    Recreation Fees: Information on Forest Service Management of
    Revenue from the Fee Demonstration Program (25-APR-03,
    GAO-03-470).

    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. Under the trial program, the Congress authorized the
    four federal land management agencies, including the Forest
    Service, to charge fees to visitors and to retain the revenues
    for use in addition to other appropriated funds. The Congress
    originally authorized the program for 3 years and has extended it
    several times. As Congress considers whether to extend the
    program or to make it permanent, the Chairman of the Subcommittee
    on Forests and Forest Health asked GAO to address several
    questions about the Forest Service's administration of the
    program: (1) How are spending priorities determined for the
    revenues generated by the program? (2) How has the agency spent
    its fee demonstration program revenues? (3) What, if anything, is
    the agency doing to measure the impact of the recreation fee
    revenues on reducing the agency's deferred maintenance backlog?
    (4) How does the agency account for its fee demonstration program
    revenues?
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-03-470
        ACCNO:   A06717
      TITLE:     Recreation Fees: Information on Forest Service Management
    of Revenue from the Fee Demonstration Program
         DATE:   04/25/2003
      SUBJECT:   Appropriated funds
    	     Revenue sharing
    	     User fees
    	     Land management
    	     Financial management
    	     Program evaluation
    	     NPS Recreational Fee Demonstration
    	     Program

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    GAO-03-470

                                           A

    Report to the Chairman, Subcommittee on Forests and Forest Health,
    Committee on Resources, House of Representatives

    April 2003 RECREATION FEES Information on Forest Service Management of
    Revenue from the Fee Demonstration Program

    GAO- 03- 470

    Results in Brief 2 Background 5 Local Forest Service Officials Determine
    Spending Priorities 6 The Forest Service Has Spent Most Revenues on a Wide
    Range of

    Activities at the Sites Where the Fees Are Collected 7 The Forest Service
    Has No Process for Measuring the Impact of Fee

    Revenues on Deferred Maintenance 19 The Forest Service Accounts for Its
    Fee Demonstration Program

    Revenues and Expenditures Separately from Other Funds but Does Not
    Accurately Account for Some Fee Collection Costs 24 Agency Comments 27

    Appendixes

    Appendix I: Answers to Additional Subcommittee Questions 29

    Appendix II: Scope and Methodology 33

    Appendix III: Comments from the U. S. Department of Agriculture 36

    Appendix IV: Comments from the Department of the Interior 40 Tables Table
    1: Forest Service Fee Demonstration Expenditures in Fiscal Year 2001 9

    Table 2: Revenues and Visitation Data and Reason for Selecting
    Demonstration Sites GAO Visited 10 Table 3: Amount of Forest Service
    Recreation Programs* Appropriations and Its Recreational Fee Demonstration

    Program Revenues, Fiscal Years 1996- 2002 30 Table 4: Comparison of Forest
    Service Recreation Appropriations* Allocations to Its Regional Offices to
    Fee Demonstration

    Revenues 31 Table 5: Demonstration Sites GAO Visited 33

    Figures Figure 1: Forest Service and National Park Service Fiscal Year
    2001 Fee Demonstration Expenditures by Category 4

    Figure 2: Enhancement of Boat Launching Area along the Nantahala River 11
    Figure 3: Increased Lake Patrols and Maintenance of Floating

    Restrooms at Shasta- Trinity National Recreation Area 12 Figure 4: Cleanup
    of an Illegal Trash Dump in San Bernardino

    National Forest 14 Figure 5: Wastewater Treatment Plant at Multnomah Falls
    15

    Figure 6: Comparison of Forest Service and National Park Service Fiscal
    Year 2001 Fee Demonstration Expenditures 19 Figure 7: Before and After
    Pictures of a Rehabilitated Trail at the

    Nantahala River Gorge 21

    This is a work of the U. S. Government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
    its entirety without further permission from GAO. It may contain
    copyrighted graphics, images or other materials. Permission from the
    copyright holder may be necessary should you wish to reproduce copyrighted
    materials separately from GAO*s product.

    April 25, 2003 The Honorable Scott McInnis Chairman, Subcommittee on
    Forests and Forest Health Committee on Resources House of Representatives

    Dear Mr. Chairman: 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.
    Under the trial program, the Congress authorized the four federal land
    management agencies* the National Park Service, the Fish and Wildlife
    Service, and the

    Bureau of Land Management, all within the Department of the Interior, and
    the Forest Service, within the Department of Agriculture* to charge fees
    to visitors and to retain the revenues for use in addition to other
    appropriated funds. The Congress originally authorized the program for 3
    years and has extended it four times. The authority to collect these fees
    currently expires at the end of fiscal year 2004. The Congress is now
    considering whether it should extend the program a fifth time or whether
    it should make the program permanent. Central to the debate is how
    effectively the land management agencies are using the hundreds of
    millions of dollars that the

    recreation fees have provided them. The legislation authorizing the
    Recreational Fee Demonstration Program encouraged the land management
    agencies to experiment with new fees and fee structures for recreational
    activities and directed them to use the fee revenues to increase the
    quality of the visitor experience and to enhance the protection of
    natural, historic, and cultural resources. The agencies were given
    authority to use fee revenues for a broad array of

    activities. The agencies must set aside at least 80 percent of the
    revenues collected under the program for the sites that collected the
    fees. By allowing the field sites to retain such a large percentage of the
    fees collected, the Congress created a powerful incentive for these sites
    to generate enough revenues to visibly improve conditions in the areas
    they

    managed. According to the program*s legislative history, the Congress
    believed that such local improvements would enhance visitor acceptance of
    the new fees.

    As the Recreational Fee Demonstration 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, you asked us
    to address the following questions about the Forest Service*s
    administration

    of the program: (1) How are spending priorities determined for the
    revenues generated by the Recreational Fee Demonstration Program? (2) How
    has the agency spent its fee demonstration program revenues? (3) What, if
    anything, is the Forest Service doing to measure the impact of

    the recreation fee revenues on reducing the agency*s deferred maintenance
    backlog? (4) How does the Forest Service account for its fee demonstration
    program revenues? While our analysis focused on the Forest Service, to
    provide some

    perspective, we also obtained some information on how the National Park
    Service manages its fee demonstration program since it generates, by far,
    the largest amount of fee revenue. Specifically, where significant
    differences exist between the two agencies, we provide contrasting
    information. Together, the Forest Service and the Park Service collect
    over 90 percent of the fees under the Recreational Fee Demonstration
    Program. In fiscal year 2001, the Forest Service collected $35 million in
    fees; the Park Service collected $126 million.

    Further, as our work progressed, you asked us to respond to additional
    questions about specific aspects of the Recreational Fee Demonstration
    Program. These questions and our responses to them are included as
    appendix I of this report. The scope and methodology used in our analysis
    is included as appendix II.

    Results in Brief 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. Local managers 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. The guidance also emphasizes a

    preference for maintaining existing facilities such as restrooms and
    visitor centers and discourages forest managers from initiating new
    construction projects. In the Forest Service, local forest managers retain
    between 90 and 100 percent of the fee demonstration revenue at the sites
    where fees are collected. In contrast, local National Park Service
    managers retain 80

    percent of fee revenues at collecting sites, with the remaining 20 percent
    going to other sites that have high- priority needs. 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. Based on the most recent Forest Service data
    available, in fiscal year 2001, the agency spent 29 percent of its fee
    demonstration revenue expenditures on visitor services and operations,
    including trash collection, campfire programs, and visitor satisfaction
    surveys; 21 percent on maintenance of facilities, such as repairing
    comfort stations and fixing roofs; and 17 percent on fee collection. The
    remaining 33 percent was spent on such activities as enhancing facilities,
    protecting resources, and enforcing laws. The legislation authorizing the
    fee demonstration program permitted the participating agencies to spend
    fee

    revenues on all of these kinds of on- site activities as long as the
    expenditures contributed to enhancing the visitor experience or helped
    protect, preserve, or enhance resources. We reviewed the activities of
    nine demonstration sites in three different regions to verify that the fee
    revenues were actually being spent in accordance with the authorizing
    legislation for the program and agency spending priorities. We found no
    inconsistency. However, we did find that the Forest Service does not
    provide consistent

    information on where fee revenue is being spent. At each of the sites we
    reviewed, officials told us that deciding which category a particular
    expenditure falls into is a subjective judgment that is not necessarily

    consistent among sites. For example, the repair of an aging restroom
    facility could be categorized as either *maintenance,* or a facility
    enhancement that could fall into the *other* category. As shown in figure
    1, the National Park Service*s fee demonstration expenditures reflect
    greater emphasis on maintenance and fee collection activities compared to
    the Forest Service.

    Figure 1: Forest Service and National Park Service Fiscal Year 2001 Fee
    Demonstration Expenditures by Category

    The Forest Service does not have a process for measuring the impact of fee
    demonstration expenditures on reducing the deferred maintenance backlog.
    According to the Forest Service, the agency does not track the extent to
    which fee demonstration expenditures have been used for deferred
    maintenance for a number of reasons including the temporary nature of the
    program and because the agency is not required by the fee program
    legislation to measure the impact of fee demonstration revenues on
    deferred maintenance. Further, while acknowledging that it has a
    significant deferred maintenance problem, the agency has not developed a

    reliable estimate of its deferred maintenance needs. In contrast, the
    National Park Service has placed a higher priority on addressing its
    deferred maintenance needs with revenues from the fee demonstration
    program. In fiscal year 2001, the Park Service began to track the extent
    to which it has used fee demonstration revenues to address its multi-
    billion

    dollar deferred maintenance backlog. During that year, the Park Service
    spent about 35 percent of its fee demonstration revenues on maintenance

    activities. Since the program began, agency officials estimate that about
    70 percent of its fee demonstration expenditures have been for deferred
    maintenance activities ($ 274 million out of $395 million). However, like
    the Forest Service, the Park Service has not yet developed a reliable
    estimate of its deferred maintenance needs.

    The Forest Service keeps its fee demonstration revenue in two different
    Treasury accounts separate from its other appropriated funds, as required
    by the authorizing fee program legislation. Eighty percent of its fee

    revenues are maintained in an account for expenditure without further
    appropriation at the site where the fees were collected and 20 percent of
    its fee revenues in another account for expenditure on an agencywide basis
    without further appropriation. Although the Forest Service tracks its fee
    revenues and expenditures separately from other appropriated funds, it
    does not accurately account for some fee collection costs. Specifically,
    the

    Forest Service does not report total revenues and fee collection costs
    related to discounts that vendors receive for selling recreation passes
    directly to the public. The National Park Service has established a
    similar account structure to comply with the Recreational Fee
    Demonstration Program requirements.

    We received comments from the U. S. Department of Agriculture and the
    Department of the Interior on a draft of this report. The U. S. Department
    of Agriculture generally agreed with the report*s contents. Interior did
    not offer overall comments on the report. Both departments provided us
    with clarifying and technical comments that we incorporated into the
    report as appropriate. Comments from the U. S. Department of Agriculture
    are included in appendix III and comments from the Department of the
    Interior are included in appendix IV.

    Background 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 traditionally has been a decentralized organization, in
    which its programs are administered through 9 regional offices, 155
    national forests, and over 600 ranger districts (each forest has several
    districts).

    The Forest Service implemented the Recreational Fee Demonstration Program
    in fiscal year 1996 with four demonstration sites that generated $43,000
    during the year. 1 The program has steadily grown over the past 5 years
    and covers 87 sites, in 80 national forests, that generated over $35
    million in fiscal year 2001. 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.

    Local Forest Service Spending priorities for the Recreational Fee
    Demonstration Program are

    Officials Determine largely determined by local forest managers who are
    given broad discretion

    in deciding how to use fee demonstration revenues. Forest Service Spending
    Priorities headquarters provide general program guidance that advises
    local managers to establish spending priorities that focus on two things.
    First, local managers are to identify what the visitors want because the
    Forest Service believes that forest users will more likely accept paying
    fees if they

    see that their money is spent on improving recreational visitor services
    in the national forests they visit. Second, existing facilities such as
    restrooms and visitor centers should be maintained because the agency
    prefers to use recreation fees 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 through

    such methods as obtaining comment cards that are received from visitors,
    using universities to conduct visitor surveys, and using local user
    groups, associations, and regional boards. 2 According to these officials,
    visitors 1 The Forest Service refers to fee demonstration sites as
    projects. Throughout this report, we refer to them as sites. Under the
    original Recreational Fee Demonstration Program legislation, no fewer than
    10 but up to 50 sites per agency were permitted to charge, collect, and
    establish recreation fees (Pub. L. No. 104- 134, tit. III, S: 315( 1996)).
    In fiscal year 1997 appropriations, Congress increased the number of
    authorized sites per agency to 100 (Pub. L. No. 104- 208, tit. III, S: 319
    (1996)). In fiscal year 2002 appropriations, the Congress

    eliminated the 100 demonstration sites per agency limitation (Pub. L. No.
    107- 63, tit. III, S: 312 (b)( 2001)). 2 Regional boards consist of
    membership with recreation, forest, law enforcement, fiscal, and economic
    backgrounds and are used to help oversee the fee demonstration program
    within each region of the Forest Service.

    desire that spending priorities should address such things as 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 has committed to retaining
    almost all fee demonstration revenues at the collection sites* between 90
    and 100 percent of fee revenues collected are to be retained and used at
    the collection site. In regions 5 and 8 (the Pacific Southwest and
    Southern regions) that we visited, 95 percent of fee revenues are retained
    and used at the collecting site and in region 6 (the Pacific Northwest),
    92 percent of fee

    revenues are retained on site. The portion of fee revenues that are not
    retained on site is used by the regional offices for a variety of
    programrelated activities like providing new demonstration projects with
    start- up money, providing fee demonstration signs and brochures, regional
    pass sales, and for marketing activities. In contrast to the Forest
    Service, the National Park Service permits demonstration sites to retain
    no more than 80 percent of the fee revenue collected. The Park Service
    requires that the remaining 20 percent of fee

    revenues be used for addressing high- priority needs at other lower-
    revenue fee demonstration sites, at park units that do not participate in
    the fee demonstration program, or for servicewide priorities, such as
    funding youth groups to work on national park projects. In terms of
    program priorities, the Park Service emphasizes that local managers focus
    on addressing deferred maintenance and critical resources protection
    needs.

    The Forest Service Has As permitted by the authorizing legislation for the
    Recreational Fee Spent Most Revenues

    Demonstration Program, the Forest Service has spent fee revenues on a wide
    range of projects. Our analysis at a sample of sites participating in the
    on a Wide Range of

    fee demonstration program revealed that fee revenue was being spent for
    Activities at the Sites

    activities that were consistent with the legislation authorizing the
    program Where the Fees Are

    and the agency*s spending priorities. On the national level, the most
    recently available information indicates that about one half of the fee
    Collected

    revenues were being spent for visitor services and maintenance activities.
    However, because the agency relies on subjective determinations by local
    forest managers to categorize its expenditures, these determinations are
    not consistent among sites. Accordingly, the accuracy of program- wide
    information depicting the amounts of fee revenues spent for various
    categories is questionable. In contrast to the Forest Service, the
    National

    Park Service uses a larger portion of its fee demonstration expenditures
    on collecting fees and addressing its maintenance needs and less for
    visitor services.

    Forest Service Expenditures The Congress provided the Forest Service and
    the other land management Emphasize Maintaining agencies broad authority
    in deciding how to spend fee demonstration

    revenues. The 1996 authorizing legislation for the program 3 directed the
    Existing Facilities and

    agencies to spend fee revenues to ** increase the quality of the visitor
    Providing Visitor Services experience at public recreational areas and
    enhance the protection of resources.* This legislation permitted the
    agencies to spend fee demonstration revenues in the following areas:
    backlogged repair and maintenance projects (including projects related to
    health and safety),

    interpretation, signage, habitat or facility enhancement, resource
    preservation, annual operation (including fee collection), maintenance,
    and law enforcement relating to the public use of lands. For fiscal year
    2001, the Forest Service reported that it collected about $35

    million in fees and spent about $29.3 million. As shown in table 1, the
    Forest Service spent the fee revenues on a wide range of activities, as
    allowed by the legislation that authorized the program. The Forest Service
    spent about half of their fee revenues in two categories: visitor services
    and operations and maintenance. 3 Omnibus Consolidated Rescissions and
    Appropriations Act of 1996, Pub. L. No. 104- 134, tit. III, S: 315( c)(
    3).

    Tabl e 1: Forest Service Fee Demonstration Expenditures in Fiscal Year
    2001

    Dollars in thousands

    Types of activities included in expenditure Fee demonstration Percent of
    total Expenditure category a category expenditures expenditures

    Visitor Services and Routine incidental costs like mowing, trash
    Operations collections, and toilet pumping $8,566 29

    Maintenance Repair or replacement of worn assets such as toilets, roofs,
    and trails; includes projects related to health and safety and backlogged
    maintenance b 6,101 21 Cost of Collection Direct fee collections costs
    including fee collections and non- payment enforcement 5,051 17
    Interpretation and Signing Delivering interpretation and information to
    visitors such as interpretive programs and tours 3,859 13 Facility
    Enhancement Enhancement of existing facilities such as new building,
    trail, or picnic table construction 3,365 12 Security and Enforcement
    Enforcement of laws and regulations such as

    protection of facilities, visitors, and natural and cultural resources
    1,164 4

    Resource Preservation and Resource and habitat restoration, enhancement
    Enhancement and preservation, such as landscaping and wildlife

    fencing 911 3 Other Includes interagency transfers and other

    miscellaneous expenditures 238 1

    Tot al $29,255 100

    Source: GAO analysis of Forest Service data. a In fiscal year 2002, the
    Forest Service combined health and safety expenditures into the
    maintenance

    category and habitat enhancement expenditures into the resource
    preservation and enhancement category. We used these combined categories
    for reporting the fiscal year 2001 expenditures. b Backlogged or deferred
    maintenance expenditures may also be categorized under categories other
    than maintenance. To get some indication whether the Forest Service is
    spending the fee revenues consistent with the authorizing legislation and
    agency priorities and to verify that projects were being completed, we
    reviewed the

    activities of a sample of demonstration sites in the three Forest Service
    regions that have generated the most fee demonstration revenues. The three
    regions we visited were region 5, the Pacific Southwest, generating $5. 7
    million; region 6, the Pacific Northwest, generating $5.7 million; and

    region 8, the Southern Region, generating $6. 1 million in fiscal year
    2001. Collectively, the three regions represent 58 percent of total fee
    demonstration revenues generated by the Forest Service in fiscal year
    2001. In each of the three regions, we selected three fee demonstration
    sites, as shown in table 2. Our site selection criteria were the same for
    each region.

    Specifically, we selected a site that generated the most fee revenues, a
    site that had the least fee revenues, and of the remaining sites in each
    region, the one that had the least fee revenue per visitor. Table 2:
    Revenues and Visitation Data and Reason for Selecting Demonstration Sites
    GAO Visited

    Dollars in thousands

    Fiscal year Fiscal year 2001 2001

    Reason for Region/ sites visited a State revenues

    visitation selection 5* Pacific Southwest  Shasta- Trinity National
    Forests (Shasta- Trinity

    National Recreation Area) California

    $1, 407 3,550

    Highest revenue  Klamath National Forest California

    37 21

    Lowest revenue  Enterprise Forest Project b California 3,105

    15, 245 Lowest revenue per visitor

    6* Pacific Northwest

     Gifford Pinchot National Forest (Mount St. Helens National Volcanic
    Monument)

    Washington 1,285

    635 Highest revenue  Colville National Forest

    Washington 15

    6 Lowest revenue  Columbia River Gorge National Scenic Area Washington

    384 1,982

    Lowest revenue per (Multnomah Falls) & Oregon visitor

    8* Southern

     North Carolina National Forests North Carolina 1,103

    982 Highest revenue  Kisatchie National Forest

    Louisiana 103

    344 Lowest revenue  Texas National Forests

    Texas 175

    2,500 Lowest revenue per visitor Source: GAO analysis based on Forest
    Service data.

    a We did not make an on- site visit to the Kisatchie National Forest site
    because the site was closed due to a hurricane at the time we were
    conducting our fieldwork. We did, however, obtain appropriate supporting
    documentation from the site manager.

    b The Enterprise Forest project covers four national forests in Southern
    California. Revenues in each of these four forests* Angeles, Cleveland,
    Los Padres, and San Bernardino Forests* do not exceed the revenue
    generated at Shasta- Trinity National Forests. The Enterprise Forest site
    generated the lowest revenues per visitor. We visited the Angeles and San
    Bernardino National Forests.

    Based on our review and on- site observations at the selected sites, we
    found that the fee revenues were spent consistent with the legislative
    authority provided for the program and with spending priorities set by the
    agency. The following paragraphs illustrate the types of projects that
    were being funded with fee demonstration revenues at the sites we visited.

    Projects at Sites Having The three sites having relatively high amounts of
    fee revenue generally had Relatively High Amounts of Fee

    popular destination attractions for visitors. At these sites, fee revenues
    Revenue

    were spent on projects geared toward enhancing the overall visitor
    experience. For example:  The Nantahala River Gorge, one of the sites in
    the National Forests of

    North Carolina fee demonstration project, is a world- class whitewater
    river that attracts about 250,000 people annually. In fiscal year 2001,
    the site generated about $208,000 in fee revenues through user fees and
    special use permits for commercial outfitters. During that year, the site
    spent over $292,000 in fee revenues, which included revenues generated

    from prior years. Nantahala Gorge officials spent most of their fee
    revenues to upgrade or enhance facilities for serving visitors. For
    example, they spent about $150, 000 by providing handicap accessibility,

    improving visitor safety, and eliminating erosion and sedimentation of the
    Nantahala River by constructing a concrete surface for launching boats and
    rafts on the river. The following figure shows the enhanced boat-
    launching area.

    Figure 2: Enhancement of Boat Launching Area along the Nantahala River

     The Shasta Trinity National Recreation Area demonstration site, located
    in northern California, generated in fiscal year 2001 about $1. 1 million
    fee revenues through special use permit fees for over 700 privatelyowned
    house boats and 55 recreation facilities such as resorts, docks, marinas,
    and organized camps on Shasta Lake and Trinity Lake. Site managers spent
    over $514,000 in fee revenues in fiscal year 2001. Most of the
    expenditures were for maintenance, enhancing facilities, and

    visitor services. The expenditures included regular cleaning and
    maintenance of the floating restrooms, increasing the number of portable
    restrooms and dumpsters available for visitors, installing

    floating directional signs and underwater obstacle markers for boaters,
    providing bear- proof food lockers, increasing the frequency of safety
    patrols on the lake, and expanding staffing and hours of operation at the
    visitor center. Figure 3 shows some examples of these projects.

    Figure 3: Increased Lake Patrols and Maintenance of Floating Restrooms at
    Shasta- Trinity National Recreation Area

    Projects at Sites Having The three sites that we visited that had
    relatively low amounts of fee Relatively Low Amounts of Fee revenues were
    generally located away from urban areas. 4 These sites had Revenue

    fewer visitors and fewer visitor needs than the high revenue sites. Their
    expenditures focused on maintaining existing facilities and providing
    basic visitor services. The following examples illustrate the types of
    expenditures at these sites.  The Klamath National Forest in northern
    California collects fee

    revenues through fees charged at 15 of 36 campgrounds in the forest. The
    Klamath National Forest collected over $37, 000 in fiscal year 2001, the
    first year of the fee program in this forest. They did not report any
    expenditures until fiscal year 2002. Their spending was limited in fiscal
    year 2002 because they were asked to defer spending on projects and

    acquisitions to help ensure that the Forest Service had enough money to
    carry out fire suppression activities. 5 In fiscal year 2002, the site
    spent only $1, 740 to replace four decaying picnic tables at a campground.

     The Kisatchie National Forest, in Louisiana, collects fee revenues from
    31 recreational sites, including 12 campgrounds and 12 day- use sites. The
    Kisatchie National Forest generated over $103, 000 and spent about $58,000
    in fee revenue during fiscal year 2001. They spent most of their fee
    revenues on fee collections, facility enhancements, and maintenance,
    including such things as repairing or replacing water and sewer lines,
    reconstructing trails, constructing handicap- accessible walkways and
    restrooms, and acquiring fire rings, cooking grills, and

    picnic tables to improve campground services. Projects at Sites Having The
    sites that had large numbers of visitors, but relatively small amounts of
    Relatively Heavy Visitor Use and

    revenue were generally located near major metropolitan areas. As a result,
    Low Amount of Revenue

    these sites typically spent their fee revenues managing the impacts of
    visitors. The following examples illustrate the types of expenditures at
    these sites.  The Angeles and San Bernardino National Forests are two of
    the four

    forests that are part of the Enterprise Forest fee demonstration site that
    4 We did not make an on- site visit to the Kisatchie National Forest site
    because the site was closed because of 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. 5 See appendix I for a
    discussion of transferring funds from the Forest Service recreation
    programs for supplementing wildfire suppression activities.

    received over 15 million visitors during fiscal year 2001. The Angeles and
    San Bernardino National Forests are both located within a 2- hour drive of
    metropolitan Los Angeles. They generate most of their fee revenues through
    a recreation use fee called the Adventure Pass. 6 In fiscal year 2001, the
    Angeles National Forest generated about $1. 3 million and spent over
    $737,000, and the San Bernardino National

    Forest generated about $920,000 and spent over $832,000 in expenditures.
    Both the Angeles and San Bernardino National Forests spent about 80
    percent of its fiscal year 2001 revenue for providing

    visitor services and maintaining operations, maintenance of facilities,
    and for providing interpretative services. At the Angeles National Forest,
    these expenditures included such things as providing more public
    restrooms, including crew expenses to clean and maintain them, and for
    renting portable toilets. At the San Bernardino National Forest, fee
    revenues were spent on new interpretative programs for visitors,
    maintaining trails, and improving forest operations, including removing
    refuse from illegal trash dumps, as shown below.

    Figure 4: Cleanup of an Illegal Trash Dump in San Bernardino National
    Forest

     Multnomah Falls, located within 30 miles of Portland, Oregon, is one of
    the most popular attractions in the Columbia River Gorge National 6 The
    Adventure Pass is a vehicle- parking pass that is required to be displayed
    on vehicles while occupants are recreating on the four urban national
    forests in Southern California.

    Scenic Area. This site receives nearly 2 million visitors per year.
    Visitors are not charged a fee at Multnomah Falls. Instead, the site gets
    its fee revenue by retaining a portion of the special use permit fees from

    a private concessionaire that runs the Multnomah Falls Lodge. The Lodge is
    located at the entrance to the falls and serves as a visitor center that
    sells food and souvenirs to visitors. In fiscal year 2001, the Columbia
    River Gorge National Scenic Area generated about $220,800. It spent $290,
    000 from current and prior year fee revenues, of which nearly 90 percent
    was spent on visitor services and operations. More than half of these
    expenditures were for a contract to operate a

    wastewater treatment plant for the Multnomah Falls Lodge, as shown in the
    following figure. Most of the remaining expenditures were spent on
    staffing and operating the visitor center at the lodge.

    Figure 5: Wastewater Treatment Plant at Multnomah Falls

    Forest Service Information To promote accountability for using fee
    demonstration funds, the House

    on Fee Demonstration Committee on Appropriations directed the Forest
    Service, along with the

    Expenditure Is Not other federal agencies participating in the fee
    Demonstration Program, to jointly prepare an annual report on the
    Recreational Fee Demonstration

    Consistently Reported Program. 7 Among other things, this report provides
    the Congress with information on the amount of fee demonstration revenues
    collected and

    how they are spent. The Forest Service compiles this data from the local
    fee program managers across the nation. However, we found that the
    information that the Forest Service provides on categorizing expenditures
    is not consistently reported. First, the fee program managers do not
    allocate their expenditures into the spending categories in a systematic
    manner. Second, the Forest Service fee revenue expenditure reporting

    categories overlap. The Forest Service reports its fee demonstration
    expenditures using spending categories largely corresponding to those
    identified in the legislation authorizing the demonstration program. These
    categories are visitor services and operations, maintenance,
    interpretation and signing, facility enhancement, resource preservation
    and enhancement, security and enforcement, and cost of collection.
    However, the Forest Service

    officials stated that their accounting system is not set up to track
    expenditures into these categories. Local fee program managers, who
    compile the fee revenue expenditure data, use various methods to record
    their expenditures. At the sites we visited, we found that local managers
    relied on a variety of financial information sources such as project work
    plans and job code summary reports, as well as reviewing bills and
    receipts, as a basis for allocating their expenditures into the reporting
    categories. Further, one manager stated that he also interviewed his staff
    on work performed and the time they devoted to various tasks to estimate
    the amount of fee revenues spent in each reporting category. Accordingly,
    in the absence of forest managers having a consistent and systematic
    method for tracking and recording the expenditure amounts by spending

    category, the accuracy of the spending information in the agency*s annual
    report is questionable. 7 H. R. Rep. No. 105- 163 (1997).

    Another concern affecting the spending information in the agency*s annual
    report is the subjectivity of the spending categories themselves. Despite
    headquarters guidance that attempts to define the kinds of activities that
    should be included in each spending category, officials at seven of the
    nine demonstration sites that we visited told us that deciding which
    reporting

    category a particular expenditure falls into involves making a judgment
    that is not necessarily consistent among sites. 8 For example, when an
    aging restroom needs extensive repairs, it may be more cost effective to
    build a new facility to replace it. In this situation, the expenditures
    for building a new facility can be reported as a *maintenance* expense, or
    as a *facility enhancement* expense. In either instance, the expenditure
    is consistent with the types of expenditures authorized under the program.
    However, deciding under which expenditure category is reported is a

    judgment of the site manager. Similarly, expenditures for fee enforcement
    activities and fee collections may also be reported inconsistently. For
    example, we found that some sites we visited reported fee enforcement
    activities as part of their *cost of collections.* However, other sites
    reported fee enforcement activities as part of their expenditures for

    *security and enforcement.* These inconsistencies further affect the
    consistency of the Forest Service*s reporting of where fee revenues are
    actually spent.

    According to Forest Service program officials, the agency is reluctant to
    invest in a new system that would more accurately categorize expenditures
    because further categorization of expenditures is not required by
    legislation, nor have the agencies participating in the fee demonstration

    program been asked by the Congress to do so. In commenting on a draft of
    this report, the Forest Service noted that it chose to create seven
    expenditure categories to track those identified in the legislation as a
    means of reporting accomplishments to the Congress.

    To help ensure that fee demonstration expenditures are consistently
    reported, the Forest Service also said that it will re- examine its
    reporting procedures and consider using broader categories that are used
    by the Department of the Interior agencies.

    8 The other two demonstration sites did not have any expenditures during
    fiscal year 2001.

    National Park Service Fee Compared to the Forest Service, the National
    Park Service spent relatively Expenditures Emphasize more of its fee
    demonstration expenditures on maintenance and fee collection activities. 9
    In fiscal year 2001, the Forest Service spent about Maintenance and Fee
    $29 million and the National Park Service spent about $116 million of its
    fee Collection demonstration revenues. 10 The National Park Service spent
    about 35 percent of its fiscal year 2001 fee demonstration expenditures on

    maintenance activities. In contrast, the Forest Service spent about 21
    percent of its expenditures in this area. The Park Service spent about 26
    percent of its fee expenditures on fee collection activities compared to
    about 17 percent in the Forest Service. About 10 percent of the Park
    Service*s fee demonstration expenditures were used on visitor services,
    such as interpretation exhibits and services, compared to 29 percent for
    the Forest Service. The Park Service spent the remaining 28 percent on
    such other activities as protecting natural and cultural resources
    compared to 33 percent for the Forest Service.

    The following figure graphically portrays the spending emphasis of the two
    agencies.

    9 In making this comparison, we combined several of the reporting
    categories for these two agencies in order to report similar categories.
    As a result, the percentage shown in the *Other* category appears large.
    Also, we refer to the Park Service*s *health and safety maintenance*
    expenditures as *maintenance.* 10 Total fiscal year 2001 fee demonstration
    revenues for the Forest Service and Park Service were about $35 million
    and about $126 million (excluding $14 million in National Park Passport
    revenue), respectively.

    Figure 6: Comparison of Forest Service and National Park Service Fiscal
    Year 2001 Fee Demonstration Expenditures

    Note: The percentages for the National Park Service do not add up to 100
    due to rounding. In commenting on a draft of this report, the Forest
    Service noted that compared to the National Park Service, the Forest
    Service expends more fee demonstration expenditures on visitor services
    and less on maintenance because unlike the Park Service, many Forest
    Service sites with high visitation near metropolitan areas lack the
    infrastructure that might require deferred maintenance. Additionally, the
    Forest Service noted

    that its expenditures reflect the agency*s guidance to local forest
    managers to spend fee demonstration revenues on needs that have been
    identified by forest visitors.

    The Forest Service Has The Forest Service has used a portion of its fee
    program revenues to help

    No Process for address its deferred maintenance backlog. However, the
    agency does not have a process for measuring how much has been spent on
    deferred Measuring the Impact maintenance or its impact on reducing its
    deferred maintenance needs. In of Fee Revenues on

    addition, while the agency acknowledges that it has a significant deferred
    Deferred Maintenance

    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 is spending on deferred maintenance, it would not

    know if its total deferred maintenance needs are being reduced. While the
    Park Service also does not have a reliable estimate of its deferred
    maintenance needs, it has placed a higher priority on addressing this
    problem and has begun to track the amount of fee revenues that are being
    used for deferred maintenance.

    The Forest Service Does The legislation authorizing the Recreational Fee
    Demonstration Program

    Not Track Fee Expenditures permits the Forest Service and the other
    participating agencies to spend fee

    That Address Deferred revenues on deferred maintenance needs. In fact, at
    each of the locations Maintenance Needs we visited, the site managers told
    us that they were using a portion of fee

    revenues to do a variety of projects that addressed deferred maintenance
    needs. Those projects included such things as replacing worn and rotted
    picnic tables at a campground in Klamath National Forest in California,
    fixing eroded and deteriorated hiking trails in the Nantahala Gorge in the
    North Carolina National Forest, and replacing deteriorating restrooms in
    Kisatchie National Forest in Louisiana. Figure 7 shows before and after

    pictures of a rehabilitated trail at the Nantahala River Gorge.

    Figure 7: Before and After Pictures of a Rehabilitated Trail at the
    Nantahala River Gorge

    However, even though the Forest Service is spending a portion of its fee
    revenues in this area, the agency does not specifically track how much it
    spent on deferred maintenance. So, expenditures like the trail maintenance
    at Nantahala Gorge are reported as a *resource preservation

    and enhancement expenditure.* Because the Forest Service uses this
    approach, the amount of agency expenditures for deferred maintenance
    cannot be determined nor can the agency determine whether the backlog of
    deferred maintenance needs is being reduced.

    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 invest its fee demonstration revenues for
    developing and implementing a system for tracking deferred maintenance
    spending. Second, the fee demonstration program is temporary and it is
    unclear at this time whether the Congress will make the program permanent.
    As a result, agency officials said that this uncertainty makes them
    question the wisdom of developing an additional process for tracking
    deferred

    maintenance. Finally, the agency was not required by the fee program
    legislation to measure the impact of fee revenues on deferred maintenance.
    They have chosen not to do so. The Forest Service Has a

    Forest Service officials acknowledge that the agency has a significant
    Significant Deferred

    deferred maintenance problem. In fiscal year 2001, the agency estimated
    Maintenance Problem

    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. Further, the Inspector

    General pointed out that the agency had no system or systematic way to
    compile the information needed to provide managers or Congress with
    reliable estimates. 11 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. Accordingly, even if the Forest
    Service collected

    11 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).

    specific information on the amount of fee revenue being used to address
    deferred maintenance needs, the agency would not know if its total
    deferred maintenance needs are being reduced. The National Park Service

    Since the fee demonstration program began, the Congress and the current
    Has Placed a Higher Priority administration have encouraged the National
    Park Service to place a on Addressing Deferred priority on spending fee
    demonstration revenues to help reduce its Maintenance Needs

    multi- billion dollar deferred maintenance backlog. Our review of the Park
    Service*s guidance to on- site park managers showed that the agency has
    emphasized that fee demonstration revenues should be spent on deferred
    maintenance projects. In fiscal year 2001, the Park Service began to track
    the amount of fee revenues used for addressing deferred maintenance needs.
    During that year, the Park Service spent about 35 percent of its fee
    demonstration expenditures on maintenance activities. Since the program

    began, agency officials estimate that about 70 percent of its fee
    demonstration expenditures have been for deferred maintenance activities
    ($ 274 million out of $395 million). 12, 13 However, while the agency is
    now tracking its deferred maintenance

    expenditures, like the Forest Service, the Park Service has not yet
    developed a reliable estimate of its total deferred maintenance backlog.
    As reported by us, the Department of Interior*s Inspector General, and

    others, 14 the Park Service has had longstanding difficulties in
    developing an accurate and reliable estimate of the amount of deferred
    maintenance on its assets. In 2002, we reviewed the status of the Park
    Service*s efforts to develop better deferred maintenance data. 15 At that
    time, the agency was just beginning to implement a new asset management
    process that should,

    12 Recreational Fee Demonstration Program: Interim Report to Congress
    submitted by the U. S. Department of the Interior and the U. S. Department
    of Agriculture; April 2002. 13 It should be noted that deferred
    maintenance expenditures include projects such as resource preservation
    and visitor services.

    14 U. S. General Accounting Office, National Park Service: Efforts to
    Identify and Manage the Maintenance Backlog, GAO/ RCED- 98- 143
    (Washington, D. C.: May 14, 1998). U. S. Department of the Interior,
    Office of Inspector General, Followup of Maintenance Activities, National
    Park Service, 98- I- 344 (Washington, D. C.: Mar. 1998). U. S. Department
    of the Interior, Interior Planning, Design and Construction Council,
    Facilities Maintenance Assessment and Recommendations (Washington, D. C.:
    Feb. 1998). 15 U. S. General Accounting Office, National Park Service:
    Status of Efforts to Develop Better Deferred Maintenance Data, GAO- 02-
    568R (Washington, D. C.: Apr. 12, 2002).

    when fully and properly implemented, provide a systematic and reliable
    methodology for estimating the amount of deferred maintenance needs
    throughout the national park system.

    The Forest Service The federal agencies participating in the Recreational
    Fee Demonstration

    Accounts for Its Fee Program are required by the authorizing legislation
    to maintain fee

    revenues in separate Treasury accounts and to account for fee
    Demonstration

    expenditures separately from other appropriated funds. Consistent with
    Program Revenues and this requirement, the Forest Service accounts for its
    fee revenues and Expenditures expenditures separately from other
    appropriated funds, even when using

    fee demonstration revenues along with other appropriated funds. The
    Separately from Other

    National Park Service also tracks its fee demonstration funds apart from
    its Funds but Does Not other appropriated funds as required by law.
    Although the Forest Service generally tracks its fee revenues and
    expenditures separately from other Accurately Account for

    appropriated funds, it does not accurately account for some fee collection
    Some Fee Collection

    costs. Costs The Forest Service

    The authorizing legislation for the fee demonstration program requires the
    Separately Accounts for Its

    participating federal agencies to maintain fee revenues in separate Fee
    Demonstration Treasury accounts and to account for fee expenditures
    separately from Revenues and Expenditures

    other appropriated fund expenditures. The Forest Service is required to
    maintain its fee revenues in two separate Treasury accounts* 80 percent of
    its fee revenues are maintained in an account for expenditure without
    further appropriation at the site where the fees were collected and 20
    percent of its fee revenues in another account for expenditure on an
    agencywide basis without further appropriation. The Forest Service
    appropriately maintains its fee revenues in separate Treasury accounts and
    tracks expenditures separately from other appropriated funds. The Forest
    Service officials generally follow the same recording and spending
    procedures for its fee demonstration funds that they use for other

    appropriated funds. In particular, agency officials ensure they have
    proper authority before spending the fee revenues and that they do not
    spend over the amount of resources available. 16 16 The Anti- Deficiency
    Act prohibits expenditures and obligations that exceed the amounts
    available in the related appropriation or fund accounts.

    While the Forest Service accounts for fee revenue and expenditures
    separate from other appropriated funds, it can and does use fee revenues
    along with other appropriated funds to complete projects. For example,
    officials at the Gifford Pinchot National Forest 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 separately accounted for revenues and expenditures from the fee

    demonstration program from the other appropriated funding sources. The
    National Park Service, like the Forest Service, also accounts for fee
    demonstration funds separately from its other appropriated funds. Park
    Service officials stated that the funds in the fee demonstration program
    accounts are also deposited with the U. S. Treasury and are separately
    accounted for when used with other appropriated funds to complete

    projects. Forest Service Does Not In the Pacific Southwest and the Pacific
    Northwest regions, the Forest Accurately Account for Service uses vendors
    to help sell some forest passes directly to the public. Some Fee
    Collection Costs The Forest Service uses vendors in order to increase
    convenience for the visiting public and to save agency administration
    costs. As payment for a vendor*s services, the Forest Service allows the
    vendor to retain a certain percentage of the value of the pass, which the
    Forest Service refers to as a

    discount. 17 These vendor discounts are one part of the total fee
    collection costs for the Forest Service. The Forest Service may use up to
    15 percent of the current year fee collections to cover fee collection
    costs in that fiscal year.

    Forest Service officials in the Pacific Southwest and Pacific Northwest
    regions did not record the vendor discount and did not count vendor
    discounts as part of their fee collection costs. Although the Forest
    Services accounting system should capture all revenues and expenses,
    program

    officials were not aware at the time the system was developed that vendor
    discounts should have been captured. Forest officials at the locations
    where this was occurring could not tell us the total amount of vendor
    discounts that the agency has permitted. Excluding vendor discounts from
    the cost of collection is also inconsistent with federal financial
    accounting 17 These discounts are incentives or commissions to vendors for
    handling and selling the passes.

    standards and the U. S. Department of Agriculture financial manual. 18
    These standards require that total revenues and expenses be reported. The
    Forest Service practice of allowing vendor discounts results in inaccurate
    fee revenue and expenditure reporting. Because the vendor retains the
    discount rather than the Forest Service first collecting all fee revenues
    and then paying the vendor out of these revenues, the amount of fee
    revenues that the forest receives is reduced. In addition, the vendor

    discounts are not included as part of fee collection costs. Thus, both fee
    revenues and fee collection costs are underreported. Because of inaccurate
    reporting of fee revenues and collection costs, the Forest

    Service has no assurance that it is in compliance with the recreational
    fee demonstration legislation requirement only allowing 15 percent of fee
    revenues to be used for fee collection costs.

    For example, at the San Bernardino and Angeles National Forests, private
    vendors receive a handling fee of $1.00 for every $5. 00 daily pass sold.
    For illustration purposes, consider the following scenario. If these two
    forests sell 1,000 daily $5 passes in 1 year they should have $5,000 in
    reported fee revenues. If they pay the vendor $1 for each $5 pass, they
    should have fee collection costs associated with the vendor*s services of
    $1,000. In contrast, the Forest Service*s practice of not reporting vendor
    discounts

    would result in only $4,000 in reported fee revenues and no reported fee
    collection costs associated with the vendor*s services. For the two
    forests in our example, both of which are in the Enterprise Forest
    project, nearly 20 percent of fee revenues were used to cover fee
    collection costs in fiscal year 2001. If this occurs at multiple
    recreation sites, there is a risk that the Forest Service would exceed the
    statutory limitation that not more than 15 percent of total revenues be
    used for fee collection costs. The practice of not reporting vendor
    discounts as part of fee collection costs makes it difficult to determine
    compliance with the statutory limitation.

    The Forest Service agrees that vendor discount expenses are not fully
    disclosed and as a result collections are understated. According to the
    Forest Service, however, its use of vendors is limited and thus represents
    a

    relatively small portion of expenditures. 18 Statement of Federal
    Financial Accounting Standards No. 4 (Managerial Cost Accounting Concepts
    and Standards for the Federal Government) and No. 7 (Accounting for
    Revenue and Other Financing Sources) and the USDA Financial and Accounting
    Standards Manual, March 17, 2000; section 12. 51. 1. 9.

    In commenting on a draft of this report, the Forest Service stated that it
    is preparing accounting instructions for the field, and it plans to
    implement a new procedure in the immediate future to record the revenue
    deposited into the U. S. Treasury and use an accounting mechanism that
    would indicate the foregone revenue and *cost of collection* associated
    with the discount.

    Agency Comments We provided the U. S. Department of Agriculture and the
    Department of the Interior copies of a draft of this report. The U. S.
    Department of Agriculture generally agreed with the contents in the
    report. Interior did not offer overall comments on the report. Both
    departments provided us with

    clarifying and technical comments that we incorporated into the report as
    appropriate. Comments from the U. S. Department of Agriculture are
    included in appendix III and comments from the Department of the Interior
    are included in appendix IV.

    As arranged with your office, unless you publicly announce its contents
    earlier, we plan no further distribution of this report until 30 days
    after the date of this letter. At that time, we will send copies to the
    Secretary of Agriculture; the Secretary of the Interior; the Chief of the
    Forest Service;

    Director, National Park Service; the Director, Office of Management and
    Budget; and other interested parties. We will make copies available to
    others upon request. This report will also be available on GAO*s home page
    at http:// www. gao. gov.

    If you or your staff have any questions about this report, please contact
    me at (202) 512- 3841. Key contributors to this report were Cliff Fowler,
    Frank Kovalak, Patricia Rennie, Jason Venner, Amy Webbink, and Arvin Wu.

    Sincerely yours, Barry T. Hill Director, Natural Resources and Environment

    Appendi xes Answers to Additional Subcommittee

    Appendi x I

    Questions Subsequent to completing our fieldwork during this review, the
    Subcommittee on Forests and Forest Health asked us additional questions
    about specific aspects of the Recreational Fee Demonstration Program. To
    address these additional questions, we requested the Forest Service fee
    demonstration program manager to respond to the specific questions and to
    provide relevant supporting documentation. We reviewed the supporting
    documentation to determine if it was consistent with our knowledge of the
    program and it supported agency statements made in response to the issues
    being questioned. A summary of the Forest Service*s responses follows.

    Question 1: Since the implementation of the Recreational Fee Demonstration
    Program in fiscal year 1996, how much money was transferred from the
    Forest Service recreation program, including the fee demonstration
    program, to fund wildfire suppression and emergency rehabilitation
    activities?

    Since fiscal year 1996, the Forest Service has transferred $38 million
    from its recreation program to fund wildfire suppression and emergency
    rehabilitation activities. All of the recreation program funds transferred
    occurred in fiscal year 2002. In that year, the agency transferred over
    $900 million from a variety of Forest Service appropriation accounts. The

    $38 million dollars transferred from the recreation program was a portion
    of the total amount transferred. More specifically, the agency transferred
    $24 million from its recreation appropriation and $14 million from the
    Recreational Fee Demonstration Program. The $24 million came from two
    recreation accounts--$ 9 million from an account called Recreation,
    Heritage, and Wilderness Resources, and $15 million from an account for
    capital improvements and maintenance for trials. The remaining $14 million
    that was transferred from the fee demonstration program came from an
    unobligated balance of about $34 million that existed at the end of fiscal
    year 2002. According to the fee demonstration program manager, the fee
    revenues were the last tier of funds to be transferred for 2002 fire
    suppression activities. All funds transferred from the fee demonstration

    program were replenished when the Congress enacted the fiscal year 2003
    appropriations for the Forest Service. Question 2( a): Have congressional
    appropriations for the Forest

    Service recreation programs been reduced since the implementation of the
    Recreational Fee Demonstration Program?

    Congressional appropriations for the Forest Service recreation programs
    have not declined since the start of the Recreational Fee Demonstration
    Program in 1996. The following table shows the general increase in
    recreation appropriations and fee demonstration program revenues since
    1996.

    Tabl e 3: Amount of Forest Service Recreation Programs* Appropriations and
    Its Recreational Fee Demonstration Program Revenues, Fiscal Years 1996-
    2002 Dollars in millions

    Fiscal Year 1996 1997 1998 1999 2000 2001 2002

    Recreation appropriations a $267 $281 $277 $293 $301 $363 $390 Fee
    demonstration revenues 0 b 9 21 27 32 35 38 Source: GAO analysis of Forest
    Service data.

    a Includes appropriations for the Forest Service trails and facilities
    maintenance, reconstruction, and capital improvements; recreation,
    heritage, and wilderness program. Excludes recreation fee collections and
    fee demonstration revenue. b The Forest Service implemented the
    Recreational Fee Demonstration Program in fiscal year 1996

    with four demonstration sites that generated $43,000 during the year.

    Question 2( b): Has the agency itself reduced the operating budgets of
    recreation programs since the implementation of the fee demonstration
    program?

    The implementation of the Recreational Fee Demonstration Program does not
    appear to be a factor in deciding the amount of recreation program funds
    that the Forest Service allocates to its regional offices. In order to
    determine whether the Forest Service offset recreation appropriations with

    fee demonstration revenues, we reviewed whether the recreation
    appropriation allocations to its regional offices decreased as fee
    demonstration revenues increased. We reviewed the regional allocations for
    each year since the fee demonstration program began. As shown in the
    following table, regional allocations have generally increased since the
    fee program began. As a result, it appears that the fee demonstration
    revenues were used to supplement rather than supplant recreation program
    funds.

    Tabl e 4: Comparison of Forest Service Recreation Appropriations*
    Allocations to Its Regional Offices to Fee Demonstration Revenues

    Dollars in millions

    Fiscal year 1996 1997 1998 1999 2000 2001 2002

    Region 1 (Northern Rockies) $22 $21 $21 $23 $25 $27 $30 Region 2 (Rocky
    Mountain) 27 29 28 29 27 35 36 Region 3 (Southwest) 23 26 24 28 26 31 34
    Region 4 (Intermountain) 27 31 32 35 32 40 41 Region 5 (Pacific Southwest)
    40 40 42 43 45 52 57

    Region 6 (Pacific Northwest) 40 38 38 37 39 44 46 Region 8 (Southern) 32
    31 31 34 33 41 46 Region 9 (Eastern) 28 26 27 26 27 31 36 Region 10
    (Alaska) 13 17 16 18 16 20 22

    Total regional allocation a $252 $259 $258 $273 $271 $321 $347

    Other b 16 22 19 20 30 42 42

    Tot al a recreation appropriations c $267 $281 $277 $293 $301 $363 $390
    Fee demonstration revenues d $9 $21 $27 $32 $35 $38

    Source: GAO analysis based on Forest Service data. a Some totals do not
    add correctly due to rounding.

    b Other includes funds for headquarters administration and program
    operations, research stations, and program reserves that have not been
    allocated to each region. c Total recreation funds exclude fee
    demonstration revenues and fee collections. Fee collections were

    deleted because the regions directly request appropriation budget
    authority based on 15 percent of fee collections. Thus, the headquarters
    do not allocate fee collections to its regional offices. d The fee
    demonstrated program generated $43,000 in fiscal year 1996 when the
    program began.

    Question 3( a): What is the amount of appropriated dollars the Forest
    Service spent in fiscal year 2001 for administrative overhead to manage
    and operate the Recreational Fee Demonstration

    Program? The Forest Service accounting system does not specifically track
    administrative overhead costs for the Recreational Fee Demonstration

    Program or any other individual program within the agency. Forest Service
    officials estimate that in 2001 the agency spent about $10 million of
    appropriated funds to support the fee demonstration program. The agency

    estimates that $1 million is specifically for fee collection activities
    and about $9 million is for support costs for the program such as the
    salary and benefits for staff involved in general management, program
    planning, legislative and public communications, business services, as
    well as common service costs such as rents and utilities, and certain
    personnel costs like worker*s compensation and unemployment insurance.

    Question 3( b): What is the amount of recreation fee demonstration dollars
    that the Forest Service spent in fiscal year 2001 for administrative
    overhead to manage and operate the Recreational

    Fee Demonstration Program?

    As noted in the answer to 3( a), the Forest Service accounting system does
    not track administrative overhead costs for the Recreational Fee
    Demonstration Program or any other individual program within the agency.
    As a result the agency cannot determine these costs. Fee program expenses
    that could be considered administrative overhead are comprised of the cost
    of collecting fees and expenditures for routine program operations
    provided at the fee demonstration sites* such as on- site management
    support, site operation and maintenance planning activities,

    and conducting on- site visitor surveys. In fiscal year 2001, the Forest
    Service spent approximately $5. 1 million in fee revenues for fee
    collection. In addition, the national fee program manager estimates that a
    small

    percentage of the $8. 6 million spent for fee program operations in fiscal
    year 2001 could also be considered administrative overhead.

    Question 3( c): How does the Forest Service account for Recreational Fee
    Demonstration Program expenses such as periodic agencywide meetings on the
    fee demonstration program?

    The Forest Service pays for its annual national meeting of fee
    demonstration program managers and staff using other recreation
    appropriated funds although agency officials told us that some attendees
    may use fee demonstration program funds if it is part of their training
    program. According to the fee demonstration program manager, this

    practice allows more fee demonstration funds to be used for on- the-
    ground demonstration site activities.

    Appendi x II

    Scope and Methodology To address each of the objectives, we reviewed the
    relevant Forest Service policies and procedures at the agency*s
    headquarters, three regional offices, and nine demonstration sites. We
    selected three Forest Service regions to contact because they represented:
    (1) the three largest fee demonstration program revenue generating regions
    during fiscal year 2001; (2) geographical diversity; and (3) diversity in
    the types of recreational use (concentrated use in smaller areas versus
    more dispersed use in large areas.) At each of these regions, we selected
    and obtained information on

    how fee demonstration projects were prioritized, and how the revenues were
    used and accounted for at selected demonstration sites. Within each
    region, we selected the sites that generated the largest fee demonstration
    revenues in fiscal year 2001, the lowest fee revenues, and of the
    remaining sites in each region, the one that had the least fee revenue per
    visitor. We selected this methodology to determine whether capital
    development

    projects were being funded at the high- revenue sites while some basic
    health or safety or other high- priority needs were not being addressed at
    other sites because of the lack of fee demonstration revenues. Table 5
    identifies the demonstration sites that we visited.

    Table 5: Demonstration Sites GAO Visited Region/ sites visited a State 5*
    Pacific Southwest

     Enterprise Forest Project b California  Shasta- Trinity National
    Forests (Shasta-

    Trinity National Recreation Area) California  Klamath National Forest

    California 6* Pacific Northwest

     Gifford Pinchot National Forest (Mount St. Helens National Volcanic
    Monument) Washington  Col umbia Rive rGor geNa tion alSc enic Area
    (Multnomah Falls)

    Washington and Oregon  Colville National Forest Washington

    8* Southern

     North Carolina National Forests North Carolina  Kisatchie National
    Forest

    Louisiana  Texas National Forests Texas

    Source: GAO based on Forest Service data. a We did not make an on- site
    visit to the Kisatchie National Forest site because the site was closed

    because of 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. b The Enterprise Forest project covers four national
    forests in Southern California. These include the

    Angeles, Cleveland, Los Padres, and San Bernardino Forests. We visited the
    Angeles and San Bernadino National Forests.

    In additon to collecting and reviewing this general information, we
    addressed each of the four objectives as follows. To determine how
    spending priorities are determined for the revenues generated by the
    Recreational Fee Demonstration Program, we interviewed Forest Service fee
    demonstration program officials at headquarters, the three regional
    offices, and the nine sampled sites; reviewed the applicable program
    guidance; and reviewed on- site records at each of the nine sites we
    visited to determine how spending priorities were actually being set.

    To determine how the Forest Service spent its fee demonstration program
    revenues, we obtained information on total fee demonstration expenditures
    for fiscal year 2001 and program expenditures for the nine demonstration
    sites we visited in the three regions selected. We also obtained
    information on the types of projects being funded and the amount of
    expenditures for each site. In addition, we determined whether the types
    of expenditures made by each of the fee demonstration sites we visited
    were made in accordance with the legislative authority provided for the
    program and with the agency*s program priorities.

    To determine what, if anything, the Forest Service is doing to measure the
    impact of recreation fee revenues on reducing the agency*s deferred
    maintenance backlog, we interviewed local site managers to determine the
    types of projects being funded and the extent of fee revenues spent to

    address the deferred maintenance backlog. We also obtained information on
    whether the Forest Service has a reliable estimate of its deferred
    maintenance needs and identified whether the agency has a process to
    measure the impact of fee demonstration revenues on deferred

    maintenance. We obtained this information from interviews with
    headquarters and on- site program officials and a review of Forest Service
    and other agency reports on the deferred maintenance issues within the
    agency.

    To determine how the Forest Service accounts for its fee demonstration
    program revenues and expenditures, we interviewed the headquarters fee
    demonstration program manager and site managers on how the agency accounts
    for fee demonstration revenues and expenditures compared to other
    appropriated funds and how it accounts for its fee collection costs.

    While our analysis focused on the Forest Service, we also collected some
    information on how the National Park Service was handling its activities
    in each of the four areas covered by the objectives. We selected the Park
    Service to provide perspective and comparative information to that of the

    Forest Service because these two agencies generate most of the fee
    revenues under the Recreational Fee Demonstration Program. We limited our
    work at the Park Service to obtaining and reviewing the relevant
    documentation for each of the four objectives and interviewing appropriate
    agency officials to get a complete understanding of the documents. We did

    not conduct any on- site visits to verify the practices being followed by
    local park managers. Because our analysis focused on the Forest Service,
    specifically on a detailed review of nine Forest Service fee demonstration
    sites, the information reported should not be generalized in making any
    conclusions with respect to the National Park Service.

    Finally, to address the three additional questions about specific aspects
    of the recreational fee demonstration program (see app. I), we requested
    the Forest Service fee demonstration program manager at headquarters to
    response to the specific questions and to provide supporting
    documentation. We reviewed this documentation and asked appropriate
    follow- up questions, as necessary, to make sure the information was
    consistent with our understanding of the program. We conducted our work
    from August 2002 through January 2003 in accordance with generally
    accepted government auditing standards.

    Comments from the U. S. Department of

    Appendi x II I Agriculture Note: GAO comments supplementing those in the
    report text appear at the end of this appendix.

    See comment 1. Now on p. 10. Now on p. 16. Now on pp. 16- 17.

    Now on p. 17. Now on p. 13. See comment 2.

    Now on pp. 19 and 8. Now on p. 22. See comment 3.

    Now on pp. 25- 26. See comment 4.

    Now on p. 26.

    The following are GAO*s comments on the U. S. Department of Agriculture*s
    letter dated April 9, 2003. GAO*s Comments 1. We agree and acknowledged
    their comments on page 17 of the report.

    2. We agree and acknowledged their comments on page 19 of the report. 3.
    We agree and revised the sentence on page 22 of the report. 4. We agree
    and acknowledged their comments on page 27 of the report.

    Comments from the Department of the

    Appendi x V I Interior Note: Note: Note: Note: GAO GAO GAO GAO comments
    comments comments comments supplementing supplementing supplementing
    supplementing those those those those in in in in the the the the report
    report report report text text text text appear appear appear appear at at
    at at the the the the end end end end of of of of this this this this
    appendix. appendix. appendix.

    appendix.

    See comment 1. Now on p. 3. Now on p. 18. Now on p. 23.

    See comment 2. Now on pp. 7- 8. See comment 3.

    See comment 4.

    The following are GAO*s comments on the Department of the Interior*s
    letter dated April 11, 2003. GAO*s Comments 1. The National Park Service
    expressed the concern that we used *maintenance* as one of the expenditure
    categories rather than *health

    and safety maintenance* and by doing so the expenditure category is
    misinterpretated to represent deferred maintenance. We did not change the
    report to *health and safety maintenance* as requested by the Park
    Service. In table 1 of our report, we describe that the maintenance
    expenditure category includes projects related to health and safety and
    backlogged maintenance and we note that backlogged or deferred maintenance
    expenditures may also be categorized under categories other than
    maintenance. We added a note stating that we refer to the Park Service*s
    *health and safety maintenance* expenditures as *maintenance.*

    2. We revised the report to say that local managers focus on addressing
    deferred maintenance and critical resource protection needs. 3. We changed
    the language to say that the National Park Service uses a

    larger portion of fee demonstration *expenditures* rather than *revenues*
    on collecting fees and addressing its maintenance needs and less for
    visitor services. 4. We added the following statement in the scope and
    methodology. Because our analysis focused on the Forest Service,
    specifically on a

    detailed review of nine Forest Service fee demonstration sites, the
    information reported should not be generalized in making any conclusions
    with respect to the National Park Service.

    (360247)

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    a

    GAO United States General Accounting Office

    The Forest Service largely determines its spending priorities for the
    Recreational Fee Demonstration Program through local forest managers who
    are given broad discretion in deciding how to use fee demonstration

    revenues. Local managers 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.

    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 reviewed the activities of nine demonstration sites in three Forest
    Service regions to verify that the fee revenues were being spent in
    accordance with the authorizing legislation for the program and agency
    spending priorities. GAO found no inconsistency. The Forest Service does
    not have a process for measuring the impact of fee

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

    The Forest Service keeps its fee revenue in an account separate from other
    appropriated funds, as required by the authorizing fee program
    legislation. Although the Forest Service tracks its fee revenues and
    expenditures separately from other appropriated funds, it does not
    accurately account for some fee collection costs. The Forest Service, in
    commenting on a draft of this report, generally agreed with the report*s
    contents.

    Cleanup of an Illegal Trash Dump in the San Bernardino National Forest
    Using Recreational Fee Demonstration Program Revenues

    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. Under the trial program, the
    Congress authorized the four federal land management agencies, including
    the Forest Service, to charge fees

    to visitors and to retain the revenues for use in addition to other
    appropriated funds. The Congress originally authorized the program for 3
    years and has extended it several times. As Congress considers whether to

    extend the program or to make it permanent, the Chairman of the
    Subcommittee on Forests and

    Forest Health asked GAO to address several questions about the Forest
    Service*s administration of the program: (1) How are spending priorities
    determined for the

    revenues generated by the program? (2) How has the agency spent its fee
    demonstration program revenues? (3) What, if anything, is the agency doing
    to measure the impact of the recreation fee revenues on

    reducing the agency*s deferred maintenance backlog? (4) How does the
    agency account for its fee demonstration program revenues?

    www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 470. To view the full report,
    including the scope and methodology, click on the link above. For more
    information, contact Barry T. Hill at (202) 512- 9775 or hillbt@ gao. gov.
    Highlights of GAO- 03- 470, a report to the Chairman, Subcommittee on
    Forests and

    Forest Health, Committee on Resources, House of Representatives April 2003

    RECREATION FEES

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

    Page i GAO- 03- 470 Recreation Fees

    Contents

    Contents

    Page ii GAO- 03- 470 Recreation Fees

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    Appendix I

    Appendix I Answers to Additional Subcommittee Questions Page 30 GAO- 03-
    470 Recreation Fees

    Appendix I Answers to Additional Subcommittee Questions Page 31 GAO- 03-
    470 Recreation Fees

    Appendix I Answers to Additional Subcommittee Questions Page 32 GAO- 03-
    470 Recreation Fees

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    Appendix II

    Appendix II Scope and Methodology

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    Appendix II Scope and Methodology

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    Appendix III

    Appendix III Comments from the U. S. Department of Agriculture

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    Appendix III Comments from the U. S. Department of Agriculture

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    Appendix III Comments from the U. S. Department of Agriculture

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    Appendix IV

    Appendix IV Comments from the Department of the Interior

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    Appendix IV Comments from the Department of the Interior

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