Payments to Counties: Shortcomings in Oversight and Implementation of Key Parts of the Secure Rural Schools Act May Be Addressed by Recent Agency Guidance
Published: 2013-03-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Under the Secure Rural Schools Act, counties with federal lands may elect to receive payments to help stabilize revenues lost because of declining federal timber sales. Under Title III of the act, counties are authorized to use these funds for certain projects related to wildland fire and emergency services on federal lands. The act provides oversight roles for the Forest Service and BLM, requiring them to review counties certification of their Title III expenditures as the agencies determine to be appropriate and to issue regulations to carry out the acts purposes. GAO reported to this committee in July 2012 that the agencies had provided limited oversight of county spending under Title III and that, although the projects for which counties reported using Title III funds were generally aligned with the broad purposes of Title III, county spending did not in all cases appear consistent with specific provisions of the act.
This testimony describes (1) key findings of GAOs July 2012 report on oversight and implementation of the act (GAO-12-775) and (2) actions the agencies have taken to strengthen oversight of county spending since the July 2012 report was issued. The testimony is based primarily on GAOs 2012 report and includes selected updates conducted in March 2013 on actions the agency has taken in response to that report.
GAO is making no recommendations in this testimony. In July 2012 GAO recommended that the agencies strengthen their oversight by issuing regulations or clear guidance. The agencies concurred, and took action to implement this recommendation.
section_title: What GAO Found
paragraphs: In July 2012 GAO reported that the Forest Service and Bureau of Land Management (BLM) had taken few actions to oversee county spending under Title III of the Secure Rural Schools and Community Self-Determination Act, and that the guidance they provided was limited and in some cases did not appear consistent with the act. GAO also reported that some expenditures by selected counties may have been inconsistent with the act--which may have resulted in part from the limited guidance available from the agencies--and that reviewed counties did not consistently follow Title III's administrative requirements. Specifically, GAO found the following:
Neither the Forest Service nor BLM had issued regulations under the act, and the guidance the agencies had issued was limited and sometimes unclear. Forest Service guidance, for example, did little to clarify language in the act, neither defining terms from the act nor specifying which types of expenditures were allowed under the act and which were not. The absence of clear guidance or regulations was of particular concern to GAO because the act itself does not define key terms. For example, the act authorizes counties to use Title III funds for "emergency services" but does not specify the types of activities covered by this term. Moreover, the agencies did not have assurance that they had an accurate accounting of the amounts of Title III funding spent and unspent by the counties, which is important because the act requires unobligated funds to be returned to the U.S. Treasury upon the act's expiration.
The counties GAO reviewed reported using Title III funds for projects that were generally aligned with the three broad purposes of Title III--wildland fire preparedness, emergency services on federal land, and community wildfire protection planning--but GAO identified certain expenditures by some counties that may not be consistent with specific requirements of the act. Such expenditures included funding for activities such as clearing vegetation along evacuation routes, updating 9-1-1 systems, and conducting routine law enforcement patrols on federal land. Some counties GAO reviewed reported using funds to purchase equipment, such as radios and GPS equipment, sonar equipment, watercraft, all-terrain vehicles, snowmobiles, and trucks for patrols.
Counties also did not consistently follow Title III's administrative requirements, which include annual certification of expenditures, 45-day notification periods to the public and others before spending funds, and deadlines for project initiation. For example, some counties did not submit a certification for certain years when they spent funds, some counties submitted their certifications late, and some counties did not consistently follow notification and project initiation requirements.
Since GAO's report was issued, the Forest Service and BLM have provided additional guidance to counties, which clarifies allowable uses of Title III funds. In addition, the agencies reported that they plan to change their requirements for annual reporting of expenditures to obtain additional information regarding the extent to which counties have obligated their Title III funds. The additional guidance addresses the recommendation in GAO's July 2012 report.

section_title: Letter
paragraphs: I am pleased to be here today to discuss our work on the Secure Rural  Schools and Community Self-Determination Act. As you know, the act  was a response to the steep decline in federal timber sales during the  1990s, which significantly decreased revenues from national forests  managed by the Department of Agriculture’s Forest Service and from  some public lands managed by the Department of the Interior’s Bureau of  Land Management (BLM). Counties containing federal lands have  historically received a percentage of the revenues generated by the sale  or use of natural resources on these lands, and the act was enacted in  part to stabilize payments to counties dependent on revenues from  federal timber sales. The act, which covers all National Forest lands and  certain BLM lands in western Oregon, was initially enacted in 2000 and  has been reauthorized several times, most recently for a 1-year extension  in 2012. Under the act, each county may continue to receive a portion of  the revenues generated from the sale or use of resources from federal  lands or can choose instead to receive annual payments based in part on  historical revenue payments to the county. Title III of the act authorizes  counties to use a portion of the payments for certain purposes related to  wildland fire and emergency services on federal lands.
In 2011, at the request of this committee, we undertook a review of the  oversight and implementation of the 2008 reauthorization of Title III. We  examined the actions the Forest Service and BLM had taken to oversee  county spending under Title III and the extent to which county  expenditures were consistent with the provisions of the act. In July 2012  we reported that the agencies had provided limited oversight of county  spending under Title III and that, although the projects for which counties  reported using Title III funds were generally aligned with the purposes of  Title III, county spending did not in all cases appear consistent with the  act. We recommended that the Forest Service and BLM strengthen their  oversight by issuing regulations or clear guidance specifying the types of  allowable county uses of Title III funds. The agencies concurred with this  recommendation and have taken action to do so. We also suggested that  Congress, if it chooses to extend Title III beyond the 1-year  reauthorization enacted in 2012, consider revising and clarifying the  language of Title III to make explicit which types of expenditures are and  are not allowable under the act.
My testimony today will describe (1) key findings of our 2012 report  related to oversight and implementation of the act and (2) actions the  agencies have taken to strengthen oversight of county spending since our  report was issued. This statement is based on our July 2012 report, and  includes selected updates conducted in March 2013 on actions the  agencies have taken in response to our report’s recommendation. To  conduct the updates, we reviewed additional guidance issued by the  agencies and interviewed agency officials. Detailed information about  scope and methodology can be found in our July 2012 report. We  conducted the performance audit work that supports this testimony in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform audits 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.
subsections: section_title: Background
paragraphs: The Secure Rural Schools Act was enacted to help address fiscal  difficulties confronting rural counties having substantial federal lands and  a history of federal timber harvesting. The act, as reauthorized, comprises  three principal titles. Under Title I, counties are to use the majority of  payments they receive for the same purposes for which they used federal  receipts, in most cases for the benefit of roads and schools. Under Title II,  counties may reserve a portion of the payments to fund certain land  management projects that benefit federal lands. Title III authorizes the  use of a portion of the payments for certain purposes related to wildland  fire and emergency services on federal lands. These authorized uses  include carrying out certain activities to increase the protection of people  and property from wildland fires under the Firewise Communities  program, reimbursing the county for search and rescue and other  emergency services performed on federal land, and developing  community wildfire protection plans to help protect homes and  neighborhoods. Title III requires counties to follow certain administrative  requirements, including publishing public notices of proposed uses for the  payments and submitting annual certifications of Title III expenditures to  either the Forest Service or BLM, as appropriate, stating that any Title III  funds spent in the previous year went toward authorized uses. For fiscal  years 2008 through 2011, 358 counties received a total of $108 million for  Title III projects, and individual counties received from about $3,600 to  over $2 million in a single fiscal year for such projects.
The Forest Service and BLM are responsible for carrying out certain parts  of the Secure Rural Schools Act. Both agencies calculate the amounts  that counties are to receive each year, and both agencies are required by  the act to review the counties’ certification of Title III expenditures as the  agencies determine to be appropriate. The act also requires the agencies  to issue regulations to implement the act, although it does not describe  what the regulations are to address or establish a deadline for issuing  them.
section_title: Federal Agencies Had Provided Limited Oversight of County Spending at the Time of Our Report, and Some County Expenditures May Have Been Inconsistent with the Provisions of the Act
paragraphs: In our July 2012 report, we found that the Forest Service and BLM had  taken few actions to oversee county spending under Title III of the Secure  Rural Schools Act and that the guidance they provided was limited and, in  some cases, did not appear consistent with the act. We also found that  some expenditures by selected counties we contacted may have been  inconsistent with the act—which may have resulted in part from the  limited guidance available from the agencies—and that counties we  reviewed did not consistently follow Title III’s administrative requirements.
subsections: section_title: Oversight by Federal Agencies
paragraphs: In July 2012, we reported that neither the Forest Service nor BLM had  issued regulations under the act and that the guidance the agencies had  issued was limited and sometimes unclear. We expressed particular  concern that the agencies had not developed regulations or clear  guidance because the act itself does not define key terms. For example,  the act authorizes counties to use Title III funds for “search and rescue  and other emergency services, including firefighting, that are performed  on federal land” but does not specify the types of activities covered by this  phrase.certain provisions open to varying interpretations, and available guidance  from the agencies had done little to clarify this language, counties had  generally been left to make their own interpretations about which types of  expenditures are allowable under Title III and which are not.
We concluded that because the language of the law leaves  To provide guidance, the Forest Service had developed a brief overview  of Title III, which generally echoed wording in the act, and a “frequently  asked questions” document responding to questions on authorized uses  of Title III funds. At the time of our report, agency officials told us they  believed the frequently asked questions document provided sufficient  clarity for counties to use when considering how to spend Title III funds.
Officials from several counties we contacted, however, told us they found  these documents to be of little help, and our review of these documents  found that they did not clearly define terms from the act or specify which  types of expenditures were allowed under the act and which were not. For  example, the act authorizes counties to use Title III funds for “search and  rescue and other emergency services, including firefighting, that are  performed on federal land” but does not define the types of activities  covered by this phrase. Neither of the Forest Service documents defined  such activities. In addition, in the frequently asked questions document,  the Forest Service listed eight specific uses of Title III funds—including  purchase of capital equipment, capital improvements, purchase of land,  and training for emergency response—and asked, “Are Title III funds  authorized for the following uses?” Instead of answering the question  directly, the documents stated that for certain uses—such as construction  of facilities, purchase of real property, and purchase of vehicles and other  capital equipment—the act does not explicitly authorize these uses. It  then further stated that reimbursement for certain uses—such as the  purchase of replacement equipment damaged or destroyed during an  emergency response or maintenance of vehicles and equipment in  proportion to their actual use for emergency services performed on  federal land—may be allowable. We concluded that such statements  were confusing and unclear.
Further, our review showed that, in addition to being unclear, the Forest  Service’s frequently asked questions document appeared to be  inconsistent with certain provisions of the act. For example, the act  authorizes counties to use Title III funds to carry out activities under the  Firewise Communities program to educate homeowners about, and assist  them with, techniques in home siting, construction, and landscaping.  Forest Service guidance documents, however, defined Firewise  Communities as an approach that, among other things, “emphasizes  community responsibility for planning in the design of a safe community  as well as effective emergency response.” The documents did not  emphasize the act’s requirement that counties’ Firewise activities with  Title III funds must be limited to providing fire-related education or  assistance to homeowners. Moreover, the frequently asked questions  document stated that developing emergency 9-1-1 systems under  Firewise—which is not an activity clearly authorized under the act—may  also be an authorized use of Title III funds. We raised concerns that  including emergency response in a definition of Firewise and suggesting  that developing 9-1-1 systems may be an authorized activity under the act  could lead some counties to interpret the act as allowing expenditures  that improve the county’s emergency response—a use not clearly  authorized under the act.
Our report also raised issues related to counties’ certification that any  Title III funds spent in the previous year went toward uses authorized  under the act. For example, we found that the Forest Service and BLM  had jointly developed a process to assist counties in certifying their Title  III expenditures but that the information the agencies directed the  counties to submit—typically the amount spent in each of the three  allowable Title III spending categories but without further details regarding  actual activities—did not allow either agency to determine whether  counties spent their Title III funds appropriately. In addition, the act  requires counties to submit certifications only for the years they have  spent funds, and we found that neither the Forest Service nor BLM had a  process to contact counties that did not submit a certification to determine  if these counties spent no Title III funds that year or had simply not  submitted the required certification. Some county officials we interviewed  said they had not submitted certifications even when their counties had  Title III expenditures the previous year. Overall, we found that of the  $108 million in Title III payments provided to 358 counties for fiscal years  2008 through 2011, the counties had certified having spent about  $46 million—or less than half the total amount—by the end of calendar  year 2011. However, because the agencies did not have a process to  ensure an accurate accounting of the amounts of Title III funds spent and  unspent, we concluded that it was unclear whether the amounts were  accurate and that it would be difficult to ensure that counties return to the  U.S. Treasury any funds that remain unobligated upon the act’s  expiration, as the act requires.
section_title: Consistency of County Expenditures
paragraphs: We also found that expenditures by counties we contacted for our 2012  report did not in all cases appear consistent with the act. These counties  reported using Title III funds for projects that were generally aligned with  the three broad purposes of Title III—wildland fire preparedness,  emergency services on federal land, and community wildfire protection  planning— and some counties reported expenditures that were clearly  authorized by the act. Nevertheless, we identified various expenditures by  some counties that may not have been consistent with specific  requirements of the act, such as the following examples:
Wildland fire preparedness. Title III authorizes counties to spend  funds for activities carried out under the Firewise Communities  program but specifies that these activities are to involve educating or  assisting homeowners with home siting, home construction, or home  landscaping to help protect people and property from wildfires. Some  counties we reviewed used Title III funds on broad emergency  preparedness activities that may not be consistent with the 2008 act.  For example, two counties we reviewed told us they spent part of their  Title III funds to clear vegetation along roads, some of which are  potential emergency evacuation routes, and others said they removed  vegetation from county lands, parks, schools, or cemeteries or from  larger swaths of land to create fuel breaks—locations not directly  associated with home siting, home construction, or home landscaping.  In addition, four counties used Title III funds to update their 9-1-1  telephone systems, according to county officials—an activity not  clearly authorized by Title III (although, as noted, agency guidance  stated that such an activity may be allowable).
Emergency services on federal land. Title III authorizes counties to  use funds as reimbursement for search and rescue and other  emergency services, including firefighting, that they perform on  federal lands. Some counties we reviewed spent Title III funds on  activities that may not have been consistent with this requirement. For  example, instead of reimbursements for specific incidents, a number  of counties used Title III funds to pay a portion of their fire or  emergency services departments’ salary and administrative costs,  including office supplies, utility costs, or insurance. As justification for  this approach, these counties cited the high percentage of federal  land in their counties or the difficulty in breaking out the costs of  emergency services on federal versus nonfederal land. Some  counties we reviewed also used the funds to carry out routine law  enforcement patrols on federal land; officials from one of these  counties told us that these patrols help reduce and deter criminal  activity and enhance visitor safety on federal lands. In addition, some  counties reported that, to maintain access to federal lands, they used  Title III funds to help rebuild flood-damaged roads, and some reported  using funds to purchase equipment, such as radios and GPS  equipment, sonar equipment, watercraft, all-terrain vehicles,  snowmobiles, and trucks for patrols.
Community wildfire protection planning. The act authorizes counties to  use Title III funds “to develop community wildfire protection plans in  coordination with the appropriate Secretary concerned.” Some  counties we reviewed reported Title III expenditures for wildfire  protection planning activities that may not be consistent with this  provision. For example, one county used Title III funds to purchase  vehicles having firefighting capabilities, as well as other equipment  associated with emergency response. Another county used Title III  funds to contract for firefighter dispatch and suppression services.  Officials from this county explained that county emergency service  units cannot reach certain remote areas quickly, so they contract with  a state agency to provide dispatch and suppression services during  the heavy wildland fire season, and because the area served is  largely federal land, the county pays for a portion of the contract costs  with Title III funds.
section_title: Administrative Requirements
paragraphs: We also found that counties we reviewed did not consistently follow Title  III’s administrative requirements. Title III requires counties to certify  expenditures to the Forest Service or BLM annually and provide 45-day  notification to the public and any applicable resource advisory committee  before spending funds. The 2008 act also required projects to be  initiated by September 30, 2011. Our review identified instances where  counties did not follow the requirements, including:
Certification. Some counties did not submit certifications at all or  submitted their certifications late, some certified expenditures for  multiple years simultaneously, and some acknowledged putting  incorrect information on the certification form. We found various  reasons for counties’ not complying with the certification requirements  in the act. Three counties, according to county officials we  interviewed, did not submit their certifications to the Forest Service for  the years they spent funds because they were unaware of the  requirement to do so. Two other counties submitted certification forms  for some but not all years in which they spent funds, and many  counties submitted their certification forms after the deadline specified  in the act, in some cases because they were initially unaware of or  overlooked the requirement to do so.
Public notification. The act directs each county, before moving forward  with Title III projects, to publish a proposal describing its planned use  of Title III funds in local newspapers or other publications, after which  the county must allow a 45-day comment period before using the  funds. Some counties in our review followed only part of the public  notification requirement. For example, some counties published  notices in their local newspapers but did not allow for a 45-day  comment period before moving ahead with projects or activities,  according to county officials and documents, while other counties  issued public notices in some years but not in others. We also found  four counties that did not issue any public notices on their Title III  project proposals; officials from these counties told us that they were  unaware of the requirement to do so.
Notice to resource advisory committees. Some counties in our review  did not notify the relevant resource advisory committees of their Title  III projects, as required under the act. County officials cited a number  of reasons for the lack of notification, including (1) they were unaware  of the requirement to do so; (2) the committee meets only once a year  in the summer, which does not coincide with the county’s timeline for  the Title III budgeting process; and (3) the county planned to notify the  resource advisory committee but did not because a local Forest  Service official stated that resource advisory committees were  involved only in Title II, not Title III projects—even with a specific  reference to such committees in Title III of the act.
Project initiation. Some counties did not initiate projects by September  30, 2011, as required by the 2008 act.interviewed provided a number of reasons why they missed this  deadline. For example, counties did not receive their Title III funds for  fiscal year 2011 until 2012, and officials in one county told us that their  county’s guidelines prohibit starting projects before funding is actually  received. Another county had not initiated all of its Title III projects  because some of its previous projects had cost less than estimated,  unexpectedly leaving the county more Title III funds to spend; county  officials told us that they were selecting additional Title III projects on  which to use the extra funding.
The 2008 act also required Title III funds to be obligated by September  30, 2012, and officials from nearly all counties in our review that had  spent funds told us they anticipated doing so. However, as noted, the agencies did not have a process to ensure an accurate accounting of the  amount of Title III funds spent and unspent, making it difficult to ensure  that unobligated funds are returned to the U.S. Treasury when the act  expires.
section_title: The Forest Service and BLM Have Taken Action to Strengthen Oversight
paragraphs: In response to our recommendation that the agencies strengthen their  oversight by issuing regulations or clear guidance specifying the types of  allowable county uses of Title III funds, the Forest Service and BLM  provided additional guidance to counties, which clarifies the types of  allowable uses of county funds. In addition, the agencies reported that  they plan to update their expenditure reporting requirements for Title III  funds, so that counties report not only funds expended the previous year  but also amounts remaining unobligated.
Regarding guidance, soon after our report was issued in July 2012,agencies updated their websites to provide substantial additional  information on allowable expenditures under the act. Given that this  information includes specific discussion about, and numerous examples  of, expenditures that are and are not authorized by the act, we believe   the  that this additional guidance addresses our recommendation. The  guidance addressed each of the three main areas of allowable spending  under Title III, as follows:
Wildland fire preparedness. As we noted, several counties reported  expending funds for broad emergency preparedness activities under  the Firewise Communities program that did not appear consistent with  the act because they did not involve providing fire-related education or  assistance to homeowners. This issue is specifically addressed in the  guidance, which now states that Title III authorizes funds to be “spent  on Firewise Communities program activities that (1) educate  homeowners in fire-sensitive ecosystems about techniques in siting  (positioning or locating) a home, constructing a home, landscaping  and maintenance around a home. . .or (2) assist homeowners in  implementing these techniques” (emphasis in original). The guidance  goes on to list examples of activities that are authorized—such as  disseminating Firewise information or assisting with “clean-up days”— and those that are not—such as updating 9-1-1 systems or clearing  vegetation along emergency evacuation routes or from county lands,  parks, schools, cemeteries, or other larger swaths of land not directly  associated with home siting.
Emergency services on federal land. Likewise, the guidance  addresses concerns we raised about whether certain projects related  to emergency services on federal land were clearly consistent with the  act. The guidance, among other things, clarifies the definition of  emergency services and provides lists of expenses that are  authorized (e.g., salary or wages of emergency response personnel  deployed during an emergency response) and those that are not (e.g.,  routine sheriff’s patrols of national forest roads and campgrounds,  cleanup after a flood event, and purchase of capital equipment or real  property).
Community wildfire protection planning. The guidance also addresses  concerns we raised about development of community wildfire  protection plans by clarifying authorized uses and illustrating those  that are not authorized, including the implementation of activities  described in such plans.
Regarding annual reporting requirements on the part of counties, both  agencies updated the certification form for counties to use in certifying  Title III expenditures, so that counties must report not only on the funds  expended the previous year but also on the amount of their Title III funds  that remain unobligated. Such an update is consistent with guidance  provided by Agriculture’s Office of General Counsel in response to a  Forest Service request for legal advice on its role in counties’ return of  unobligated Title III funds. The update is likely to allow the agencies a  more accurate accounting of the overall amounts of Title III funds spent  and unspent—a need we noted in our report.
In our July 2012 report, we also suggested that if Congress chooses to  extend Title III beyond the 1-year reauthorization enacted in 2012, it  should consider revising and clarifying the language of Title III to make  explicit which types of expenditures are and are not allowable under the  act. Given that the agencies have issued guidance that we believe  clarifies the allowable uses of Title III funds, there may be less need for  changes to the language of the act itself. Nevertheless, it will be important  to monitor counties’ Title III expenditures to observe whether the  incidence of expenditures that appear inconsistent with the act diminishes  in the wake of the additional guidance the agencies have issued.
Chairman Wyden, Ranking Member Murkowski, and Members of the  Committee, this completes my prepared statement. I would be pleased to  respond to any questions that you may have at this time.
section_title: GAO Contacts and Staff Acknowledgments
paragraphs: If you or your staff have any questions about this testimony, please  contact me at (202) 512-3841or fennella@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this statement. Key contributors to this testimony include  Steve Gaty (Assistant Director), Ellen W. Chu, Jonathan Dent, Richard P.  Johnson, Lesley Rinner, and Leigh McCaskill White.
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