Wetlands Protection: Corps of Engineers Does Not Have an Effective Oversight Approach to Ensure That Compensatory Mitigation Is Occurring
Published: 2005-09-08T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Because wetlands provide valuable functions, the administration set a national goal of no net loss of wetlands in 1989. Section 404 of the Clean Water Act generally prohibits the discharge of dredged or fill material into waters of the United States, which include certain wetlands, without a permit from the U.S. Army Corps of Engineers (Corps). To help achieve the goal of no net loss, the Corps can require compensatory mitigation, such as restoring a former wetland, as a condition of a permit when the loss of wetlands is unavoidable. Permittees can perform the mitigation or pay a third party--a mitigation bank or an in-lieu-fee arrangement--to perform the mitigation. GAO was asked to review the (1) guidance the Corps has issued for overseeing compensatory mitigation, (2) extent to which the Corps oversees compensatory mitigation, and (3) enforcement actions the Corps can take if required mitigation is not performed and the extent to which it takes these actions.
section_title: What GAO Found
paragraphs: The Corps has developed guidance that establishes two primary oversight activities for compensatory mitigation: requiring the parties performing mitigation to periodically submit monitoring reports to the Corps and conducting compliance inspections of the mitigation. However, parts of the guidance are vague or internally inconsistent. For example, the guidance suggests that the Corps place a high priority on requiring and reviewing monitoring reports when "substantial mitigation" is required, but it does not define substantial mitigation. Furthermore, one section of the guidance directs district officials to conduct compliance inspections of a relatively high percentage of compensatory mitigation sites, while another section designates these inspections as a low priority, leading to confusion by Corps officials. Overall, the seven Corps districts GAO visited performed limited oversight to determine the status of compensatory mitigation. The Corps required monitoring reports for 89 of the 152 permit files reviewed where the permittee was required to perform compensatory mitigation. However, only 21 of these files contained evidence that the Corps received these reports. Moreover, only 15 percent of the 152 permit files contained evidence that the Corps had conducted a compliance inspection. The Corps districts provided somewhat more oversight for mitigation performed by the 85 mitigation banks and 12 in-lieu-fee arrangements that GAO reviewed. For the 60 mitigation banks that were required to submit monitoring reports, 70 percent of the files contained evidence that the Corps had received at least one monitoring report. However, only 36 percent of the mitigation bank files that GAO reviewed contained evidence that the Corps conducted an inspection. For the 6 in-lieu-fee arrangements that were required to submit monitoring reports to the Corps, 5 had submitted at least one report. In addition, the Corps had conducted inspections of 5 of the 12 arrangements. The Corps can take a variety of enforcement actions if required compensatory mitigation is not performed. These actions include issuing compliance orders, assessing administrative penalties of up to $27,500, requiring the permittee to forfeit a bond, suspending or revoking a permit, implementing the enforcement provisions of agreements with third parties, and recommending legal actions. District officials rarely use these actions and rely primarily on negotiation to resolve any violations. In some cases, GAO found district officials may not be able to use enforcement actions after detecting instances of noncompliance because they have limited their enforcement capabilities. For example, because they did not always specify the requirements of compensatory mitigation in the permits, they had no legal recourse for noncompliance.

section_title: Letter
paragraphs: Wetlands such as bogs, swamps, and marshes support a number of valuable  functions—controlling floods, improving water quality, and providing  wildlife habitat, among other things. Given the value of these functions, the  administration set a national goal in 1989 of balancing the losses and gains  of wetlands to achieve no net loss of wetlands. Each subsequent President  has reaffirmed and expanded this goal to achieve net gains of wetlands in  the long term. The U.S. Army Corps of Engineers (Corps) is responsible for  processing permit applications from individuals and businesses seeking to  build driveways, houses, golf courses, or commercial buildings or perform  other activities that could degrade or destroy wetlands on their property,  and each year the Corps approves thousands of these permit applications.  The Corps’ decisions are to reflect the national concern for both the  protection and utilization of important resources.
Under section 404 of the Clean Water Act, the Corps and the Environmental  Protection Agency (EPA) regulate activities affecting wetlands. Under  related regulations and guidance issued by these agencies, a permittee is  expected to avoid deliberate discharge of fill materials into wetlands or  other federally regulated waters and then to minimize discharges that  cannot be avoided. If such discharges are unavoidable, the Corps can  require mitigation to compensate for the loss and/or degradation of  wetlands from permitted activities as a condition of issuing the permit.  Such compensatory mitigation could involve (1) creating a new wetland,  (2) restoring a former wetland, (3) enhancing a degraded wetland, or (4)  preserving an existing wetland. Since 1993, the Corps has required such  mitigation on more than 40,000 acres of land per year. Permittees may  perform their own compensatory mitigation, often on or near the project  site, or they may pay another entity to perform mitigation, usually at a  location away from the project site, but generally within the same  watershed. This kind of mitigation, known as third-party mitigation, is  typically performed by mitigation banks or sponsors of in-lieu-fee  arrangements. Mitigation banks are often private for-profit entities with  land in areas where they believe that they can successfully establish  wetlands. These areas include those that have the potential to become  wetlands, previously filled wetlands, wetlands that have been degraded by  invasive plant species, or wetlands that are threatened by development.  After the mitigation banks improve these areas as wetlands, permittees  required to perform compensatory mitigation pay fees to the mitigation  bank to fulfill their mitigation requirements. In contrast to mitigation  banks, in-lieu-fee arrangements are often sponsored by public or nonprofit  entities. Under agreements with the Corps, in-lieu-fee sponsors receive  payments from multiple permittees required to perform compensatory  mitigation. Then, at a later date, the sponsors use these funds to establish  wetlands.
The Corps is responsible for ensuring that permittees, mitigation banks,  and in-lieu-fee sponsors perform required compensatory mitigation.  However, the Corps historically has not emphasized oversight of such  mitigation activities. In 1988, we reported that the Corps placed a high  priority on issuing permits and did not routinely inspect project sites to  ensure that permittees were in compliance with their permit conditions,  which include any compensatory mitigation that the permittee was  required to perform. More recently, the National Research Council,  environmental groups, and others have raised concerns that the Corps may  not spend sufficient time on oversight to ensure that permittees or third  parties are performing the required compensatory mitigation.
In this context, you asked us to review the (1) guidance the Corps has  established for overseeing compensatory mitigation, (2) extent to which  the Corps oversees compensatory mitigation, and (3) enforcement actions  the Corps can take if it determines that compensatory mitigation  requirements are not being met and the extent to which it takes such  actions.
In conducting our work, we selected 7 of the 38 Corps districts that  implement the section 404 program—Charleston, South Carolina;  Galveston, Texas; Jacksonville, Florida; New Orleans, Louisiana; St. Paul,  Minnesota; Seattle, Washington; and Wilmington, North Carolina. We  selected these districts because they represent different geographic areas  of the United States and collectively accounted for over two-thirds of the  compensatory mitigation required by individual permits issued in fiscal  year 2003. To identify the guidance the Corps has established for  overseeing compensatory mitigation, we examined Corps documents and  interviewed officials from Corps headquarters, as well as from Corps’  district offices.
To determine the extent to which the Corps oversees compensatory  mitigation, we reviewed a total of 249 files. We reviewed 152 permit files  issued in fiscal year 2000 where the permittee was responsible for the  mitigation. We selected this time frame because most of the permits we  reviewed were valid for 5 years or less, and sufficient time would have  passed for the permittee to begin work on the permitted project and for the  Corps to have received a monitoring report or conducted a compliance  inspection. We also reviewed files for 85 mitigation banks and 12 in-lieu-fee  arrangements. The mitigation bank and in-lieu-fee arrangement files we  reviewed usually provided data on the mitigation activities for multiple  permittees, and the mitigation conducted can encompass thousands of  acres. While our results cannot be generalized to all 38 Corps districts,  according to a Corps official responsible for managing the program  nationally, our findings would most likely represent program  implementation by other Corps districts. We also interviewed district  officials to obtain additional information on how they oversee  compensatory mitigation.
To identify enforcement actions the Corps can take if it determines that  compensatory mitigation requirements are not being met and the extent to  which it takes these actions, we examined agency regulations and  documents that outline available enforcement actions, reviewed agency  data on noncompliance cases, and discussed levels of noncompliance and  actions taken with district officials. In addition, we interviewed several  sponsors of mitigation banks and a sponsor of an in-lieu-fee arrangement to  obtain their perspectives on the Corps’ mitigation program. A more  detailed description of the scope and methodology of our review is  presented in appendix I. We performed our work between June 2004 and  September 2005 in accordance with generally accepted government  auditing standards.
subsections: section_title: Background
paragraphs: Wetlands include swamps, marshes, bogs, and similar areas. They are  characterized by three factors: (1) frequent or prolonged presence of water  at or near the soil surface, (2) hydric soils that form under flooded or  saturated conditions, and (3) plants that are adapted to live in these types  of soils. Wetlands are found throughout the United States. They may differ  greatly in their physical characteristics; for example, water may not be  present on the wetland for part of the year or it may be present year-round.  Figures 1 and 2 show two different types of wetlands—a marsh and a  bayou.
Wetlands provide many important functions for the environment and for  society. For example, wetlands   improve water quality by removing excess nutrients from sources such  as fertilizer applied to agricultural land and municipal sewage and by  trapping other pollutants in soil particles;  reduce the harmful effects of weather events by storing flood waters  and buffering roads and houses from the storm surges caused by  hurricanes; and  provide important habitat for plants and wildlife—more than one-third  of threatened and endangered species, such as the whooping crane and  Florida panther, live in wetlands.
Over half of the estimated 220 million acres of wetlands in the contiguous  United States during colonial times have disappeared, and many of the  remaining wetlands have been degraded. This loss in wetlands was  primarily caused by agricultural activities and development; significant  wetland loss continued through the mid-1970s. While the economic  pressure to develop wetlands continues today, according to the U.S. Fish  and Wildlife Service, the rate of wetland loss has decreased significantly  over the past 30 years.
The decrease in the rate of wetlands loss stems from executive actions and  legislation, prompted by an increased recognition of the benefits of  wetlands. In 1977, the first executive order for the protection of wetlands  directed federal agencies to take action to minimize the destruction of  wetlands and to preserve and enhance wetlands’ benefits when carrying  out responsibilities such as managing federal lands and facilities or  providing federally financed construction. Subsequently, in 1989, the  administration set a national goal of no net loss of wetlands to ensure that  these valuable resources are protected.
The Clean Water Act provides the primary legislative authority for federal  efforts to regulate wetlands and other waters of the United States. The  act’s objective is to restore and maintain the chemical, physical, and  biological integrity of the nation’s waters. The section 404 program under  the Clean Water Act is the principal federal program that provides  regulatory protection for wetlands. Section 404 generally prohibits the  discharge of dredged or fill material in waters of the United States, which  include certain wetlands, without a permit from the Corps. Responsibility  for issuing these permits is delegated to 38 Corps district offices. The Corps  requires the permittee to first avoid discharges of dredged or fill materials  into wetlands and then to minimize discharges that cannot be avoided. To  replace lost wetland functions, the Corps can require compensatory  mitigation as a condition of issuing a permit when damage or degradation  of wetlands is unavoidable.
Compensatory mitigation can consist of creating a new wetland, restoring a  former wetland, enhancing a degraded wetland, or preserving an existing  wetland. According to Corps guidance, compensatory mitigation should  generally provide, at a minimum, one-to-one functional replacement for a  lost wetland. When determining the type, size, and nature of  compensatory mitigation to be performed, district officials may consider  factors such as the wetland’s location, the rarity of the ecosystem, water  levels, vegetation, wildlife usage, and the presence of endangered species.  In some cases, the loss of the functions of a certain wetland area may be  offset by either a larger or a smaller wetland area. For example, on an  acreage basis, the ratio should be greater than one-to-one when the lost  wetland functions are high and the replacement wetlands provide lower  functions.
In the absence of information about the functions of a certain site, acreage  may be used instead to determine the amount of compensatory mitigation  to help achieve the national goal of no net loss. Figure 3 shows land before  and after a wetland restoration project.
Compensatory mitigation may be performed by permittees or third parties.  Third-party mitigation is typically performed by mitigation banks, which  are generally private for-profit entities that establish wetlands under  agreements with the Corps, or under in-lieu-fee arrangements, which are  often sponsored by public or nonprofit entities. Under mitigation banking  guidance issued in 1995 and in-lieu-fee guidance issued in 2000, mitigation  bank and in-lieu-fee sponsors should have formal, written agreements with  the Corps, developed in consultation with EPA and other resource agencies  such as the U.S. Fish and Wildlife Service, to provide frameworks for how  the mitigation bank or in-lieu-fee arrangement will operate. According to  Corps guidance, these written agreements should include information on   the mitigation site, including the types of wetlands to be developed, the  conditions of any existing wetlands, and the geographic area; and   site management, such as   monitoring plans and reporting protocols on the progress of the   remedial actions and the parties responsible for performing them if  the mitigation is not successful,  accounting procedures for tracking payments received from  permittees,  performance standards for determining ecological success of the   provisions for long-term management and maintenance.
The Corps and EPA, which have joint enforcement authorities for the  section 404 program, established a memorandum of agreement allocating  enforcement responsibilities between the two agencies. According to this  agreement, the Corps is the lead enforcement agency for all violations of  Corps-issued permits, while EPA is the lead enforcement agency when  unpermitted activities occur in wetlands. Historically, the Corps has not  emphasized enforcement activities. In 1988, we reported that many Corps  permits were not monitored for compliance with permit conditions, the  Corps districts we visited at that time did not place a high priority on  detecting unauthorized impacts to wetlands, and the frequent lack of  monitoring could result in the loss of valuable wetland resources.  Subsequently, in 1993, we reported that the Corps continued to emphasize  permit processing over compliance and enforcement and that funding and  staffing shortfalls had inhibited the Corps’ and EPA’s compliance and  enforcement activities. More recently, the National Research Council,  environmental groups, and others have noted the same lack of emphasis on  monitoring and enforcement.
section_title: Corps Guidance for Oversight of Compensatory Mitigation Is Sometimes Vague or Internally Inconsistent
paragraphs: The Corps has developed guidance that establishes two primary activities  for oversight of compensatory mitigation performed by permittees or third  parties. The guidance directs Corps districts to require that permittees  performing compensatory mitigation periodically submit monitoring  reports that provide information on the status of their mitigation efforts.  For mitigation banks and in-lieu-fee arrangements, the guidance directs  Corps districts to require sponsors to submit annual monitoring reports.  The guidance also suggests that district staff conduct annual on-site  inspections of mitigation bank activities but does not specify a frequency  for inspections of mitigation activities performed by permittees and in-lieu- fee sponsors. However, we found that parts of the guidance are vague or  internally inconsistent, thus limiting their usefulness.
subsections: section_title: Corps Guidance Establishes Two Primary Oversight Activities for Compensatory Mitigation
paragraphs: The Corps has three primary guidance documents that establish  requirements for overseeing compensatory mitigation performed by  permittees, mitigation banks, or in-lieu-fee arrangements: (1) The 1999  Army Corps of Engineers Standard Operating Procedures for the  Regulatory Program; (2) The Federal Guidance for the Establishment,  Use and Operation of Mitigation Banks; and (3) The Federal Guidance on  the Use of In-Lieu-Fee Arrangements for Compensatory Mitigation  Under Section 404 of the Clean Water Act and Section 10 of the Rivers  and Harbors Act. The two primary oversight activities these guidance  documents establish are (1) Corps review of monitoring reports submitted  by permittees or third parties and (2) the conduct of compliance  inspections (field visits) that provide firsthand knowledge of the status of  the mitigation. The guidance documents lay out the following  requirements:   1999 Standard Operating Procedures for the Regulatory Program.
This document, which highlights current Corps policies and procedures  and provides guidance to the districts for setting priorities for their  regulatory program activities, calls for Corps districts to require  permittees to submit periodic monitoring reports and states that the  districts should review all monitoring reports. It also states that  compliance inspections are essential to ensure that compensatory  mitigation is performed and directs Corps districts to inspect a relatively  high percentage of compensatory mitigation performed by permittees to  ensure compliance with permit conditions. Districts are to inspect all  mitigation banks to ensure compliance with the banking agreement.
Federal Guidance for the Establishment, Use and Operation of  Mitigation Banks. Developed to provide guidance for establishing,  using, and operating mitigation banks, this federal guidance directs the  Corps to require that mitigation bank sponsors submit annual  monitoring reports to the Corps and other authorizing agencies, which  can include the EPA and the U.S. Fish and Wildlife Service, among  others. Typically, mitigation banks are to be monitored for 5 years;  however, according to the guidance, it may be necessary to extend this  period for mitigation banks that require more time to reach a stable  condition or that have undertaken remedial activities. In addition, the  guidance encourages members of the mitigation banking review team,  which the Corps chairs, to conduct regular (e.g., annual) on-site  inspections, as appropriate, to monitor bank performance.
Federal Guidance on the Use of In-Lieu-Fee Arrangements for  Compensatory Mitigation Under Section 404 of the Clean Water Act  and Section 10 of the Rivers and Harbors Act. This federal guidance  was developed to ensure that in-lieu-fee arrangements can serve as an  effective and useful mitigation approach. The guidance specifies that  there should be appropriate schedules established for regular (e.g.,  annual) monitoring reports to document funds received, impacts  permitted, funds disbursed, types of projects funded, and the success of  projects conducted. Furthermore, the guidance calls for the Corps in  conjunction with other federal and state agencies to evaluate these  reports and conduct regular reviews to ensure that the arrangement is  operating effectively and is consistent with agency policy and the  specific agreement.
section_title: Corps Guidance Is Sometimes Vague or Internally Inconsistent
paragraphs: Although Corps guidance documents establish monitoring reports and  compliance inspections as the two primary oversight activities for  compensatory mitigation, these guidance documents are sometimes vague  or internally inconsistent. Specifically, the guidance is vague on the  following key points:   The circumstances under which monitoring reports should be  required. Although the Corps’ standard operating procedures call for  district officials to require and review monitoring reports for mitigation  banks and “other substantial mitigation,” it does not define substantial  mitigation. We found that Corps districts differed in how they defined  “substantial mitigation.”   For example, two districts require mitigation  reports when the mitigation involves restoring, enhancing, or creating a  wetland but not when the mitigation involves preserving a wetland.
Another district interpreted “substantial” mitigation to include  mitigation projects that generally involved more than one-half acre.
The actions district officials should take if reports are not submitted  as required. Corps guidance does not address the issue of  noncompliance if monitoring reports are not submitted for review. For  the files that we reviewed, we found that monitoring reports were  provided for 44 percent, or 68 of the 155 cases in which these reports  were required. District officials told us that, because of budget  constraints, little time is spent on compliance activities, including  following up on the submission of monitoring reports. While three  districts that we visited have established a process for tracking due  dates for monitoring reports from either permittees or third parties,  none of the districts had a system for tracking reports from both.  Without such tracking systems, a district official told us that Corps  officials may not realize when monitoring reports are due or that the  reports were not submitted as required.
The information that should be included in a monitoring report. The  guidance does not specify what information should be included in  monitoring reports submitted by permittees and mitigation banks,  despite the importance of these reports as a primary means of  overseeing compliance with mitigation requirements. We found that  some monitoring reports were only a few pages in length and provided  limited information about the site, while other reports were over 50  pages in length, were more comprehensive, and included data on the  water levels at the mitigation site, the plants growing at the site,  methods for monitoring both the water levels and plant growth,  documentation of animals present at the site, and photographs of the  site. The Chief of the Regulatory Branch acknowledged that the  information submitted in monitoring reports varies significantly and  may not always provide the details needed to assess the status of the  compensatory mitigation.
Furthermore, the guidance is internally inconsistent about the emphasis  districts should place on compliance inspections. The Corps’ standard  operating procedures state that compliance inspections are essential, and  districts should inspect a relatively high percentage of compensatory  mitigation sites to ensure compliance with permit conditions, although  they do not define what high means. The mitigation banking guidance  states that districts should inspect all mitigation performed by banks  annually to ensure compliance with the banking agreement. The in-lieu- fee guidance does not specify how often compliance inspections should be  conducted. However, the standard operating procedures also designate all  compliance inspections as a low-priority activity, to be performed only if  the goals for other higher-priority work, such as issuing permits, have been  achieved. Furthermore, the guidance states that the degree to which  districts perform lower priority work would affect whether districts  received additional resources. District officials told us that in the past they  were instructed that if they spent too many resources on low-priority  activities, their budget would be reduced. Consequently, a number of  district officials told us that they are unsure of how much time to spend on  compliance inspections. According to officials in one district we visited, for  instance, the number of sites they were inspecting was based on a target  set in the 1991 guidance because the current guidance is not as specific.  Other districts do not have a specific goal for the number of inspections  that district officials will conduct for mitigation activities. The Corps is  revising its standard operating procedures to include specific performance  goals for compliance inspections. Corps officials told us they expect to  finalize the revised standard operating procedures by fall of 2005.
section_title: Corps Districts Perform Limited Oversight of Compensatory Mitigation
paragraphs: Overall, the Corps districts we visited have performed only limited  oversight of compensatory mitigation undertaken by permittees and third  parties. For the 152 individual permit files that we reviewed, we frequently  found little evidence that the required monitoring reports were submitted  or that the Corps conducted compliance inspections. Although Corps  districts provided somewhat more oversight for mitigation performed by  the 85 mitigation banks and 12 in-lieu-fee arrangements that we reviewed,  we found that oversight was still limited even in these cases. Detailed  results of our file review by district are presented in appendix III.
subsections: section_title: Corps Districts Provide Little Oversight of Mitigation Performed by Permittees
paragraphs: According to our review of 152 permit files where the permittee was  responsible for performing the compensatory mitigation, the Corps  districts generally provided little oversight either through a monitoring  report or a compliance inspection. The Corps required permittees to  submit monitoring reports for 89 of the 152 permit files that we reviewed.  This ranged from a low of zero in Charleston to a high of 100 percent in  Seattle. However, we found only 21 files contained evidence that the Corps  actually received these required reports, ranging from a low of zero in two  districts to a high of 69 percent in Jacksonville. Furthermore, only 15  percent, or 23 of the 152 permit files, showed that the Corps had conducted  a compliance inspection. The actual proportion of permits receiving  oversight may be less because several districts could not locate some of the  permit files that we requested for review.
The following cases illustrate situations in which the Corps required  compensatory mitigation as a condition of permit issuance, but the files  contained no evidence that the Corps had conducted oversight:   In November 1999, the Corps issued a permit authorizing a permittee to  install two boat slips and dredge approximately 5,270 feet of a canal in  Louisiana, which would affect marsh and other wetland areas. As a  condition of issuing this permit, the Corps required the permittee to use  the dredge material and establish wetland plants to create a 710-acre  intertidal marsh. The Corps also required the permittee to submit annual  monitoring reports for 5 years. The file contained no evidence that the  Corps had received any monitoring reports or conducted compliance  inspections to determine the status of the required mitigation.
In May 2000, the Corps issued a permit authorizing a developer to fill  over 430 acres of wetlands to build a residential golf community in  Florida. As a condition of issuing this permit, the Corps required the  permittee to enhance over 1,000 acres of wetlands and to create 13 acres  of wetlands. The Corps also required the permittee to submit annual  monitoring reports for 5 years. The file contained no evidence that the  Corps had conducted any compliance inspections or received any  monitoring reports to determine the status of the required mitigation.
In May 2000, the Corps issued a permit authorizing a permittee to fill 77  acres for a landfill in Texas. As a condition of issuing this permit, the  Corps required the permittee to create 122 acres of prairie wetlands and  to preserve 58 acres of wetlands on-site. The preservation area also  included lakes and uplands that were to be managed for wildlife habitat.  The Corps required the permittee to submit monitoring reports after 6  months and annually for 5 years. The file contained no evidence that the  Corps had conducted any compliance inspections or received any  monitoring reports to determine the status of the required mitigation.
Moreover, even when Corps officials conducted oversight, they did not  always perform suggested follow-up. For example, in one permit file we  reviewed, the Corps issued a permit in December 1999 that authorized the  excavation of an approximately 15-acre sand and gravel mining project in a  wetland area. The Corps required the permittee to restore the mining area  to a wetland plant community as the excavation occurred and to submit  annual monitoring reports on the progress of this restoration effort. The  permittee submitted one report to the Corps in March 2000, which stated  that the work authorized by the permit had begun but that compensatory  mitigation activities could not be completed until excavation was  completed. No other monitoring reports were in the file, and the file did not  contain any evidence that Corps officials had followed up to determine if  the compensatory mitigation was performed. Another file indicated that, in  December 2000, a Corps official had inspected a project site to assess the  status of the required compensatory mitigation for a permit issued in  August 2000. This permit authorized filling about 6 acres of wetlands to  build a retail facility. The official’s inspection indicated that construction  was almost finished, but the mitigation to enhance 4 acres of wetlands was  still under way. The official recommended that the site be revisited at a  later date. However, the file contained no evidence that the Corps  conducted a follow-up compliance inspection or contacted the permittee to  determine the status of the mitigation.
section_title: Corps Districts Perform Somewhat Greater Oversight of Mitigation Performed by Mitigation Banks and In-Lieu-Fee Sponsors
paragraphs: Corps districts provided somewhat more oversight for mitigation  conducted by third parties, although even in these cases oversight was  limited. Of the 85 mitigation banks that we reviewed, the Corps required  that 71 percent, or 60 of the 85 mitigation bank sponsors, submit  monitoring reports and 70 percent, or 42 mitigation bank files, contained  evidence that at least one monitoring report had been received. However,  only 31 of the 85 mitigation bank files contained evidence that the Corps  conducted a compliance inspection. This ranged from a low of 13 percent  in the St. Paul district to a high of 78 percent in the Wilmington district. The  following cases illustrate situations where files contained no evidence that  the Corps had conducted oversight of the mitigation bank:   In February 1999, the Corps approved a mitigation bank in Texas that  preserved and protected about 540 acres of swamp. The agreement  between the Corps and the mitigation bank sponsor included a  requirement that the sponsor submit an annual report on the mitigation  bank’s status of operation and maintenance. The file contained no  evidence of any monitoring reports submitted by the sponsor or  compliance inspections conducted by the Corps.
In August 1999, the Corps approved an approximately 360-acre  mitigation bank in Louisiana to reestablish a productive, coastal,  forested wetland ecosystem on previously converted agricultural lands.  The agreement between the Corps and the mitigation bank sponsor  included a requirement that the sponsor provide the Corps with annual  monitoring reports for at least 5 years and then reports once every 5  years. The file contained no evidence of any monitoring reports  submitted by the sponsor or compliance inspections conducted by the  Corps.
In December 2001, the Corps approved a 2,100-acre mitigation bank in  Florida to restore native tree species and enhance the site’s hydrology.  The agreement between the Corps and the mitigation bank sponsor  required the sponsor to submit annual monitoring reports to the Corps  for 4 years. The file contained no evidence of any monitoring reports  submitted by the sponsor or compliance inspections conducted by the  Corps.
For in-lieu-fee arrangements, the Corps required the sponsors of 6 of the 12  in-lieu-fee arrangements that we reviewed to submit monitoring reports.  We found that five of the six files contained evidence that the sponsor had  submitted at least one report. We also found that the Corps had received  monitoring reports from one in-lieu-fee sponsor who was not required to  submit a report. In addition, the files contained evidence that the Corps had  conducted at least one compliance inspection for 5 of the 12 arrangements.
section_title: Conflicting Guidance and Limited Resources Contribute to the Corps’ Low Level of Oversight of Compensatory Mitigation
paragraphs: District officials told us that the Corps’ conflicting guidance, which notes  that compliance inspections are crucial but makes them a low priority, as  well as limited resources contribute to their low level of oversight of  compensatory mitigation activities. According to the Chief of the  Regulatory Branch, historically, districts were to issue permits within  specified time frames. If those time frames were not met, work in other  areas, including compliance, was not to be performed. In addition, funds  were allocated primarily for permit processing, with little remaining for  other activities. However, Corps headquarters and district officials  recognize the importance of oversight. They stated that without a  comprehensive oversight program the Corps cannot ensure that  compensatory mitigation will occur. In the absence of additional national  guidance and resources, some of the districts we visited have decided to  take their own steps to improve oversight. For example, Jacksonville  district officials increased their compliance inspections of compensatory  mitigation performed by permittees; the number of inspections more than  tripled from 2003 to 2004 after several years of decline. In addition, New  Orleans district officials told us that, in 2003, they began tracking  monitoring reports and compliance inspections for mitigation banks, more  aggressively followed up to ensure that the mitigation banks submit  required monitoring reports, and increased the number of compliance  inspections of the mitigation banks.
section_title: Corps Districts Can Take a Variety of Enforcement Actions to Resolve Violations but Rely Primarily on Negotiation
paragraphs: The Corps can take a variety of enforcement actions if required  compensatory mitigation is not performed. Possible enforcement actions  include issuing compliance orders and assessing administrative penalties,  requiring the permittee to forfeit a bond, suspending or revoking a permit,  and implementing the enforcement provisions of agreements with third  parties to perform mitigation on permittees’ behalf. In addition, the Corps  may refer a case to the Department of Justice to bring legal action in  federal district court. However, district officials rarely use these  enforcement actions, relying primarily on negotiation with permittees or  third parties as a first step in the enforcement process to resolve any  noncompliance cases they detect. In some cases, district officials want to  pursue enforcement actions after detecting instances of noncompliance,  but they may not be able to do so because they have limited their  enforcement capabilities by not including specific requirements in the  permits or third-party agreements.
subsections: section_title: A Variety of Enforcement Actions Are Available to Corps Districts
paragraphs: When the Corps determines that required compensatory mitigation has not  been performed, the type of enforcement action taken would depend on,  among other things, whether mitigation is to be carried out by the  permittee or by a third party.
In cases where the permittee was to perform the mitigation, the Corps may  issue a compliance order, assess administrative penalties, require the  permittee to forfeit a bond, suspend or revoke a permit, and/or refer the  case to the Department of Justice for legal action. Under section 404 of the  Clean Water Act and Corps regulations, the Corps may take the following  actions:   Issue compliance orders to permittees who violate any condition of  their permits. Each order must specify the nature of the violation,  which could include failure to implement mitigation requirements, and  specify a time by which the permittee must come into compliance.
Assess administrative penalties, in an amount of up to $27,500.
Require the permittee to forfeit a bond, if such a bond was a condition  of the permit. The Corps has the authority to require permittees to post  a financial bond to assure that they will fulfill all obligations required by  the permit, which could include compensatory mitigation.
Suspend a permit for, among other things, a permittee’s failure to  comply with the terms and conditions of the permit. A suspension  requires the permittee to stop the activities previously authorized by the  suspended permit. Following the suspension, the Corps may take action  to reinstate, modify, or revoke the permit.
Refer the case to the Department of Justice to bring an action in  federal district court seeking an injunction and civil penalties.  Cases that are appropriate for judicial actions include violations that are  willful, repeated, flagrant, or of substantial impact. Civil penalties may  be awarded by the court in an amount of up to $25,000 per day for each  violation.
The enforcement actions available to the Corps for a mitigation bank or in- lieu-fee sponsor's failure to carry out mitigation would depend on the  provisions that are incorporated into each permit (if applicable) and  mitigation bank agreement or in-lieu-fee agreement and would be governed  by the terms of the agreement with the Corps. For example, once the Corps  has agreed that a permittee’s mitigation requirements will be satisfied by a  mitigation bank or in-lieu-fee arrangement, the permittee satisfies these  mitigation requirements by submitting the required payment to the third- party sponsor. Federal guidance for mitigation banks states, “it is extremely  important that an enforceable mechanism be adopted establishing the  responsibility of the bank sponsor to develop and operate the bank  properly.” The guidance states that the bank sponsor is responsible for  securing sufficient funds or other financial assurances in the form of,  among other things, performance bonds, irrevocable trusts, escrow  accounts, and letters of credit. In addition, “the banking agreement should  stipulate the general procedures for identifying and implementing remedial  measures at a bank.” Similarly, federal guidance states that an in-lieu-fee  agreement should contain, among other things, “financial, technical and  legal provisions for remedial actions and responsibilities (e.g., contingency  fund)”; “financial, technical and legal provisions for long-term management  and maintenance (e.g., trust)”; and a “provision that clearly states that the  legal responsibility for ensuring mitigation terms are fully satisfied rests  with the organization accepting the fee.”
section_title: Corps Districts Rely Primarily on Negotiation
paragraphs: While the Corps may take a variety of enforcement actions, the seven  districts did not take any enforcement actions in fiscal year 2003, the latest  year for which data is available. Instead, district officials primarily rely on  negotiation, a first step in the Corps’ enforcement process, to resolve  noncompliance issues. In keeping with Corps regulations, district officials  told us that, when they find that required compensatory mitigation has not  been performed, they first notify the responsible party and gather relevant  information to better understand the noncompliance case. They then  attempt to negotiate by discussing with the permittees or third parties  available corrective actions and time frames for voluntarily bringing the  work into compliance. For example, at one district, officials told us that  corrective actions by responsible parties could include working with an  environmental organization such as The Nature Conservancy to improve  wetlands or developing a traveling exhibit for local schools to educate  children about the value of protecting wetlands. According to Corps  officials, no additional action is needed generally because responsible  parties are willing to work with the Corps to get back into compliance.
If district officials do not succeed in voluntarily bringing the responsible  party into compliance, they notify the responsible party in writing, laying  out potential enforcement actions available to the Corps and time frames  for the party to respond to the letter—the next step toward achieving  compliance. District officials told us they generally resort to such actions  to achieve compliance only after negotiation has failed because such  actions usually take more time to implement. For example, one district  official estimated that when the Corps refers a noncompliance case to the  Department of Justice, district officials may be occupied for several  months. Similarly, according to Corps officials, developers prefer to  negotiate with the Corps because it is less time-consuming than pursuing  legal solutions. In addition, use of enforcement actions does not always  ensure that the required compensatory mitigation will be completed. For  instance, Corps district officials told us, while monetary penalties are an  effective tool that draws attention to compliance and enforcement, the  funds collected from assessing these penalties are required by law to go  into the general fund of the federal Treasury.
section_title: Corps Sometimes Limits Its Own Enforcement Ability
paragraphs: On occasion, district officials wanting to pursue enforcement actions after  detecting instances of noncompliance may not be able to do so because  they have limited their enforcement capabilities; that is, they have not  specified the requirements for compensatory mitigation in permits and  failed to establish agreements with third parties. In our file review, we  identified several permits that lacked this crucial information about  required mitigation. Both the Chief of the Regulatory Branch and district  officials stress the importance of including specific mitigation information  in permits so that the Corps can take actions necessary to ensure required  compensatory mitigation occurs. However, some of the districts we visited  acknowledged that the lack of enforceable conditions included within a  permit has been a problem and they have efforts under way, such as permit  reviews and standardized permit conditions, to ensure that future permits  are issued with the conditions needed to ensure enforceability. Although a  review process for permit conditions may be a good idea, we found that,  even when a review process was in place in some of the districts we visited,  they still had issued permits with unenforceable conditions.
In addition, we found that three districts had not established formal  agreements with third parties to document the objectives and  implementation of mitigation banks or in-lieu-fee arrangements, as called  for in federal guidance. Of the 85 mitigation bank files we reviewed, 21 did  not have agreements with the Corps. These mitigation banks were all  located in Minnesota, one of two states with mitigation banks that fall  under the jurisdiction of the St. Paul District Office. According to district  officials, Minnesota had developed state mitigation banking guidelines  before the federal guidelines. Many of the banks in Minnesota were  approved by the state program and partially developed before requesting  Corps approval. Corps officials told us they had decided not to take  additional steps to develop agreements with these mitigation banks.  Currently, district officials issue a letter approving all or a portion of the  state bank for use in the Corps compensatory mitigation program but do  not develop a banking agreement with the bank sponsor. At the time of our  review, district officials realized that the lack of mitigation banking  agreements limited their enforcement ability and, therefore, were  developing banking guidelines to provide more structure for the  establishment of mitigation banks in Minnesota. However, they had not yet  begun to consistently develop such agreements.
For the in-lieu-fee arrangements we reviewed, the Galveston and New  Orleans districts have not established formal agreements with in-lieu-fee  sponsors. Without such agreements, district officials may not know how  many permittees are using these arrangements to fulfill their compensatory  mitigation requirements. For example, for the arrangements that he was  responsible for monitoring, a Galveston district official could not provide  us with information about the number of permittees using the arrangement  to perform compensatory mitigation, the total amount of payments the in- lieu-fee sponsor had received, or any oversight activities conducted by the  Corps to ensure that the sponsor was performing the required  compensatory mitigation. Before our visit, Galveston district officials were  unaware that their four in-lieu-fee arrangements were not in compliance  with federal guidance and are now attempting to restructure these  arrangements. In addition, a Galveston district official told us the district  will develop such agreements with the sponsors of future arrangements.  With regard to the in-lieu-fee arrangement in New Orleans that did not have  an agreement, officials told us that resource constraints and other  priorities had prevented them from establishing a formal agreement with  the in-lieu-fee sponsor. This arrangement has collected approximately $1  million since its inception in 1994, but district officials could provide no  other information regarding oversight of the arrangement.
Until the districts establish formal agreements with third-party sponsors,  the Corps does not have sufficient legal recourse if third parties do not  perform required compensatory mitigation because the sponsors have not  reached agreement with the Corps on what penalties and/or corrective  actions will be required to address any problems if the mitigation efforts  are not performed. The Corps’ Chief of the Regulatory Branch noted that he  would encourage the districts to cease using these in-lieu-fee arrangements  to provide compensatory mitigation until such agreements are established.
section_title: Conclusions
paragraphs: The Corps’ section 404 program is crucial to the nation’s efforts to protect  wetlands and achieve the national goal of no net loss. Although Corps  officials acknowledge that compensatory mitigation is a key component of  this program, the Corps has consistently neglected to ensure that the  mitigation it has required as a condition of obtaining a permit has been  completed. The Corps’ priority has been and continues to be processing  permit applications. In 1988 and 1993, we reported that the Corps was  placing little emphasis on its compliance efforts, including compensatory  mitigation, and little has changed. The Corps continues to provide limited  oversight of compensatory mitigation, largely relying on the good faith of  permittees to comply with compensatory mitigation requirements. The  Corps’ oversight efforts have been further hampered by vague and  inconsistent guidance that does not (1) define key terms, (2) specify the  actions Corps staff should take if required monitoring reports are not  received, or (3) set clear expectations for oversight of compensatory  mitigation. Furthermore, district officials have failed to establish  agreements with third-party sponsors that would ensure the agency has  legal recourse if compensatory mitigation is not performed. Until the Corps  takes its oversight responsibilities more seriously, it will not know if  thousands of acres of compensatory mitigation have been performed and  will be unable to ensure that the section 404 program is contributing to the  national goal of no net loss of wetlands.
section_title: Recommendations for Executive Action
paragraphs: Given the importance of compensatory mitigation to the section 404  program and its contribution to achieving the national goal of no net loss of  wetlands, we recommend that the Secretary of the Army direct the Corps  of Engineers to establish an oversight approach that ensures required  mitigation is being performed throughout the nation. As part of this  oversight approach, the Corps should  develop more specific guidance for overseeing compensatory mitigation  performed by permittees, mitigation banks, and in-lieu-fee sponsors; in  particular, the guidance should define key terms such as “substantial  mitigation” and specify the actions Corps officials should take if  required monitoring reports are not received;  clarify expectations for oversight of mitigation, including establishing  goals for the number of monitoring reports that should be reviewed and  the number of compliance inspections that should be conducted; and  review existing mitigation banks and in-lieu-fee arrangements to ensure  that the sponsor has an approved agreement with the Corps, as called  for in federal guidance; if such agreements are not in place, they should  be developed and the Corps should ensure that future mitigation banks  and in-lieu-fee arrangements have these approved agreements.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Secretary of the Department of  Defense for review and comment. The Department of Defense concurred  with the report’s findings and recommendations. In its written comments,  the Department of Defense stated that the Corps is currently revising its  standard operating procedures. According to the department, the revised  guidance will provide details on mitigation requirements as well as  compliance and enforcement procedures. The department also indicated  that the Corps will issue a Regulatory Guidance Letter that will clarify  monitoring requirements for compensatory mitigation and include an  outline for standardized monitoring reports. In addition, the Department of  Defense provided technical comments and clarifications that we  incorporated, as appropriate. The Department of Defense’s written  comments are presented in appendix IV.
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 of this report to interested  congressional committees and Members of Congress; the Secretary of  Defense; the Secretary of the U.S. Army; and the Chief of Engineers and  Commander, U.S. Army Corps of Engineers. We also will make copies  available to others upon request. In addition, the report will be available at  no charge on the GAO Web site at http://www.gao.gov.
If you have any questions about this report, please contact me at (202) 512- 3841 or mittala@gao.gov. Contact points for our Offices of Congressional  Relations and of Public Affairs may be found on the last page of this report.  GAO staff who made major contributions to this report are listed in  appendix V.
section_title: Scope and Methodology
paragraphs: Our review focused on the compensatory mitigation activities at 7 of the  U.S. Army Corps of Engineers’ (Corps) 38 districts that implement the  section 404 program: Charleston, South Carolina; Galveston, Texas;  Jacksonville, Florida; New Orleans, Louisiana; St. Paul, Minnesota; Seattle,  Washington; and Wilmington, North Carolina. We selected these districts  because they represent different geographic areas of the United States, and  they comprised over two-thirds of the compensatory mitigation required by  individual permits issued in fiscal year 2003. The Charleston, Galveston,  Jacksonville, New Orleans, St. Paul, and Wilmington districts were the top  districts nationwide in terms of mitigation required by individual permits.  While the Seattle district is not one of the top 7 districts nationwide, it is  one of the top districts in the western region in terms of required individual  permit mitigation, and we included it to provide geographic coverage. To  determine how much compensatory mitigation was required by permits  issued by each of the 38 districts, we used the Quarterly Permit Data  System data, which we examined and determined to be suitably reliable for  selecting the districts to be included in our review.
To identify the guidance the Corps has established for overseeing  compensatory mitigation, we examined legislation, federal guidance on  mitigation banks and in-lieu-fee arrangements, Corps regulations, Corps  guidance, and supplemental guidance developed by the districts. We also  met with responsible Corps headquarters and district officials to discuss  the Corps’ guidance on oversight of compensatory mitigation.
To determine the extent to which the Corps oversees compensatory  mitigation, we reviewed a total of 249 files. We reviewed 152 permit files  issued in fiscal year 2000 where the permittee was responsible for the  mitigation. We selected this time frame because sufficient time would have  passed for the permittee to begin work on the permitted project, as most of  the permits we reviewed were valid for 5 years or less, and for the Corps to  have received a monitoring report or conducted a compliance inspection.  We also reviewed files for 95 mitigation banks (including 10 mitigation  banks approved in 2004), and 12 in-lieu-fee arrangements. The mitigation  banks we reviewed had been approved since the mitigation banking  guidance was established on November 28, 1995. For in-lieu-fee  arrangements, we reviewed the arrangements currently operating at the  seven districts at the time of our site visit. These mitigation bank and in- lieu-fee arrangement files usually provided data on the mitigation activities  for multiple permittees, and the mitigation conducted can encompass  thousands of acres. Owing to the large number of permits and mitigation  banks at some of the districts, we selected a random sample of permit files  at Jacksonville and of mitigation banks at the Jacksonville, New Orleans,  and St. Paul districts. These samples were drawn so that the estimates from  the samples would have a precision margin of about plus or minus 15  percentage points at the 95 percent confidence level. However, we decided  not to project our estimates to the population of permits in the seven  districts because some districts were unable to find information for our  sampled units, and another district was unable to provide a list of permits  within the scope of our sample. Since we had no information on the  missing permits, we are only presenting estimates for the permits and  banks that we reviewed.
While our results are not representative of the activities of the 38 district  offices nationwide, the Corps’ Chief of the Regulatory Branch told us that  our findings would likely indicate program implementation at the other  districts not included in the scope of our review. Tables 1 through 3 detail  the permit files, mitigation banks, and in-lieu-fee arrangements reviewed at  each of the districts.
As listed in table 1, we reviewed all permits that met our criteria (individual  permits where the permittee was responsible for performing mitigation  issued in fiscal year 2000) with the following exceptions:  Charleston. The district could not locate three permit files.
Jacksonville. We selected a random sample of 55 the 167 individual  permits identified by Jacksonville officials. The district could not locate  complete permit files for 13 of the permits we requested. In addition, 18  of the permits we requested did not meet our criteria; for example, some  permits were modified in fiscal year 2000 but were not issued in that  year.
New Orleans. District officials could not identify the permits that met  our criteria from the district database. Therefore, we asked district  officials to select the permits issued in fiscal year 2000 where the  permittee was responsible for performing compensatory mitigation and  reviewed all of the permits they identified.
St. Paul. The district could not locate one permit file.
In addition to the file reviews, we spoke with district officials and reviewed  relevant documentation to gain a better understanding of the districts’  oversight programs and to gather any information that may not have been  available during our file reviews.
To identify the enforcement actions the Corps can take if it determines that  compensatory mitigation requirements are not being met and the extent to  which it takes these actions, we analyzed Corps data on how the district  offices resolved instances of noncompliance during fiscal year 2003. In  addition, we reviewed relevant regulations and documentation obtained  either from Corps officials or identified during our file reviews. We also  discussed with headquarters and district officials the enforcement actions  available to the Corps and the frequency with which the districts used these  actions.
In addition, we met with several sponsors of mitigation banks and in-lieu- fee arrangements, as well as subject area experts, such as members of the  National Research Council, to gain their views on the Corps’ mitigation  program. We conducted our review from June 2004 through September  2005 in accordance with generally accepted government auditing  standards.
section_title: Corps of Engineers Federal Guidance for Oversight of Compensatory Mitigation
paragraphs: As noted earlier, the Corps has three primary guidance documents for  overseeing compensatory mitigation performed by permittees, mitigation  banks, and in-lieu-fee arrangements: (1) The 1999 Army Corps of  Engineers Standard Operating Procedures for the Regulatory Program  (Parts I and II); (2) The Federal Guidance for the Establishment, Use and  Operation of Mitigation Banks; and (3) The Federal Guidance on the Use  of In-Lieu-Fee Arrangements for Compensatory Mitigation Under  Section 404 of the Clean Water Act and Section 10 of the Rivers and  Harbors Act. These documents provide guidance for overseeing  compensatory mitigation as described in this appendix.
subsections: section_title: Standard Operating Procedures for the Regulatory Program (Parts I and II)
paragraphs: The Corps’ 1999 Standard Operating Procedures for the Regulatory  Program (Part I) highlights critical policies and procedures that are major  factors in administering a consistent program nationwide. It specifies the  following:   For all compensatory mitigation,  Compliance inspections are essential.
Districts will inspect a relatively high percentage of compensatory  mitigation to ensure compliance with permit conditions. This is  important because many of the Corps permit decisions require  compensatory mitigation to offset project impacts.
To minimize field visits and the associated expenditures of resources,  permits with compensatory mitigation requirements should require  applicants to provide periodic monitoring reports and certify that the  mitigation is in accordance with permit conditions. Districts should  review all monitoring reports.
Districts will require all permittees to submit a self-certification  statement of compliance. Districts should not be expending funds on  surveillance as a discrete activity. Surveillance should be performed  in conjunction with other activities such as permit or enforcement  actions.
For mitigation banks,  Districts will inspect all mitigation banks to ensure compliance with  the banking agreement.
These are not mentioned in Part I of the standard operating  procedures.
The Corps’ Standard Operating Procedures for the Regulatory Program  (Part II) lists the work that should be prioritized. Part II states that it is not  intended to dissuade districts from doing lower priority work; however, all  districts should perform the high priority work before expending resources  on the lower priority work. Part II specifies the following for mitigation:  High priority work consists of:  requiring and reviewing monitoring reports on mitigation banks and  other substantial mitigation, including in-lieu-fee approaches to  assure success; and   Low priority work consists of:  compliance inspections for all mitigation and multiple site visits to a  mitigation site.
section_title: Federal Guidance for the Establishment, Use and Operation of Mitigation Banks
paragraphs: The Federal Guidance for the Establishment, Use and Operation of  Mitigation Banks, issued in November 1995, provides policy guidance for  the establishment, use, and operation of mitigation banks for the purpose  of providing compensatory mitigation. Oversight guidance in this  document is as follows:  Members of the mitigation banking review team, which the Corps  chairs, are encouraged to conduct regular (e.g., annual) on-site  inspections, as appropriate, to monitor bank performance.
Annual monitoring reports should be submitted to the authorizing  agencies, which include the Corps. The period for monitoring will  typically be 5 years; however, it may be necessary to extend this period  for projects requiring more time to reach a stable condition or where  remedial activities were undertaken.
section_title: Federal Guidance on the Use of In-Lieu-Fee Arrangements for Compensatory Mitigation Under Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act
paragraphs: The Federal Guidance on the Use of In-Lieu-Fee Arrangements for  Compensatory Mitigation Under Section 404 of the Clean Water Act and  Section 10 of the Rivers and Harbors Act, issued in November 2000,  clarifies the manner in which in-lieu-fee mitigation may serve as an  effective and useful approach to satisfy compensatory mitigation  requirements and meet the administration goal of no net loss of wetlands.  Related to oversight, it specifies the following:   There should be appropriate schedules for regular (e.g., annual)  monitoring reports to document funds received, impacts permitted, how  funds were disbursed, types of projects funded, and the success of  projects conducted, among other aspects of the arrangement.
The Corps should evaluate the reports and conduct regular reviews to  ensure that the arrangement is operating effectively and is consistent  with agency policy and the specific agreement.
section_title: File Review Results by Corps District
paragraphs: This appendix presents the results of our file review at seven Corps  districts—Charleston, South Carolina; Galveston, Texas; Jacksonville,  Florida; New Orleans, Louisiana; St. Paul, Minnesota; Seattle, Washington;  and Wilmington, North Carolina. Results of our review for individual  permits issued in fiscal year 2000 where permittees were responsible for  the mitigation are presented in table 4. Results for mitigation banks  approved between the date of the mitigation bank federal guidance  (November 28, 1995) and December 31, 2003, are in table 5 and in-lieu-fee  arrangements currently operating at the districts at the time of our site  visits are in table 6.
section_title: Comments from the Department of Defense
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: Anu K. Mittal (202) 512-3841 (mittala@gao.gov)
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Sherry McDonald, Assistant  Director; Diane Caves; Jonathan Dent; Doreen Feldman; Janet Frisch;  Natalie Herzog; Cynthia Norris; Karen O’Conor; Anne Rhodes-Kline; Jerry  Sandau; Carol Herrnstadt Shulman; Lisa Vojta; and Daniel Wade Zeno made  key contributions to this report.