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

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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

Page 1 GAO- 03- 470 Recreation Fees United States General Accounting
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Appendix I

Appendix I Answers to Additional Subcommittee Questions Page 30 GAO- 03-
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Appendix I Answers to Additional Subcommittee Questions Page 31 GAO- 03-
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Appendix I Answers to Additional Subcommittee Questions Page 32 GAO- 03-
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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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