National Park Service: Major Operations Funding Trends and How Selected Park Units Responded to Those Trends for Fiscal Years 2001 through 2005
Published: 2006-04-05T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In recent years, some reports prepared by advocacy groups have raised issues concerning the adequacy of the Park Service's financial resources needed to effectively operate the park units. This statement addresses (1) funding trends for park service operations and visitor fees for fiscal years 2001-2005; (2) specific funding trends for 12 selected high-visitation park units and how, if at all, the funding trends have affected operations; and (3) recent management initiatives the Park Service has undertaken to address fiscal performance and accountability of park units. This statement is based on GAO's March 2006 report, National Park Service: Major Operations Funding Trends and How Selected Park Units Responded to Those Trends for Fiscal Years 2001 through 2005, GAO-06-431 (Washington, D.C.: March 31, 2006).
section_title: What GAO Found
paragraphs: Overall, amounts appropriated to the National Park Service (Park Service) in the Operation of the National Park System account increased from 2001 to 2005. In inflation-adjusted terms, amounts allocated by the Park Service to park units from this appropriation for daily operations declined while project-related allocations increased. Project-related allocations increased primarily in (1) Cyclic Maintenance and Repair and Rehabilitation programs to reflect an emphasis on reducing the estimated $5 billion maintenance backlog and (2) the inventory and monitoring program to protect natural resources through the Natural Resource Challenge initiative. Also, on an average annual basis, visitor fees collected increased about 1 percent--a 2 percent decline when adjusted for inflation. All park units we visited received project-related allocations, but most of the park units experienced declines in inflation-adjusted terms in their allocations for daily operations. Each of the 12 park units reported their daily operations allocations were not sufficient to address increases in operating costs, such as salaries, and new Park Service requirements. In response, officials reported that they either eliminated or reduced some services or relied on other authorized sources to pay operating expenses that have historically been paid with allocations for daily operations. Also, implementing important Park Service policies--without additional allocations--has placed additional demands on the park units and reduced their flexibility. For example, the Park Service has directed its park units to spend most of their visitor fees on deferred maintenance projects. While the Park Service may use visitor fees to pay salaries for permanent staff who administer projects funded with these fees, it has a policy prohibiting such use. To alleviate the pressure on daily operations allocations, we believe it would be appropriate to use visitor fees to pay the salaries of employees working on visitor fee funded projects. Interior believes that, while employment levels at individual park units may have fluctuated for many reasons, employment servicewide was stable, including both seasonal and permanent employees. GAO identified three initiatives--Business Plan, Core Operations Analysis, and Park Scorecard--to address park units' fiscal performance and operational condition. Of the park units with a business plan we visited, officials stated that the plan, among other things, have helped them better identify future budget needs. Due to its early development stage, only a few park units have participated in the Core Operations Analysis; for those we visited who have, officials said that they are better able to determine where operational efficiencies might accrue. Park Service headquarters used the Scorecard to validate and approve increases in funding for daily operations for fiscal year 2005.

section_title: Letter
paragraphs: We are pleased to provide for the record a summary of our report on  issues surrounding the principle sources of funding for the operations of  the National Park Service (Park Service) from fiscal years 2001 through  2005, and how the selected park units we visited responded to their  allocations of such funds. Congress provides funding for the Park Service  through a number of appropriations accounts; the largest is the Operation  of the National Park System (ONPS), which funds the management,  operations, and maintenance of park areas and facilities and the general  administration of the Park Service. Congress has made additional funding  available by permitting the Park Service to charge and retain recreation  fees, referred to in this report as “visitor fees.” The Park Service also has,  among other sources, authority to charge and retain concessions fees and  to accept donations and voluntary services. As with any federal program,  the Park Service is expected to manage within whatever level of funding is  provided and to allocate resources to its park units in a way that is both  efficient and effective in delivering services.
The Park Service has chosen to allocate funds to its park units in two  categories—for daily operations, and another for specific, non-recurring  projects. Park managers use allocations for daily operations to pay for  visitor and resource protection, interpretation and education, and facilities  operations, among other things. About 80 percent or more of the park  units’ daily operations allocations pay for salaries and benefits for staff to  carry out these mission components, while the remainder is used for  overhead expenses such as utilities, supplies, and training. The project- related portion provides funds for non-recurring projects such as replacing  roofs on park facilities or rehabilitating campgrounds. Park managers  generally use these project allocations to pay temporary employees or  contractors to complete these projects.
In recent years, concerns over the deteriorating condition of the national  parks have received increasing attention. Some reports prepared by  advocacy groups cite a lack of sufficient staff and financial resources  necessary to effectively operate the park units. They report dwindling  visitor services, crumbling buildings, and threatened resources at many  park units including the Everglades, Gettysburg, Great Smoky Mountains,  Olympic, Yellowstone, and others. Some of these reports argue that the  purchasing power of the park units’ funding has been weakened due to  inflation and required employee pay and benefit increases that were not  accounted for in their daily operations funding. However, the Department  of the Interior stated that the Park Service’s operating funds have  increased significantly from 1980 through 2005, particularly when  compared to other domestic federal agencies.
This statement, which is based on our recent report on the operating  condition of the national parks, addresses (1) funding trends for Park  Service operations and visitor fees for fiscal years 2001 through 2005; (2)  specific funding trends for several high-visitation park units and how, if at  all, these funding trends have affected operations, including the park units’  ability to provide services for fiscal years 2001 through 2005; and (3)  recent management initiatives the Park Service has undertaken to address  the fiscal performance and accountability of park units.
To identify funding trends for Park Service operations and visitor fees  from fiscal years 2001 through 2005, we obtained and analyzed  appropriations legislation, data on the Park Service’s allocation of funds  from the ONPS account, and data on visitor fees. To determine funding  trends for selected individual park units and how these trends affected the  park units’ ability to provide services to visitors, we selected 12 park units  based on visitation, regional diversity, and preliminary data on allocations  for daily operations. We visited the 12 park units, gathered and analyzed  funding and cost data, and interviewed park officials to determine  allocation trends and their impact on operations (including visitor  services). To identify recent management initiatives the Park Service has  under way to address fiscal performance and accountability for fiscal  years 2001 to 2005, we gathered and reviewed documentation on several  management initiatives and interviewed Park Service headquarters,  regional office, and individual park unit officials. A more detailed  description of our scope and methodology is contained in the report on  which this statement is based. We performed our work from January 2005  to March 2006 in accordance with generally accepted government auditing  standards.
In summary we found that    Overall, amounts appropriated to the Park Service in the ONPS account  increased from fiscal years 2001 through 2005. The amounts appropriated  rose from about $1.4 billion in fiscal year 2001 to almost $1.7 billion in  fiscal year 2005—an average annual increase of about 5 percent, or about 1  percent when adjusted for inflation. The Park Service makes this  appropriation available to park units by allocating amounts for daily  operations and for projects. In inflation-adjusted terms, the Park Service’s  allocation for daily operations declined slightly while the project-related  allocations increased. The amount the Park Service allocated to park units  for daily operations increased from about $903 million in fiscal year 2001  to almost $1.03 billion in fiscal year 2005—an average annual increase of  about 3 percent per year, but a slight decline of 0.3 percent per year when  adjusted for inflation. In allocating resources to park units, the Park  Service increased allocations for project-related activities at a higher rate  than for daily operations. Project-related allocations increased overall in  both nominal and inflation-adjusted dollars. Total project-related  allocations rose from $478 million in 2001 to $641 million in 2005, an  average annual increase of about 8 percent per year, or about 4 percent  per year in inflation-adjusted dollars. In addition to this funding, the Park  Service collected a total of about $717 million in visitor fees from fiscal  years 2001 through 2005—or about $670 million when adjusted for  inflation.
All of the 12 high-visitation park units that we visited received project- related allocations between fiscal years 2001 through 2005, but for most  park units their allocations for daily operations declined in inflation- adjusted terms. Allocations of project-related funds at the 12 high- visitation park units we visited varied from year to year. Although  allocations for daily operations increased in nominal terms from 2001  through 2005 at all 12 parks we visited, 8 of the 12 experienced a decline in  inflation-adjusted allocations and 4 experienced an increase in inflation- adjusted allocations. Park managers at all 12 park units we visited  reported their allocations were not sufficient to address increases in  operating costs, such as salary and benefit increases and rising utility  costs; and new Park Service requirements directed at reducing its deferred  maintenance needs, implementing its asset management strategy, and  maintaining law enforcement levels. Officials also stated that these factors  reduced their management flexibility. For example, the Park Service set a  goal to spend the majority of its visitor fees on deferred maintenance  projects. While the Park Service may use visitor fees to pay salaries for  permanent staff that administer projects funded with these fees, it has a  policy prohibiting such use. Instead, these salaries are paid using  allocations for daily operations, which reduces the amount of the  allocation available for visitor services and other activities, and limits the  park units’ ability to maintain these services and activities. To alleviate the  pressure on daily operations allocations, we believe it would be  appropriate to use visitor fees to pay the salaries of employees working on  visitor fee-funded projects.
In response to daily operations allocation trends, increased costs, and new  policy requirements, parks reported that they either eliminated or reduced  some services; they also relied on other authorized funding sources and  volunteers to pay for activities that have historically been paid for from the  allocations for daily operations. Because allocations for daily operations  did not increase commensurately with rising costs, officials at the park  units we visited stated that they absorbed these additional costs by  reducing spending on personnel and other expenditures. Park officials  also told us that they reduced services including, reducing visitor center  hours, educational programs, basic custodial duties, and law enforcement  operations, such as back-country patrolling. Officials at the park units also  stated that they increasingly relied on volunteers and nonprofit partner  organizations to provide services that were traditionally offered by park  rangers, including providing information and educational programs to  visitors. In commenting on a draft of our report, the Department of the  Interior said that the report creates a misleading impression concerning  the state of park operations, claiming that (1) record high levels of funds  are being invested to staff and improve parks and (2) the report does not  examine the results achieved with these inputs. The department also  believes that while employment levels at individual park units may have  fluctuated for many reasons, employment servicewide was stable,  including both seasonal and permanent employees. We believe, however,  that the report provides a detailed analysis of the major funding trends  affecting Park Service operations, including those at the 12 park units we  visited, as well as the department’s initiatives and efforts to achieve  results.
We identified three management initiatives that the Park Service has  undertaken to address fiscal performance and accountability and to better  manage within available resources: the Business Plan Initiative (BPI), the  Core Operations Analysis (COA), and the Park Scorecard. These initiatives  are in varying stages of development and implementation. For the most  part, it is too soon to assess the effectiveness of these initiatives.
subsections: section_title: Background
paragraphs: The Park Service is the caretaker of many of the nation’s most precious  natural and cultural resources. Today, more than 130 years after the first  national park was created, the National Park System has grown to include  390 units covering over 84 million acres. These units include a diverse mix  of sites—now in more than 20 different categories. The Park Service’s  mission is to preserve unimpaired the natural and cultural resources of the  National Park System for the enjoyment of this and future generations. Its  objectives include providing for the use of the park units by supplying  appropriate visitor services and infrastructure (e.g., roads and facilities) to  support these services. In addition, the Park Service protects its natural  and cultural resources (e.g., preserving wildlife habitat and Native  American sites) so that they will be unimpaired for the enjoyment of future  generations.
The Park Service receives its main source of funds to operate park units  through appropriations in the ONPS account. The Park Service chooses to  allocate funds to its park units in two categories—one for daily operations,  and another for specific, non-recurring projects. Daily operations  allocations for individual park units are built on park units’ allocation for  the prior year. Park units receive an increased allocation for required pay  increases and may request specific increases for new or higher levels of  ongoing operating responsibilities, such as adding additional law  enforcement rangers for increased homeland security protection. As is  true for other government operations, the cost of operating park units will  increase each year due to required pay increases, the rising costs of  benefits for federal employees, and rising overhead expenses such as  utilities. The Park Service may provide additional allocations for daily  operations to cover all or part of these cost increases. If the continuation  of operations at the previous year’s level would require more funds than  are available, park units must adjust either by identifying efficiencies  within the park unit, use other authorized funding sources such as fees or  donations to fund the activity, or reduce services. Upon receiving their  allocations for daily operations each year, park unit managers exercise a  great deal of discretion in setting operational priorities. Generally, 80  percent or more of each park unit’s allocation for daily operations is used  to pay the salaries and benefits of permanent employees (personnel costs).  Park units use the remainder of their allocations for daily operations for  overhead expenses such as utilities, supplies, and training, among other  things.
In addition to daily operations funding, the Park Service also allocates  project-related funding to park units for specific purposes to support its  mission. For example, activities completed with Cyclic Maintenance and  Repair and Rehabilitation funds include re-roofing or re-painting buildings,  overhauling engines, refinishing hardwood floors, replacing sewer lines,  repairing building foundations, and rehabilitating campgrounds and trails.  Park units compete for project allocations by submitting requests to their  respective regional office and headquarters. Regional and headquarters  officials determine which projects to fund. While an individual park unit  may receive funding for several projects in one year, it may receive none  the next.
Park units are authorized to collect revenue from outside sources such as  visitor fees and donations—although how they are used may be limited to  specific purposes. Since 1996, the Congress has provided the park units  with authority to collect fees from visitors and retain these funds for use  on projects to enhance recreation and visitor enjoyment, among other  things. Since 2002, the Park Service has required park units to spend the  majority of their visitor fees on deferred maintenance projects, such as  road or building repair. The Park Service also receives revenue from  concessionaires under contract to perform services at park units—such as  operating a lodge—and cash or non-monetary donations from non-profit  organizations or individuals. These funds may vary from year to year and,  in the case of donations, may be accompanied by stipulations on how the  funds may be used.
section_title: Appropriations for the Operation of the National Park System Account Increased Overall from Fiscal Year 2001 to 2005; When Adjusted for Inflation, the Total Allocation for Daily Operations Declined Overall and the Total Allocation for Projects Increased Overall
paragraphs: Overall appropriations for the ONPS account—including the amounts the  Park Service allocated for daily operations and projects—rose in both  nominal and inflation-adjusted dollars overall from fiscal year 2001  through 2005. Appropriations increased in nominal terms from about $1.4  billion in fiscal year 2001 to almost $1.7 billion in fiscal year 2005, an  average annual increase of about 4.9 percent (i.e., about $68 million per  year). After adjusting these amounts for inflation, the average annual  increase was about 1.3 percent or almost $18 million per year. By contrast,  the Park Service’s overall budget authority increased to about $2.7 billion  in 2005 from about $2.6 billion in 2001, an average increase of about 1  percent per year. In inflation adjusted dollars, the total budget authority  fell by an average of about 2.5 percent per year. Figure 1 shows the  appropriations for the ONPS account from fiscal years 2001 through 2005.
The Park Service’s total allocation for daily operations for park units  increased overall in nominal dollars but declined slightly when adjusted  for inflation from fiscal year 2001 through 2005. As illustrated in figure 2,  overall allocations for daily operations for park units rose from about $903  million in fiscal year 2001 to almost $1.03 billion in fiscal year 2005—an  average annual increase of about $30 million, or about 3 percent. After  adjusting for inflation, the allocation for daily operations fell slightly from  about $903 million in 2001 to about $893 million in 2005—an average  annual decline of about $2.5 million, or 0.3 percent. The fiscal year 2005  appropriation for the ONPS account included an additional $37.5 million  over the amounts proposed by the House and Senate for the ONPS  account, to be used for daily operations. The conference report  accompanying the appropriation stated that the additional amount was to  be used for (1) a service-wide increase of $25 million and (2) $12.5 million  for visitor services programs at specific park units.
Allocations for projects and other support programs increased overall in  both nominal and inflation-adjusted dollars. These allocations rose from  about $478 million in 2001 to about $641 million in 2005—an average  annual increase of about 7.7 percent, or about $36.5 million. When  adjusted for inflation, the increase was 3.9 percent, or about $18.7 million  per year. Figure 3 shows allocation trends of projects and other support  programs for the Park Service from fiscal years 2001 through 2005. Three  programs that include project funding for individual park units—Cyclic  Maintenance, Repair and Rehabilitation, and Inventory and Monitoring— account for over half of the increase for the project and support program  allocations. As a percentage of total project and support program funding,  funding for these programs rose to 31 percent in 2005 from 23 percent in  2001. For example, Cyclic Maintenance program funding increased from  $34.5 million in 2001 to $62.8 million in 2005—an average annual increase  of 16.2 percent in nominal terms or 12.1 percent when adjusted for  inflation. Increases in the Cyclic Maintenance and Repair and  Rehabilitation programs reflect an emphasis on the effort for the Park  Service to reduce its estimated $5 billion maintenance backlog. Increases  in the Inventory and Monitoring Program reflect an emphasis on  protecting natural resources primarily through an initiative called the  Natural Resource Challenge.
Visitor fees are also used to support park units. Overall, the Park Service  collected about $717 million in visitor fees in addition to their annual  appropriation for operations from 2001 through 2005, increasing from  about $140 million to about $147 million in 2005 (an average annual  increase of about 1 percent); however, in inflation-adjusted dollars, the  Park Service collected about $670 million in visitor fees, falling from about  $140 million in 2001 to about $127 million 2005 (an average annual decline  of over 2 percent). Overall, the Park Service collected an average of about  $143 million per year in nominal terms or about $134 million per year  when adjusted for inflation. Visitor fee revenue depends on several  factors, including the number of visitors to each park unit, the number of  national passes purchased, and the amount each park charges for entry  and services.
section_title: Allocation Trends for Projects and Daily Operations at 12 High- Visitation Park Units Varied, but All 12 Parks Reported Reduced Services and an Increasing Reliance on Other Authorized Sources to Supplement Daily Operations Allocations
paragraphs: All 12 park units we visited received allocations for projects from fiscal  years 2001 through 2005 that varied among years and among park units.  Allocations for daily operations for the 12 park units we visited also  varied. On an average annual basis, each unit experienced an increase in  daily operations allocations, but most experienced a decline in inflation- adjusted terms. Officials at each park believed that their daily operations  allocations were not sufficient to address increases in operating costs and  new Park Service management requirements. To manage within available  funding resources, park unit managers also reported that, to varying  degrees, they made trade-offs among the operational activities—which in  some cases resulted in reducing services in areas such as education,  visitor and resource protection, and maintenance activities. Park officials  also reported that they increasingly relied on volunteers and other  authorized funding sources to provide operations and services that were  previously paid with allocations for daily operations from the ONPS  account.
Park units use project-related allocations for such things as rehabilitating  structures, roads, and trails; and inventorying and monitoring natural  resources. The allocations for projects at the 12 park units totaled $76.8  million from 2001 through 2005. Allocations varied from park to park and  year to year because these allocations support non-recurring projects for  which park units are required to compete and obtain approval from Park  Service headquarters or regional offices. For example, at Grand Canyon  National Park, allocations for projects between 2001 and 2005 totaled $6.7  million. However, during that time, the amount fluctuated from $824,000 in  2001 to $1.9 million in 2004 and $914,000 in 2005. Appendix I shows  project-related allocations and their fluctuations from fiscal years 2001  through 2005 for the 12 parks we visited.
All twelve park units experienced an annual average increase, in nominal  terms, in allocations for daily operations; however, when adjusted for  inflation, 8 of the 12 parks we visited experienced a decline ranging from  less than 1 percent to approximately 3 percent. For example, Yosemite  National Park’s daily operations allocations increased from $22,583,000 in  2001 to $22,714,000 in 2005, less than an average of 1 percent per year.  However, when adjusted for inflation, the park’s allocation for daily  operations fell by about 3 percent per year. Daily operations allocations at  the remaining four parks increased after adjusting for inflation, ranging  from less than 1 percent to about 7 percent. For example, Acadia National  Park’s daily operations allocations increased from $4,279,000 in fiscal year  2001 to $6,498,000 in fiscal year 2005, an average annual increase of about  11 percent in nominal terms and about 7 percent when adjusted for  inflation. Park officials explained that although the daily operations  allocation substantially increased over this period, most of the increase  was for new or additional operations. To illustrate, in 2002, Acadia  acquired the former Schoodic Naval Base. The increases in allocations for  daily operations were to accommodate this added responsibility rather  than for maintaining operations that were in existence prior to the  acquisition.
Park unit officials reported that required salary increases exceeded the  allocation for daily operations, and rising utility costs have reduced their  flexibility in managing daily operations allocations. Park Service  headquarters officials reported that from 2001 through 2005, the Park  Service paid personnel cost increases enacted by the Congress. For  example, from fiscal years 2001 through 2005, Congress enacted salary  increases of about 4 percent per year for federal employees. Park Service  officials reported that the Park Service covered these salary increases with  appropriations provided in the ONPS account. The Park Service allocated  amounts to cover about half of the required increases, and park units had  to reduce spending to compensate for the difference. As a consequence of  the increases, park units had to eliminate or defer spending in order to  accommodate the increases. Officials at several park units told us that  since 2001, they have refrained from filling vacant positions or have filled  them with lower-graded or seasonal employees. For example, in an effort  to continue to perform activities that directly impact visitors—such as  cleaning restrooms and answering visitor questions—officials at Sequoia  and Kings Canyon National Parks stated that they left several high-graded  positions unfilled in order to hire a lower graded workforce to perform  these basic operational duties. Officials at most park units also told us that  when positions were left vacant, the responsibilities of the remaining staff  generally increased in order to fulfill park obligations.
In addition to increasing personnel costs, officials at many of the parks we  visited explained that rising utility costs caused parks to reduce spending  in other areas. For example, at Grand Teton National Park, park officials  told us that to operate the same number of facilities and assets, costs for  fuel, electricity, and solid waste removal increased from $435,010 in 2003  to $633,201 in 2005—an increase of 46 percent, when adjusted for  inflation. Officials told us that, as a result, their utility budget for fiscal  year 2005 was spent by June 2005—three months early. In August, the park  accepted the transfer requests of two division chiefs and used the salaries  from these vacancies to pay for utility costs for the remaining portion of  the year. Officials at some parks attributed increased utility costs to new  construction that was generally not accompanied with a corresponding  increase to their allocation for daily operations.
Officials at most of the parks we visited also told us that their park units  generally did not receive additional allocations for administering new Park  Service policies directed at reducing its maintenance backlog,  implementing a new asset management strategy, or maintaining specified  levels of law enforcement personnel (referred to as its “no-net-loss  policy”), which has reduced their flexibility in addressing other park  priorities. While officials stated that these policies were important,  implementing them without additional allocations reduced their  management flexibility. For example, since 2001, the Park Service has  placed a high priority on reducing its currently estimated $5 billion  maintenance backlog. In response, the Park Service, among other things,  set a goal to spend the majority of its visitor fees on deferred maintenance  projects—$75 million in 2002 increasing to $95 million in 2005. Officials at  several park units report that they have used daily operations allocations  to absorb the cost of salaries for permanent staff needed to oversee the  increasing number of visitor fee-funded projects. Park officials reported  that the additional administrative and supervisory tasks associated with  these projects add to the workload of an already-reduced permanent staff.  Furthermore, while the Park Service may use visitor fees to pay salaries  for permanent staff that manage and administer projects funded with  visitor fees, it has a policy prohibiting such use. Instead, these salaries are  paid using allocations for daily operations which reduce the amount of the  allocation available for visitor services and other activities and limit the  park units’ ability to maintain these services and activities.
To address differences between allocations for daily operations and  expenses, officials at the park units we visited reported that they reduced  or eliminated some services paid with daily operations allocations— including some that directly affected visitors and park resources. Park  officials at some of the parks we visited told us that before reducing  services that directly affect the visitor, they first reduced spending for  training, equipment, travel, and supplies paid from daily operations  allocations. However, most parks reported that they did reduce services  that directly affect the visitor, including reducing visitor center hours,  educational programs, basic custodial duties, and law enforcement  operations, such as back-country patrolling. Furthermore, when funds  allocated for daily operations were not sufficient to pay for activities that  were previously paid with this source, the park units we visited reported  that they deferred activities or relied on other authorized funding sources  such as allocations for projects, visitor fees, donations from cooperating  associations and friends groups, and concessions fees. From 2001 to 2005,  some parks delayed performing certain preventative maintenance  activities formerly paid with allocations for daily operations until other  authorized funding sources, such as project funds (including funds for  cyclic maintenance, repair and rehabilitation, and visitor fees) could be  found and approved.
Rather than eliminating or not performing daily operational activities,  some parks used volunteers and funding from authorized sources such as  donations from non-profit partners and concessionaires’ fees to  accomplish activities that were formerly paid with daily operations funds.  Officials at several park units said that they increasingly depend on  donations from cooperating associations to pay for training and equipment  and rely on their staff and volunteers to provide information and  educational programs to visitors that were traditionally offered by park  rangers. Funds from these sources can be significant, but they are subject  to change from year to year. Officials at several park units expressed  concern about using funding from other authorized sources to address  needs—not only because the funds can vary from year to year, but also  because these partners’ stipulations on how their donations can be used  may differ from the parks’ priorities. As a result, relying on these sources  for programs that require a long term funding commitment could be  problematic.
section_title: The Park Service Has Undertaken Three Management Initiatives to Address Fiscal Performance and Accountability of Park Units
paragraphs: We identified three management initiatives that the Park Service has  undertaken to address the fiscal performance and accountability of park  units and to better manage within their available resources: the Business  Plan Initiative (BPI), the Core Operations Analysis (COA), and the Park  Scorecard. Each initiative operates separately and is at various stages of  development and implementation. Table 2 in appendix II summarizes each  of the three initiatives and their stages of implementation.
Through the BPI process, park unit staff—with the help of business interns  from the Student Conservation Association—identify all sources and uses  of park funds to determine funding levels needed to operate and manage  park units. Using this information, park unit managers develop a 5-year  business plan to address any gaps between available funds and park unit  operational and maintenance needs. The process used in the BPI involves  6 steps, completed over an 11-week period. Park staff and the business  interns (1) identify the park unit’s mission; (2) conduct an inventory of  park assets; (3) analyze park funding trends; (4) identify sources and uses  of park funding; (5) analyze park operations and maintenance needs; and  (6) develop a strategic business plan to address gaps between funds and  park needs. All 12 of the park units we visited have completed a business  plan. Many officials—both at the unit level and headquarters—stated that  business plans are, among other things, useful in helping them identify  future budget needs. Once completed, park managers often issue a press  release to announce its completion. Park managers may also send copies  to their legislators, local community councils, and park partners (such as  cooperating associations) to communicate the results. A Park Service  official stated, however, that the Park Service is still refining these  business plans to serve as a better tool for justifying funding needs.
The COA was developed in 2004 to help park managers evaluate their park  unit’s core mission, identify essential park unit activities and associated  funding levels, and make fully informed decisions on staffing and funding.  The COA is part of a broader Park Service-wide effort to integrate  management tools to improve park efficiency. Park Service headquarters,  regional officials, and park unit staffs work together in a step-by-step  process to conduct the analysis. These steps include preparing a 5-year  budget cost projection (BCP) to establish baseline financial information  and help project future park needs, defining core elements of the park  unit’s mission, identifying park priorities, reviewing and analyzing  activities and associated staff resources, and identifying efficiencies.  Budget staff for each park unit first complete a 5-year BCP that uses the  current year’s funding level for daily operations as a baseline, and  estimates future levels, increases in non-personnel costs, and fixed costs  such as salaries and benefits. The general target of the analysis is to adjust  personal services and fixed costs at or below 80 percent of the unit’s  funding levels for daily operations. Three of the twelve park units we  visited have completed (or are in the process of completing) a COA, and  three will begin the COA in fiscal year 2006. The remaining six park units  we visited have yet to be selected. Park unit officials told us that the  preliminary results have helped them determine where efficiencies in  operations might accrue. A Park Service regional official told us that the  core operations process is still in its early development, noting that  preliminary results are useful but too early to determine results to be  realized by the park units.
Park Service headquarters developed the Park Scorecard beginning in  fiscal year 2004 to serve as an indicator of each park unit’s fiscal and  operational condition, and managerial performance. The scorecard is  intended to provide an overarching summary of each park unit’s condition  by offering a way to analyze individual park unit needs. It also provides  Park Service officials with information needed to understand how park  units compare to one another based on broad financial, -organizational, - recreational, -and resource-management criteria. Although the Park  Scorecard is still under development, the Park Service’s headquarters  budget office used it to validate and approve requests for increases in daily  operations allocations for the highest priorities among park units to be  funded out of a total of $12.5 million that was provided in 2005 for daily  operations directed at visitor service programs. The Park Service  approved requests for funding at 3 out of the 12 parks we visited  (Badlands National Park, Grand Teton National Park, and Yellowstone  National Park). Park Service headquarters officials, with the assistance  and input of park unit managers, plan on refining the Park Scorecard to  more accurately capture all appropriate park measurements and to  identify, evaluate, and support future budget increases for park units. The  Park Service also intends for park managers to use the Park Scorecard to  facilitate discussions about their needs and priorities.
In closing, we have found that overall, from 2001 through 2004, the Park  Service increased allocations for support programs and project funding  while placing less of an emphasis on funds for daily operations. In fiscal  year 2005, this trend shifted, and as evidenced by our visits to 12 park  units, appears to be going in the direction needed to help the units  overcome some of the difficulties they have recently experienced in  meeting operational needs. In responding to these trends, park unit  officials found ways to reduce spending on their allocations for daily  operations and to identify and use authorized sources other than these  allocations to minimize some impacts on park operations and visitor  services. While park units are relying more on other sources to perform  operations, using such funds has its drawbacks because it usually takes  parks longer, with more effort from park employees to obtain and use  these sources. Visitor fees have been an important and significant source  of funds for park units to address high priority needs such as reducing its  maintenance backlog. However, Park Service policy prohibiting the use of  visitor fees to pay salaries of permanent employees managing projects may  reduce the flexibility in managing the use of funding for daily operations.  While the Park Service is embarking upon three management initiatives  that they believe will improve park performance and accountability, and  better manage within available resources, it is too early to assess the  effectiveness of these initiatives.
section_title: GAO Recommendation and Agency Response
paragraphs: To reduce some of the pressure on funding for daily operations, we  recommended that the Secretary of the Interior direct the Director of the  Park Service to revise its policy to allow park units to use visitor fee  revenue to pay the cost of permanent employees administering projects  funded by visitor fees to the extent authorized by law. In commenting on a  draft of our report, the department generally agreed with the  recommendation, but stated that it should clearly state that visitor fee  revenue (and not other sources) be used to fund only a limited number of  permanent employees and be specifically defined for the sole purpose of  executing projects funded from fee revenue. We believe our  recommendation, as written, gives the agency the flexibility sought. The  department also said that our report creates a misleading impression  concerning the state of park operations in that (1) record high levels of  funds are being invested to staff and improve parks, and (2) the report  does not examine the results achieved with these inputs. The department  also believes that while employment levels at individual park units may  have fluctuated for many reasons, employment servicewide, including  both seasonal and permanent employees, was stable. We believe however,  that our report provides a detailed analysis of the major funding trends  affecting Park Service operations, including those at the 12 high-visitation  park units we visited, as well as the department’s initiatives and efforts to  achieve results.
This concludes our statement for the record.
section_title: GAO Contact and Staff Acknowledgments
paragraphs: For further information on this statement, please contact Robin Nazzaro at  (202) 512-3841 or nazzaror@gao.gov. Individuals making contributions to  this testimony included Roy Judy, Assistant Director; Thomas Armstrong,  Ulana Bihun, Denise Fantone, Doreen Feldman, Tim Guinane, Richard  Johnson, Alison O’Neill, and Patrick Sigl.
section_title: Appendix I: Project Allocations for 12 Selected Park Units, Fiscal Years 2001 through 2005