The Chesapeake Bay is the largest of the nation’s estuaries, measuring nearly 200 miles long and 35 miles wide at its widest point. Roughly half of the bay’s water comes from the Atlantic Ocean, and the other half is freshwater that drains from the land and enters the bay through the many rivers and streams in its watershed basin. As shown in figure 1, the bay’s watershed covers 64,000 square miles and spans parts of six states— Delaware, Maryland, New York, Pennsylvania, Virginia, and West Virginia—and the District of Columbia. Over time, the bay’s ecosystem has deteriorated. The bay’s “dead zones”— where too little oxygen is available to support fish and shellfish—have increased, and many species of fish and shellfish have experienced major declines in population. The decline in the bay’s living resources has been cause for a great deal of public and political attention. Responding to public outcry, on December 9, 1983, representatives of Maryland, Virginia, and Pennsylvania; the District of Columbia; the EPA; and the Chesapeake Bay Commission signed the first Chesapeake Bay agreement. Their agreement established the Chesapeake Executive Council and resulted in the Chesapeake Bay Program—a partnership that directs and conducts the restoration of the bay. Subsequent agreements in 1987 and again in 1992 reaffirmed the signatories’ commitment to restore the bay. The partners signed the most current agreement, Chesapeake 2000, on June 28, 2000. Chesapeake 2000—identified by the Bay Program as its strategic plan—sets out an agenda and goals to guide the restoration efforts through 2010 and beyond. In Chesapeake 2000, the signatories agreed to 102 commitments—including management actions, such as assessing the trends of particular species, as well as actions that directly affect the health of the bay. These commitments are organized under the following five broad restoration goals: Protecting and restoring living resources—14 commitments to restore, enhance, and protect the finfish, shellfish and other living resources, their habitats and ecological relationships to sustain all fisheries and provide for a balanced ecosystem; Protecting and restoring vital habitats—18 commitments to preserve, protect, and restore those habitats and natural areas that are vital to the survival and diversity of the living resources of the bay and its rivers; Protecting and restoring water quality—19 commitments to achieve and maintain the water quality necessary to support the aquatic living resources of the bay and its tributaries and to protect human health; Sound land use—28 commitments to develop, promote, and achieve sound land use practices that protect and restore watershed resources and water quality, maintain reduced pollutant loadings for the bay and its tributaries, and restore and preserve aquatic living resources; and Stewardship and community engagement—23 commitments to promote individual stewardship and assist individuals, community- based organizations, businesses, local governments and schools to undertake initiatives to achieve the goals and commitments of the agreement. As the only federal signatory to the Chesapeake Bay agreements, EPA is responsible for spearheading the federal effort within the Bay Program through its Chesapeake Bay Program Office. Among other things, the Chesapeake Bay Program Office is to develop and make available information about the environmental quality and living resources of the Chesapeake Bay ecosystem; help the signatories to the Chesapeake Bay agreement develop and implement specific plans to carry out their responsibilities; and coordinate EPA’s actions with those of other appropriate entities to develop strategies to improve the water quality and living resources in the Chesapeake Bay ecosystem. The Bay Program had established 101 measures to assess progress on individual aspects of the Bay. For example, the Bay Program had developed measures for determining trends in individual fish and shellfish populations, such as crabs, oysters, and rockfish. The Bay Program had also developed other measures to provide the information it needs to make management decisions. For example, to help inform its decisions regarding the effects of airborne nitrogen compounds and chemical contaminants in the bay ecosystem and to help establish reduction goals for these contaminants, the Bay Program had a measure to estimate vehicle emissions and compare them to vehicle miles traveled. While the Bay Program had established these 101 measures, it had not developed an approach that would allow it to translate these individual measures into an overall assessment of the progress made in achieving the five broad restoration goals. For example, although the Bay Program had developed measures for determining trends in individual fish and shellfish populations, it had not yet devised a way to integrate those measures to assess the overall progress made in achieving its Living Resource Protection and Restoration goal. According to an expert panel of nationally recognized ecosystem assessment and restoration experts convened by GAO, in a complex ecosystem restoration project like the Chesapeake Bay, overall progress should be assessed by using an integrated approach. This approach should combine measures that provide information on individual species or pollutants into a few broader- scale measures that can be used to assess key ecosystem attributes, such as biological conditions. The signatories to the Chesapeake Bay agreement have discussed the need for an integrated approach over the past several years. However, according to an official from the Chesapeake Bay Program Office, until recently they did not believe that the program could develop an approach that was scientifically defensible, given their limited resources. The program began an effort in November 2004 to develop, among other things, a framework for organizing the program’s measures and a structure for how the redesign work should be accomplished. In our report, we recommended that the Chesapeake Bay Program Office complete its efforts to develop and implement such an integrated approach. In January 2006, the Bay Program formally adopted an initial integrated approach for assessing both bay health and management actions taken to restore the bay. However, according to a Bay Program official, more work is needed before a fully integrated approach for assessing restoration progress can be implemented. The Bay Program’s primary mechanism for reporting on the health status of the bay—the State of the Chesapeake Bay report—was intended to provide the citizens of the bay region with a snapshot of the bay’s health. However, our review found that the State of the Chesapeake Bay report did not effectively communicate the current health status of the bay because it mirrored the shortcomings in the program’s measures by focusing on the status of individual species or pollutants instead of providing information on a core set of ecosystem characteristics. For example, the 2002 and 2004 State of the Chesapeake Bay reports provided data on oysters, crab, rockfish, and bay grasses, but the reports did not provide an overall assessment of the current status of living resources in the bay or the health of the bay. Instead, data were reported for each species individually. The 2004 State of the Chesapeake Bay report included a graphic that depicts oyster harvest levels at historic lows, with a mostly decreasing trend over time, and a rockfish graphic that shows a generally increasing population trend over time. However, the report did not provide contextual information that explained how these measures are interrelated or what the diverging trends meant about the overall health of the bay. Our experts agreed that the 2004 report was visually pleasing but lacked a clear, overall picture of the bay’s health and told us that the public would probably not be able to easily and accurately assess the current condition of the bay from the information reported. We also found that the credibility of the State of the Chesapeake Bay reports had been undermined by two key factors. First, the Bay Program had commingled data from three sources when reporting on the health of the bay. Specifically, the reports mixed actual monitoring information on the bay’s health status with results from a predictive model and the results of specific management actions. The latter two results did little to inform readers about the current health status of the bay and tended to downplay the bay’s actual condition. Second, the Bay Program had not established an independent review process to ensure that its reports were accurate and credible. The officials who managed and were responsible for the restoration effort also analyzed, interpreted, and reported the data to the public. We believe this lack of independence in reporting led to the Bay Program’s projecting a rosier view of the health of the bay than may have been warranted. Our expert panelists believe that an independent review panel—to either review the bay’s health reports before issuance or to analyze and report on the health status independently of the Bay Program—would significantly improve the credibility of the program’s reports. We recommended that the Chesapeake Bay Program Office revise its reporting approach to improve the effectiveness and credibility of its reports. In response to our recommendation, the Bay Program developed a new reporting format that was released for public review and comment in March 2006. The new report, entitled Chesapeake Bay 2005 Health and Restoration Assessment, is divided into two parts: part one is an assessment of ecosystem health and part two is an assessment of progress made in implementing management actions. The new report appears to have a more effective communications framework and clearly distinguishes between the health of the bay and the management actions being taken. In addition, the Bay Program plans to have its Scientific and Technical Advisory Committee independently review the new report and the process used to develop it. This review is planned for completion by late summer. Eleven key federal agencies; the states of Maryland, Pennsylvania, and Virginia; and the District of Columbia provided almost $3.7 billion in direct funding from fiscal years 1995 through 2004 to restore the bay. Federal agencies provided a total of approximately $972 million in direct funding, while the states and the District of Columbia provided approximately $2.7 billion in direct funding for the restoration effort over the 10-year period. Of the federal agencies, the Department of Defense’s Army Corps of Engineers provided the greatest amount of direct funding—$293.5 million. Of the states, Maryland provided the greatest amount of direct funding— more than $1.8 billion—which is over $1.1 billion more than any other state. Typically, the states provided about 75 percent of the direct funding for restoration, and the funding has generally increased over the 10-year period. As figure 2 shows, the largest percentage of direct funding— approximately 47 percent—went to water quality protection and restoration. Sound land use ($1.1 billion) Water quality protection and restoration ($1.7 billion) Ten of the key federal agencies, Pennsylvania, and the District of Columbia provided about $1.9 billion in additional funding from fiscal years 1995 through 2004 for activities that indirectly affected bay restoration. These activities were conducted as part of broader agency efforts and/or would continue without the restoration effort. Federal agencies provided approximately $935 million in indirect funding, while Pennsylvania and the District of Columbia together provided approximately $991 million in indirect funding for the restoration effort over the 10-year period. Of the federal agencies, the U.S. Department of Agriculture provided the greatest amount of indirect funding—$496.5 million—primarily through the Natural Resources Conservation Service. Of the states, Pennsylvania provided the greatest amount of indirect funding—$863.8 million. As with direct funding, indirect funding for the restoration effort had also generally increased over fiscal years 1995 through 2004. As figure 3 shows, the largest percentage of indirect funding—approximately 44 percent—went to water quality protection and restoration. Despite the almost $3.7 billion in direct funding and more than $1.9 billion in indirect funding that has been provided for activities to restore the bay, the Chesapeake Bay Commission estimated in a January 2003 report that the restoration effort faced a funding gap of nearly $13 billion to achieve the goals outlined in Chesapeake 2000 by 2010. Subsequently, in an October 2004 report, the Chesapeake Bay Watershed Blue Ribbon Finance Panel estimated that the restoration effort is grossly underfunded and recommended that a regional financing authority be created with an initial capitalization of $15 billion, of which $12 billion would come from the federal government. Chesapeake 2000 and prior agreements have provided the overall direction for the restoration effort over the past two decades. Although Chesapeake 2000 provides the current vision and overall strategic goals for the restoration effort, along with short- and long-term commitments, we found that the Bay Program lacked a comprehensive, coordinated implementation strategy that could provide a road map for accomplishing the goals outlined in the agreement. In 2003, the Bay Program recognized that it could not effectively manage all 102 commitments outlined in Chesapeake 2000 and adopted 10 keystone commitments as a management strategy to focus the partners’ efforts. To achieve these 10 keystone commitments, the Bay Program had developed numerous planning documents. However, we found that these planning documents were not always consistent with each other. For example, the program developed a strategy for restoring 25,000 acres of wetlands by 2010. Subsequently, each state within the bay watershed and the District of Columbia developed tributary strategies that described actions for restoring over 200,000 acres of wetlands—far exceeding the 25,000 acres that the Bay Program had developed strategies for restoring. While we recognize that partners should have the freedom to develop higher targets than established by the Bay Program, we are concerned that having such varying targets could cause confusion, not only for the partners, but for other stakeholders about what actions are really needed to restore the bay, and such varying targets appear to contradict the effort’s guiding strategy of taking a cooperative approach to achieving the restoration goals. We also found that the Bay Program had devoted a significant amount of their limited resources to developing strategies that were either not being used by the Bay Program or were believed to be unachievable within the 2010 time frame. For example, the program invested significant resources to develop a detailed toxics work plan for achieving the toxics commitments in Chesapeake 2000. Even though the Bay Program had not been able to implement this work plan because personnel and funding had been unavailable, program officials told us that the plan was being revised. It is unclear to us why the program is investing additional resources to revise a plan for which the necessary implementation resources are not available, and which is not one of the 10 keystone commitments. According to a Bay Program official, strategies are often developed without knowing what level of resources will be available to implement them. While the program knows how much each partner has agreed to provide for the upcoming year, the amount of funding that partners will provide in the future is not always known. Without knowing what funding will be available, the Bay Program is limited in its ability to target and direct funding toward those restoration activities that will be the most cost effective and beneficial. The Chesapeake Bay Program Office recognizes that some of the plans are inconsistent and unachievable. The office told us that it was determining how to reconcile the program’s various plans and stated that these plans were developed to identify what actions will be needed to achieve the commitments of Chesapeake 2000 and were not developed considering available resources. The office also recognizes that there is a fundamental gap between what needs to be done to achieve some of the commitments and what can be achieved within the current resources available. According to Chesapeake Bay Program Office officials, the development of an overall implementation plan that takes into account available resources had been discussed, but that the partners could not agree on such a plan. We recommended that the Chesapeake Bay Program Office develop a comprehensive, coordinated implementation strategy that takes into account available resources. In response to our recommendations, the Bay Program has taken several actions. The Chesapeake Bay Program Office is currently developing a Web-based system to link and organize the program’s various planning documents. In addition, program partners adopted a funding priorities framework in October 2005 that designates three broad funding priorities—agriculture, wastewater treatment, and developed and developing lands—for accelerating the implementation of the states’ tributary strategies. While these actions are important, they fall short of the comprehensive, coordinated implementation strategy we recommended. The program still needs to reconcile the inconsistencies of the program’s various planning documents and clearly link the 10 keystone commitments with the funding priority framework adopted by program partners. We continue to believe that the development of a comprehensive, coordinated implementation strategy that lays out what the program plans to accomplish and that is directly linked to the funding that is available would allow the program to move forward in a more strategic and well-coordinated manner. In closing, Mr. Chairman, it is well recognized that restoring the Chesapeake Bay is a massive, difficult, and complex undertaking. While the Bay Program has made significant strides, our October 2005 report documented how the success of the program has been undermined by the lack of (1) an integrated approach to measure overall progress; (2) independent and credible reporting mechanisms; and (3) coordinated implementation strategies. These deficiencies have resulted in a situation in which the Bay Program could not present a clear and accurate picture of what the restoration effort had achieved, could not effectively articulate what strategies would best further the broad restoration goals, and could not identify how limited resources should be prioritized. We are encouraged that the Bay Program is taking actions to address our recommendations because, without these actions, we do not believe the Bay Program will be able to change the status quo and move the restoration effort forward in the most cost-effective manner. Mr. Chairman, this concludes my prepared statement. I would be happy to respond to any questions that you or Members of the Subcommittee may have. For further information about this testimony, please contact Anu Mittal at (202) 512-3841. Other individuals making significant contributions to this testimony were Sherry McDonald, Assistant Director; Bart Fischer; and James Krustapentus. 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Summary: The Chesapeake Bay Program (Bay Program) was created in 1983 when Maryland, Pennsylvania, Virginia, the District of Columbia, the Chesapeake Bay Commission, and the Environmental Protection Agency (EPA) agreed to establish a partnership to restore the Chesapeake Bay. The partnership's most recent agreement, Chesapeake 2000, sets out an agenda and five broad goals to guide the restoration effort through 2010. This testimony summarizes the findings of an October 2005 GAO report (GAO-06-96) on (1) the extent to which appropriate measures for assessing restoration progress have been established, (2) the extent to which current reporting mechanisms clearly and accurately describe the bay's overall health, (3) how much funding was provided for the effort for fiscal years 1995 through 2004, and (4) how effectively the effort is being coordinated and managed. The Bay Program had developed over 100 measures to assess progress toward meeting certain restoration commitments and providing information to guide management decisions. However, the program had not yet developed an integrated approach that would allow it to translate these individual measures into an assessment of overall progress toward achieving the five broad restoration goals outlined in Chesapeake 2000. For example, while the Bay Program had appropriate measures to track crab, oyster, and rockfish populations, it did not have an approach for integrating the results of these measures to assess progress toward the agreement's goal of protecting and restoring the bay's living resources. In response to GAO's recommendation, the Bay Program adopted an initial integrated approach in January 2006. The State of the Chesapeake Bay reports did not provide effective and credible information on the current health status of the bay. Because these reports focused on individual trends for certain living resources and pollutants, it was not easy for the public to determine what these data collectively said about the overall health status of the bay. The credibility of these reports had been undermined because the program had commingled actual monitoring data with results of program actions and a predictive model, and the latter two tended to downplay the deteriorated conditions of the bay. Moreover, the Bay Program's reports were prepared by the same program staff who were responsible for managing the restoration effort, which led to reports that projected a rosier picture of the bay's health than may have been warranted. In response to GAO's recommendation, the program has developed a new reporting format and plans to have the new report independently assessed. From fiscal years 1995 through 2004, the restoration effort received about $3.7 billion in direct funding from 11 key federal agencies; the states of Maryland, Pennsylvania, and Virginia; and the District of Columbia. These funds were used for activities that supported water quality protection and restoration, sound land use, vital habitat protection and restoration, living resources protection and restoration, and stewardship and community engagement. During this period, the restoration effort also received an additional $1.9 billion in funding from other federal and state programs for activities that indirectly contributed to the restoration effort. The Bay Program did not have a comprehensive, coordinated implementation strategy to help target limited resources to those activities that would best achieve the goals outlined in Chesapeake 2000. Although the program had adopted 10 key commitments to focus the partners' efforts and had developed numerous planning documents, some of these documents were inconsistent with each other or were perceived as unachievable by program partners. In response to GAO's recommendation, the Bay Program is currently developing a Web-based system to unify its various planning documents and has adopted a funding priority framework. These actions, while important, fall short of the strategy recommended by GAO.