategic plan and annual 

performance plans, and it had not systematically monitored or reported on its 

progress—elements called for by the Government Performance and Results 

Act and recommended by GAO in its first report in 2005. The Trust’s financial 

management has also been weak. Consequently, it has been difficult for 

Congress and the public to understand the Trust’s goals and objectives, annual 

plans and performance, or progress. 

According to current Trust officials, becoming financially self-sustaining, 

particularly by the end of fiscal year 2015 when federal appropriations are due 

to expire, is the Trust’s biggest challenge. Most of the Trust’s other challenges 

follow from this one, including identifying, developing, or expanding revenuegenerating activities that would enable the Trust to raise sufficient funds; 

obtaining funds for major capital investments; and addressing a number of 

legal constraints—such as its authority to enter into long-term leases or 

acquire property—which potentially limit its ability to attract long-term 

businesses that could generate revenues. Nevertheless, the Trust is continuing 

to explore opportunities for becoming financially self-sustaining. 

Valle Grande from Redondo Peak, the Highest Point in Valles Caldera National Preserve 

Source:GAO.

View GAO-10-84 or key components.

For more information, contact Robin M. 

Nazzaro at (202) 512-3841 or 

nazzaror@gao.gov. 
Page i GAO-10-84 

Contents 

Letter 1

Background 4 

The Trust Has Taken Steps to Achieve the Preservation Act’s Goals 

but Has Made Less Progress Than Expected 7 

The Trust Has Failed to Put in Place Key Elements of an Effective 

Management Program 20 

The Trust Sees Becoming a Self-Sustaining Entity as Its Greatest 

Challenge 28 

Conclusions 30 

Recommendation for Executive Action 31 

Agency Comments and Our Evaluation 31 

Appendix I Comments from the Valles Caldera Trust 33 

Appendix II GAO Contact and Staff Acknowledgments 39 

Table 

Table 1: Gross Revenues by Activity, as Reported by the Trust for 

Fiscal Years 2005–2008 15 

Figures 

Figure 1: Valles Caldera National Preserve, with Valles Caldera 

Crater, in North-Central New Mexico 5 

Figure 2: Typical Logging Road System, Redondito Peak, 2005 8 

Figure 3: Main Entrance of Valles Caldera Preserve, Before and 

After Installation of New Gate 9 

Figure 4: Original Baca Ranch Owner’s Home 10 

Figure 5: Old and New Temporary Visitor Centers 10 

Figure 6: Planned Timeline and Actual Status of the Valles Caldera 

Trust’s Program Development 18 

 Valles Caldera Trust 
Abbreviations 

GCCA Government Corporation Control Act 

GPRA Government Performance and Results Act of 1993 

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Page ii GAO-10-84 Valles Caldera Trust
Page 1 GAO-10-84 

 

United States Government Accountability Office

Washington, DC 20548 

 

October 30, 2009 

The Honorable Jeff Bingaman 

Chairman 

The Honorable Lisa Murkowski 

Ranking Member 

Committee on Energy and Natural Resources 

United States Senate 

The Honorable Nick Rahall, II 

Chairman 

The Honorable Doc Hastings 

Ranking Member 

Committee on Natural Resources 

House of Representatives 

In 2000, the Valles Caldera Trust was created by Congress as a 20-year 

public-private land management experiment, whose aim was to protect 

and preserve—without the need for continuing infusions of federal tax 

dollars—a unique volcanic parcel of land in New Mexico. Today, however, 

nearly halfway through the Trust’s 20-year life span, supporters and critics 

disagree over whether this public-private model can succeed or should be 

terminated. 

The Valles Caldera Preservation Act of 20001

 authorized the federal 

government to purchase Valles Caldera, comprising about 89,000 acres of 

privately owned land known as the Baca Ranch. The Caldera has served as 

a model for geological studies of this area and other volcanic areas around 

the world, and it has had religious significance for Native Americans since 

prehistoric times. In addition, the landscape offers opportunities for 

winter and summer recreation and provides ranchers with forage for 

livestock. To manage the land, for which the government paid close to 

$97 million, the Preservation Act also established the Trust, governed by a 

Board of Trustees, as a wholly owned government corporation.2

 The act 

specifically charges the Trust with managing the land to achieve a number 

of goals, including the following: 

1

Pub. L. No. 106-248, Title I. 

2

Until the Trust could be organized, the preserve came under jurisdiction of the U.S. Forest 

Service, within the Department of Agriculture. 

 Valles Caldera Trust 
 

• protecting and preserving Valles Caldera’s scientific, scenic, historic, and 

natural values and archaeological, geological, and cultural resources for 

future generations; 

• providing opportunities for public recreation; 

• providing for sustained-yield management of the ranch for timber 

production and domesticated livestock grazing, insofar as these activities 

are consistent with the Trust’s other responsibilities; and 

• becoming financially self-sustaining—that is, operating without federal 

funds—within 15 years of the law’s enactment, or by the end of 2015. 

In managing the preserve, the Trust is expected to incorporate elements of 

both public and private administration to promote the preserve’s long-term 

sustainability. The Trust is subject to the Government Corporation Control 

Act (GCCA) and to the Government Performance and Results Act of 1993 

(GPRA).3

 These two laws provide general authorities for wholly owned 

government corporations to carry out government functions and a general 

management framework to enhance the federal government’s efficiency 

and effectiveness and provide greater accountability for results, 

respectively. Among other requirements under GCCA, the Trust must 

obtain independent financial audits and report annually to Congress. 

Under GPRA, the Trust must prepare a strategic plan with long-term 

measurable goals and objectives and an annual performance plan for 

achieving the strategic plan’s goals and objectives, and it must submit 

annual performance reports to Congress and the President. 

From the land’s acquisition in 2000 through fiscal year 2009, the Trust 

received about $31 million in federal funding to operate and maintain the 

land as a national preserve. Under the Preservation Act, the authorization 

of appropriations for the Trust expires at the end of fiscal year 2015. If at 

the end of fiscal year 2014, the Board believes that the Trust has met the 

goals and objectives of the act but has not become financially selfsustaining, the Board may submit to the relevant congressional 

committees a recommendation to authorize appropriations beyond 2015. 

Also, under the act, the Trust itself is to terminate in fiscal year 2020. 

According to the Preservation Act, in 2018 the Board must make a 

recommendation to the Secretary of Agriculture whether to extend or 

 

3

31 U.S.C. § 9101 et seq. (GCCA); Pub. L. No. 103-62 (1993) (GPRA). 

Page 2 GAO-10-84 Valles Caldera Trust
 

terminate the Trust in 2020. Within 120 days after receipt of the 

recommendation, the Secretary must submit to Congress the Board’s 

recommendation on extension or termination, along with the Secretary’s 

recommendation. If the Trust is terminated, the preserve will become part 

of the Santa Fe National Forest and therefore be managed by the U.S. 

Forest Service, within the Department of Agriculture, as part of the 

national forest system. 

The Preservation Act also directs us to study and report twice on the 

Trust’s activities, including on the Trust’s ability to meet its obligations 

under the act. In November 2005, we issued our first report, which 

concluded that the Trust had made some progress in meeting goals of the 

act and recommended that it establish a more effective management 

control program and increase its accountability to Congress and other 

stakeholders.4

 The present report, our second and last one required by the 

Preservation Act, examines (1) the Trust’s progress since 2000; (2) the 

extent to which the Trust has fulfilled certain of its obligations as a 

government corporation; and (3) the challenges the Trust faces as it 

continues moving toward fulfilling the goals of the act. 

To address these issues, we analyzed documents, financial records, and 

other information from the Trust and Forest Service, and we visited the 

preserve to observe the actions the Trust has taken to date toward meeting 

its statutory obligations. In addition, we analyzed and assessed the Trust’s 

fulfillment of GCCA’s and GPRA’s requirements. We also interviewed 

current and former officials of the Trust’s Board and staff, as well as 

Forest Service officials, about the programs and activities that the Trust 

has initiated since assuming management of the preserve. We interviewed 

representatives of various local interest groups and stakeholders, such as 

Los Amigos de Valles Caldera and Caldera Action.5

 We also assessed data 

related to revenue-generating programs and activities, such as the number 

of livestock grazing on the preserve from year to year, and determined that 

 

4

GAO, Valles Caldera: Trust Has Made Some Progress but Needs to Do More to Meet 

Statutory Goals, GAO-06-98 (Washington, D.C.: Nov. 16, 2005). 

5

Los Amigos de Valles Caldera and Caldera Action are nonprofit organizations interested in 

the preserve. 

Page 3 GAO-10-84 Valles Caldera Trust
 

these data were sufficiently reliable for the purposes of this report.6 We 

conducted this performance audit from November 2008 through October 

2009, in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. 

About 1.2 million years ago, a volcano erupted and collapsed inward, 

forming the crater now known as Valles Caldera, in north-central New 

Mexico (see fig. 1). Almost entirely surrounded by the Forest Service’s 

Santa Fe National Forest and the National Park Service’s Bandelier 

National Monument, this geologically and ecologically unique area covers 

about 89,000 acres of meadows, forests, hot springs, volcanic domes, and 

streams supporting elk herds, fish, and other wildlife. While in private 

hands, the Baca Ranch was operated as a working ranch, providing grazing 

for livestock plus hunting and fishing for a limited number of visitors. 

According to the Preservation Act, the working ranch arrangement was to 

continue after ownership was assumed by the federal government. 

Background 

 

6

To determine the number of livestock grazing on the preserve or otherwise managed by 

the Trust, we compared the Trust’s own documents with counts obtained by Agriculture 

and by owners of livestock participating in the grazing program. For financial data, we 

compared audited financial statements of the Trust for fiscal years 2005–2008 with data 

from the Trust’s own annual reports. 

Page 4 GAO-10-84 Valles Caldera Trust
 

Figure 1: Valles Caldera National Preserve, with Valles Caldera Crater, in North-Central New Mexico 

Sources: Valles Caldera Trust (main map and satellite photo); Map Resources (New Mexico).

4

25

40

Santa Fe

National

Forest

Santa Fe

National Forest

N

Jemez Springs

Main gate

Albuquerque

Santa Fe

New Mexico

Taos

Los Alamos

Bandelier 

National

Monument

Valles

Caldera

National

Preserve

0 5 10 20 miles

Page 5 GAO-10-84 Valles Caldera Trust
 

The act also calls for the Trust to protect and preserve the land while 

attempting to achieve a financially self-sustaining operation. “Financially 

self-sustaining,” as defined by the act, means that management and 

operating expenditures—including trustees’ expenses; salaries and 

benefits; administrative, maintenance, and operating costs; and facilities 

improvements—are to equal or be less than proceeds derived from fees 

and other receipts for resource use and development. Appropriated funds 

are not to be considered. To carry out its duties, the Trust has the 

authority to solicit and accept donations of funds, property, supplies, or 

services from any private or public entity; negotiate and enter into 

agreements, leases, contracts, and other arrangements with any individual 

or federal or private entity; and consult with Indian tribes and pueblos. 

The Trust’s Board consists of nine trustees. The President of the United 

States appoints seven of these trustees, and the other two are the 

Supervisor of Santa Fe National Forest and the Superintendent of 

Bandelier National Monument, under the jurisdiction of the Department of 

the Interior’s National Park Service. Of the seven presidential appointees, 

who are selected in consultation with New Mexico’s congressional 

delegation, five must be New Mexico residents. Appointees are to be 

selected on the basis of their expertise or experience, as follows: one 

trustee each (1) with livestock and range management expertise; (2) with 

expertise in recreation management; (3) who is knowledgeable in 

sustainable management of forest lands for commodity and 

noncommodity purposes; (4) with expertise in financial management, 

budget and program analysis, and small business operations; (5) who is 

familiar with the cultural and natural history of the region; (6) who is 

active in a nonprofit conservation organization concerned with Forest 

Service activities; and (7) who is active in state or local government 

activities in New Mexico, with expertise in the customs of the local area. 

Trustees are appointed to 4-year terms and can be reappointed; no trustee, 

however, may serve more than 8 consecutive years. The trustees select a 

chairman from the Board’s ranks. With the exception of the Board Chair, 

trustees serve without pay, although they are reimbursed for travel and 

subsistence expenses while performing their duties. The Board must hold 

at least three public meetings a year in New Mexico. An executive director, 

who is hired by the Board, oversees the Trust’s day-to-day operations. 

Page 6 GAO-10-84 Valles Caldera Trust
 

Although the Trust has taken steps to establish and implement a number 

of programs and activities to achieve the goals of the Preservation Act, it is 

behind the schedule it set for itself in 2004. A number of factors, such as 

high turnover among Board members and key management staff, have 

contributed to this slow progress, according to former and current Board 

members and staff. 

The Trust Has Taken 

Steps to Achieve the 

Preservation Act’s 

Goals but Has Made 

Less Progress Than 

Expected 

The Trust Took a Number 

of Steps toward Achieving 

Preservation Act Goals 

As we reported in 2005, the Board’s first steps were to establish a basic 

organization and to acquaint itself with conditions at the preserve.7

 In 

2001, the Board held regular meetings and listening sessions with the 

public and gathered views on how the preserve should be managed. The 

Board hired its first employee, an executive director, in October 2001 and, 

in December 2001, issued 10 principles to guide future decision making. 

These principles focused on a long-term view, emphasizing the ideas of 

landscape protection, sound business management and good-neighbor 

relations, the role of science in defining programs, and the quality of 

experiences to be provided to the public at the preserve. Overall, these 

principles constituted the Trust’s initial philosophy and foundation for the 

programs and activities that the Trust undertook to fulfill the Preservation 

Act’s goals. The following sections describe some of the Trust’s 

accomplishments. 

Shortly after the federal government assumed ownership of the preserve, 

the Trust learned that the existing infrastructure—such as roads, 

buildings, fences, and water treatment facilities—was in disrepair and 

needed rehabilitation. All the roads needed upgrading, fences were falling 

down, rodents had invaded all the structures, and the water supply system 

was not functioning. Work began immediately, and it continues today. 

The Trust Has Surveyed and 

Repaired Roads, Buildings, 

Fences, and Other 

Infrastructure 

The preserve has about 1,000 miles of roads, including 140 miles of main 

access roads. Road building into the preserve began in 1935, and by the 

1970s, more than 800 miles of logging roads had been bulldozed into highelevation forests, causing erosion and damaging downhill streams and 

wetland areas (see fig. 2). On assuming its management role, the Trust 

determined that the existing roads could not be readily used to support 

 

7

GAO-06-98. 

Page 7 GAO-10-84 Valles Caldera Trust
 

administration, ranching, recreation, or other needs. Since then, the Trust 

has upgraded over 14 miles of road to all-weather gravel standards, so they 

are usable for passenger vehicles and are not as environmentally 

damaging. To enhance safety and public viewing of the preserve, the Trust 

also installed kiosks, scenic turnouts, and a new gate (see fig. 3); in 

addition, it reconfigured the entry to and exit from New Mexico 

Highway 4, the main access road to the preserve. The Trust has 

systematically numbered and mapped a network of about 184 miles of 

roads, which provide open public access, as well as restricted access for 

the Trust’s land management activities. 

Figure 2: Typical Logging Road System, Redondito Peak, 2005 

Source: Valles Caldera Trust.

Page 8 GAO-10-84 Valles Caldera Trust
 

Figure 3: Main Entrance of Valles Caldera Preserve, Before and After Installation of New Gate 

Source: Valles Caldera Trust. Source: GAO.

Before After

At the time of the federal government’s purchase, the preserve had 

numerous existing buildings, fences, and other structures. In 2002, the 

Trust recognized that the majority of its structures needed major 

restoration to bring them up to local building codes. Over the next 6 years, 

the Trust conducted minor maintenance on the ranch buildings used to 

house employees and documented the condition of structures of historic 

value throughout the preserve (see fig. 4). In addition, the Trust repaired 

the preserve’s 54 miles of boundary fences—including adjusting their 

height to allow for elk movement—and installed signs restricting access to 

the preserve. The Trust also assessed the layout and condition of 64 miles 

of interior fences, many of which were used to separate pastures for 

livestock. Other facilities, such as livestock corrals, have also been 

assessed and rehabilitated, and in 2009 a new temporary visitor building 

was purchased and placed on site (see fig. 5). 

Page 9 GAO-10-84 Valles Caldera Trust
 

Figure 4: Original Baca Ranch Owner’s Home 

Source: GAO.

Figure 5: Old and New Temporary Visitor Centers 

Source: GAO.

Old temporary visitor center New temporary visitor center

Page 10 GAO-10-84 Valles Caldera Trust
 

Regarding water supplies, when the federal government acquired the 

preserve, the existing water treatment facility was not functioning, so no 

potable water was available. Rehabilitating this facility became one of the 

Trust’s top priorities. Repairs to the water collection and filtration systems 

were completed in 2004, the water distribution system was repaired in 

2005, and potable water became available in spring 2006. Still, the present 

water supply freezes during the winter and can dry up during the summer; 

the Trust is therefore evaluating groundwater reserves and options for 

drilling a well to supply water year-round. 

In the end, rehabilitating deteriorating infrastructure has proven to be an 

expensive and time-consuming endeavor, and the Trust’s efforts have not 

begun to address capital improvements, such as permanent visitor 

facilities or roads in support of the Preservation Act’s goals. Indeed, as of 

2008, the Trust still faced nearly $1.2 million in deferred maintenance costs 

for existing buildings alone. 

From the time it first articulated the principles by which it would manage 

Valles Caldera, the Trust viewed science as key to protecting and 

preserving the land while developing programs that could bring in 

revenue. It committed to using science in an “adaptive management” 

framework, by continuously gathering and applying site-specific scientific 

knowledge. According to the Trust’s Framework and Strategic Guidance 

for Comprehensive Management, the chief characteristic of the Trust’s 

view of adaptive management is the monitoring of natural systems and the 

human activities impinging on those systems, coupled with use of the 

monitoring information to guide and, when needed, revise management 

goals and activities.8

 Thus, according to Trust documents, the Trust makes 

land management decisions on the basis of scientific research and 

monitoring, taking into account the public’s views and federal 

environmental requirements. 

The Trust Created a Science 

Program to Lay the Foundation 

for Activities Allowed at the 

Preserve 

The science program includes three components: inventorying natural 

resources, monitoring environmental changes resulting from the Trust’s 

programs, and conducting research that will help manage the preserve’s 

resources. Up and running in 2003, this program assists the Trust in 

complying with federal environmental requirements, including those of the 

 

8

Valles Caldera Trust, Valles Caldera National Preserve: Framework and Strategic 

Guidance for Comprehensive Management (Los Alamos, N.Mex., 2005). This document 

sets out the framework for decision making that the Trust proposed to apply as it 

developed programs and policies for the management and use of the preserve. 

Page 11 GAO-10-84 Valles Caldera Trust
 

National Environmental Policy Act of 1969 (NEPA).9 By 2008, the Trust 

had assessed or was assessing most of the preserve’s natural resources, 

such as its forests, biodiversity, watershed and stream health, fish habitats, 

ground water quality, and geology and soils. In inventories of cultural 

resources, the Trust has also uncovered over 430 historic and 

archaeological sites. Such inventories will continue to be done as needed 

before construction projects or other ground disturbance to comply with 

NEPA guidelines. In addition, to assess the effects of activities such as 

grazing, recreation, or forest thinning, the Trust has established long-term 

programs to monitor ecological conditions, including climate, stream 

water quality, and plant and animal habitat and population dynamics. 

Finally, in collaboration with universities, federal and state agencies, and 

other research entities, the Trust has hosted a wide range of research 

programs, ranging from a study of the ecological drivers of rodent-borne 

diseases to earth-coring studies of past climate change. For example, 

hydrological research funded by the National Science Foundation through 

the University of Arizona is to provide information to aid in the day-to-day 

management of the preserve and also contribute to the understanding of 

hydrologic systems overall. This research should help scientists 

understand how much precipitation the preserve’s lands absorb and 

predict the amount of runoff into its streams and rivers. As more data 

become available, scientists may be able to forecast the effect of 

precipitation and drought on water quality and forage availability on the 

preserve and to use the information to drive future management decisions 

about livestock and recreation. Each year the Trust has generated between 

$1 million and $2 million of externally funded research. 

To further enhance and communicate the results of the science program, 

the Trust in August 2009 leased a facility in the town of Jemez Springs, 

20 miles west of the preserve’s main gate, as a new science and education 

center adjacent to the Trust’s administrative headquarters. The facility is 

to accommodate a laboratory, classrooms, offices, a dining hall, and 

lodging for visitors participating in the center’s formal and informal 

science education programs for all age groups. 

 

9

Under NEPA, federal agencies are to evaluate the likely environmental effects of projects 

they are proposing, using an environmental assessment or, if the projects likely would 

significantly affect the environment, a more detailed environmental impact statement. The 

Trust published its own NEPA procedures in the Federal Register in 2003. 68 Fed. Reg. 

42460–42472 (July 17, 2003). 

Page 12 GAO-10-84 Valles Caldera Trust
 

Given that the Preservation Act requires keeping the preserve as a working 

ranch, grazing has been a central activity since the Trust began. Over the 

years, the grazing program’s objectives, scope, and size have changed 

repeatedly, in response to annual scientific assessments of forage 

availability, as well as shifting directives from the Board. In addition, 

because the preserve is federal land, continued grazing requires 

completion of a NEPA environmental assessment. The Trust’s ultimate 

goal is to manage its livestock operations for multiple aims, including 

revenue generation, local community benefit, research, and public 

education. 

Since 2002, the Trust Has Been 

Experimenting with a Variety 

of Approaches to Manage 

Grazing 

To date, the Trust has experimented with a number of grazing programs, 

beginning in 2002 with a small drought-relief program that allowed just 

over 700 cow-calf pairs belonging to local ranchers to graze on preserve 

pastures for 5 weeks. The Trust also hosted a “conservation stewardship” 

program for local ranchers, allowing about 200 cattle in each of 2 years to 

graze on preserve lands for about 4 months while the ranchers 

implemented conservation measures on their own lands. In addition, the 

Trust has conducted a breeding program for 3 years to benefit local 

ranchers and has tested varied cattle management approaches in an 

attempt to make the program profitable for the Trust. In 2006, because of 

drought, the Trust switched its focus to research assessing the effects on 

cattle forage of controlled burning of the grasslands; initial findings 

suggested that such burning improved forage quality. Then in 2008, the 

Trust attempted to make a profit from grazing, allowing nearly 2,000 head 

of cattle to graze at the preserve over a 4-month period and generating 

about $58,000 in gross revenues. Because the cattle were brought in from 

Mexico and were sold in Texas, this effort drew local criticism. Moreover, 

the sheer number of cattle created conflicts with fishing and other 

recreational activities. In 2009, the program again took on a research 

emphasis and aimed to benefit local communities.10

The preserve’s lands encompass more than 60,000 forested acres. When 

the Trust was first established, these forests were envisioned as a possible 

source of revenue toward the Preservation Act’s purpose of providing for 

the multiple use and sustained yield of the preserve’s renewable 

The Trust Has Taken a Number 

of Steps to Manage Its Forests 

 

10The focus of research in 2009 was to develop a livestock resistant to high-altitude 

diseases. 

Page 13 GAO-10-84 Valles Caldera Trust
 

resources.11 But the Trust’s forest inventory in 2006 revealed a lack of 

marketable timber, partly because of intensive logging in the past. As a 

result of this logging and past fire suppression, about half the preserve’s 

forested acres contain dense vegetation that pose a very high risk of 

wildland fire. To date, therefore, the Trust’s forest management efforts 

have focused on restoring forest health, reducing the risk of large fires, 

and protecting watersheds. These efforts have also included identifying 

the most effective means of reducing hazardous fuels and a potential 

market for the sale of wood products (poles, mulch, pellets), sometimes in 

collaboration with local businesses. 

Beginning in 2002, the Trust granted the public limited access to the 

preserve for recreation; in most cases, it has charged a fee for this access. 

In the beginning, public recreation was confined to guided hikes or van 

tours. Over the next several years, the Trust allowed varied summer and 

winter activities, including: 

The Trust Continues to Expand 

Recreational Opportunities 

• Hunting. The Trust has worked with New Mexico’s Department of Game 

and Fish to hold elk hunts since 2002. In 2008, the Trust added a spring 

turkey hunt. 

• Fishing. In 2003, the Trust granted 1,785 people access to the preserve’s 

two fishable streams, on a first-come, first-served basis. The Trust also 

holds adult and youth fishing clinics. In 2009, it began allowing anglers to 

drive their own vehicles to parking areas near assigned stream reaches, 

instead of providing van transportation as in previous years. 

• Hiking. Visitors have been allowed to hike at the preserve since 2002, first 

in guided hikes, then on their own. The Trust has increased the number 

and mileage of available hiking trails, opening about 30 miles of trails to 

hikers, including 5 miles requiring no fee. 

 

11The Multiple Use and Sustained Yield Act of 1960 defines multiple use to mean “the 

management of all the various renewable surface resources of the national forests so that 

they are utilized in the combination that will best meet the needs of the American people.” 

16 U.S.C. § 531(a). Sustained yield means “the achievement and maintenance in perpetuity 

of a high-level annual or regular periodic output of the various renewable resources of the 

national forests without impairment of the productivity of the land.” 16 U.S.C. § 531(b). 

Page 14 GAO-10-84 Valles Caldera Trust
 

• Other recreational activities. The Trust has also offered horse-drawn 

wagon rides, sleigh rides, van tours, snowshoeing, cross-country skiing, 

stargazing lectures, horseback riding, marathon runs, mountain biking, 

group tours and seminars, workshops, antler collection, and overnight 

photographic and birding excursions. 

In 2006, the Trust also hosted its first free open house, which drew more 

than 1,400 cars and nearly 4,000 people. The Trust used this event to 

inform the public about then-current programs and future opportunities 

and to monitor the effects of so many visitors. Since 2008, the preserve has 

been open 7 days a week from April through September for summer 

recreation and events and fewer days the rest of the year to accommodate 

hunting and winter activities. 

The Preservation Act’s findings and purposes section states, among other 

things, that the Baca Ranch could serve as a model for sustainable land 

development and use of timber, grazing, and recreation and that 

management of the ranch through a trust would eventually allow the ranch 

to become financially self-sustaining. Over its existence, the Trust 

recognized it had no marketable timber, but it has experimented with a 

number of grazing options and expanded recreational opportunities. 

Collectively, from 2005 through 2008,12 the Trust’s grazing, recreation, and 

other activities have generated, on average, about $733,000 in gross 

revenues per year (see table 1). In comparison, from 2000 through 2009, 

the Trust received nearly $31 million in federal funding—an average of 

about $3.5 million per year over the time frame. 

The Trust Has Taken Its First 

Steps toward Becoming 

Financially Self-Sustaining 

Table 1: Gross Revenues by Activity, as Reported by the Trust for Fiscal Years 

2005–2008 

Activity 2005 2006 2007 2008

Hunting $285,625 $317,365 $330,276 $368,776

Fishing 71,645 60,415 67,392 68,913

Grazinga39,654 0 5,800 58,584

Concessions 9,558 48,496 42,513 54,743

Summer recreation 15,600 22,027 25,800 45,811

Miscellaneousb131,288 246,817 183,058 43,091

 

12We omitted data for 2002, 2003, and 2004 because fewer revenue-generating recreational 

activities were under way in those years. 

Page 15 GAO-10-84 Valles Caldera Trust
 

Activity 2005 2006 2007 2008

Special events 67,646 38,719 42,439 40,425

Facility rentals 5,000 45,095 30,210 36,015

Winter recreation 26,203 15,910 22,469 19,170

Total $652,219 $794,844 $749,957 $735,528

Source: Valles Caldera Trust. 

a

The Trust did not have a revenue-generating grazing program in 2006 because of drought. 

b

Miscellaneous revenues include donations; sale of livestock; interest on investments; and grants 

received by the Trust for inventory, monitoring, research, and restoration projects. 

Faced with average gross revenues amounting to about 20 percent of 

average federal funding, the Board of Trustees contracted with an 

independent consulting firm in 2008 to develop a revenue enhancement 

study aimed at realizing annual revenues of about $5 million.13 Made public 

in April 2009, this document details various options for generating 

revenues of this scale and bringing the Trust to financially self-sustaining 

status by the end of fiscal year 2015. These options include high-end 

elements such as a luxury lodge, as well as more modest elements such as 

tent camps. The options could be mixed and matched to produce a plan 

that the Trust could use as it decides how to further develop infrastructure 

and public programs at the preserve. According to the Trust, many of the 

options described in this document are to be incorporated into the 

alternatives the Trust is evaluating in preparing the environmental 

analyses called for by NEPA before it can provide for greater public access 

and use of the preserve. 

The Trust Is Behind Its 

Own Schedule to Achieve 

the Goals of the Act in 

2015 

The Trust has not met the timeline that it set for itself to meet the 

Preservation Act’s goals, as outlined in a required report to Congress in 

2004. The timeline called for achieving financially self-sustaining status in 

three phases over 15 years, a schedule reiterated in the Trust’s 2005 

Framework and Strategic Guidance.

14

• Phase 1, institution building, was to take place from 2001 through 2005. 

During this phase, the Trust was to develop the staff and tools needed to 

manage the preserve as a wholly owned government corporation, 

including accounting systems and support mechanisms for its science-

 

13Entrix, A Plan for Revenue Enhancement on the Valles Caldera Preserve: Opportunities 

and Alternatives (Vancouver, Wash., 2009). 

14Valles Caldera Trust, Framework and Strategic Guidance, appendix B. 

Page 16 GAO-10-84 Valles Caldera Trust
 

based adaptive management approach. No new roads or facilities were to 

be constructed during phase 1; rather, all public programs were to use 

existing infrastructure and temporary buildings and would therefore not 

require a full environmental assessment or environmental impact 

statement under NEPA. 

• Phase 2, program development, was to take place from 2005 through 2010. 

During phase 2, the Trust envisioned completing NEPA analyses for major 

infrastructure projects and beginning construction for an array of 

programs, such as an integrated road and trails system, an interpretive 

center, and a science and education facility. 

• Phase 3, program refinement, was to unfold from 2010 through 2015. 

During phase 3, the Trust planned to cultivate additional sources of funds 

and streamline programs to permit decreasing reliance on federal 

appropriations as revenue-generating programs expanded. It was believed 

that the experience gained in the prior phases would enable the Trust to 

increase revenues and decrease costs in time to be self-sustaining by the 

end of fiscal year 2015. 

As of September 2009, only the science and grazing programs at the 

preserve have moved into phase 2 of the Trust’s envisioned timeline. The 

Trust’s publication in 2003 of its own NEPA regulations and its adaptive 

management framework marked the passage of the science program into 

phase 2. With completion of a forage environmental assessment in January 

2009, the grazing program moved into phase 2.15 For recreation and 

associated infrastructure development to move into phase 2, a public use 

and access plan including NEPA compliance—which is due in mid-2010—

must be completed. For the Trust’s forest management program, too, a 

NEPA analysis will have to be done to move into phase 2. Thus, at the 

close of fiscal year 2009, the Trust continued to work mostly on phase 1 of 

its programs and activities—at least 5 years behind its anticipated 

schedule (see fig. 6). 

 

15In 2009, the Trust renamed its grazing program “livestock operation.” 

Page 17 GAO-10-84 Valles Caldera Trust
 

Figure 6: Planned Timeline and Actual Status of the Valles Caldera Trust’s Program Development 

Source: GAO analysis of Valles Caldera Trust data.

Science program

Grazinga

Recreation

Planned timeline

2000 2005 2010 2015

Phase 1

Phase 1

Phase 2

Phase 2

Phase 1

Infrastructure Phase 1

Forest management Phase 1

Phase 1 Phase 2

Phase 3

a

Grazing was renamed “livestock operation” in 2009. 

A Number of Factors Have 

Delayed the Trust’s 

Progress 

Current and previous Trust Board and staff members have all identified 

certain factors as contributing most significantly to delays in the Trust’s 

progress. Key among these factors is high turnover among Board 

members. Under the Preservation Act, at least three Board positions are 

up for appointment every 2 years. In addition, members may resign for 

personal reasons before completing their term of appointment, and the 

two ex officio Board members from the Forest Service and the Park 

Service may change according to how they are assigned within their own 

agencies. A time lag—ranging from 2 to 9 months—inevitably occurs 

between the end of some members’ terms and the beginning of others’. 

Thus, it can take months before a full Board is seated once again. New 

members face a learning curve. The result of such frequent turnover has 

led to delays in decision making, as well as false starts to programs. For 

example, an environmental assessment that needed to be completed 

before permanent livestock operations could be put in place was restarted 

three times before it was finally completed in 2009, largely because of 

Board turnover. 

The Trust has also experienced high turnover among key management 

staff. Within its first 7 years, nine people served as acting executive 

director or executive director; the most recent executive director reported 

for duty in January 2009. The chief administrative officer position also 

Page 18 GAO-10-84 Valles Caldera Trust
 

turned over four times. In addition, the position of communications 

manager—key to the Trust’s obligation to communicate and collaborate 

with the public—remained vacant for 3 years, until 2009. Among the 

Trust’s key management staff, only the preserve general manager, who is 

responsible primarily for the preserve’s natural resources, infrastructure, 

and recreational programs, and the preserve science and education 

director, who is responsible for and has developed the science and 

education programs, have been with the Trust since they were first hired, 

in 2002 and 2003, respectively. 

In addition, according to the Trust’s Board and staff, they discovered upon 

assuming their responsibilities that the preserve’s cultural and natural 

resources and infrastructure were not as healthy or robust as they had 

expected or as described in the opening to the Preservation Act. For 

example, road building and timber cutting in high-elevation forests had 

been done since the early 1930s, and streamside and other areas had been 

damaged by logging roads and overgrazing. Forests clear-cut in the 1960s 

and 1970s had been replaced by dense stands of young trees that provide 

little marketable timber and present a wildland fire hazard. Further, the 

act directed the Trust to open the preserve for public recreation within 

2 years after the federal government purchased the land. As a result, the 

Trust found itself with more ecological restoration and infrastructure 

rehabilitation to do than expected—even while providing public access to 

the preserve—almost immediately after it assumed active management of 

the land in August 2002. 

Finally, almost everyone we interviewed observed that one or more of the 

foregoing factors contributed to the Trust’s inability to focus on 

establishing itself as a fully functioning government corporation, which in 

turn exacerbated the effects of Board and staff turnover. Ultimately, these 

shortcomings raised serious concerns among interest groups and the 

public about whether the Trust could successfully manage the preserve in 

the manner envisioned by the Preservation Act. 

Page 19 GAO-10-84 Valles Caldera Trust
 

As of September 2009, the Trust had yet to develop and put in place 

several key elements of an effective management control program for a 

government corporation, as required under GPRA and as we 

recommended in our previous report.16 Specifically, the Trust had not 

clearly defined a long-term strategic plan, developed annual performance 

plans, or systematically monitored and reported its progress. Additionally, 

the Trust’s financial management has been weak. Consequently, it has 

been difficult for Congress and the public to understand the Trust’s longterm goals and objectives, annual plans and performance, or progress. 

The Trust Has Failed 

to Put in Place Key 

Elements of an 

Effective Management 

Program 

As a Government 

Corporation, the Trust Is 

Required to Have Effective 

Management Controls 

For government agencies and corporations, GPRA and GCCA specify the 

means to achieve an effective management control program. That is, they 

establish a framework for government entities to provide reasonable 

assurance that an organization’s operations are effective and efficient, that 

its financial reporting is reliable, and that the organization is complying 

with applicable laws and regulations. This framework includes, among 

other components, (1) a strategic plan with long-term, measurable goals 

and objectives; (2) annual performance plans for achieving the strategic 

plan’s goals and objectives; (3) performance monitoring and reporting; and 

(4) annual management reviews and financial audits. Such plans, methods, 

and procedures are collectively known as internal, or management, 

controls. 

Under GPRA, a federal agency is required to develop a strategic plan that 

covers a period of at least 5 years, to be updated every 3 years, and 

includes the agency’s mission statement, identifies its long-term strategic 

goals and objectives, describes strategies to achieve those goals and 

objectives, explains the relationship between long-term and annual goals, 

analyzes key external factors, and specifies how and when program 

evaluations will be conducted. GPRA further requires each agency to 

submit an annual performance plan, which must establish performance 

goals that link the goals of the agency’s strategic plan directly with 

managers’ and employees’ day-to-day activities. In essence, this plan is to 

set forth the yearly performance goals the agency will use to gauge 

progress toward the strategic goals, identifies performance measures the 

agency will use to assess its progress, explains the procedures the agency 

will use to verify and validate its performance data, and ties these goals 

and measures with the processes and resources the agency will use to 

 

16GAO-06-98. 

Page 20 GAO-10-84 Valles Caldera Trust
 

meet performance goals. In addition, GPRA requires agencies to report 

each year, usually to the President and Congress, on program performance 

for the previous fiscal year. This annual performance report should 

describe the performance indicators established in the agency’s annual 

performance plan and the actual program performance achieved 

compared with the performance goals. It should also explain why a 

performance goal has not been met and set forth plans for achieving it. 

Finally, the plan should also summarize the year’s program evaluations 

and findings. Key steps and critical practices for GPRA implementation 

include involving stakeholders in defining missions, plans, and outcomes; 

producing key results-oriented performance measures at each level of the 

agency or organization; and using the results of measuring past 

performance to inform future planning. 

Under GCCA, a government corporation must submit annual management 

reports to Congress, including statements of financial position, operations, 

and cash flow; a budget report reconciliation;17 a report summarizing the 

results of an annual financial audit; and other information about 

operations and financial status. GCCA also requires that the corporation’s 

financial statements be independently audited in accordance with 

generally accepted government auditing standards. 

Finally, under the Preservation Act, the Trust is required to report annually 

to Congress on its activities. These reports are to be “comprehensive and 

detailed report[s] of [the Trust’s] operations, activities, and 

accomplishments for the prior year, including information on the status of 

ecological, cultural, and financial resources . . . and benefits provided by 

the Preserve to local communities” and “shall also include a section that 

describes the Trust’s goals for the current year.”18 The law also requires 

preparation of an annual budget. 

The Trust Lacks a Strategic 

Plan 

We reported in 2005 that the Trust lacked a GPRA-compliant strategic plan 

and recommended that it develop such a plan. Although the Trust agreed 

with our recommendation, it still did not have a plan in place as of 

September 2009. The Trust has, however, produced two documents (one 

of them in response to a previous recommendation from us) that offer 

 

17Among other things, a budget report reconciliation essentially reconciles actual 

expenditures with budgeted amounts. 

18Pub. Law No. 106-248, Title I, § 106(e)(2). 

Page 21 GAO-10-84 Valles Caldera Trust
 

some strategic guidance, although neither of these meets GPRA 

requirements or was used as a formal strategic plan. The first guidance 

document was the 2005 Framework and Strategic Guidance for 

Comprehensive Management, which presents the values and vision the 

Trust was to apply in making management decisions. The document 

articulates the Trust’s commitment to the various goals of the Preservation 

Act, including operating the preserve as a working ranch according to 

principles of science-based adaptive management, striving toward 

financial self-sufficiency, and making the preserve accessible to visitors. 

As we observed in our 2005 report, the 187-page document describes, 

among other things, the preserve’s history and natural features; the Trust’s 

approach to decision making; and public involvement at the preserve, 

including a range of potential public uses, from hunting and fishing to 

hiking and camping.19

The second Trust document that contains some elements of a strategic 

plan was prepared in response to our recommendation in 2005 that the 

Trust develop strategic and annual performance plans. Issued in 

November 2006, this 7-page document includes a mission statement that 

echoes some of the goals in the Preservation Act: 

The mission of the Valles Caldera Trust is to operate the preserve as a working ranch; to 

become financially self-sustaining; to meet the varied needs of visitors; to utilize and 

steward the multiple resources of the preserve; and to work collaboratively with our 

neighbors. 

The document also outlines six goals—which the Trust labeled alternately 

as “actions” or “near-term goals”—each accompanied by a desired 

outcome, objectives, strategies or actions, and metrics. For example, one 

of the six near-term goals is to evaluate existing facilities and identify 

needs for additional infrastructure; eight strategies and actions are given 

for achieving the objectives for that goal. The desired outcome is 

“identification of essential infrastructure” to support operations and 

“achievement of financial self-sustainability,” and one of the objectives is 

to improve the entrance to the preserve and visitor service center. To 

fulfill this objective, the document states that the Trust will engage a 

contractor to design and improve the preserve’s entrance and gives as the 

metric for measuring progress the completion of a new preserve entrance 

during fiscal year 2007. 

 

19GAO-06-98. 

Page 22 GAO-10-84 Valles Caldera Trust
 

Both the 2005 and 2006 documents fall short of GPRA’s requirements for 

effective strategic planning in a number of respects. For example, despite 

its broad and philosophical articulation of the Trust’s guiding principles—

essentially, the Trust’s vision and mission—the 2005 Framework and 

Strategic Guidance does not meet GPRA’s requirements for a formal and 

detailed strategic plan. Indeed, title aside, this document never claims to 

be a formal strategic plan. In its own words, the document does “not 

intend to present a blueprint for future management of the preserve” but 

rather to sketch “the range of possible programs the Trust will consider 

implementing in pursuit of [the Trust’s land stewardship] goals.”20

Likewise, although the 2006 “Strategic Planning Document” combines 

elements of strategic planning (mission statement, goals, and objectives) 

with elements of annual performance plans (actions and metrics), it does 

not cover a 5-year period, has not been updated, does not explain the 

relationship between long-term and annual goals, does not analyze key 

external factors, and does not specify how and when program evaluations 

are to be conducted. Furthermore, according to Trust officials and senior 

staff, the document was drafted and approved by the Trust’s Board 

without benefit of guidance or assistance from stakeholders, such as 

Congress and the public, as expected under GPRA; neither did the Board 

specifically instruct the staff to implement the actions or monitor the 

metrics. By failing to develop a strategic plan from the beginning of its 

operation of the preserve in 2002, as well as failing to craft and adopt a 

formal strategic plan later, the Trust lost an opportunity to move forward 

systematically as an institution—independent of personnel turnover in 

either the Board or staff—toward meeting the Preservation Act’s goals. In 

September 2009, recognizing the value of better strategic planning, Trust 

officials told us they were planning to work to develop a GPRA-compliant 

plan with an outside consultant experienced in developing strategic plans 

for federal agencies. 

The Trust Has Not Fully 

Met the Requirements for 

Performance Planning, 

Monitoring, or Reporting 

Since its beginning, the Trust has failed to fully meet GPRA’s annual 

performance planning, monitoring, or reporting requirements. The Trust 

has not put together formal annual performance plans containing either 

specific performance goals for the next fiscal year—goals tied directly to 

any strategic goals stated in the 2005 Framework and Strategic Guidance 

or November 2006 strategic planning document—or any performance 

measures or related information for monitoring its progress. Under GPRA, 

 

20Valles Caldera Trust, Framework and Strategic Guidance, 101, 11. 

Page 23 GAO-10-84 Valles Caldera Trust
 

an annual performance plan must establish yearly performance goals 

linked to long-term goals of a strategic plan; identify performance 

measures that will be used to gauge progress toward meeting long-term 

strategic goals; explain the methods to be used for validating and verifying 

performance data; and link the goals and measures with the processes and 

resources, such as staffing and funding, that will be used to meet the 

performance goals. The only documents that the Trust has produced to 

date that begin to address these requirements are its 2006 strategic 

planning document and fiscal year 2008 annual report to Congress. While 

not labeled an annual performance plan, the 2006 strategic planning 

document does identify “near-term” (performance) goals and metrics 

(performance measures) for fiscal year 2007, as well as for fiscal years 

2008 and 2009. These goals and metrics, however, are not linked to any 

long-term strategic goal, as required by GPRA, nor does the planning 

document meet other GPRA requirements for annual performance plans. 

In addition, although the Trust’s fiscal year 2008 annual report to Congress 

identifies goals for the upcoming 2009 fiscal year, along with metrics, 

neither the goals nor the metrics are linked to any long-term strategic goal 

or strategy for achieving such a goal. Neither are other requirements for 

annual performance plans addressed in this annual report. Although the 

Trust’s fiscal year 2007 annual report identifies 2008 performance goals, 

without metrics, annual reports before 2007 do not identify either 

performance goals or metrics for the next fiscal year. 

In monitoring its performance, the Trust has not established or monitored 

a stable set of quantitative indicators of progress over time. In its annual 

reports to Congress, the Trust summarized the past year’s 

accomplishments and mentioned its intentions for the future, sometimes 

quantitatively but more often qualitatively. For example, an early two-page 

report for fiscal year 2004 lists as one preserve goal to “manage public use, 

access to and the occupancy of the preserve” and notes an 

accomplishment under this goal as completing a road inventory of 

76 miles. The Trust’s plan, as stated, was to use this inventory to develop a 

transportation plan that was to begin in fiscal year 2007 and be completed 

in fiscal year 2008; development of this plan was labeled very high priority. 

But no methods or indicators for tracking the progress of this 

transportation plan were given. Moreover, although the transportation 

plan was supposed to begin in 2007 and be completed by 2008, reference 

to the plan in the Trust’s 2007 annual report to Congress is essentially 

identical to the wording in its 2006 annual report, and to date, no 

Page 24 GAO-10-84 Valles Caldera Trust
 

transportation plan has been developed.21 Similarly, for the Preservation 

Act’s goal of achieving financially self-sustaining operations, the Trust’s 

plan as stated in its 2004 annual report says only that it will implement 

financially sound business practices, develop and implement a business 

plan incorporating an annual budget tied to a plan of work for 5 years, and 

revise this business plan annually; again, the assigned priority is “very 

high.” Nevertheless, our review of Trust documents found that progress 

toward implementing these very high-priority plans was not formally 

monitored, nor were the plans fully executed. In fact, the 2005 annual 

report copies the wording of the 2004 report with respect to development 

of a business plan, the 2006 annual report makes no mention of a business 

plan, and the 2007 annual report lists developing a strategic business plan 

as one of its goals for 2008. 

Because it has not developed annual performance plans with performance 

goals, the Trust has not produced formal annual performance reports as 

required by GPRA. Since 2006, however, annual reports required by the 

Preservation Act, as well as a 5-year State of the Preserve report released 

in 2007, detail the Trust’s operations, activities, and prior year’s 

accomplishments, including the status of the preserve’s natural, cultural, 

and financial resources and benefits to local communities.22 While the 

Trust’s annual reports before 2006 did not address all these elements, the 

reports have improved over the years, becoming more detailed and 

comprehensive. The most recent annual report, for fiscal year 2008, 

contains major sections devoted to attainment of fiscal year 2008 goals; 

Trust organization, program accomplishments, and budget; and goals for 

fiscal year 2009. Each section on fiscal year 2008 goals attained (e.g., 

develop a strategic business plan) 

• states the goal’s objective (e.g., “to create a business plan that identifies 

options to generate revenues from programs”); 

• gives the status of progress (e.g., the Trust awarded a contract to a 

consulting firm to develop this business plan); and 

• offers a brief narrative related to the goal. 

 

21The Trust’s November 2006 strategic planning document revised the deadline for 

completing the transportation plan to fiscal year 2009. 

22Valles Caldera Trust, State of the Preserve 2002–2007 (Jemez Springs, N.Mex., 2007). 

Page 25 GAO-10-84 Valles Caldera Trust
 

With respect to goals for 2009, the report states each goal along with a 

statement of its objective, metric for measuring progress, and related 

narrative. This annual report and previous ones do not, however, report on 

the status of current year goals that were not attained or link back to a 

long-term strategy. 

The evolution of the Trust’s reports suggests a growing understanding 

within the organization of the need for key management elements, such as 

strategic goals, annual performance goals and plans, and measurable 

performance indicators. Our review of the annual reports nevertheless 

revealed a lack of consistency in report format, organization, and content 

from year to year, particularly in relation to measurable indicators of 

progress. For example, before 2007 the Trust counted and reported only 

the number of paying visitors to the preserve. In 2007, however, it began to 

include nonpaying visitors in visitor counts—a key change for 

understanding the growth in Trust programs. Yet this change in data 

collection was never explicitly pointed out in the 2007 annual report. 

Furthermore, given the absence of links in any of these reports directly to 

metrics listed in the Trust’s November 2006 strategic planning document, 

it is difficult to follow the progress of one year’s “plan” through 

subsequent years or to systematically track the Trust’s progress toward 

accomplishing the Preservation Act’s overarching goals. 

The Trust’s Financial 

Management Has Been 

Weak 

Compounding the absence of systematic strategic planning and routine 

performance planning, monitoring, and reporting, the Trust’s financial 

management has suffered from varied and numerous weaknesses. From 

when the Trust first took over management of the preserve through fiscal 

year 2003, the Trust’s finances were administered by the Forest Service. At 

the beginning of fiscal year 2004, the Trust briefly attempted to do its own 

accounting in house. When this attempt failed, however, partly because of 

turnover in accounting staff, it shifted these functions to the Department 

of the Interior’s National Business Center, which provided accounting 

services from fiscal year 2004 until fiscal year 2008. At the start of fiscal 

year 2008, the Trust once again moved its accounting operations, to the 

Forest Service’s Albuquerque Service Center, so as to bring its finances 

Page 26 GAO-10-84 Valles Caldera Trust
 

under a single, integrated financial management system and to reduce 

costs.23

In part because of poor financial management and accounting practices, 

inadequate records, and difficulties in hiring and retaining accounting 

staff, until 2007 the Trust could not produce financial statements that 

would have enabled it to fulfill its obligation to undergo an annual 

independent audit, as required by GCCA. As we reported in 2005, the Trust 

contracted in 2003 with an independent accounting firm for auditing 

services, but the firm recommended that the audit be postponed because 

the Trust lacked the financial policies, procedures, and records needed to 

produce auditable financial statements. It took several years for the Trust 

to reconstruct its financial transactions and prepare any auditable 

statements. At the end of 2007, an independent auditing firm was 

contracted. The firm completed its work in 2009, producing independent 

auditor’s reports for fiscal years 2005 through 2008. 

The auditor’s reports found numerous weaknesses in the Trust’s 

accounting, management control, and compliance with applicable laws 

and regulations. For example, the audit report for fiscal year 2008 found 

“material weaknesses” and “significant deficiencies” ranging from a lack of 

documented policies and procedures to the lack of a secure information 

technology system and failure to properly process cash and check 

payments.24 Consequently, according to the auditor’s report, decisions 

made by the Trust on the basis of deficient information could themselves 

be inaccurate or misleading. Moreover, because the Trust had not 

identified such deficiencies, it could not and did not report them to 

Congress. Among its other findings, this report also confirmed the lack of 

performance goals and objectives in compliance with GPRA requirements. 

 

23According to the Board, moving accounting services for the Trust back to the Forest 

Service has achieved annual cost savings of about $225,000 over the cost of using Interior’s 

system. 

24A material weakness is a significant deficiency, or combination of significant deficiencies, 

that results in more than a remote likelihood that a material misstatement of the financial 

statements will not be prevented or detected. A significant deficiency is a control 

deficiency, or combination of control deficiencies, that adversely affects the entity’s ability 

to initiate, authorize, record, process, or report financial data reliably in accordance with 

generally accepted accounting principles such that there is more than a remote likelihood 

that a misstatement of the entity’s financial statement that is more than inconsequential 

will not be prevented or detected. A control deficiency exists when the design or operation 

of a control does not allow management or employees, in the normal course of performing 

their assigned functions, to prevent or detect misstatements on a timely basis. 

Page 27 GAO-10-84 Valles Caldera Trust
 

The audit reports for all the audited fiscal years thus cast considerable 

doubt on the accuracy and completeness of the Trust’s annual or other 

reports to date and its degree of compliance with applicable laws. 

As a result of the auditor’s reports, the Trust has made an effort to 

improve its management control framework. In July 2009, for example, the 

Trust asked the Albuquerque Service Center to conduct an “internal 

control assessment” of the Trust’s operations, which the center had begun 

to do as of the end of fiscal year 2009. Once completed, this assessment 

could help improve the Trust’s management controls. 

In managing a remote, undeveloped expanse of public land under the 

public-private experiment created by the Preservation Act, the Trust is 

breaking new ground. In accordance with the act’s goals, the Trust is 

responsible for preserving and protecting the preserve’s resources while 

generating revenues from these resources. The long-term vision 

articulated in the Preservation Act is for the Trust to become a selfsustaining entity, without need for federal funding. Yet the current Board 

chairman and the Trust’s executive director believe that, of all the goals 

for the foreseeable future, becoming financially self-sustaining is the most 

challenging. A consensus among Board members is that the Trust will not 

become financially self-sustaining by the end of fiscal year 2015 as 

envisioned by the Preservation Act; a few within the Trust doubt that this 

goal can ever be achieved. In particular, as for other multiple-use land 

management agencies, a daunting corollary to the Trust’s mission is how 

to balance managing the land to produce a sustained yield of revenuegenerating resources with preserving and protecting those resources and 

other natural and cultural values of the preserve. Others external to the 

Trust, such as Los Amigos de Valles Caldera and Caldera Action, have 

expressed similar views about the Trust’s ability to become financially 

self-sustaining. Nevertheless, the Trust is continuing to explore 

opportunities for becoming financially self-sustaining. 

The Trust Sees 

Becoming a SelfSustaining Entity as 

Its Greatest Challenge 

As of the end of fiscal year 2009—nearly halfway through the 20-year 

public-private land management experiment and about 6 years before the 

authorization for Trust appropriations expires—the Trust had only begun 

to focus on the goal of becoming financially self-sustaining. A number of 

issues—such as its remaining life expectancy, activities capable of 

providing sufficient revenues, funds for needed key capital investments, 

and legal issues—present significant challenges to achievement of this 

goal. These challenges include the following: 

Page 28 GAO-10-84 Valles Caldera Trust
 

• Completing key steps to becoming financially self-sustaining in the time 

remaining before the end of fiscal year 2015, when the current 

authorization of appropriations expires. If the Trust is not well on its way 

toward becoming financially self-sustaining by the end of fiscal year 2015, 

the Trust may or may not have the funds to continue operating, regardless 

of how much or how little progress it has made on its various land 

management and recreation programs. Yet within the 6 years from the 

beginning of fiscal year 2010 to the end of fiscal year 2015, the Trust must 

develop a public use and access plan, including an environmental impact 

statement and an associated transportation plan; secure funding to 

implement these plans; begin and complete construction; and then begin 

operating the programs to generate revenues. All these activities could 

well take longer than 6 years. 

• Identifying, developing, or expanding revenue-generating activities that 

would enable the Trust to raise sufficient funds to become financially selfsustaining. To date, several anticipated sources of revenue have not 

materialized or have not materialized to the degree anticipated. For 

example, the vision of timber production as a major source of revenue 

disappeared when an inventory of the preserve’s timber resources 

revealed that few to no trees of commercial value remained after clearcutting in the mid-twentieth century. Both current and former Trust 

officials noted that many of the forested areas are more a liability than an 

asset to the Trust because they are covered with dense vegetation that 

could fuel large wildland fires. Recreation, too, failed to prosper as 

expected. The Trust had anticipated holding luxury elk hunts to provide a 

major source of future revenue and, in 2008, sought state legislation to 

allow these hunts. The proposal received public criticism, however, and 

the legislation failed. In addition, the Trust’s several years of 

experimenting with various approaches to grazing has led to the 

realization that grazing will not make as much money as anticipated. 

• Obtaining funding for major capital investments to construct and 

preserve facilities and other infrastructure needed to generate revenues. 

The 2009 revenue enhancement study commissioned by the Trust 

estimated that somewhere between $21 million and $53 million would be 

needed to further develop the facilities and infrastructure to support 

greater public use of the preserve, such as additional parking lots and 

further road upgrades, a visitor center, an educational research center, and 

a visitor lodge. Yet neither the revenues the Trust has generated to date 

through any of its programs nor current appropriations are sufficient to 

make such investments. 

Page 29 GAO-10-84 Valles Caldera Trust
 

• Legal constraints. The Trust faces several legal constraints that may affect 

its ability to achieve financially self-sustaining operations, according to 

Trust officials. Provisions of the Preservation Act—specifically, that the 

Trust expires in 2020 and that it is prohibited from entering into leases 

lasting longer than 10 years—limit the Trust’s ability to attract 

concessionaires or other enterprises desiring to establish long-term 

businesses on the preserve that could generate revenue for the Trust. 

Another question facing the Trust, according to Trust officials, is what 

authority it has to borrow and lend money. Trust officials said that 

Agriculture’s General Counsel told them that the Preservation Act does not 

specifically address this question. The Trust recently learned it has no 

authority to borrow money from the Federal Financing Bank, whose 

purpose is to make loans to government corporations. Trust officials also 

raised concerns about the Trust’s authority to purchase property outside 

the preserve or to construct new buildings inside the preserve. In addition, 

the Trust has expressed concern about not having access to the federal 

“judgment fund”—a permanent indefinite appropriation available to 

federal agencies under certain circumstances to satisfy judgments against 

them—to cover liability incidents such as hunting accidents. According to 

a Senate committee report on a 2004 bill amending the Preservation Act, 

the Department of Justice opposed a provision of the bill that would have 

provided the Trust access to the judgment fund.25 The Trust is paying over 

$80,000 annually for liability insurance. 

Nine years have passed since the federal government purchased Valles 

Caldera, and 11 years remain before the Valles Caldera Trust could, under 

the Preservation Act, come under Forest Service jurisdiction if it fails to 

become financially self-sustaining. The ultimate success of the Valles 

Caldera land management experiment hinges on the Trust’s ability to 

become a fully functioning, financially self-sustaining government 

corporation while simultaneously preserving and protecting the land’s 

natural, cultural, and recreational values. We acknowledge that achieving 

Conclusions 

 

25According to this Senate committee report, the Department of Justice opposed the 

provision that would have made the Trust eligible to pay claims, judgments, and 

settlements from the judgment fund. In general, according to an administration statement 

contained in the Senate report, government corporations like the Trust should pay 

judgments and settlements out of their own funds. The administration stated that because 

the Trust is an autonomous corporation with its own funds and an entity whose liabilities 

are properly charged to corporate funds, it is appropriate for the Trust to continue to 

satisfy judgments and settlements against it out of Trust funds. S. Rep. No. 108-269 at 6 

(2004). 

Page 30 GAO-10-84 Valles Caldera Trust
 

such a mission is no easy task, and we recognize that the Trust continues 

to work toward achieving these goals. Nevertheless, the Trust has 

struggled for nearly a decade to establish the basic framework for 

effective management required of government corporations, it has not 

maintained the pace of progress it set for itself, and it faces a number of 

legal constraints. Thus, it is uncertain whether the Trust can overcome its 

management and legal challenges and, as many Board and management 

officials of the Trust have also noted, whether it can achieve financially 

self-sustaining status by the Preservation Act’s 2015 deadline. We believe 

that our previous recommendations, if implemented, could substantially 

enhance the Trust’s ability to make greater progress toward meeting the 

goals of the act, as well as to improve management oversight, 

accountability, and transparency under GCCA and GPRA. We therefore 

reiterate the need for the Trust to fully implement recommendations from 

our 2005 report, specifically, continue to develop—and systematically 

implement—the following elements of effective management: 

• a formal strategic plan that includes measurable goals and objectives; 

• a plan, including planned timelines, for becoming financially selfsustaining; and 

• mechanisms for periodic monitoring and reporting of the Trust’s 

performance to Congress and other stakeholders. 

To help further the Trust’s efforts toward becoming a financially selfsustaining government corporation, we recommend that the Trust’s 

Chairman of the Board and Executive Director work with the relevant 

congressional committees to seek legislative remedies, as appropriate, for 

the legal challenges confronting the Trust. 

We provided the Valles Caldera Board of Trustees with a draft of this 

report for review and comment. The Board generally agreed with our 

findings and conclusions but did not comment on our recommendation. In 

its written comments, the Trust said it found our assessment of its 

accomplishments to date accurate, although it provided additional details 

about infrastructure, forestry work, the livestock program, and science 

and education. In addition, the Board agreed with our finding that the 

Trust has failed to put in place an effective management program, saying 

“there is no excuse for these plans and controls to be lacking” and “top 

Recommendation for 

Executive Action 

Agency Comments 

and Our Evaluation 

Page 31 GAO-10-84 Valles Caldera Trust
 

priority will be given to reaching prompt compliance with the law.” The 

Board also noted that we aptly described the current and future challenges 

the Trust is facing and stated that financial self-sustainment by 2015 is not 

a possibility under the current provisions of the Preservation Act. Without 

agreeing or disagreeing with our recommendation that the Trust work 

with Congress to seek legislative remedies for its legal challenges, the 

Trust stated that changes to the law are needed. 

We are sending copies of this report to the Board Chairman, Valles Caldera 

Trust and other interested parties. In addition, the report will be available 

at no charge on the GAO Web site at http://www.gao.gov. 

If you or your staff members have any questions about this report, please 

contact me at (202) 512-3841 or nazzaror@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this report. GAO staff who made major contributions to this 

Robin M. Nazzaro 

report are listed in appendix II. 

Director, Natural Resources and Environment 

Page 32 GAO-10-84 Valles Caldera Trust
Appendix I: Comments from the Valles Appendix I: Comments from the Valles Caldera Trust 

Caldera Trust 

Page 33 GAO-10-84 Valles Caldera Trust 
Appendix I: Comments from the Valles 

Caldera Trust 

Page 34 GAO-10-84 Valles Caldera Trust
Appendix I: Comments from the Valles 

Caldera Trust 

Page 35 GAO-10-84 Valles Caldera Trust
Appendix I: Comments from the Valles 

Caldera Trust 

Page 36 GAO-10-84 Valles Caldera Trust
Appendix I: Comments from the Valles 

Caldera Trust 

Page 37 GAO-10-84 Valles Caldera Trust
Appendix I: Comments from the Valles 

Caldera Trust 

Page 38 GAO-10-84 Valles Caldera Trust
Appendix II: 

A

GAO Contact and Staff 

cknowledgments 

Page 39 GAO-10-84 

Appendix II: GAO Contact and Staff 

Acknowledgments 

Robin M. Nazzaro, (202) 512-3841 or nazzaror@gao.gov

In addition to the person named above, David P. Bixler, Assistant Director; 

Lisa Brownson; Ellen W. Chu; Elizabeth Curda; Richard P. Johnson; 

Mehrzad Nadji; James M. Rebbe; Dawn Shorey; Jena Sinkfield; and Maria 

Vargas made key contributions to this report. 

 Valles Caldera Trust 

GAO Contact 

Staff 

Acknowledgments 

(361031) 
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