Recreation Fees: Information on Forest Service Management of	 
Revenue from the Fee Demonstration Program (17-SEP-03,		 
GAO-03-1161T).							 
                                                                 
Since 1996, federal land management agencies have collected over 
$900 million in recreation fees from the public under an	 
experimental initiative called the Recreational Fee Demonstration
Program. The Forest Service's part was about $160 million. The	 
authority to collect these fees expires at the end of fiscal year
2004. Central to the debate about whether to reauthorize the	 
program is how effectively the land management agencies are using
the hundreds of millions of dollars that the recreation fees have
provided them. In April 2003, GAO reported on Forest Service	 
management of the fee demonstration program. (See Recreation	 
Fees: Information on Forest Service Management of Revenue from	 
the Fee Demonstration Program, GAO-03-470 [Washington D.C.: Apr. 
25, 2003]). This testimony is based on the work GAO conducted for
the April 2003 report. Four issues are addressed: (1) how the	 
Forest Service determines spending priorities for the revenues	 
generated by the fee program, (2) how the agency has spent its	 
fee demonstration program revenues, (3) what the agency is doing 
to measure the impact of the recreation fee revenues on reducing 
its deferred maintenance backlog, and (4) how it accounts for its
fee demonstration program revenues.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-1161T					        
    ACCNO:   A08509						        
  TITLE:     Recreation Fees: Information on Forest Service Management
of Revenue from the Fee Demonstration Program			 
     DATE:   09/17/2003 
  SUBJECT:   Budget outlays					 
	     Facility maintenance				 
	     Forest management					 
	     Maintenance costs					 
	     National forests					 
	     Performance measures				 
	     Prioritizing					 
	     User fees						 
	     Funds management					 
	     Forest Service Recreational Fee			 
	     Demonstration Program				 
                                                                 

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GAO-03-1161T

Testimony Before the Subcommittee on Forests and Forest Health, Committee
on Resources, House of Representatives

United States General Accounting Office

GAO For Release on Delivery Expected at 2: 00 p. m. a. m. EDT Wednesday,
September 17, 2003 RECREATION FEES

Information on Forest Service Management of Revenue from the Fee
Demonstration Program

Statement of Barry T. Hill, Director Natural Resources and Environment

GAO- 03- 1161T

Local forest managers largely determine Forest Service spending priorities
for the Recreational Fee Demonstration Program. Given broad discretion in
deciding how to use fee demonstration revenues, local forest managers
retain between 90 and 100 percent of the fee demonstration revenue at the
sites where fees are collected and are expected to establish spending
priorities consistent with general program guidance provided by Forest
Service headquarters. This guidance advises local forest managers to spend
fee demonstration revenues on needs that have been identified by forest
visitors and to maintain existing facilities rather than initiate new
construction projects.

On the basis of priorities identified by local users, the Forest Service
has spent fee demonstration revenues on a wide range of projects at
national forests throughout the country. The legislation authorizing the
fee demonstration program permitted all the participating agencies to
spend fee revenues on certain categories of activities to increase the
quality of the visitor experience and enhance the protection of resources.
GAO*s review at selected Forest Service sites found that expenditures were
consistent with authorizing legislation and agency spending priorities.
The Forest Service does not have a process for measuring the impact of fee

demonstration expenditures on reducing the deferred maintenance backlog.
Further, while the agency acknowledges that it has a significant deferred
maintenance problem, it has not developed a reliable estimate of its
deferred maintenance needs.

Consistent with the authorizing legislation for the fee demonstration
program, the Forest Service keeps its fee revenue in accounts separate
from other appropriated funds. The agency also tracks its fee revenues and
expenditures separately from its appropriated funds. Since 1996, federal
land

management agencies have collected over $900 million in recreation fees
from the public under an experimental initiative called the Recreational
Fee

Demonstration Program. The Forest Service*s part was about $160 million.
The authority to collect these fees expires at the end of fiscal year
2004. Central to the debate about whether to reauthorize the program is
how

effectively the land management agencies are using the hundreds of
millions of dollars that the recreation fees have provided them. In April
2003, GAO reported

on Forest Service management of the fee demonstration program. (See
Recreation Fees: Information on Forest Service Management of Revenue from
the Fee Demonstration Program, GAO- 03- 470 [Washington D. C.: Apr. 25,
2003]).

This testimony is based on the work GAO conducted for the April 2003
report. Four issues are addressed: (1) how the Forest Service determines
spending priorities for the revenues generated by the fee program, (2) how
the agency has spent its fee demonstration program revenues, (3) what the
agency is doing to measure the impact of the recreation fee revenues on

reducing its deferred maintenance backlog, and (4) how it accounts for its
fee demonstration program revenues.

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 1161T. To view the full product,
including the scope and methodology, click on the link above. For more
information, contact Barry T. Hill at (202) 512- 3841 or hillbt@ gao. gov.
Highlights of GAO- 03- 1161T, testimony before the Subcommittee on Forests
and

Forest Health, Committee on Resources, House of Representatives September
17, 2003

RECREATION FEES

Information on Forest Service Management of Revenue from the Fee
Demonstration Program

Page 1 GAO- 03- 1161T Mr. Chairman and Members of the Subcommittee: I am
pleased to be here today to discuss our most recent report on the

Forest Service*s management of the Recreational Fee Demonstration Program.
1 Since 1996, federal land management agencies have collected over $900
million in recreation fees from the public under an experimental
initiative called the Recreational Fee Demonstration Program. The Forest
Service*s part is about $160 million. The Forest Service is one of the
four federal land management agencies authorized by Congress to charge
fees to visitors and to retain the revenues for use in addition to other
appropriated funds. 2 The Congress originally authorized the program for 3
years and has extended it several times. The authority to collect these
fees currently expires at the end of fiscal year 2004.

As the program enters its seventh year, the fees continue to be
controversial at some sites, and critics question the extent to which
program expenditures directly benefit visitors. Many of the concerns
involve the Forest Service, which, unlike the National Park Service, had
not historically charged fees to enter its public lands or to use
amenities

such as trails prior to the fee demonstration program. Moreover, the
Forest Service introduced a variety of new recreation fees aimed at a
range of visitor uses, including fees for dispersed recreation, such as
trail access or backcountry camping, or for general access. Although this
experimentation provided valuable information about the types of fees that
were feasible, it also fueled questions about the Forest Service*s
administration of the program. Accordingly, as you requested, my testimony
today will address the following issues: (1) how the Forest Service
determines spending priorities for the revenues generated by the fee
program; (2) how the agency has spent its fee demonstration program
revenues; (3) what the agency is doing to measure the impact of the

recreation fee revenues on reducing its deferred maintenance backlog; and
(4) how it accounts for its fee demonstration program revenues.

1 U. S. General Accounting Office, Recreation Fees: Information on Forest
Service Management of Revenue from the Fee Demonstration Program, GAO- 03-
470 (Washington, D. C: Apr. 25, 2003). 2 The other three land management
agencies authorized to charge fees under the Recreational Fee
Demonstration Program are the National Park Service, the Fish and Wildlife
Service, and the Bureau of Land Management.

Page 2 GAO- 03- 1161T Local forest managers largely determine Forest
Service spending priorities for the Recreational Fee Demonstration
Program. Given broad discretion in deciding how to use fee demonstration
revenues, local forest managers

retain between 90 and 100 percent of the fee demonstration revenue at the
sites where fees are collected. Local managers are expected to establish
spending priorities consistent with general program guidance provided by
Forest Service headquarters. This guidance advises local managers to spend
fee demonstration revenues on needs that have been identified by forest
visitors; it also directs local managers to spend the resources on

maintaining existing facilities rather than initiating new construction
projects.

On the basis of priorities identified by local users, the Forest Service
has spent fee demonstration revenues on a wide range of projects at
national forests throughout the country. The legislation authorizing the
fee demonstration program permits the participating agencies to spend fee
revenues on a broad range of activities aimed at increasing the quality of
the visitor experience and enhancing the protection of resources such as
providing visitor services, maintaining and enhancing facilities, fee
collections, and enforcing laws. To verify how the fee revenue was being
spent we visited a number of Forest Service sites across the country and
found that expenditures were consistent with the authorizing legislation
for the program and agency spending guidance and priorities.

The Forest Service has not developed a process for measuring the impact of
fee demonstration expenditures on reducing the deferred maintenance
backlog. According to agency officials, there are several reasons for
this* for example, the temporary status of the program and the fact that
the legislation establishing the program does not require that the impact
be measured. Further, while officials acknowledge that the Forest Service
has a significant deferred maintenance problem, the agency has not
developed a reliable estimate of its deferred maintenance needs.

Consistent with the authorizing legislation for the fee demonstration
program, the Forest Service keeps its fee revenue in Treasury accounts
separate from other appropriated funds. The agency also tracks its fee
revenue and expenditures separately from its appropriated funds.

The Forest Service is responsible for managing over 192 million acres of
public lands in the United States. In carrying out its responsibilities,
the Forest Service has traditionally been a decentralized organization,
whose Results in Brief

Background

Page 3 GAO- 03- 1161T programs are administered through nine regional
offices, 155 national forests, and over 600 ranger districts (each forest
has several districts).

The Forest Service began implementing the Recreational Fee Demonstration
Program in fiscal year 1996 with four demonstration sites that generated a
total of $43,000 during the year. 3 The program has steadily grown over
the past 6 years and now covers 92 sites in 114 national forests and
grasslands. These sites generated about $38 million in revenue in fiscal
year 2002. A demonstration site may consist of an individual forest; a
group of forests, such as the National Forests in Texas; or a specific
area or activity within a forest, such as Mount St. Helens National
Volcanic Monument in the Gifford Pinchot National Forest in Washington.

Spending priorities for the Recreational Fee Demonstration Program are
largely determined by local forest managers who are given broad discretion
in deciding how to use fee demonstration revenues. Forest Service
headquarters provides general program guidance that advises the local
managers to focus their spending priorities on two things. First, local
managers are to identify what the visitors want because the Forest Service
believes that users will more likely accept having to pay fees if they see
that their money is spent on improving services in the forests they visit.
Second, existing facilities such as restrooms and visitor centers should
be maintained because the agency prefers to use fee revenue to maintain
such facilities rather than to initiate new capital projects that would
increase its inventory of assets and add to operating and maintenance
costs.

In the three Forest Service regions that we visited, local forest managers
told us that they establish priorities on the basis of visitor desires
that are identified through visitor comment cards, visitor surveys, local
user

3 Although the Forest Service refers to fee demonstration sites as
projects throughout this statement, we call them sites. Under the original
Recreational Fee Demonstration Program legislation, between 10 and 50
sites per agency were permitted to establish, charge, and collect
recreation fees (P. L. 104- 134, title III, Sec. 315 [1996]). In fiscal
year 1997 appropriations, the Congress increased the number of authorized
sites to 100 per agency (P. L. 104- 208, title III, Sec. 319 [1996]). In
fiscal year 2002 appropriations, the Congress

eliminated the 100 demonstration sites per agency limitation (P. L. 107-
63, title III, Sec. 312 (b)[ 2001]). Local Forest Service

Officials Determine Spending Priorities

Page 4 GAO- 03- 1161T groups, associations, and regional boards. 4
According to these officials, visitors generally desire spending
priorities that address health and safety

needs; maintenance needs; and improved visitor services, such as
interpretative services.

Further, local forest managers told us that visitors expect that fee
demonstration revenues be retained and used at the sites where fees are
collected. In this regard, the Forest Service retains between 90 and 100
percent of fee revenues for use at the collection sites. The portion of
fee revenues that is not retained on site is used by the regional offices
for a variety of program- related activities, such as providing start- up
money for new demonstration sites, providing fee demonstration program
signs and brochures, initiating regional pass sales, and supporting
marketing activities.

In the authorizing legislation for the Recreational Fee Demonstration
Program, the Congress provided the Forest Service and the other land
management agencies broad authority in deciding how to spend fee
demonstration revenues. The 1996 authorizing legislation 5 permitted the
agencies to spend fee demonstration revenues for: backlogged repair and
maintenance projects, interpretation, signage, habitat or facility
enhancement, resource preservation, annual operation (including fee
collection), maintenance, and law enforcement relating to the public use
of lands. Our analysis at a sample of sites participating in the fee
demonstration program showed that fee revenue was being spent on a wide
range of projects that were consistent with the authorizing legislation
the program and agency spending priorities. For fiscal year 2001, the
Forest Service reported that it collected about $35 million in fees and

spent about $29.3 million, with about half of the expenditures going
toward visitor services and operations and maintenance activities.

We reviewed the activities at a sample of demonstration sites in three
Forest Service regions that have generated the most revenue to determine

4 Regional boards, which consist of members with recreation, forest, law
enforcement, fiscal, and economic backgrounds, are used to help oversee
the fee demonstration program within each region of the Forest Service.

5 Omnibus Consolidated Rescissions and Appropriations Act of 1996, P. L.
No. 104- 134, title III, Sec. 315( c)( 3). Revenues Are Spent on a Wide
Range of

Activities

Page 5 GAO- 03- 1161T how funds were spent, the appendix lists the
specific regions and sites we visited. The types of projects being funded
at the sites we visited included  constructing a boat launch area along
the Nantahala River, a world- class

whitewater river that attracts about 250,000 people annually in the
National Forests of North Carolina;  operating a wastewater treatment
plant that serves the visitor center at

Multnomah Falls, located within 30 miles of Portland, Oregon, and one of
the most popular attractions in the Columbia River Gorge National Scenic
Area, which receives over 2 million visitors per year; and  acquiring
fire rings, cooking grills, and picnic tables at Kisatchie National

Forest in Louisiana to improve campground services. On the basis of our
review and on- site observations, we found that the fee demonstration
program expenditures were consistent with the legislative authority
provided for the program and with agency spending priorities.

The Forest Service has used a portion of its fee program revenues to help
address its deferred maintenance backlog. However, the agency does not
have a process for measuring how much has been spent on deferred
maintenance or the impact of the fee revenue program has had on reducing
its deferred maintenance needs. In addition, while the agency acknowledges
that it has a significant deferred maintenance problem, it has not
developed a reliable estimate of its deferred maintenance needs. As a
result, even if the agency knew how much fee revenue it spent on deferred
maintenance, it would not know the extent to which its total deferred
maintenance needs were being reduced.

The legislation authorizing the Recreational Fee Demonstration Program
permits the Forest Service and the other participating agencies to spend
fee revenues on deferred maintenance needs. In fact, at each of the
locations we visited, the site managers told us that they were using a
portion of fee revenues to implement a variety of projects that addressed
deferred maintenance needs such as replacing worn and rotted picnic tables
at a campground in Klamath National Forest in California, fixing eroded
hiking trails in the Nantahala Gorge in the North Carolina National
Forest, and replacing deteriorating restrooms in Kisatchie National Forest
in Louisiana. The Forest Service Has No Process for

Measuring the Impact of Fee Revenues on Deferred Maintenance

Page 6 GAO- 03- 1161T Forest Service officials told us that there are a
number of reasons why the agency has not developed a process to track
deferred maintenance expenditures from fee demonstration revenues. First,
the agency chose to use its fee demonstration revenue to improve and
enhance on- site visitor

services rather than to use its revenue in developing and implementing a
system for tracking deferred maintenance spending. Second, because the fee
demonstration program is still temporary, agency officials said that they
have concerns about developing an additional process for tracking deferred
maintenance. Finally, the agency faced no specific requirement was to
measure the impact of fee revenues on deferred maintenance.

Forest Service officials acknowledge that the agency has a significant
deferred maintenance problem. In fiscal year 2001, the agency estimated
that its total deferred maintenance backlog was in the billions of
dollars, most of which was for forest roads and bridges. According to the
Forest Service, the recreation- related component of this estimate was in
the hundreds of millions of dollars.

However, in March 1999, the Department of Agriculture*s Inspector General
testified that the Forest Service did not have a reliable estimate of the
amount of its deferred maintenance backlog. 6 Further, the Inspector

General pointed out that the agency had no systematic method for compiling
the information needed to provide managers or the Congress with reliable
estimates. Although the Forest Service has since implemented an initiative
to help gather and develop better information on the amount of its
deferred maintenance backlog, the findings of the Inspector General*s
report are still valid. Forest Service officials acknowledge that they are
still in the process of developing a reliable estimate of the agency*s
deferred maintenance backlog.

6 Testimony of Roger Viadero, Inspector General, U. S. Department of
Agriculture, before the Committee on Agriculture, Subcommittee on
Department Operations, Oversight, Nutrition, and Forestry, House of
Representatives, Concerning the Financial Accountability of the Forest
Service (Mar. 11, 1999).

Page 7 GAO- 03- 1161T The authorizing legislation for the fee
demonstration program requires the participating federal agencies to
maintain fee revenue in separate Treasury

accounts and to account for fee expenditures separately from other
appropriated fund expenditures. Consistent with the requirement, the
Forest Service maintains its fee revenues in separate Treasury accounts
and tracks fee revenue and expenditures separately from other appropriated
funds. For example, officials at the Gifford Pinchot National Forest in
the Pacific Northwest Region used a combination of fee

demonstration revenues and other appropriated funds to replace a bridge on
the Pacific Crest National Scenic Trail in 2001. For this project, agency
officials accounted for revenues and expenditures from the fee

demonstration program separately from the revenues and expenditures from
other appropriated funding sources.

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 me at (202)
512- 3841. Nancy Crothers, Cliff Fowler, Amy Webbink and Arvin Wu made key
contributions to this statement. The Forest Service

Accounts for Its Fee Demonstration Program Revenues and Expenditures
Separately from Other Funds

GAO Contacts and Staff Acknowledgments

Page 8 GAO- 03- 1161T Region/ sites visited State 5* Pacific Southwest
Enterprise Forest Project a

Shasta- Trinity National Forests (Shasta- Trinity National Recreation
Area) Klamath National Forest

California California California

6* Pacific Northwest Gifford Pinchot National Forest (Mount St. Helens
National Volcanic Monument) Columbia River Gorge National Scenic

Area (Multnomah Falls) Colville National Forest

Washington Washington and Oregon Washington

8* Southern North Carolina National Forests Kisatchie National Forest
Texas National Forests

North Carolina Louisiana Texas Source: GAO based on Forest Service data.
Note: We did not visit the Kisatchie National Forest site because it was
closed due to a hurricane at

the time we were conducting our fieldwork. We did, however, obtain
documentation from the site manager on each of our review objectives. a
The Enterprise Forest project covers four national forests in Southern
California: the Angeles,

Cleveland, Los Padres, and San Bernardino forests. We visited the Angeles
and San Bernardino National Forests. Appendix: Demonstration Sites Visited

(360401)

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