The Tongass National Forest covers about 16.8 million acres in southeast Alaska and is the largest national forest in the United States, equal to an area about the size of West Virginia. The U.S. Department of Agriculture's Forest Service manages the Tongass for multiple uses, such as timber production, outdoor recreation, and fish and wildlife. The Forest Service's Alaska Region, headquartered in Juneau, Alaska, carries out the management responsibilities. Because of its magnitude, the Tongass is divided into three administrative areas--Chatham, Stikine, and Ketchikan--each having an area office headed by a forest supervisor. Each area office has between two and four ranger districts, headed by a district ranger, to carry out daily operations. In the 1950s, the Forest Service awarded 50-year (long-term) contracts to the Ketchikan Pulp Company (KPC)--now a wholly owned subsidiary of the Louisiana Pacific Corporation--and the Alaska Pulp Corporation (APC)--a Japanese-owned firm--to harvest Tongass timber. As stipulated in their contracts, each company built a pulp mill to process the harvested timber--KPC near Ketchikan and APC in Sitka. In return, the Forest Service guaranteed a 50-year timber supply totaling about 13.3 billion board feet for both contracts. KPC's contract expires in 2004. APC's contract was to expire in 2011, but the Forest Service terminated it for breach of contract on April 14, 1994, because APC shut down its pulp mill in September 1993. The Forest Service also sells Tongass timber to companies other than APC and KPC. These companies, referred to as independent short-term contractors, purchase timber under contracts usually lasting 3 to 5 years. Since 1980, about 30 percent of all Tongass timber sales have been made under independent short-term contracts. Although some of these short-term contracts have been awarded to APC and KPC, most have been awarded to other contractors. Since the early 1980s, the Congress has expressed concern about the adverse impacts of the long-term contracts on competition for timber in southeast Alaska and on the Forest Service's ability to effectively manage the Tongass. Part of the concern centered on the perceived competitive advantages to APC and KPC that resulted from differences between certain provisions of the long-term and short-term independent contracts. Another part of the concern centered on the relationship of the long-term contracts to the overall management of the Tongass National Forest and, more specifically, to issues related to other forest resources such as fish and wildlife. ". . . it is in the national interest to modify the contracts in order to assure that valuable public resources in the Tongass National Forest are protected and wisely managed. Modification of the long-term timber sale contracts will enhance the balanced use of resources on the forest and promote fair competition within the southeast Alaska timber industry." Among other things, the act directed the Secretary of Agriculture to unilaterally revise the long-term contracts in order to reflect nine specific modifications (see app. I for a complete list). A number of these modifications called for making long-term contracts consistent with short-term contracts in such respects as timber sale planning, environmental assessment, and the administration of road credits. Other provisions of the act added new environmental requirements, such as leaving timber buffers at least 100 feet in width along designated streams. Four months after the act was passed, and pursuant to one of the act's requirements, we issued a report to the Senate Committee on Energy and Natural Resources and the House Committee on Interior and Insular Affairs. That report described the Forest Service's revisions to the long-term contracts for each of the nine modifications and discussed whether the changes reflected the modifications specified in section 301(c) of the act. We concluded that, with the exception of dealing with the administration of road credits, the contract changes complied with the act's requirements. We also concluded that more time would be needed to determine how these changes were actually carried out. You requested that we review the Forest Service's implementation of certain contract modifications and other provisions of the Tongass Timber Reform Act. As agreed with your office, we focused this report mainly on two issues--road credits and timber buffers. More specifically, we determined whether credits that timber harvesters receive for building harvest-related roads are used consistently between long-term and short-term timber sale contracts and whether buffers of standing timber have been left along designated streams as the act requires, and how the Forest Service monitors the buffers' effectiveness. During our review, we also noted inconsistencies in the Forest Service's documentation of the environmental significance of changes to timber harvest unit boundaries after environmental impact statements had been prepared. As agreed with your office, we included an analysis of this issue in this report. To address the first objective, we analyzed the use of road credits by short-term contractors in fiscal years 1990-93 and compared this usage with road credits used by long-term contractors. Using Forest Service accounting data, we also determined the extent to which the long-term contractors had applied road credits against the cost of purchasing Tongass timber since the inception of the long-term contracts through the end of fiscal year 1993. To address the second objective, we reviewed and analyzed the results of buffer monitoring conducted in 1992 and 1993 by the Forest Service and the Alaska Department of Fish and Game, reviewed the monitoring reports for 1991-93 from the Forest Service's Alaska Region and visited the Craig and Thorne Bay Ranger Districts within the Tongass National Forest to observe stream buffers. We also reviewed changes made in buffer-related policies and procedures by the Forest Service's Alaska Region in 1993-94. To address the third objective, we reviewed and compared the planned harvest unit boundary maps included in the environmental impact statements with maps of the actual harvest boundaries. On the basis of discussions with the Forest Service, the state of Alaska's Department of Environmental Conservation, and a private conservation group, we selected 19 APC timber harvest units and 41 KPC harvest units where the boundary changes may have been significant enough to require further environmental analyses. Our sample constituted about 33 percent of the APC units and 18 percent of the KPC units in which harvests had occurred outside the original boundaries. To determine the adequacy of documentation, we reviewed and analyzed harvest unit files. More specifically, we determined whether the files contained evidence that the forest supervisor had determined that the proposed boundary changes would not significantly change the effects discussed in the environmental impact statement or that the change was significant and would require a supplement to the environmental impact statement. In conducting our work, we also obtained additional information and comments from the Forest Service, the state of Alaska, timber industry officials, and representatives of conservation groups. Within the Forest Service, we performed work at the headquarters in Washington, D.C.; the Alaska Regional Office in Juneau, Alaska; the Ketchikan Area Office in Ketchikan, Alaska; and the Thorne Bay Ranger District in Thorne Bay, Alaska and the Craig Ranger District in Craig Alaska. Our work with Forest Service officials was focused on the timber management and wildlife and fisheries staffs. In September 1993, while our review was under way, APC closed its pulp mill, charging that it was losing money because the prices it paid for timber as a result of the long-term contract modifications were too high. The Forest Service responded that closure of the pulp mill constituted a breach of contract, and in April 1994 the Forest Service terminated APC's long-term contract. Although the APC contract is not active, we elected to retain certain data on APC in this report for illustrative purposes, and also because the courts have not yet ruled on the Forest Service's action in terminating the contract. We conducted our review between September 1992 and October 1994 in accordance with generally accepted government auditing standards. As requested, we did not obtain official agency comments on a draft of this report. However, the information in this report was discussed with timber management officials, including the Director, Timber Management Staff, at Forest Service headquarters, the Director's counterpart in the Alaska Region, and officials in the Department of Agriculture's Office of General Counsel. As chapter 2 will discuss, these officials disagreed with our conclusions about purchaser road credits. In other respects, however, they agreed that the information presented was accurate. We have incorporated their suggested changes where appropriate. Purchasers of timber in the Tongass National Forest often pay for part of the timber they purchase with credits they have received for building harvest-related roads. The Tongass Timber Reform Act required modifications to KPC's and APC's long-term contracts to ensure that credits KPC and APC received for building such roads would be provided in a manner consistent with procedures used in providing road credits to short-term contractors. This provision was aimed at eliminating KPC's and APC's competitive advantage of being able to maintain certain road credits for much longer periods of time than short-term contractors. As we pointed out in our March 1991 report, the Forest Service did not modify the APC and KPC contracts to address this provision of the act. Forest Service officials continue to believe this contract modification is not required. They maintain that consistency already exists because road credits are canceled at the end of all timber sale contracts, whether long-term or short-term. However, this approach leaves the long-term contractors' competitive advantage intact and is not consistent with congressional direction that the contracts be modified. Harvesting timber often requires that the company harvesting the timber build roads to move logging equipment in and out of the harvest area and transport harvested logs. As compensation to the timber purchaser, the Forest Service gives road credits equal to the estimated cost of building the roads. Timber purchasers can use these credits instead of cash to pay for timber. Certain limitations apply to road credits used to pay for harvested timber. When the Forest Service prepares a timber sale, it establishes a base value for the timber. This base value must be paid in cash. For example, if a timber sale has a base value of $400,000 and is sold under competitive bid for $900,000, the purchaser must pay the base value ($400,000) in cash. The remaining $500,000 can be paid in whole or in part with road credits. Because timber purchasers cannot use road credits to pay the entire cost of the timber, situations may arise in which they cannot use all the road credits they have earned. To continue the example above, if the purchaser earned road credits worth $700,000, the purchaser could apply only $500,000 in credits against the cost of the timber, because the difference between the purchase price and the base value is only $500,000. Those road credits that can be applied against the cost of timber are called "effective"; those road credits left over are called "ineffective." In this example, the timber purchaser has $500,000 of effective credits and $200,000 of ineffective credits. Under Forest Service contracts, a timber purchaser retains ineffective road credits until the expiration of the timber sale contract in which the credits are earned. Although such credits may appear valueless, for long-term contractors they can become effective--and therefore acquire value--if the timber's purchase price is adjusted upwards to reflect higher current market values for timber. Again using the earlier example, a subsequent adjustment in the purchase price from the original $900,000 to $1 million would also mean that $100,000 of ineffective road credits would be made effective. This additional amount could be used to offset the increased purchase price. APC and KPC have made extensive use of road credits as a means of paying for timber. Each used road credits to pay for about three-fourths of the value of timber harvested under its long-term contract. Through the end of fiscal year 1993, the value of timber sold to the two companies since the inception of the long-term contracts has been about $268 million (in constant 1993 dollars). The two companies used road credits to pay for 75 percent, or $201 million, of the total price of timber. KPC used road credits to pay for 73 percent of its timber; APC used road credits to pay for 79 percent. (See table 2.1.) The Forest Service did not revise the provision on the use of road credits in its long-term contracts to make them similar to the provision in its short-term contracts, as required by the reform act. Because this modification was not made, APC and KPC have been able to use ineffective road credits from timber offering to timber offering throughout the remaining life of their long-term contracts. By contrast, ineffective road credits for short-term contracts are canceled at the end of the contracts. We pointed out this inconsistency in our March 1991 report and recommended that action be taken. The Forest Service, however, has not acted on our recommendation. The Forest Service maintained--and continues to do so--that for ineffective road credits, no modification was needed to make the treatment of road credits consistent between long-term and short-term contracts. The Forest Service believes that the treatment is consistent, in that ineffective road credits are terminated at the end of either type of contract. It maintains that the amount of time the long-term contractors could hold the credits is not relevant. Our concern about the Forest Service's argument is that although ineffective credits are canceled at the end of both types of contracts, long-term contractors continue to hold a competitive advantage. Short-term contractors can use ineffective road credits only during the length of their contracts, which are considerably shorter than the 50-year long-term contracts--short-term contracts usually last 3 to 5 years. The long-term contractors are able to keep these credits available for possible use over a longer period by transferring them from timber offering to timber offering. Their competitive advantage is that they have greater ability to retain and use ineffective credits to offset timber payments if the price of timber rises during the life of their contracts. In our view, the language of the Tongass Timber Reform Act, as well as its legislative history, makes it clear that the Congress intended the Forest Service to make changes in road credits so that they would be treated substantially the same under both long- and short-term contracts. Comparisons between the two types of contracts show that this competitive advantage can be substantial. For example, as of March 1993, APC and KPC held $5.4 million in ineffective road credits; four short-term contractors held $3 million in ineffective road credits. The contracts held by the short-term contractors are scheduled to expire in 1995 and 1996, at which time any remaining ineffective credits will be canceled. By contrast, KPC retains the ability to convert or transfer its ineffective credits between offerings until the year 2004. APC would have been able to carry forward its ineffective credits to 2011 had its contract not been terminated. The following are more specific illustrations of how KPC has been able to use ineffective road credits in ways that short-term timber contract holders cannot: In March 1992, KPC transferred $7,510,248 in road credits it had received from five previous timber offerings back to the long-term contract's main account for use in subsequent offerings. Of this amount, only $26,086 was effective road credits. Had the credits been treated consistently with those of short-term contracts, KPC would not have been able to transfer the $7,484,162 in ineffective credits. In January 1993, KPC paid cash in the amount of $407,747 instead of using road credits for timber that it had harvested. Had this been a short-term contract, the financial transaction would have been closed and the credits could not have been used. However, because it was under a long-term contract, KPC was able to transfer ineffective road credits from other offerings to this one, replace the cash with ineffective credits, and thus receive a refund of the cash it paid above the base rate. In our March 1991 report, we noted that the Forest Service did not modify the long-term timber sales contracts to comply with the requirements of the reform act that road credits be treated substantially the same under both long- and short-term contracts. We pointed out that the language of the Tongass Timber Reform Act, as well as its legislative history, makes it clear that the Congress intended the Forest Service to make changes in road credits so that they would be treated substantially the same under both long- and short-term contracts. In that report, we recommended that the Forest Service revise the contracts accordingly. We continue to believe that ineffective road credits resulting from each timber offering should be canceled under KPC's long-term contract after each timber offering is completed. Unless the Forest Service revises KPC's long-term contract to bring this change about, KPC will continue to have a competitive advantage over short-term timber contract holders. Our conclusions would also be applicable to APC if the Forest Service had not terminated APC's long-term contract or if for some reason APC's contract is reinstated in the future. In its response to our earlier report and in its discussions on a draft of this report, the Forest Service has continued to maintain that its current policy complies with the act and intends to take no action to modify the provision for road credits in long-term contracts. The Forest Service maintains that the treatment of road credits is consistent, in that ineffective road credits are terminated at the end of either type of contract. They maintain that the length of time that the long-term contractors can hold the road credits is not relevant. Our concern about the Forest Service's argument is that although ineffective credits are canceled at the end of both types of contracts, long-term contractors continue to hold a competitive advantage. Their competitive advantage is that they have greater ability to retain and use ineffective credits to offset timber payments if the price of timber rises during the life of their contracts. In our view, the language of the Tongass Timber Reform Act, as well as its legislative history, makes it clear that the Congress intended the Forest Service to make changes in road credits so that they would be treated substantially the same under both long-and short-term contracts. In light of the Forest Service's position that it needs to take no action to comply with the Tongass Timber Reform Act's provision on road credits, the Congress may wish to consider directing the Secretary of Agriculture to modify the Ketchikan Pulp contract so that ineffective road credits generated during a timber offering would be canceled after the timber offering is completed. The Tongass Timber Reform Act directs the Forest Service to protect fish and wildlife habitat in streamside, or "riparian," areas of harvest units by designating 100-foot buffers of timber to be left standing along the sides of many streams in timber harvest areas. During inspections of these buffers in 1992 and 1993, however, both the Forest Service and the state of Alaska found buffers that, at some point along their length, did not meet the minimum 100-foot width requirement. The Forest Service has since taken sufficient steps to ensure greater compliance with this requirement. The Forest Service's management plan for the Tongass National Forest, as well as its agreement with the state of Alaska for managing water quality, calls for monitoring the effectiveness of buffers. We found that before 1994, the Forest Service's monitoring efforts had been limited in scope and often did not include measurements against important criteria that could help determine how effectively buffers were working. This situation was partly the result of the lack of specific monitoring guidance from the Alaska Regional Office. In fiscal year 1994, the Forest Service implemented a new program to monitor buffers' effectiveness that, among other things, provides clearer direction for the types of information to be gathered. The reform act requires that timber harvesters leave 100-foot buffers of standing timber along two classes of streams in the Tongass National Forest--class I streams and class II streams that flow directly into class I streams: Class I streams are perennial or intermittent streams that (1) are direct sources of domestic-use water; (2) provide spawning, rearing, or migration habitat for migratory and resident fish; or (3) have a major effect on the water quality of another class I stream. Class II streams that flow directly into a class I stream are perennial or intermittent streams that (1) provide spawning and rearing habitat for resident fish or (2) have moderate influence on the water quality of other class I or class II streams. Such buffers are designed to protect riparian areas, which are important in such ways as providing fish and wildlife habitat, protecting stream channels and stream banks, and stabilizing floodplains. Whenever the stream lies within the harvest area, the act requires a 100-foot buffer on each side. Whenever the stream forms a boundary of the harvest area, the buffer must be at least 100 feet wide on the side where timber is to be harvested. The act required buffers for those timber harvest units from which timber was either sold or released for harvest on or after March 1, 1990. The Forest Service took two main steps to implement this provision of the act. First, it modified APC's and KPC's long-term contracts to require that buffers of at least 100 feet be established along class I and class II streams. Second, the Forest Service modified its regional Soil and Water Conservation Handbook in February 1991 to incorporate changes resulting from the act. The handbook now identifies the management practices needed to maintain and protect water quality and fisheries habitat and to minimize adverse effects on riparian areas from logging and other land-disturbing management activities. The handbook's changes reinforce the importance of the buffers by calling for special attention to land and vegetation for 100 feet from the edges of all streams, lakes, and other bodies of water. Under an agreement with the Alaska Department of Environmental Conservation, the Forest Service is to monitor how well the buffers have been implemented. Among other things, the Forest Service is to determine whether established buffers comply with applicable standards and guidelines, including checking whether the buffers are at least 100 feet wide. In addition to the Forest Service's monitoring, the Alaska Departments of Fish and Game and Environmental Conservation monitor buffer widths. On-site monitoring inspections during 1992 and 1993 by the Forest Service and the Department of Fish and Game of portions of KPC's and APC's buffers showed instances in which the 100-foot minimum requirement was not met. More specifically: In September 1992, the Department of Fish and Game reported that during an inspection of harvest units on northern Prince of Wales Island, at least 16 of the 20 buffer measurements taken did not meet the 100-foot requirement. The narrowest portions of the buffers measured were about 50 feet wide, and portions of 11 buffers were less than 75 feet wide. In October 1992, Thorne Bay Ranger District staff made 132 buffer measurements and found that portions of 38 buffers--almost 29 percent--were less than 100 feet wide; most were narrower by 10 to 20 feet. In July 1993, an interdisciplinary team from the Sitka Ranger District reviewed more than 120 timber harvest units and found that portions of the buffers in more than 100 of the units were less than 100 feet wide. However, these buffers were usually only narrower by a few feet. The inspectors noted that such factors as uneven terrain, dense vegetation, and meandering, multichannel stream courses can lead to errors in designating buffers and adhering to minimum widths across the many miles of riparian areas affected by timber harvests. Changes have been made to address the problems identified in the inspections of buffer widths by the Forest Service and the Alaska Department of Fish and Game. Each of the three area offices of the Tongass National Forest--Ketchikan, Stikine, and Chatham--recognized the need to take corrective action to attain a higher degree of conformity with the requirement and have taken actions to ensure greater compliance. The Ketchikan area office, where the greatest concentration of buffers exists, provides an example. In March 1993, in response to a December 1992 directive from the area office, the area's three district rangers reported that corrective actions had either been taken or would be taken in the near future. For example, the rangers said that a certification statement on buffer widths had been added to the planning documents for all harvest units, cloth tapes and laser guns were being used to provide precise measurements of buffer widths, and district personnel received training on buffer measurements and other aspects of harvest unit layout. Similar steps have been taken or are under way in the Stikine and Chatham areas. We believe the steps taken at the area and district levels will help ensure that buffers with the appropriate widths are established. The Tongass Land Management Plan and the Forest Service's agreement with the Alaska Department of Environmental Conservation specify that the Forest Service is to monitor the effectiveness of its projects, activities, and practices. As part of its monitoring effort, the Forest Service is to determine if buffers have been effective in minimizing the adverse effects that logging and other land-disturbing activities could have on riparian areas. We found that before 1994, the Forest Service did not have a regional program to monitor the buffers' effectiveness. Each of the area offices had its own monitoring procedures. However, these procedures to monitor buffer effectiveness were limited in scope and often did not include measurements against important criteria (such as water quality) needed to determine how effectively buffers were working. For example, within the Stikine area, monitoring of the buffers' effectiveness consisted of visual observations of the extent to which the buffers contained timber that had been blown down by wind. While these observations yielded insights into the relative lack of effectiveness of buffers with blown-down timber, the focus on this single characteristic left many questions about effectiveness unaddressed. Similarly, the Ketchikan area limited its monitoring efforts to steep, deeply cut drainages. Again, the efforts yielded useful information, but the effectiveness of buffers that did not fall into this one limited category went largely unaddressed. According to Stikine area officials, the lack of sufficient funds, staff, and monitoring objectives were the primary reasons why monitoring buffers' effectiveness has been limited. In addition, Ketchikan area officials told us that more specific direction was needed from the Alaska Regional Office identifying the kinds of information needed to monitor buffers' effectiveness. Alaska Regional Office officials said that they initiated a monitoring project in 1992 that would lead to establishing a regionwide program to monitor buffers' effectiveness. The project reviewed the condition of buffers, evaluated their effectiveness at maintaining riparian habitat and water quality, and recommended improvements to buffers' design. The project identified six types of information for use in assessing buffers' effectiveness, including measuring the volume of large woody debris in a stream and determining the stability of stream banks. According to the regional office monitoring coordinator, the project was tested at eight sites in the Chatham area in 1993. For example, in June 1993 the Forest Service and the Alaska Department of Environmental Conservation jointly monitored the effectiveness of two buffers along a class II stream. The environmental specialist with the Alaska Department of Environmental Conservation told us preliminary indications showed that the two buffers were meeting expectations in being able to protect riparian areas. The regional office monitoring coordinator also told us that the 1994 buffer monitoring plans for each of the area offices included the types of information identified as contributing to the evaluation of buffers' effectiveness in the eight-site project. Currently, each of the three areas is also participating in a multiyear, forestwide study of the stability and effectiveness of stream buffers. According to the regional monitoring coordinator, the interim results of the study will be available in the spring of 1995. The Forest Service has taken steps to improve both monitoring the width of buffers and evaluating their effectiveness. These steps should help ensure that buffers more consistently meet minimum width requirements and that their overall effectiveness is assessed more systematically. Because the buffer requirement is relatively new and because the effectiveness of buffers has been studied only to a limited degree, more time will be needed to determine how well they are working to help protect fish and wildlife habitat in timber harvest areas. If the boundary of a timber harvest unit is changed after the environmental impact statement (EIS) for the area has already been prepared, the Forest Service's policy requires that forest supervisors determine and document whether the changes are environmentally significant enough to require additional environmental study. Forest supervisors were not, in all cases, documenting the environmental significance of the harvest units' boundary changes or the need for additional analysis beyond what had been described in the existing EIS. This was particularly the case for KPC's harvest units. We examined 41 instances in which boundary changes had occurred in areas harvested by KPC and found that in 39 instances the documentation was not adequate. In 17 instances, there was no documentation at all, and in 22 instances the documentation had not been reviewed according to the Forest Service's policy. We also examined 19 instances in which boundary changes had occurred in areas harvested by APC and found that adequate documentation was present in 18 of them. As a result, the Forest Service had no assurance that the environmental consequences of the boundary changes were analyzed. During our review, in October 1993 the current forest supervisor responsible for KPC's harvest units sent instructions to district rangers detailing a process for assessing boundary changes and specifically stated that he would document the environmental significance of any changes and the need for any additional environmental analysis. Under the Forest Service's policy and in compliance with the National Environmental Policy Act, the Forest Service is required to assess the environmental impacts of proposed timber harvests and prepare an EIS. Among other things, an EIS documents the location and design of the planned timber harvest units within the area covered by the timber offering and identifies the volume of timber to be cut. For a number of reasons, the boundaries of timber harvest units analyzed in the EIS may subsequently be revised. At the time the EIS is developed, precise information about the volume of economically harvestable timber, unique habitat for endangered species, or other specific characteristics of the land may not be known with complete accuracy. For example, more detailed on-site review could show that the planned boundaries contain less harvestable timber than originally projected or that additional eagle nesting areas or streams requiring buffer protection might be found. To deal with such circumstances and still provide the needed volume of harvestable timber, boundary adjustments may be needed. However, by this time the EIS may have been developed, made available for comment, and approved. The Forest Service's policy contains several requirements for assessing and documenting the environmental effects of boundary changes made after environmental review has already been completed. The EIS specifies that for any proposed action (such as a boundary change) that deviates from a planned activity, the forest supervisor is to document the environmental significance of the proposed action. In doing so, if the forest supervisor determines that the impacts of the change do not deviate significantly from the impacts discussed in the EIS, the timber sale can proceed without further environmental study. However, if the forest supervisor determines that the change is significant, a supplemental EIS must be prepared. Contrary to the Forest Service's policy, forest supervisors had not in all cases documented the environmental significance of changes to harvest unit boundaries or the need for additional environmental analysis--particularly for KPC's harvest units. This situation occurred primarily because the forest supervisor inappropriately delegated his authority to district rangers to determine if boundary changes were signifcant and did not require the district rangers to provide documentation if they determined that the change was not significant. The Forest Service's policy does not allow this authority to be delegated to district rangers and in all cases requires documentation of the environmental significance. We reviewed the files for 60 harvest units--19 for APC and 41 for KPC--that had boundary changes after the EIS had been prepared. These units represented about 33 percent of APC's units and 18 percent of KPC's units in which harvests had occurred outside the original boundaries. Adequate documentation was present in 18 of the 19 files for APC's units but in only 2 of the 41 files for KPC's units. More specifically, for KPC's units, 16 units had no documentation at all of the environmental significance of 1 unit had adequate documentation of the environmental significance of one boundary change but no documentation for a second boundary change, and 22 units had documentation prepared by someone other than the forest supervisor--such as a district ranger--with no indication that the forest supervisor had reviewed the results. Guidance from the region places the responsibility for such determinations with the forest supervisor. Documentation of environmental impacts is important because it clearly demonstrates that the impacts were considered. However, the lack of documentation goes beyond simply being out of compliance with the Forest Service's policy. When no documentation was present in the file, the Forest Service had no assurance that the environmental significance of the boundary changes had actually been analyzed. While the absence of a forest supervisor's review of documentation may seem of less concern than the absence of documentation altogether, the absence of review has been a concern that the Forest Service has tried to correct for some time. In a November 1990 review, personnel in the Alaska Region noted that the forest supervisor responsible for KPC's harvest units at that time had inappropriately delegated to others the authority to make determinations about the environmental significance of boundary changes. Contrary to the Forest Service's policy, the delegation of authority did not require documentation if it was determined that the boundary change was not significant. The Alaska Region personnel recommended that the delegation of authority be withdrawn. When those personnel followed up in February 1992, they noted that the practice had apparently stopped since the forest supervisor had verbally withdrawn his delegation of authority. However, 9 of the 22 instances we examined in which the forest supervisor's review was lacking occurred after February 1992. We discussed our findings with the current forest supervisor and he agreed that there was a need for better documentation of boundary changes and their significance. In October 1993, the forest supervisor sent a letter to district rangers setting forth a detailed five-step process for assessing boundary changes and specifically stating that the forest supervisor will determine the significance of any changes and the action necessary. The Forest Service needs to ensure that the problems of missing or inadequate documentation of the environmental significance of boundary changes to timber harvest units are addressed. In recent years, although the problem has been noted, progress in correcting it has been slow. Improved compliance is important in providing assurance that environmental concerns associated with timber harvesting activities under long-term contracts have been fully addressed. Accordingly, we believe the Alaska Regional Office needs to continue its oversight of forest supervisors' compliance with the documentation requirements for changes to harvest unit boundaries that are made after the EIS have been issued. To ensure full consideration and disclosure of the environmental impacts of boundary changes to harvest units, we recommend that the Secretary of Agriculture direct the Chief of the Forest Service to require Alaska Regional Office officials to periodially check to ensure that forest supervisors are properly documenting the environmental significance of boundary changes to timber harvest units made after EIS's have been issued in the Tongass National Forest. We discussed the facts and our conclusions with the Forest Service officials responsible for timber management activities at headquarters and the Alaska Regional Office. These officials generally agreed with our facts and conclusions concerning documenting changes to timber harvest units and provided some technical clarifications that we incorporated, as appropriate.

Summary:
Pursuant to a congressional request, GAO reviewed the Forest Service's implementation of certain unilateral modifications to long-term contracts in Alaska and other requirements of the Tongass Timber Reform Act, focusing on whether: (1) road credits are used consistently between long-term contracts and short-term contracts; (2) buffers of standing timber have been left along designated streams as required; and (3) the Forest Service is requiring full documentation of environmental effects whenever changes are made to timber harvest area boundaries. GAO found that: (1) the Forest Service believes it treats road credits consistently across all contracts, since unused road credits are cancelled at the end of all timber sales contracts; (2) the long-term contractors' ability to carry unused road credits forward for longer periods than short-term contractors gives them an unfair competitive advantage; (3) some streamside buffers did not meet the 100-foot minimum width during the first years immediately following the act's passage, but the Forest Service has since taken steps to enforce this requirement; (4) in 1994, the Forest Service issued guidance and initiated a new monitoring program to ensure the buffers' effectiveness; (5) the Forest Service often does not document the environmental effects of timber harvest boundary changes; (6) in some instances, the forest supervisor has inappropriately delegated his documenting authority to district rangers and waived documentation where he believed boundary changes were insignificant; and (7) the forest supervisor has since withdrawn the authority delegation and established a detailed process for assessing boundary changes.