Both the Forest Service and BLM conduct timber sales as part of their management of public land. However, the agencies differ in their organizational structure and in the sources of funding they use for carrying out timber sales. Timber sales activities involve staff time and, in some cases, equipment and supplies, to identify the sale area, conduct the required environmental analyses, solicit bids, prepare the timber sale contract, mark the sale boundary and the trees to be cut or left, and monitor the harvest operations and reforestation activities. The Forest Service manages 193 million acres of national forests and grasslands. The Service has nine regions that oversee 155 national forests; the forests, in turn, oversee more than 600 ranger districts. Each region (see fig. 1) encompasses a broad geographic area, headed by a regional forester who reports directly to the Chief of the Forest Service and provides leadership for, and coordinates the activities of, the various forests within the region. Each forest, headed by a supervisor, allocates the budget and coordinates activities among the various ranger districts within the forest. Each ranger district, headed by a district ranger, conducts or oversees “on the ground” activities such as construction and maintenance of trails; operation of campgrounds; management of wildlife habitat; and the sale and harvest of forest products, including timber. The districts vary in size from 50,000 acres to more than 1 million acres. The Forest Service’s timber sales-related activities are funded by a variety of appropriations. Within the Service’s appropriations, there are several programs (or “budget line items”) directly or indirectly related to timber sales. For the Forest Products Program, which is responsible for most timber sales-related activity, the Forest Service received about $277.6 million of its $1.5 billion national forest system appropriation in fiscal year 2006. However, the Forest Products Program is not limited to timber sales; some expenditures within the program are associated with other products, such as mushrooms and decorative grasses and foliage. The Service issues permits that allow individuals to gather such products from the forests, whether for personal use or for sale. Conversely, not all timber sales- related expenditures are included in the Forest Products Program. Certain timber sales’ planning expenses, for example, might be borne by other programs—including vegetation and watershed management or wildlife and fish management—if the primary purpose of the sale is to improve vegetative conditions or wildlife habitat rather than to provide commercial timber. The Forest Service also uses various other funds to pay for timber sales- related activities, including (1) the Knutson-Vandenberg Trust Fund, (2) the Salvage Sale Fund, (3) the Brush Disposal Fund, (4) the Timber Sales Pipeline Restoration Fund, and (5) stewardship contracting revenue. The Knutson-Vandenberg (K-V) Trust Fund, established by the Knutson-Vandenberg Act of 1930 (16 U.S.C. §§ 576-576b), was created to collect a portion of timber sales revenue to pay for the reforestation of areas from which timber is cut. The reforestation projects eligible for such funding include growing trees for planting, planting trees, sowing seeds, removing weeds and other competing vegetation, and preventing animals from damaging new trees. The act was amended in 1976 to allow the Forest Service to use these funds for other timber sales area improvement activities, such as creating wildlife habitat. It was amended again in 2005 to authorize expenditures within the entire Forest Service region in which the timber sales occurred. In fiscal year 2006, the Forest Service allocated $40 million of K-V funds for forest product sales under the expanded authority, and another $77.6 million of K-V funds for activities conducted under the original K-V authority. The Salvage Sale Fund, derived from salvage sale revenue, is used to pay for preparing and administering future salvage sales. The fund may also be used to pay for the design, engineering, and supervision of construction of roads associated with such sales. The Salvage Sale Fund was created by the National Forest Management Act of 1976 (16 U.S.C. 472a(h)). Individual salvage sale timber contracts designate the amount of receipts to be collected and transferred to the Salvage Sale Fund. For fiscal year 2006, the Forest Service allocated $75.8 million for salvage sales. The Brush Disposal Fund, derived from payments made by timber purchasers, is used to pay for the removal of brush and debris that result from logging. For fiscal year 2006, the Forest Service allocated $11.6 million from the Brush Disposal Fund for this purpose. The Brush Disposal Fund is a permanent fund created to allow the deposit of funds to pay for certain brush disposal work on all timber sales, including salvage sales. Forest Service staff complete brush disposal work using funds collected as an additional charge to the purchaser, based on the amounts paid for the trees harvested. The funds are deposited in the Brush Disposal Fund, and the Service generally seeks to spend them within 3 years of the completion of the sale. Brush disposal usually entails chipping or burning vegetative debris from the sale, such as stumps, broken treetops, tree limbs and branches, or damaged brush resulting from logging operations. Brush disposal is also referred to as slash disposal. The Timber Sales Pipeline Restoration Fund, authorized by the Omnibus Consolidated Rescissions and Appropriations Act of 1996 (Pub. L. No. 104-134), is used to pay for certain eligible timber sales. For fiscal year 2006, the Forest Service had $2.5 million in the pipeline fund. The act created this fund to receive a portion of the receipts from certain timber sales released under the fiscal year 1995 Supplemental Appropriations for Disaster Assistance and Rescissions Act. The revenue deposited in the fund is to be used for the preparation of timber sales not funded by annual appropriations and to fund certain recreation projects. Specifically, 75 percent of the revenue is to be used for the preparation of green timber sales on national forest and certain BLM lands, and 25 percent is to be used for recreation projects. Stewardship contracting revenue, derived from stewardship projects involving the sale of timber, is used to pay for future stewardship projects. For fiscal year 2006, the Forest Service had $1.7 million in such revenue available. Stewardship contracting involves the use of any of several contracting authorities that were first authorized for use by the Forest Service on a pilot basis in October 1998. The Omnibus Consolidated and Emergency Supplemental Appropriations Act for 1999 established stewardship contracting authority to achieve national forest land management goals that meet local and rural community needs. Prominent among the stewardship contracting authorities is the ability to (1) trade goods—timber, for example—for contract services, such as thinning of small trees and brush, and (2) retain for use in future stewardship projects any revenue generated through selling forest products such as timber, rather than returning the revenue to the Department of the Treasury, as is required for traditional timber sales. Although stewardship contracting was initially established as a demonstration project that involved a limited number of individual projects within the Forest Service and was to end in 2002, the Consolidated Appropriations Resolution of 2003, among other things, extended the use of stewardship contracting authority to 2013, eliminated the limit on the number of projects, authorized commercial tree removal for forest health purposes as a project purpose, and extended the authority to BLM. The Forest Service’s tracking of its timber sales-related expenditures has been the subject of several of our previous reports. For example, in 2001 we reported that serious accounting and financial reporting deficiencies precluded an accurate determination of the total costs associated with the timber sales program and, in fact, rendered the Service’s cost information unreliable. In 2003, we noted that the Service could not accurately report on the actual costs of individual work activities. And in 2006, we reported that the Forest Service did not have a system that allowed it to determine the cost of its activities below the program level, resulting in a continuing focus on budget management without a corresponding focus on cost management. BLM administers more land than any other federal agency—about 261 million acres. Of that amount—most of which is located in the western states, including Alaska—roughly 69 million acres (about 26 percent) are commercial forests and woodlands. BLM’s organizational structure includes national, state, and field-level units. National units include BLM’s headquarters office as well as national centers with specific service and support responsibilities, such as the National Business Center in Denver, Colorado. State-level units consist of 12 state offices that implement BLM’s activities in one or more states. Field-level units include 144 district and field offices that carry out the “on the ground” activities, including timber sales, under the supervision of the BLM state offices. Figure 2 shows BLM- administered lands and the boundaries of BLM state jurisdictions. BLM’s timber sales-related activities are funded through various appropriations. BLM conducts timber sales under two separate forestry programs. Most of BLM’s timber program is associated with the agency’s lands in western Oregon, which are managed expressly for the purpose of providing a permanent source of timber supply, protecting watersheds, regulating stream flow, contributing to the economic stability of local communities and industries, and providing recreational facilities under the provisions of the Oregon and California Sustained Yield Act of 1937. These lands, heavily forested with Douglas fir and western hemlock species, are responsible for the majority of BLM’s timber production. BLM timber sales undertaken in western Oregon are funded by the Oregon and California Grant Lands appropriation; in fiscal year 2006, BLM allocated $27.1 million for the sale of this timber.