Endangered Species Act: U.S. Fish and Wildlife Service's American Burying Beetle Conservation Efforts
Published: 2016-12-22T00:00:00

Fast Facts:
Protecting endangered and threatened species, such as the American burying beetle
Construction and other projects may harm endangered or threatened species and their habitat. To help protect these species, the Fish and Wildlife Service focuses on avoiding and minimizing harm—for example, by working with developers to relocate or modify their project.
For any remaining impacts, developers may be able to pay for conservation measures through FWS-approved programs.
However, FWS doesn’t centrally track or monitor how effectively some of these programs protect their target species. We recommended that FWS finalize plans to track these programs.

Highlights:
section_title: Why GAO Did This Study
paragraphs: The ABB is a large scavenger insect that FWS listed as endangered in 1989 under the Endangered Species Act (ESA). FWS uses various strategies to address potential adverse impacts on protected species from construction and other projects. In some cases, FWS has required project proponents to take specific steps to avoid, minimize, or compensate for a project's potential impacts on the ABB or its habitat. When these proponents make financial contributions to compensate for the impacts of these projects, FWS generally refers to it as compensatory mitigation. GAO was asked to provide information on how FWS uses different compensatory mitigation strategies.
This report examines: (1) how FWS has sought to avoid and minimize potential adverse impacts on the ABB from projects and (2) what is known about FWS's compensatory mitigation strategies and how FW has used two of them, in-lieu fee programs and conservation banks, for the ABB. GAO reviewed relevant laws, policies, guidance, and conservation efforts for the ABB; analyzed FWS data on ESA consultations and the use of conservation banks; and interviewed officials from FWS, project proponents, and organizations involved in ABB conservation.
section_title: What GAO Found
paragraphs: To address the potential adverse impacts of construction and other projects on the American burying beetle (ABB) and its habitat, the U.S. Fish and Wildlife Service (FWS), within the Department of the Interior, first focuses on avoidance and minimization approaches. For example, to avoid impacts on ABB habitat, FWS may suggest that project proponents—public and private entities—relocate the project or part of the project to another location. If complete avoidance is not possible, FWS may suggest ways to minimize the potential impacts, such as reducing soil disturbance during construction or limiting the use of pesticides. If avoidance and minimization actions are impractical or inadequate, then FWS may suggest compensatory mitigation strategies, which allow project proponents to choose to compensate for the potential adverse impacts of their projects.
FWS uses several types of compensatory mitigation strategies, including (1) conservation banks, in which third parties invest up front in protected lands that are conserved and managed for a species, and then sell mitigation credits to project proponents, and (2) in-lieu fee programs, in which third parties generally collect money from several project proponents and conduct conservation activities for the species in a location away from the project site after the project's potential impacts have occurred. FWS has used two conservation banks in Oklahoma and three in-lieu fee programs in several states specifically to conserve the ABB. FWS tracks key information about its conservation banks, such as the location and mitigation credits available, and uses this information to help manage activities. However, FWS has not fully implemented its plan to track in-lieu fee programs. FWS signed an interagency agreement with the U.S. Army Corps of Engineers in February 2016 to modify its Regulatory In-lieu fee and Bank Information Tracking System (RIBITS) to enable FWS to track its in-lieu fee programs. However, FWS has not obligated funds for the necessary modifications or developed a timetable for doing so. Federal internal control standards provide that management should design control activities to achieve objectives and respond to risks. To accomplish this, federal internal control standards recommend that management define the time frames for how objectives will be achieved. Until FWS collects relevant and reliable data on its in-lieu fee programs, the agency will not be able to evaluate the effectiveness of its programs and determine the most effective strategy for conservation.
section_title: What GAO Recommends
paragraphs: To ensure that appropriate plans are made to obligate funds, GAO recommends that FWS establish a timetable with milestones for modifying RIBITS to incorporate FWS's in-lieu fee program information.
FWS concurred with this recommendation.

section_title: Letter
paragraphs: Historically, the American burying beetle (ABB), a large scavenger insect  native to North America, was present in more than 30 U.S. states and  parts of Canada. However, as of the late 1980s, two known populations of  the ABB remained—one on Block Island, Rhode Island, and the other in  eastern Oklahoma. Consequently, in 1989 the Department of the  Interior’s U.S. Fish and Wildlife Service (FWS) listed the ABB as an  endangered species, providing it certain protections under the  Endangered Species Act of 1973 (ESA). Since listing the ABB, FWS has  taken steps to conserve the ABB and has used several strategies to  mitigate potential harm to the species from the construction of new roads  or oil and gas pipelines and other projects. In some cases, FWS has  required project proponents to take specific steps to avoid, minimize, or  compensate for a project’s potential impacts on the ABB or its habitat.  When project proponents make financial contributions to compensate for  the impacts of these projects, FWS generally refers to it as compensatory  mitigation.
FWS has used different compensatory mitigation strategies for the ABB,  including in-lieu fee programs and conservation banks. Generally, under  in-lieu fee programs, project proponents make financial contributions to a  third party that conducts off-site conservation activities (i.e., in a location  away from the project site). These third parties generally bundle  contributions and, once they obtain sufficient funds, they conduct their  conservation activities. As a result, conservation activities usually occur  after the project’s potential impacts on endangered and threatened  species or their habitat have occurred. In contrast, conservation banks,  in accordance with FWS-approved conservation bank instruments, are  protected lands that are conserved and permanently managed for species  that are endangered, threatened, candidates for listing, or at risk.  Conservation banks, also in a location off-site from the project, are to  offset the adverse impacts to these species in advance of the project.  For example, land may be purchased and set aside as an ABB reserve.  Conservation bank sponsors then sell credits to project proponents who  are seeking to mitigate the potential impacts of their projects.
Scientists have found it difficult to study and understand the ABB because  of its unique life cycle. Specifically, the ABB lives for approximately  1 year; is typically inactive underground for 6 to 9 months; and, when  active, emerges from the ground only at night. As of October 2016, ABB  populations were known or believed to exist in nine U.S. states,  predominantly in the Midwest, including as part of reintroduction  programs and experimental populations. FWS expects to complete a  national-level scientific evaluation of the ABB’s current condition in 2017  and then, in response to a petition to delist the ABB, make a  determination about the ABB’s status as an endangered species.
You asked us to examine how FWS uses compensatory mitigation  strategies for endangered or threatened species, including the ABB. This  report examines (1) how FWS has sought to avoid and minimize potential  adverse impacts on the ABB from construction and other projects and  (2) what is known about FWS’s compensatory mitigation strategies and  how FWS has used two of these strategies, in-lieu fee programs and  conservation banks, for the ABB. In addition, you asked us to review the  contributions and disbursements for a specific in-lieu fee program for the  ABB. We briefed your office on the results of that review on August 30,  2016, and have included the briefing slides as an appendix to this report.
To conduct our work, we reviewed and analyzed relevant laws, agency  policies, guidance, and other documentation related to the ESA,  compensatory mitigation strategies, and conservation efforts for the ABB,  as well as our body of work on endangered species issues. We  interviewed officials from FWS headquarters, FWS regional offices, and  FWS Ecological Services field offices in states with an ABB presence.  We also interviewed officials from other relevant federal agencies, such  as the Department of the Interior’s Bureau of Land Management and the  U.S. Army Corps of Engineers; representatives of The Nature  Conservancy, a nonprofit organization involved in ABB conservation  efforts; as well as private companies, including representatives of the oil  and gas industry. To determine how FWS has sought to avoid and  minimize potential adverse impacts on the ABB, we reviewed FWS  biological opinions and other official correspondence with federal and  nonfederal project proponents. We analyzed data from FWS’s Tracking  and Integrated Logging System (TAILS) on the number of consultations  with FWS that have occurred about the ABB across FWS regions for  fiscal years 2008 through 2015. To assess the reliability of TAILS data,  we interviewed agency officials and reviewed agency documentation  about TAILS. We determined that the data were sufficiently reliable for  our purposes.
To determine what is known about FWS’s compensatory mitigation  strategies and how FWS has used in-lieu fee programs and conservation  banks for the ABB, we reviewed agency documentation related to  compensatory mitigation, including agency guidance and policies.  We conducted a site visit in April 2016 to FWS’s Oklahoma Ecological  Services Field Office, which is FWS’s lead field office for the ABB, and  the Tallgrass Prairie Preserve in Oklahoma, where The Nature  Conservancy has conserved ABB habitat. We requested data from FWS  regarding all current FWS in-lieu fee programs for endangered and  threatened species. We checked the data we received for missing data  and other errors and determined that the data were not sufficiently  reliable for our purposes. We also reviewed related documentation  from FWS and other federal agencies, such as the Bureau of Land  Management, the Oklahoma Department of Transportation, and  conservation organizations involved in the in-lieu fee programs.
We interviewed representatives from the American Burying Beetle  Conservation Bank and the Muddy Boggy Conservation Bank, which both  operate for the conservation of the ABB. We also analyzed FWS data on  the number of conservation banks for all species listed under the ESA,  which is reported in the U.S. Army Corps of Engineers’ Regulatory In-lieu  fee and Bank Information Tracking System (RIBITS). To assess the  reliability of data in RIBITS, we interviewed agency officials and reviewed  agency documentation and determined that the data were sufficiently  reliable for our purposes. Appendix I contains a more detailed description  of our objectives, scope, and methodology.
We conducted this performance audit from November 2015 to December  2016 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.
subsections: section_title: Background
paragraphs: This section discusses the organization of FWS, the provisions of the  ESA, and the life cycle of the ABB.
subsections: section_title: U.S. Fish and Wildlife Service Organization
paragraphs: Among its duties, FWS is responsible for administering the ESA for  certain species, including terrestrial species, such as the ABB. FWS  headquarters, regions, and field offices are responsible for implementing  the ESA within their area of responsibility. Since 2008, FWS’s Oklahoma  Ecological Services Field Office within FWS’s Southwest Region has  served as the lead field office for the ABB. Figure 1 shows a map of FWS  regions and the Ecological Services field offices in areas where ABBs are  known or believed to be present.
section_title: Endangered Species Act Provisions
paragraphs: The purposes of the ESA include providing a means whereby the  ecosystems upon which endangered species and threatened species  depend may be conserved and providing a program for the conservation  of such endangered species and threatened species. Section 4 of the  ESA contains the requirements and processes for listing or delisting a  species as endangered or threatened, designating critical habitat, and  developing a recovery plan for a listed species.
Sections 9 and 10 of the ESA generally prohibit the “take” of endangered  species unless the take is incidental to, and not the purpose of, carrying  out an otherwise lawful activity. Section 7 of the ESA and its  implementing regulations direct a federal agency to consult with FWS  when the agency determines that an action it authorizes, funds, or carries  out may affect a listed species or critical habitat. Federal actions requiring  consultation under section 7 include issuing nonfederal entities a permit  or license for their activities. For example, oil and gas companies are  required to get a permit from the Bureau of Land Management before  drilling into a federally owned mineral estate. If the agency, with FWS’s  concurrence through informal consultation, determines that the proposed  action is not likely to adversely affect the listed species or its critical  habitat, then formal consultation is not required. Formal consultation  usually ends with FWS issuing a biological opinion for the proposed  action, which may include an incidental take statement containing  provisions that the project proponent must comply with to minimize the  project’s impact on the species. Under section 10 of the ESA, for  actions by project proponents that might take a listed species and that do  not have a federal nexus—such as federal funding, approval, or permit— the Secretary of the Interior may issue permits to allow “incidental take” of  listed species. Table 1 summarizes key provisions of the ESA.
section_title: American Burying Beetle Life Cycle
paragraphs: At about 1-1/2 inches long, the ABB is the largest of the North American  carrion beetles, known for its orange-red markings and named for its  unique behavior of burying animal carcasses—such as birds and small  mammals—to provide a source of nourishment for its developing young.  ABBs depend on dead animals for food and reproduction. The ABB is an  annual species that lives underground and emerges nocturnally when  surface temperatures consistently exceed 60 degrees Fahrenheit. Once  emerged, the ABB seeks a suitable carcass and competes for a mate.  The mated pair then buries the carcass, which the ABB uses to sustain its  young. The ABB is a winged insect, and, according to FWS’s evaluation  of available research, it can travel up to 18 miles in one night. The ABB  pair raises its young underground using chemical secretions to preserve  the carcass for its offspring. Figure 2 shows two ABB specimens.
Through its actions to find and bury carcasses in the soil, ABBs are  beneficial in controlling pests, converting carcasses into soil nutrients,  and aerating the soil. To preserve the carcasses of their prey, ABBs  secrete chemicals that researchers are studying for applicability in  treating bacterial infections, preventing fungal growth, and preserving  meat at room temperature for human consumption. According to  scientists, ABBs also benefit human health and agriculture by reducing  disease vectors. Specifically, ABBs limit outbreaks of flies and other  animals that could affect livestock production. ABBs are one of the few  insects that provide parental care for their offspring. In addition, ABBs are  considered an indicator species that is useful in evaluating the overall  health of the environment. Figure 3 shows the life cycle of the typical  ABB.
According to FWS documentation, the ABB, which was once found in  more than 30 states, had disappeared from over 90 percent of its  historical range by March 2008. The exact reasons for the decline of the  ABB are unknown. However, according to FWS documentation, biologists  have identified some potential reasons for the decline, such as the  elimination or decline of appropriate-sized carcasses, habitat loss and  fragmentation due to widespread agriculture and development, and  increased competition from other animals and invasive species.  According to officials at FWS, the agency improves its knowledge about  the ABB through research and scientific surveys to detect and record the  presence of the ABB in specific locations, which must be conducted  during the ABB’s limited active season. Appendix II provides more detail  about the species’ current and historical range.
section_title: FWS Has Sought to Avoid and Minimize Potential Adverse Impacts on the ABB through Discussions with Project Proponents and by Requiring Mitigation Activities
paragraphs: FWS has sought to avoid and minimize potential adverse impacts on the  ABB from construction and other projects by discussing mitigation options  with project proponents and by requiring mitigation activities. These  discussions can result in project proponents choosing to incorporate  mitigation options into project proposals. FWS may also require project  proponents to take mitigation actions specified in incidental take  statements included in biological opinions it issues or habitat conservation  plans it approves. To help monitor project proponents’ mitigation actions,  FWS records information about certain types of these discussions in its  TAILS database.
In their discussions with project proponents about protecting endangered  and threatened species, FWS officials said they use the principles  contained in the agency’s 1981 mitigation policy, which outlines a  hierarchy of actions to address potential harm to fish and wildlife  resources that can occur as a result of construction and other projects.  The first step in this hierarchy of actions is to avoid any impact on the  listed species, such as by relocating the construction site outside the  species’ habitat. The second step is to minimize the impact on the  species, such as by placing restrictions on when construction or other  activities can occur. According to FWS documentation, FWS can recommend a combination of avoidance and minimization measures to  protect listed species.
FWS has worked with project proponents to develop avoidance measures  for the ABB in an effort to help ensure that projects do not have a direct or  indirect adverse impact on the ABB. For example, some Ecological  Services field offices recommend that project proponents conduct  presence surveys for the ABB if the project is located where ABBs may  be present, and, according to FWS officials, project proponents often  choose to conduct such surveys. According to FWS documentation, if  surveys indicate that no ABB are present within the project area, the  project proponent may conduct its project at the proposed location with  concurrence from FWS that the project is not likely to adversely affect the  ABB. Other examples of avoidance efforts for the ABB include the  following:
Officials in the South Dakota Ecological Services Field Office said that  sometimes project proponents have relocated their projects to avoid  potential harm to the ABB. For example, in 2009 a project proponent  selected a site for a wind development project outside the ABB’s  range in South Dakota, and officials said that ABB presence was likely  one factor that influenced the selection of that site. According to these  officials, project proponents in South Dakota are able to select  alternative project sites to avoid potential impacts on the ABB, in  general, because ABB are known to be present in only a few counties  in the state, where little development occurs.
In 2011, the New England Ecological Services Field Office and a  project proponent agreed that the project proponent could avoid  harming the ABB for an airport lighting project on Block Island in  Rhode Island by eliminating certain activities that could cause ground  disturbance. For example, the project proponent agreed, among other  things, to leave buried cable in place and decided not to excavate  existing lighting poles in areas where ABB could be living.
Officials in the Oklahoma Ecological Services Field Office stated that  they provide project proponents in Oklahoma with the option to avoid  take of the ABB by locating projects in habitat unfavorable to the ABB  or where surveys indicate no ABB presence in the area. For example,  FWS considers land to be unfavorable to the ABB if it is tilled on a  regular basis or located in urban areas with paved surfaces or  roadways.
FWS has also worked with project proponents in other cases to minimize  potential impacts on the species when avoidance was not feasible. For  example, some incidental take statements included in FWS biological  opinions discuss reducing disturbances to soil in areas considered  suitable habitat for the ABB and require restoration of any soil that is  disturbed in these areas to its natural state after construction as ways for  project proponents to minimize their projects’ potential impacts on the  ABB. Other examples of minimization efforts for the ABB include the  following:  In 2009, the Kansas Ecological Services Field Office required a  project proponent to mow vegetation in areas that would be directly  disturbed during the installation of a water pipeline. According to  FWS’s biological opinion for this project, mowing vegetation on at  least a monthly basis during the ABB’s active period would make the  area less attractive to the ABB and therefore help minimize potential  adverse impacts on the species by reducing the likelihood that ABB  would be present in the areas where the project proponent would be  disturbing the ground.
In 2010, the South Dakota Ecological Services Field Office issued a  biological opinion to the Federal Highway Administration for stream  crossing projects. The incidental take statement included in the  biological opinion required that the agency use construction practices  that would minimally impact suitable habitat for the ABB adjacent to  the project area.
In 2014, the Oklahoma Ecological Services Field Office developed the  Oil and Gas Industry Conservation Plan. According to that plan, its  purpose is to provide a voluntary process for oil and gas project  proponents to obtain permits for incidental take of the ABB from their  projects that are not funded, authorized, or carried out by federal  agencies. In order to be eligible for a permit under the plan, project  proponents must agree to implement certain measures to minimize  potential impacts on the ABB from their projects. For example, project  proponents must agree to reduce the use of motor vehicles,  machinery, or heavy equipment, which can result in take of the ABB.
In 2015, the Nebraska Ecological Services Field Office conducted a  section 7 consultation with the Western Area Power Administration for  a wind energy development project in Nebraska. In the course of this  consultation, the Nebraska Ecological Services Field Office and the  project proponent agreed to several measures, including minimizing,  to the extent possible, the use of artificial lighting that can attract  insects like the ABB and result in take of the species. The project  proponent also agreed to minimize the use of pesticides and avoid  using them during the ABB’s active season, and incorporated both of  these measures into its project proposal.
If a federal agency is involved in authorizing, funding, or carrying out a  proposed project, FWS’s discussions with project proponents about  options to avoid and minimize potential adverse impacts on the ABB can  occur within the context of consultations under section 7 of the ESA. To  help monitor actions, FWS tracks information on its formal section 7  consultation activities using its TAILS database. Table 2 shows the  number of ABB-related formal section 7 consultation activities by FWS  regions and field offices from fiscal years 2008 through 2015. The  Oklahoma Ecological Services Field Office conducted 46 out of 118 of the  formal consultations on the ABB during this period—more than one-third  of those conducted nationwide.
FWS also uses TAILS to track informal activities conducted under section  7 of the ESA, such as informal consultations and technical assistance, but  FWS officials said that Ecological Services field offices differ in how they  interpret and record these informal activities. According to FWS officials,  FWS field offices also work with project proponents to avoid and minimize  potential adverse impacts on the ABB and other listed species for projects  that are not funded, authorized, or carried out by a federal agency, but the  details of the technical assistance through such discussions are not  always included in TAILS. According to FWS officials, FWS is planning  to develop standard operating procedures for using TAILS to improve the  reliability of the data. According to these officials, FWS anticipates  completing these standard operating procedures for TAILS in 3 years.
While avoiding and minimizing are FWS’s preferred alternatives, they  may not always be practical for project proponents. For example, it may  not be practical to relocate a road project or an oil and gas well to avoid  ABB habitat or to wait for the ABB’s active period to conduct a presence  survey. In these cases, FWS has other options—compensatory mitigation  strategies—that project proponents may choose to use to compensate for  the impact of their projects. We discuss compensatory mitigation in detail  in the following section.
section_title: FWS Has Used In- Lieu Fee Programs and Conservation Banks to Conserve the ABB but Does Not Track the Use of In- Lieu Fee Programs Across Regions
paragraphs: FWS uses several compensatory mitigation strategies, such as in-lieu fee  programs and conservation banks operated by third parties, to provide  project proponents the option to compensate for remaining unavoidable  impacts to endangered or threatened species after project proponents  have implemented all appropriate and practicable avoidance and  minimization measures, and FWS has used these strategies to conserve  the ABB. In September 2016, FWS issued a draft policy that would set  standards for all of its ESA compensatory mitigation strategies to achieve  greater consistency, predictability, and transparency in the  implementation of the law. FWS tracks information about its  conservation banks but has not fully implemented its plan to track its use  of in-lieu fee programs across regions and field offices. Since listing the  ABB as endangered in 1989, FWS has used three in-lieu fee programs in  several states and two conservation banks in Oklahoma to conserve the  ABB.
subsections: section_title: FWS Uses Several Types of Compensatory Mitigation Strategies and in September 2016 Issued a Draft ESA Compensatory Mitigation Policy
paragraphs: In addition to discussing and, in some cases, requiring measures to avoid  and minimize potential adverse impacts to listed species, FWS may also  discuss compensatory mitigation strategies with the project proponents so  that they can compensate for any remaining unavoidable impacts on  listed species from their projects after implementing all appropriate and  practicable avoidance and minimization measures. As a result of these  discussions, a project proponent may incorporate compensatory  mitigation strategies into its project, and FWS may also require them in  the nondiscretionary terms and conditions of incidental take statements  included in biological opinions or in habitat conservation plans and  incidental take permits, according to FWS officials.  FWS uses several  compensatory mitigation strategies, including conservation banks and in- lieu fee programs. These strategies may involve project proponents  providing financial support for mitigation in other locations (i.e., outside  the boundaries of the proposed project) to offset some or all of the  project’s impacts. For conservation banks and in-lieu fee programs,  project proponents provide money to a third party to conduct the  conservation activities. Responsibility for conducting the conservation  activities is transferred to the third party.
In addition, FWS uses other strategies, including habitat credit  exchanges, permittee-responsible mitigation, and other third-party  mitigation (see table 3). FWS gives project proponents options to  conduct mitigation on their own or through other arrangements, such as  purchasing conservation bank credits or contributing to an in-lieu fee  program, if those options exist and the project proponent is eligible under  the terms and conditions of those arrangements. FWS officials said that  when conservation banks or in-lieu fee programs have been available as  mitigation options, nearly all project proponents choose to use these  options over other compensatory mitigation strategies, such as permittee- responsible mitigation, because of issues of mitigation costs and liability.
FWS has issued guidance to its regional offices for the establishment and  use of conservation banks but has not finalized guidance that addresses  operational considerations for in-lieu fee programs and other types of  compensatory mitigation strategies. According to the guidance FWS  issued in 2003 for establishing and using conservation banks as a  compensatory mitigation strategy, conservation banks must conduct  conservation for species in advance of any project development.  Conservation banks should also obtain a permanent conservation  easement on the mitigation lands, establish a management endowment  that will support the perpetual management of the mitigation land, and  establish a time limit for fully funding the endowment. Furthermore,  according to this guidance, conservation bank proposals that are  submitted for FWS approval must contain a conservation bank agreement  that establishes a monitoring program, such as an annual reporting  requirement, a long-term management plan, and a dispute resolution  process to be used if the banks’ owners fail to meet their obligations.
According to an FWS official, the lack of guidance addressing the  establishment or use of in-lieu fee programs and other types of  compensatory mitigation strategies has led to differences in the structure,  monitoring, and oversight of these strategies across FWS. In September  2016, however, FWS issued a draft policy for public comment in the  Federal Register on ESA compensatory mitigation strategies that covers  all these compensatory mitigation strategies. This draft policy is  intended to align with departmental directives and a 2015 presidential  memorandum on mitigating impacts on natural resources from  development. It establishes standards for compensatory mitigation and  minimum criteria for achieving these standards. The draft policy stresses  the need to hold all compensatory mitigation strategies to equivalent and  effective standards, but it would not apply to mitigation arrangements that  have already been approved unless the in-lieu fee program, conservation  bank, or other arrangement is modified or amended. In addition,  according to FWS’s website, the draft policy seeks to improve  collaboration and coordination among all interested parties when FWS is  engaged in the planning and implementation of compensatory mitigation  strategies. Once finalized, the draft ESA compensatory mitigation policy  would revise and replace FWS’s 2003 conservation banking guidance.  According to FWS officials, the agency intends to finalize the policy after  the public comment period ends in October 2016.
section_title: FWS Tracks Key Information about Conservation Banks, but Its Plan to Track In-Lieu Fee Programs Has Not Been Fully Implemented
paragraphs: FWS tracks key information about the conservation banks it approves,  such as the location and credits available, but it does not track in-lieu fee  programs. FWS has identified system modifications that are needed to  the U.S. Army Corps of Engineers RIBITS database to track in-lieu fee  programs, but it has not fully implemented its plan to make these  modifications and improve monitoring and oversight of its in-lieu fee  programs.
FWS has posted information about the conservation banks it approves to  the U.S. Army Corps of Engineers’ RIBITS website since 2011, according  to an agency official. FWS monitors the number and location of  conservation banks through the RIBITS database. According to FWS  officials, the agency uses this information for a variety of management  activities, such as providing project proponents with information on  available mitigation options and facilitating incidental take authorizations  and permit compliance when conservation banks are used. Table 4  shows the distribution of FWS-related conservation banks across regions.  Information about the number of credits available and sold is accessible  to the public through the RIBITS website.
As of September 2016, there were also 21 conservation banks that had  sold all of their credits and, therefore, were no longer a mitigation option  for project proponents. In addition, FWS can suspend a conservation  bank if the sponsors of that bank fail to comply with agreed upon  parameters, such as how land will be managed for a species. As of  September 2016, there were two suspended conservation banks that  cannot sell credits at this time.
According to FWS’s National Conservation Banking Coordinator, the  agency’s regional and field offices do not consistently enter certain  information about conservation banks into RIBITS. Specifically, that  official stated that some offices do not consistently upload parts of the  conservation bank instruments, such as financial assurances or annual  monitoring reports. In addition some offices do not enter information on  “pending” conservation banks—those close to receiving FWS approval— while others do. Furthermore, this official stated that the agency has not  issued standard operating procedures on the information FWS field  offices are to enter into RIBITS. This official acknowledged the need to  improve how the agency’s regional and field offices enter data in RIBITS  to make it more consistent in order to assist with monitoring and oversight  of conservation banks. According to FWS officials, the agency intends to  develop standard operating procedures after it finalizes its ESA  compensatory mitigation policy.
In contrast to conservation banks, according to FWS headquarters  officials, the agency has not tracked the use of in-lieu fee programs  across regions and field offices because its focus has been on the  conservation banks. Without data on these programs, FWS may be  unable to respond to inquiries from the public and private sectors, or to  track administrative and ecological compliance by in-lieu fee program  sponsors, among other things. In addition, FWS is limited in its ability to  evaluate whether in-lieu fee programs are an effective strategy for  conservation. However, FWS headquarters officials we interviewed said  that FWS recognizes the need to track and monitor its in-lieu fee  programs to provide better oversight. In February 2016, FWS signed an  interagency agreement, which will be in effect for 5 years, with the U.S.  Army Corps of Engineers to, among other things, modify its RIBITS  database so FWS can track all in-lieu fee programs across regions and  field offices. According to an FWS official, although making modifications  in RIBITS to track in-lieu fee programs is an identified need, the agency  has not obligated funds for these modifications and does not have a  timeline for doing so. As a result, it is not clear when FWS will be able to  use the RIBITS database to track its in-lieu fee programs.
Federal government standards for internal control provide that  management should design control activities to achieve objectives and  respond to risks. To accomplish this, according to federal internal  control standards, management should define the time frames for  achieving the objectives. However, because it is unclear when  modifications will be made to RIBITS, it is also unclear when regions and  field offices will be able to enter information on in-lieu fee programs so  that FWS can use the RIBITS database to track these programs. Until  FWS establishes a timetable with milestones for modifying the RIBITS  database to incorporate in-lieu fee program information, the agency will  not have reasonable assurance that it will obtain relevant and reliable  data on its in-lieu fee programs, which will impact its ability to effectively  evaluate its in-lieu fee programs and determine the most effective  strategy for conservation.
section_title: FWS Has Used Three In- Lieu Fee Programs to Allow Project Proponents to Compensate for Potential Impacts on the ABB in Several States
paragraphs: Since listing the ABB as endangered in 1989, FWS has used three in-lieu  programs to provide compensatory mitigation to help conserve the ABB in  Nebraska, Oklahoma, and elsewhere in its Midwest Region. The  Nebraska Ecological Services Field Office and FWS’s Midwest Regional  Office began using in-lieu programs for the ABB in 2012 and 2013,  respectively. Both of these programs were operating at the time of our  review. The Oklahoma Ecological Services Field Office established an in- lieu fee program in 2009 but terminated the program in 2012.
subsections: section_title: Nebraska
paragraphs: In January 2012, FWS’s Nebraska Ecological Services Field Office and  the Nebraska Game and Parks Commission, a state agency, worked with  two organizations—the Rainwater Basin Joint Venture and the Nebraska  Community Foundation—to establish the Nebraska Habitat Projects  Fund. The fund is an in-lieu fee program that uses funding it receives for  conserving ABB and other species, such as migratory birds, and their  habitats. In their discussions on mitigation options, FWS and project  proponents may discuss making voluntary contributions to this fund as  one option to mitigate potential adverse impacts on the ABB from projects  in Nebraska. If FWS and the project proponent agree that making a  contribution to the fund is an appropriate mitigation strategy, FWS and the  project proponent prepare a written agreement that outlines what  contributions will be made and for what purpose. These written  agreements are then used to develop contracts between the project  proponent and the Nebraska Community Foundation, which manages the  funds.
The Rainwater Basin Joint Venture works in partnership with the  Nebraska Community Foundation to complete the planning, design, and  implementation of conservation activities and to conduct research and  monitoring activities. FWS does not have oversight responsibility for the  Nebraska Habitat Projects Fund, and FWS does not determine how  mitigation funds will be used for the ABB under this in-lieu fee program.  However, FWS is a member of a work group composed of  representatives from state agencies, such as the Nebraska Game and  Parks Commission, and nongovernmental organizations, such as The  Nature Conservancy and Audubon Nebraska, who work with an ABB  species work group to establish criteria that are used to evaluate  proposals for funding. According to FWS officials and Rainwater Basin  Joint Venture documentation, in an effort to develop landscape-scale  mitigation, a minimum threshold of $150,000 must be met before the  Nebraska Community Foundation can expend funds for ABB  conservation activities. As of October 2016, the $150,000 threshold had  not been met, and therefore no expenditures have been made from the  fund, according to FWS officials.
section_title: Midwest Region
paragraphs: In July 2013, FWS’s Midwest Regional Office entered into a  memorandum of understanding with Enbridge Pipelines to implement  conservation measures, including compensatory mitigation, to minimize  or offset the impacts to the ABB and other species resulting from  construction of the Flanagan South Pipeline, which runs through parts of  Illinois, Missouri, Kansas, and Oklahoma. In July 2013, FWS also entered  into a memorandum of agreement with The Conservation Fund, a  nonprofit conservation organization, to manage the Enbridge Pipelines’  funds for species conservation and habitat restoration. The Conservation  Fund is to use the funds to undertake mitigation projects approved by  FWS or award the funds to others to undertake FWS-approved mitigation  projects. Once FWS approves a project, The Conservation Fund is to  enter into a funding agreement with those entities or undertake the project  to conserve the ABB and other endangered species, such as the Indiana  bat, as well as to protect migratory birds. Under this program, The  Conservation Fund has provided funds to The Nature Conservancy, a  nonprofit organization involved in ABB conservation efforts, to purchase  land at its Tallgrass Prairie Preserve in Oklahoma to conserve ABB  habitat.
section_title: Oklahoma
paragraphs: In February 2009, the Oklahoma Ecological Services Field Office entered  into a memorandum of agreement with The Nature Conservancy creating  an in-lieu fee program called the American Burying Beetle Conservation  Fund. Under this program, funds from multiple sources, such as federal  agencies and private companies, were to be used to acquire lands or  easements within priority conservation areas, restore or manage potential  ABB habitat, and support research to monitor conservation areas for the  ABB.
With FWS approval, The Nature Conservancy used contributions to the  American Burying Beetle Conservation Fund to conduct conservation  activities at its Tallgrass Prairie Preserve in Oklahoma, purchase land to  expand the Preserve, and support ABB monitoring at the Preserve.  According to representatives of The Nature Conservancy, it preserves the  Tallgrass Prairie Preserve as a native tallgrass prairie habitat through the  management of a bison herd that serves as a keystone species to restore  the ecosystem. The Nature Conservancy manages the preserve to  conserve all native species, but the representatives stated that the ABB  benefits from this protected, heterogeneous grassland habitat. According  to representatives from The Nature Conservancy, it used the American  Burying Beetle Conservation Fund for various habitat management  activities, including conducting prescribed burns to manage the  grasslands and controlling invasive species, such as feral pigs.  Representatives from The Nature Conservancy said that ABB populations  have increased in both size and distribution across the preserve since  ABBs were first found at the Tallgrass Prairie Preserve in 1999. Figure 4  shows a map of The Nature Conservancy’s Tallgrass Prairie Preserve,  including land purchased with funding from FWS-approved in-lieu fee  programs for the ABB.
According to FWS officials, conservation banks offer a more consistent  conservation effort for the ABB than the American Burying Beetle  Conservation Fund because conservation bank sponsors must agree to  both conduct conservation in advance of a project’s potential adverse  effect on a species and conserve the land in perpetuity. However,  conservation banks can take several years for bank sponsors to develop  and for FWS to approve. FWS officials told us they used the American  Burying Beetle Conservation Fund as an interim compensatory mitigation  measure and that it contributed more to ABB conservation than previous  minimization measures.
The American Burying Beetle Conservation Fund operated from 2009  until July 2012, when FWS terminated it for various reasons, including  concerns that the 2009 memorandum of agreement was not the  appropriate mechanism to ensure effective oversight and adequate  documentation of the conservation activities and fund expenditures. The  total contributions and expenditures from the fund were about $1 million  each. For additional information about the cash receipts and expenses of  the American Burying Beetle Conservation Fund, see appendix III.
section_title: Since 2014, FWS Has Used Two Conservation Banks to Allow Project Proponents to Compensate for Potential Impacts on the ABB in Oklahoma
paragraphs: The Oklahoma Ecological Services Field Office approved two  conservation banks for the ABB in an effort to allow project proponents to  compensate for the potential adverse impacts of their projects on the ABB  and to provide long-term conservation for the species, according to  agency officials. FWS approved the Muddy Boggy Conservation Bank in  2014. Bank representatives told us they began working with FWS to  establish the bank in 2012, purchased the land in 2013, and received  approval to sell credits in 2014. The Muddy Boggy Conservation Bank is  approximately 3,300 acres. FWS also approved the American Burying  Beetle Conservation Bank in 2014. This bank manages approximately  3,300 acres, including approximately 900 acres that it manages as part of  a permittee-responsible mitigation arrangement. Customers for the banks  include oil and gas companies and the Oklahoma Department of  Transportation.
Since they began operating in 2014, these conservation banks have  submitted annual performance reports to FWS, and the agency has  conducted annual on-site inspections, according to agency  documentation. Representatives for both of the banks told us that they  undertake activities to manage ABB habitat, rather than specifically  managing for the species. For example, they said they use prescribed  burns and control invasive species, such as eastern red cedar and red  imported fire ants, which, if not managed, can reduce quality habitat for  the ABB.
According to FWS officials, the process of approving and establishing a  conservation bank can take several years and requires up-front  investments from bank sponsors. These officials told us FWS only  reviews and approves applications and does not propose or initiate  conservation banks. Conservation banks are private enterprises that are  proposed by potential conservation bankers. Officials also told us that  conservation banks are used in places where there is a strong demand  for compensatory mitigation. FWS requires that offsets occur within a  designated service area. Therefore, project proponents use  conservation banks within the approved service area for the project or  impact site. However, according to FWS officials, in Oklahoma, if there  are no conservation banks in a project’s service area, project proponents  can purchase credits at other conservation banks. As of November 2016,  Oklahoma was the only state where conservation banks existed for the  ABB. According to FWS officials, this is due to the market created by the  relatively high density of the ABB population; large areas of suitable  habitat; and numerous development projects, such as oil and gas well  drilling and pipelines.
According to representatives of the oil and gas industry in Oklahoma,  companies prefer to purchase conservation bank credits rather than  conduct their own permittee-responsible mitigation to avoid project delays  and minimize long-term liabilities. However, representatives of the oil and  gas industry we interviewed said they are concerned about the high costs  of the conservation bank credits, which the conservation banks set on the  basis of changing market conditions. Oil and gas industry representatives  noted that from 2009 to 2012, FWS recommended contributions to the  American Burying Beetle Conservation Fund that were significantly less  than the current cost of credits from either of the two approved  conservation banks. According to FWS officials, FWS has no control over  the cost of conservation bank credits. Those costs are negotiated  between the conservation bank and the purchasers. In contrast, the  contributions to the American Burying Beetle Conservation Fund were  based on expected survey costs, which were not always commensurate  with the cost of mitigating impacts of a proposed project. According to oil  and gas industry officials, the high cost of bank credits is one major  reason they supported a petition to delist the ABB. According to  conservation bank officials, the petition to delist the ABB has created  uncertainty regarding the market for bank credits, since project  proponents would no longer have a need to mitigate potential harm to the  ABB to move forward with their projects if FWS delisted the ABB.
section_title: Conclusions
paragraphs: FWS does not track information about its in-lieu fee programs across  regions and field offices. As a result, FWS has limited ability to evaluate  the effectiveness of these programs. FWS acknowledges this issue, and  making modifications in RIBITS to track in-lieu fee programs is an  identified need for the agency. However, it has not yet obligated funds to  make the necessary modifications or established a timetable with  milestones for modifying the RIBITS database to incorporate in-lieu fee  program information. Until FWS collects relevant and reliable data on its  in-lieu fee programs, the agency will not be able to evaluate the  effectiveness of its programs and determine the most effective strategy  for conservation.
section_title: Recommendation for Executive Action
paragraphs: To help improve FWS’s ability to evaluate the effectiveness of its  compensatory mitigation strategies and ensure that the agency  appropriately plans the obligations necessary for this purpose, we  recommend that the Director of the U.S. Fish and Wildlife Service  establish a timetable with milestones for modifying the RIBITS database  to incorporate FWS’s in-lieu fee program information.
section_title: Agency Comments
paragraphs: We provided a draft of this report for review and comment to the  Department of the Interior. The GAO audit liaison for the Department of  the Interior responded via e-mail that the U.S. Fish and Wildlife Service  concurred with our recommendation. In addition, the agency provided  technical comments on our draft report, which we incorporated as  appropriate.
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the appropriate  congressional committees, the Secretary of the Interior, the Director of  the U.S. Fish and Wildlife Service, and other interested parties. In  addition, the report will be available at no charge on the GAO website 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 fennella@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found  on the last page of this report. Key contributors to this report are listed in  appendix IV.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our objectives were to examine (1) how the Department of the Interior’s  U.S. Fish and Wildlife Service (FWS) has sought to avoid and minimize  potential adverse impacts on the American burying beetle (ABB) from  construction and other projects and (2) what is known about FWS’s  compensatory mitigation strategies and how FWS has used two of these  strategies, in-lieu fee programs and conservation banks, for the ABB. In  addition, you asked us to review the contributions and disbursements for  a specific in-lieu fee program for the ABB. We briefed your office on the  results of that review on August 30, 2016 (see the briefing slides in app.  III).
To conduct our work, we reviewed and analyzed relevant laws, agency  policies, guidance, and other documentation related to the Endangered  Species Act (ESA), compensatory mitigation strategies, and conservation  efforts for the ABB. We also reviewed our prior reports on endangered  species issues and the use of compensatory mitigation strategies.  We interviewed FWS officials from headquarters, the Office of Law  Enforcement, and the regional offices and Ecological Services field  offices in states with an ABB presence, including Region 2 and the  Oklahoma Ecological Services Field Office; Region 3 and the Columbia  and Ohio Ecological Services Field Offices; Region 4 and the Arkansas  Ecological Services Field Office; Region 5 and the New England  Ecological Services Field Office; and Region 6 and the Kansas,  Nebraska, and South Dakota Ecological Services Field Offices. We also  interviewed officials from other relevant federal agencies, including the  Department of the Interior’s Bureau of Land Management, the U.S. Army  Corps of Engineers, the Federal Energy Regulatory Commission, and the  Environmental Protection Agency; representatives from The Nature  Conservancy, a nonprofit conservation organization involved in ABB  conservation efforts; as well as representatives from the oil and gas  industry, including representatives from private oil and gas companies,  the Oklahoma Oil and Gas Association, and the Oklahoma Independent  Petroleum Association.
To determine how FWS has sought to avoid and minimize potential  adverse impacts on the ABB, we reviewed FWS biological opinions and  other official correspondence with federal and nonfederal project  proponents. In addition, we reviewed the draft ESA compensatory  mitigation policy that FWS issued in September 2016. We also analyzed  data from FWS’s Tracking and Integrated Logging System (TAILS) on the  number of consultations with FWS that have occurred about the ABB  across FWS regions for fiscal years 2008 through 2015. To assess the  reliability of the data in TAILS, we reviewed agency documentation about  TAILS and interviewed agency officials, discussing limitations related to  how specific consultation types are reported. We determined that the  TAILS data on formal consultations were sufficiently reliable for our  purposes.
To determine what is known about FWS’s compensatory mitigation  strategies and how FWS has used two of these strategies, in-lieu fee  programs and conservation banks, for the ABB, we reviewed agency  documentation related to compensatory mitigation, including agency  guidance and policies. We conducted a site visit in April 2016 at FWS’s  Oklahoma Ecological Services Field Office, which is FWS’s lead field  office for the ABB, and the Tallgrass Prairie Preserve in Oklahoma, where  The Nature Conservancy conserved ABB habitat. We requested data  from FWS regarding all current FWS in-lieu fee programs for endangered  and threatened species, but we determined that the data FWS provided  were not sufficiently reliable for our purposes because of missing  information and other errors. For example, we determined that the data  FWS provided included information on some in-lieu fee programs that had  been terminated, included information on some compensatory mitigation  strategies that are not in-lieu fee programs, and excluded at least one in- lieu fee program that is currently in operation. We also reviewed related  documentation from FWS and other federal agencies, including the  Bureau of Land Management, the U.S. Army Corps of Engineers, the  Federal Energy Regulatory Commission, and the Environmental  Protection Agency; the Oklahoma Department of Transportation; and  conservation organizations involved in the in-lieu fee programs, such as  The Nature Conservancy and The Conservation Fund. FWS officials said  that when conservation banks or in-lieu fee programs have been  available, nearly all project proponents choose these arrangements over  other compensatory mitigation strategies. Therefore, we focused on in- lieu fee programs and conservation banks for this report.
We interviewed representatives from the American Burying Beetle  Conservation Bank and the Muddy Boggy Conservation Bank, both of  which operate for the conservation of the ABB. We also analyzed FWS  data on the use of conservation banks for all species listed under the  ESA, which is reported in the U.S. Army Corps of Engineers’ Regulatory  In-lieu fee and Bank Information Tracking System (RIBITS). To assess  the reliability of data in RIBITS, we interviewed agency officials and  reviewed agency documentation about RIBITS, such as user manuals,  and determined that the data in RIBITS were sufficiently reliable for our  purposes.
We conducted this performance audit from November 2015 to December  2016 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.
section_title: Appendix II: Timeline of FWS’s Conservation and Recovery Activities for the ABB and Information on the ABB Population
paragraphs: The Department of the Interior’s U.S. Fish and Wildlife Service (FWS) has  taken several steps to conserve and recover the American burying beetle  (ABB) since it proposed listing the ABB as endangered in 1988. These  steps range from developing a recovery plan for the ABB in 1991 to  planning to determine, in 2017, whether FWS will (1) keep the ABB on the  endangered species list; (2) reclassify the species’ status from  endangered to threatened, also known as downlisting; or (3) delist the  ABB. Figure 5 provides a timeline of key activities related to ABB  conservation.
As of October 2016, the ABB was known or believed to occur naturally in  seven states: Arkansas, Kansas, Nebraska, Oklahoma, Rhode Island,  South Dakota, and Texas. In addition, FWS has attempted to reintroduce  the ABB into three states where it was found historically: Massachusetts,  Missouri, and Ohio. Table 5 provides information about the current status  of the ABB in states with known ABB presence, by FWS region and field  office.
To reintroduce the ABB to locations where it once occurred, FWS either  breeds the species in captivity or transports ABB from locations with  naturally occurring populations and releases them in other states. In  conjunction with state and nonprofit partners, FWS began efforts to  reintroduce the ABB to Nantucket Island in Massachusetts in 1994. FWS  used captive-bred ABB for this effort and FWS officials said that they  currently consider the Nantucket ABB population to be stable. In Ohio,  FWS has attempted to reintroduce the ABB since 1998, when it began  transporting naturally occurring ABB from Arkansas for release in Ohio.  FWS officials said that their reintroduction efforts in Ohio have been  unsuccessful, in part, because the ABBs from Arkansas that were used in  the reintroduction program may not be adapted to conditions that occur  further north in Ohio. FWS is now using ABB from Nebraska instead of  Arkansas to test if these ABB are more accustomed to colder winters,  according to FWS officials. In Missouri, FWS has transported and  released a non-essential, experimental ABB population in the  southwestern part of the state since 2012. FWS has documented an  increasing number of ABB in Missouri each year since the reintroduction  program began.
FWS has not designated critical habitat for the ABB, in part, because the  species is a habitat generalist, and it is still unknown what habitat type is  essential for ABB conservation, according to FWS officials. FWS officials  said that the agency improves its knowledge about the ABB’s current  range when FWS biologists, researchers from universities and nonprofit  organizations, project proponents, or others conduct surveys to detect or  monitor the presence of ABBs in locations where they are known or  believed to occur. Consequently, the ABB’s range in the United States  changes over time. Figure 6 depicts the ABB’s range as of October 2016  in relation to its known range at the time of its listing in 1989 and its  reported historical range.
section_title: Appendix III: American Burying Beetle Conservation Fund Briefing Slides
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Jeffery D. Malcolm (Assistant  Director), Maria C. Belaval, Martin (Greg) Campbell, Joseph M. Capuano,  Caitlin E. Cusati, Armetha (Mae) Liles, Edward (Ned) Malone, Elizabeth  Martinez, Genna Mastellone, Steven R. Putansu, Anne K. Rhodes-Kline,  Dan C. Royer, Jeanette M. Soares, and David A. Watsula made important  contributions to this report.