About one-third of all land in the United States is federally owned and consists largely of forests, grasslands, and other vegetated lands. Over the years, underbrush has grown substantially on these lands, and along with recent drought conditions and disease infestation, has fueled larger and more intense wildfires. Further, there has been an increase in the number and size of communities that border these areasin what is known as the wildland urban interface. Suppressing wildfires that threaten these areas costs significantly more because protecting homes and other structures is costly. In 2000 and 2002, wildfires burned nearly 8.5 million and 7 million acres, respectively; and in 2003, wildfires burned about another 4 million acres. In both 2000 and 2002, suppression costs were over $1.4 billion each year; in 2003, suppression costs nearly reached that amount. Because suppression costs have exceeded appropriated funds, the agencies have had to transfer funds from other programs to supplement their suppression funds. Two years in advance of when funds are appropriated, the Forest Service and Interior develop budget requests by estimating the annual costs to suppress wildfires. Estimating these costs is inherently difficult because of the unpredictable nature of wildfires, including where they will occur, how intense they will be, and how quickly they will spread. As a result, these estimates, at times, result in funding for wildfire suppression that is insufficient to cover actual suppression costs. Historically, the Forest Service and Interior have used a 10-year rolling average of suppression expenditures as the foundation for their suppression budget requests. During each year’s fire season, the Forest Service and Interior also develop monthly forecasts to update the overall suppression costs estimate and determine how much additional funding, if any, will be needed. When it becomes apparent that annual appropriated funds are insufficient to support forecasted suppression needs, the Forest Service and Interior are authorized to use funds from other programs within their agency to pay for emergency firefighting activities. From 1999 through 2003, the Forest Service and Interior transferred over $2.7 billion from various agency programs to help fund wildfire suppression when appropriated funds were insufficient. The Forest Service transferred monies from numerous programs supporting the breadth of its activities, while Interior transferred funds primarily from two programsconstruction and land acquisition. To determine the amount of funds to transfer, the agencies used similar monthly forecasting models to determine suppression funding needs during the fire seasons. Agency officials acknowledged, however, that the models produced widely varying forecasts of suppression costs that substantially underestimated actual costs. Also, in determining the programs from which to transfer funds, the agencies attempted to select programs with projects that would not be significantly impacted by transfers because a portion of their funds would not be needed until subsequent years. Between 1999 and 2003, the Congress reimbursed the agencies for about 80 percent of the funds that were transferred on average. However, the Congress did not always reimburse the programs in amounts proportionate to the transfers. In addition, the Forest Service and Interior had some discretion in distributing the reimbursements among various projects, depending on their priorities at the time of reimbursement. For each of the last 5 years, wildfire suppression costs have been substantially greater than the amount of funds appropriated for suppression, necessitating the Forest Service and Interior to transfer over $2.7 billion from other agency programs to help fund wildfire suppression activities. Of this amount, the Forest Service transferred the majority— almost $2.2 billion—while Interior transferred over $500 million. Nearly half of the total amount was transferred in 1 year alone, 2002, but substantial transfers were needed for other recent severe fire seasons as well. For example, during the 2000 and 2003 fire seasons, almost $400 million and about $870 million were transferred, respectively. As illustrated in figure 1, suppression costs have exceeded suppression appropriations almost every year since 1990. To determine the amount of funds to transfer each year, the agencies used monthly forecasting models to estimate likely wildfire suppression costs during the wildfire season. Agency officials acknowledged, however, that the models produced forecasts of suppression costs that varied by hundreds of millions of dollars when compared with actual, year-end suppression costs. For example, in June 2003, Interior’s forecasting model predicted that suppression costs for the year would exceed suppression appropriations by about $72 million. A month later, the model predicted costs would exceed appropriations by about $56 million; by late August, the model predicted that costs would exceed appropriations by more than $100 million. By the end of the fiscal year, Interior had transferred over $175 million to cover actual suppression costs. Forest Service forecasts also were well short of year-end suppression costs during 2003. The agency’s forecasting model predicted that annual suppression costs would reach nearly $800 million, indicating that current year funds would be about $375 million less than projected needs. By the end of the fiscal year, however, the Forest Service had transferred nearly $700 million to cover suppression costs of over $1 billion. Both Forest Service and Interior officials indicated there is a high degree of uncertainty in trying to estimate the current year’s suppression costs, primarily because weather conditions are difficult to predicteven over the short term. Despite the discrepancies between agency forecasts and actual suppression costs, the agencies have performed no formal assessments of their forecasting models’ accuracy. Agency officials acknowledged that such assessments would be useful for monitoring and improving the reliability of their models and enhancing their ability to predict when transfers will be needed and how much to transfer. The agencies also acknowledged that the forecasts have not been accurate and are revising the models in an effort to improve the forecasts. In deciding the programs from which to transfer funds, Interior and Forest Service officials primarily selected programs with projects that would not be significantly impacted by transfers because a portion of their funds would not be needed until subsequent years. Interior transferred funds mostly from its construction and land acquisition programs, with about two-thirds of the funds coming from construction. These two programs are used to construct and maintain facilities, roads, and trails on Interior lands, among other things, and to acquire additional public lands. In 2002 and 2003, Interior also transferred some funds from fire-related preparedness, postfire rehabilitation, and hazardous fuels reduction projects in order to support suppression activities. Within Interior, the National Park Service transferred substantially more funds than the other three agencies over the last 5 years, transferring about 60 percent of the $540 million transferred. Unlike Interior, the Forest Service transferred monies from numerous programs supporting the breadth of its activities. These programs included its construction; land acquisition; national forest system, which among other things conducts postwildfire rehabilitation and restoration work; and state and private forestry programs, which support activities such as grants to states, tribes, communities, and private landowners for fire management, urban forestry, and natural resource education as well as insect suppression. Before 2001, the Forest Service had transferred funds solely from its Knutson-Vandenberg Fund (K-V Fund), because historically this restoration program had large amounts of money that could not be used by the end of the fiscal year. Since the mid-1980s, the Forest Service has transferred more than $2.3 billion from this program; however, more than $400 million has not been reimbursed. As a result, the Forest Service became concerned about the viability of the K-V Fund as a source of transfers and in 2001 began transferring funds from other major Forest Service programs. The Forest Service and Interior programs from which funds were transferred and the amount of funds transferred and reimbursed from 1999 through 2003 are outlined in table 1. Additional details on these matters are included in appendixes II and III. Over the last 5 years, the Congress reimbursed, on average, about 80 percent of the funds that the Forest Service and Interior transferred for wildfire suppression expenses. Although the agencies received nearly full reimbursement for funds transferred in 2000 and 2001, the Forest Service and Interior were reimbursed about 74 percent and about 81 percent, respectively, of the funds transferred in 2002 and 2003. For these later 2 years, individual Forest Service programs were reimbursed at varying rates. For example, the Congress reimbursed the Forest Service’s state and private forestry program for nearly 100 percent and its national forest system program for 40 percent of the funds transferred in 2002. In contrast, the Congress reimbursed Interior’s construction and land acquisition programs at about 81 percent each. Congressional appropriators and Office of Management and Budget (OMB) officials worked with Forest Service and Interior officials to determine the amount of funds to reimburse to the numerous agency programs impacted by funding transfers in order to help the agencies meet their current program needs. For example, according to Forest Service officials, state and private forestry projects, such as community assistance grants and forest legacy project grants, were important priorities when the Forest Service received reimbursements in 2003 for funds transferred in 2002. As a result, the state and private forestry program received full reimbursement. In contrast, the national forest system had a large amount of funds transferred in 2002 that was dedicated for the salaries of staff diverted from their normal duties to fight wildfires. OMB officials indicated that since these employees had been paid—albeit out of the wildfire suppression account—the transferred salaries required no reimbursement. Therefore, the national forest system program was reimbursed for a much smaller amount—about 40 percent. When the Forest Service and Interior received less than full reimbursement for funds transferred in 2002 and 2003, the agencies used different procedures to distribute the reimbursed funds within their programs. Forest Service officials distributed the funds to projects reflecting current priorities within individual programs, which were not necessarily the same projects from which funds were transferred. For example, Forest Service officials in California targeted the funds to projects within the San Bernardino National Forest to help address the increased wildfire risk created by insect infestation, even though no funds had been transferred from these projects.