Forest Service: Little Progress on Performance Accountability	 
Likely Unless Management Addresses Key Challenges (01-MAY-03,	 
GAO-03-503).							 
                                                                 
Historically, the Forest Service has not been able to provide	 
Congress or the public with a clear understanding of what the	 
Forest Service's 30,000 employees accomplish with the		 
approximately $5 billion the agency receives every year. Since	 
1990, GAO has reported 7 times on performance accountability	 
weaknesses at the Forest Service, including its inability to	 
systematically link planning, budgeting, and results reporting.  
This report reviews the recent progress the Forest Service has	 
made in resolving previously identified performance		 
accountability problems and identifies key challenges the Forest 
Service must overcome to resolve these problems.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-503 					        
    ACCNO:   A06798						        
  TITLE:     Forest Service: Little Progress on Performance	      
Accountability Likely Unless Management Addresses Key Challenges 
     DATE:   05/01/2003 
  SUBJECT:   Appropriated funds 				 
	     Internal controls					 
	     Performance measures				 
	     Accountability					 
	     Strategic planning 				 

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GAO-03-503

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

United States General Accounting Office

GAO

May 2003 FOREST SERVICE Little Progress on Performance Accountability
Likely Unless Management Addresses Key Challenges

GAO- 03- 503

The Forest Service has made little real progress in resolving its long-
standing performance accountability problems and, based on the status of
its current efforts, remains years away from implementing a credible
performance accountability system. Since June 2000, when we last reported
on

performance accountability at the Forest Service, the agency has continued
to study the issue but has made little real progress. For example, in
March 2002, the agency initiated a study of how several other federal
agencies implemented their performance accountability systems and, by
September 2002, had devised a draft plan for implementing a system of its
own. However, broad support within the agency for implementing this plan
could

not be achieved, and an executive steering team was recently established
to restudy the issue. While the agency continues to study and restudy the
issue, opportunities to establish key linkages among components of a
performance accountability system have been missed. For example, in April
2000, the agency began considering a new budget system and, in August
2001, a new work- plan system* two critical components that should be part
of a

performance accountability system. However, the Forest Service has yet to
develop clear linkages between these new systems and its strategic goals
and performance results. Without these linkages, the agency will be unable
to report in an integrated, results- oriented way on what activities it
completed, how much they cost, and what they accomplished* key elements of
an effective performance accountability system. While we recognize that
developing a performance accountability system is a complex, timeconsuming
process, other federal agencies with land management responsibilities have
developed and implemented performance accountability systems and believe
that their systems have produced multiple benefits.

The Forest Service faces three key challenges that it must meet if it is
to make more progress. First, the agency needs to establish clear lines of
authority and responsibility for developing and implementing a performance
accountability system. Currently, various senior executives have
responsibilities for components of performance accountability; however, no
one has overall responsibility and authority for ensuring these components
are developed and properly linked. Second, the Forest Service needs to
address its culture of consensus decision- making, which has made it
difficult for the Forest Service to agree on how to develop and implement
an integrated performance accountability system. Third, top agency
leadership needs to give sufficient emphasis and priority to establishing
a performance accountability system. The agency is currently giving
greater emphasis to other priorities, like financial accountability. GAO
recognizes the importance of, and need for, addressing the Forest
Service*s long- standing financial accountability problems, but believes
more can and should be done to address the agency*s performance
accountability problems so that both performance and financial
accountability can work in concert to assess and, ultimately, to improve
the agency*s overall performance. Historically, the Forest Service has

not been able to provide Congress or the public with a clear understanding
of what the Forest Service*s 30, 000 employees

accomplish with the approximately $5 billion the agency receives every
year. Since 1990, GAO has reported 7 times on performance accountability
weaknesses at the Forest Service, including its inability to
systematically link planning, budgeting, and results reporting. This
report reviews the recent progress the Forest Service has made in
resolving previously identified performance accountability problems and
identifies key challenges the Forest Service must overcome to resolve

these problems. The Secretary of Agriculture should direct that the Chief
of the Forest Service appoint a senior executive

to develop a comprehensive plan with milestones to ensure the timely
implementation of an effective performance accountability system. The
Chief should also report, beginning in 2004, on (1) the agency*s progress
in implementing a performance accountability system in the agency*s annual
performance plans

and (2) its accomplishments in implementing its performance accountability
system in its annual performance report to the

Congress. In commenting on a draft of this report, the Forest Service
agreed with these recommendations.

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 503. To view the full report,
including the scope and methodology, click on the link above. For more
information, contact Barry T. Hill (202) 512- 3841 or Hillbt@ gao. gov.
Highlights of GAO- 03- 503, a report to the

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

May 2003

FOREST SERVICE

Little Progress on Performance Accountability Likely Unless Management
Addresses Key Challenges

Page i GAO- 03- 503 Forest Service Letter 1 Results in Brief 3 Background
4 Forest Service Has Made Little Progress in Resolving Known

Performance Accountability Problems, unlike Other Federal Land Management
Agencies 9 Forest Service*s Inability to Address Organizational, Cultural,
and Leadership Challenges Continues to Impede Its Progress on Performance
Accountability 15 Conclusions 16 Recommendations for Executive Action 17
Agency Comments 18 Scope and Methodology 18 Appendix I Forest Service*s
Progress on GAO- Reported

Performance Accountability Problems 20

Appendix II Detailed Forest Service Organizational Chart 22

Appendix III Comments from the Forest Service 24

Appendix IV GAO Contacts and Staff Acknowledgments 25

Related GAO Products 26

Figures

Figure 1: Forest Service*s Organizational Structure 5 Figure 2: The
Linkage among Components in GPRA Legislative Framework 7 Contents

Page ii GAO- 03- 503 Forest Service Abbreviations

BLM Bureau of Land Management BFES Budget Formulation and Execution System
GPRA Government Performance and Results Act NRCS Natural Resources and
Conservation Service OMB Office of Management and Budget PART Program
Assessment Rating Tool USDA Department of Agriculture

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.

Page 1 GAO- 03- 503 Forest Service

May 1, 2003 The Honorable Scott McInnis Chairman The Honorable Jay Inslee
Ranking Minority Member Subcommittee on Forests and Forest Health
Committee on Resources House of Representatives

For 10 years, Congress and the administration have focused on making
federal agencies more accountable for what they accomplish with the
dollars they receive. To this end, the Congress mandated in legislation
that federal agencies undertake a number of major management reforms that,
together, constitute a statutory framework for linking plans, budgets, and
results. 1 Over this period, GAO has reviewed agencies* efforts to achieve

the accountability for financial management and performance envisioned by
this framework. Since 1999, in a series of reports identifying agencies
with major management challenges and at high risk of waste, fraud, abuse,
and mismanagement, GAO has consistently reported serious financial and
performance accountability weaknesses at the U. S. Department of
Agriculture*s (USDA*s) Forest Service. As a result of these weaknesses,
the Forest Service has not been able to provide Congress and the public
with a clear understanding of what its 30,000 employees accomplish with
the approximately $5 billion it receives every year.

The Forest Service has an enormous stewardship responsibility: to maintain
the health, productivity, and diversity of the nation*s forests and
grasslands for current and future generations of Americans. The agency
manages 192 million acres of land, including a national forest system that
comprises 155 national forests, 20 national grasslands, and 17 recreation
areas. On these lands, the Forest Service, among other things, supports
recreation; sells timber; provides rangeland for grazing; maintains and

1 The Government Performance and Results Act of 1993, as well as certain
other laws, comprise this statutory framework. In particular, the Chief
Financial Officers Act of 1990 was designed to bring more effective
general and financial management practices to federal agencies; the
Paperwork Reduction Act of 1995 was intended to ensure that information
technology is managed to improve the performance of agencies; and the
Clinger- Cohen Act of 1996 requires agencies to establish goals for
improving agency operations through the effective use of information
technology. The framework also includes the Federal Managers Financial
Integrity Act and the Inspector General Act.

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 03- 503 Forest Service

protects watersheds, wilderness, fish and wildlife; and works with other
federal agencies to prevent and suppress wildfires. In addition, the
Forest Service provides financial and program support for state and
private forests and undertakes research activities. The Forest Service,
headed by a Chief, conducts these activities through three levels of field
management*- 9 regional offices, 123 forest offices, and about 600
district offices. The managers of these field offices have considerable
discretion in

interpreting and applying the agency*s policies and directions. The Chief
of the Forest Service reports to the Under Secretary of Agriculture for
Natural Resources and Environment.

In our previous reports, dating back to 1991, we noted that the agency*s
lack of performance accountability in recent years occurred, at least in
part, because it had not developed a performance accountability system
that links its budget and organizational structures, planning processes,
and resource allocations with its strategic goals, objectives, and
performance

measures. We also reported that the agency had difficulty in developing
good performance measures and monitoring progress, both of which are
critical to ensuring accountability. Furthermore, while the agency had
made numerous commitments in recent years to provide the Congress and the
public with a better understanding of what it accomplishes with
appropriated funds, it did not appear to be fully committed to
establishing the key linkages, measures, monitoring, and coordination
needed for accountability. We reported that the Forest Service has studied
options to address performance accountability but has done little else. In
addition,

we determined that the Forest Service has found it difficult to develop a
performance accountability system because responsibilities for
accountability have been fragmented among organizational components and
because the agency*s culture allows field managers significant
independence in deciding whether to implement headquarters* guidance. You
asked us to (1) review the progress the Forest Service is making in

resolving known performance accountability problems and (2) identify key
challenges impeding the Forest Service*s ability to resolve its
performance accountability problems. This report updates our reviews of
the Forest Service since we last testified before your Subcommittee in
June 2000. 2 2 U. S. General Accounting Office, Forest Service: Actions
Needed for the Agency to Become

More Accountable for Its Performance, GAO/ T- RCED- 00- 236 (Washington,
D. C.: June 29, 2000).

Page 3 GAO- 03- 503 Forest Service

The Forest Service has made little progress in resolving its long-
standing performance accountability problems and, based on the status of
its current efforts, remains years away from establishing a credible
performance accountability system. Nearly 2 years after we testified on
the agency*s performance accountability problems in June 2000, the Forest
Service once again began to study its options. In March 2002, it initiated
a study of other federal agencies* performance accountability systems to

learn how to develop, evaluate, and implement a performance accountability
system, and by September 2002, the Forest Service had formulated a draft
plan for implementing one of its own. However, the

draft plan never received broad support within the agency, and the agency
established an executive steering team to restudy the issue. However, this
team was not appointed until December 2002, nearly 2 1/2 years since we
last testified on this issue and more than 11 years after we first
reported on it. While the agency continues to study and restudy the issue,

opportunities to establish key linkages among components of a performance
accountability system have been missed. For example, the Forest Service is
developing two systems that should be integral to a performance
accountability system* budget and work- plan systems. However, the Forest
Service has not developed clear linkages between these new systems and its
strategic goals and performance results. Without these linkages, the
agency will not be able to report in an integrated, results- oriented way
on what activities it completed, how much they cost, and what they
accomplished* key elements of any effective performance accountability
system. While we recognize that developing a performance accountability
system is a complex, time- consuming process, we found that other federal
agencies with land management responsibilities have developed and
implemented performance accountability systems and believe that their
systems have produced multiple benefits.

The Forest Service faces three key challenges that it must meet if it is
to implement a credible performance accountability system: (1)
establishing clear authority and responsibility within the current
organizational structure, (2) making and implementing decisions in an
agency culture that relies heavily on consensus, and (3) establishing
sufficient leadership

emphasis and making performance accountability a higher priority. With
respect to the first challenge, several senior executives have been
assigned responsibilities for components of performance accountability.
However, none of these executives has overall responsibility and authority
for ensuring these components are properly linked, and effective
coordination continues to be difficult within the Forest Service*s
existing organizational structure. Second, the Forest Service*s culture of
making major decisions Results in Brief

Page 4 GAO- 03- 503 Forest Service

by agencywide consensus serves as a major impediment to more concerted
action on this front. Currently, the Forest Service cannot agree on an
integrated approach to creating a performance accountability system, and
without this agreement the agency*s progress is essentially stalemated.
Finally, top agency leadership has not given sufficient emphasis and
priority to establishing a performance accountability system. According to
the Under Secretary of Agriculture for Natural Resources and Environment
and the Chief of the Forest Service, the agency is focusing its efforts on
achieving financial accountability before addressing its performance
accountability needs. While we recognize the importance of, and the need
for, addressing the Forest Service*s longstanding financial accountability
problems, we believe that more can and should be done to also address its
performance accountability problems so that both performance and financial
accountability can work in concert to assess and, ultimately, to improve
the agency*s overall performance.

GAO is recommending a series of steps to ensure that the Forest Service
makes substantive progress towards developing and implementing a
performance accountability system. The Forest Service commented on a draft
of this report and agreed with our findings and recommendations.

The Forest Service is organized into six areas, each headed by a deputy
chief, who reports directly to the Chief of the Forest Service. These
deputy chiefs are responsible for the National Forest System; State and
Private Forestry; Research and Development; Budget and Finance; Programs,
Legislation and Communications; and Business Operations, as shown in
figure 1. Background

Page 5 GAO- 03- 503 Forest Service

Figure 1: Forest Service*s Organizational Structure

The Forest Service is one of four federal agencies that manage public
lands. The other three are the National Park Service, the Bureau of Land
Management (BLM), and the Fish and Wildlife Service, within the Department
of the Interior (Interior). The Natural Resources and Conservation Service
(NRCS), within USDA, provides land management assistance to the owners of
private lands. The Forest Service and the three agencies within Interior
manage 95 percent of all federal lands, while NRCS is primarily
responsible for conserving and protecting natural resources on private
lands, which constitute about 75 percent of all acreage in the contiguous
United States. NRCS has a budget of approximately $1 billion and 11,500
employees. BLM is responsible for administering more public lands than any
other federal agency, with a budget of approximately $1.7 billion and
10,900 employees. Although Other Federal Agencies

Have Land Management Responsibilities

Page 6 GAO- 03- 503 Forest Service

somewhat smaller than the Forest Service, NRCS and BLM have important land
management responsibilities.

Over the past decade, Congress and the executive branch have sought to
improve federal management by focusing more on results. The Congress
enacted several laws to create a statutory framework for results- oriented
management. The Government Performance and Results Act of 1993 (GPRA) is a
key element of this statutory framework. GPRA requires agencies to develop
strategic plans that have outcome- related goals and objectives. Agencies
must also develop annual performance plans that establish goals for
program activities and that create performance measures to assess program
outcomes and to provide a basis for linking program results with
established goals. The strategic plan must describe how the annual
performance goals relate to the strategic plan*s goals and objectives.
Finally, GPRA requires agencies to report annually on their results* that
is, the extent to which their annual performance goals have been met.
Figure 2 illustrates the relationship of the different components of this
legislative framework. Statutory and

Administrative Framework for Performance Accountability

Page 7 GAO- 03- 503 Forest Service

Figure 2: The Linkage among Components in GPRA Legislative Framework

Implementation of the legislative framework is evolving. Currently, for
example, improving the integration of budget and performance is a
highpriority initiative in the President*s Management Agenda. 3 The Office
of Management and Budget*s (OMB) Program Assessment Rating Tool (PART) is
central to this initiative. This diagnostic tool is intended to provide a
consistent approach to reviewing program design, planning, and 3 The
President*s Management Agenda seeks to improve the management and

performance of the federal government by focusing on 14 targeted areas* 5
governmentwide goals and 9 program initiatives.

Page 8 GAO- 03- 503 Forest Service

goal development as well as program management and results. OMB has begun
using PART to assess 20 percent of programs annually, beginning with the
fiscal year 2004 President*s budget request to the Congress.

GAO has documented the Forest Service*s struggles with achieving
performance accountability for over a decade. (See Related GAO Products.)
GAO concluded that the agency*s lack of performance accountability
occurred, at least in part, because it had not developed a performance
accountability system that linked its budget and organizational
structures, planning processes, and resource allocations

with its strategic goals, objectives, and performance measures. Adequate
performance measures are key to linking components of a performance
accountability system. However, as we reported, the Forest Service had not
established objective and verifiable performance measures. Nor had it
established specific and quantifiable objectives that link its strategic
goals with its annual performance measures. We reported

that the agency had difficulty establishing these linkages because the
authority for these components was fragmented among three different deputy
chiefs, with no method for resolving differences on how to best link these
components. This lack of coordination at headquarters undermined
performance accountability.

Finally, we reported that the agency*s leadership had failed to credibly
emphasize performance management at either the headquarters or field
levels. We reported that in 1991 the Chief of the Forest Service had
formed a task force to review performance accountability. The task force
found that the agency had consistently promised to take corrective actions
recommended by GAO and USDA*s Inspector General, but had most often failed
to do so and that there was *compelling* evidence of a need for increased
accountability. As a result, the task force recommended that the Forest
Service (1) institutionalize accountability in managers* performance
contracts, (2) accelerate cultural change in the agency, and (3) monitor
and track accountability through indicators or benchmarks. 4 The agency*s
leadership team adopted these concepts and distributed them agencywide.
However, as we reported in 1997, agency leadership did not follow up with

4 Forest Service, Individual and Organizational Accountability in the
Forest Service: Successful Management of Work Agreements, (Washington, D.
C.: Forest Service, 1994). Prior GAO Reports

Document Long- Standing Performance Accountability Problems

Page 9 GAO- 03- 503 Forest Service

actions to implement these concepts and, as a result, the task force*s
recommendations were never carried out.

The Forest Service has made little progress in resolving previously
identified performance accountability problems and remains years away from
implementing a credible performance accountability system. Rather than
developing and implementing a functioning performance accountability
system like other federal land management agencies, the Forest Service,
for the most part, continues to study its options, as it has for the last
11 years. The agency is developing or has implemented two systems that
should be important components of a performance accountability system* a
budget formulation and execution system and a work- planning system* but
neither was originally designed to be part of a performance accountability
system, nor has the Forest Service developed the clear linkages needed
between these new systems and its strategic goal- setting and results-
reporting functions.

To understand how other agencies have established clear linkages among key
components of a performance accountability system, the Forest Service
initiated a benchmarking study of other agencies* performance
accountability systems in March 2002, including USDA*s NRCS and Interior*s
BLM and National Park Service. 5 This study reports on lessons learned for
successfully developing, evaluating, and implementing a performance
accountability system. In particular, a good performance accountability
system, among other things, should include

 senior leadership commitment to performance accountability;  clear
delineation of organizational responsibilities for performance
measurement, budget integration, performance evaluation, and reporting; 
close coordination of performance accountability activities;  national
performance measures;  linkages from the strategic plan to annual
performance measures to

budget activities; and  the ability to track total costs and tie those
costs to desired outcomes.

5 Forest Service, Budget and Performance Integration: Benchmarking of
Other Organizational Approaches* Initial Report, (Washington, D. C.:
Forest Service, 2002). Two other agencies studied were the U. S. Coast
Guard and the U. S. Air Force. Forest Service Has

Made Little Progress in Resolving Known Performance Accountability
Problems, unlike Other Federal Land Management Agencies The Forest Service

Continues to Study Performance Accountability

Page 10 GAO- 03- 503 Forest Service

Not until July 2002 did the Chief of the Forest Service emphasize his
intention to *get started* on studying how performance accountability
could be implemented at the Forest Service. In September 2002, in response
to the Chief*s direction, the strategic planning and budget staffs
completed a draft plan for an agencywide performance accountability system
that incorporated the lessons learned from their benchmarking study. The
Forest Service*s Draft Performance Accountability System Implementation
Plan provides a conceptual framework and time frames for developing a
performance accountability system. It is designed to develop the critical
links among performance accountability components: the strategic plan,
annual performance plan, project planning, budget, and annual reporting of
results. The plan also explains how existing Forest Service databases,
such as those for formulating the budget and the annual work plans, could
be used to provide the information needed for performance accountability.
Although the Chief endorsed the concept of performance accountability
outlined in the plan, it did not receive broad

support throughout the agency. As a result, the Chief decided to further
assess performance accountability options through an executive steering
team, rather than adopt the system envisioned in the draft implementation
plan.

The executive steering team, chaired by the Deputy Chief for Programs,
Legislation, and Communications, comprises nine senior executives in key
agency positions. 6 This team is to study the Forest Service*s own
processes and systems and further consider options available for
implementing a Forest Service performance accountability system and to
report to the Chief by June 2003 on the viability of these options.
However, this team was not appointed until December 2002, nearly 2 1/2
years after we last testified on this issue and more 11 years after we
first reported on it. As a result, the Forest Service has made little
progress since 1991, when it first formed a task force to review
performance accountability.

6 Deputy Chief for Programs, Legislation, and Communications (Chair);
Deputy Chief for Business Operations; Chief Financial Officer; Deputy
Chief for the National Forest System; Chief Information Officer; Regional
Forester (region 10); Station Director, Pacific Northwest; Deputy Regional
Forester for State and Private Forestry (region 8); and Director of
Strategic Planning and Resource Assessment, serves as the non- voting
executive secretary to the team.

Page 11 GAO- 03- 503 Forest Service

The Forest Service began considering new budget and work- planning systems
in April 2000 and August 2001, respectively, long before the Chief
emphasized his intention to *get started* on performance accountability in
July 2002. These new systems should be integral parts of a performance

accountability system, but the Forest Service has not developed clear
linkages between these new systems* main outputs* budgets and work
activities* and its strategic goals and performance results. Without these
linkages, the agency will not be able to report in an integrated,
resultsoriented way on what activities it completed, how much they cost,
and what they accomplished* key elements of any effective performance
accountability system.

In June 2000, the House Committee on Appropriations reported it was
concerned that the agency devoted too much of its funding to headquarters
initiatives and special projects, to the detriment of

conservation and public service activities the Committee believed to be
important. As a result, the Committee directed the Forest Service to
better link its budget formulation and allocation systems to the actual
work planned for the nation*s forests.

The Forest Service developed such a system* the Budget Formulation and
Execution System (BFES)* and in March 2001 began using it to formulate its
fiscal year 2003 budget. The agency viewed BFES as an answer to the
Committee*s concerns, but not necessarily part of any effort to achieve
performance accountability. The Forest Service designed BFES to allow
field units to have more input into the budget formulation process, to
plan activities and their associated funding throughout the annual budget
development process, and to serve as a basis for subsequent field unit
allocations. If BFES accomplishes these goals, according to senior
officials in the budget office, it could allow field units to estimate
their ability to carry out program activities in light of the agency*s
strategic goals, headquarters priorities, and local priorities.
Furthermore, according to these officials, BFES*s potential to establish
such linkages could make it integral to the agency*s recent attempt to
develop a performance

accountability system. However, as of May 2003* more than 3 years after
the Forest Service began work on BFES and 2 years after its first use*
only a portion of the agency*s budget is included in the system.

Despite the expectations for BFES to link the agency*s strategic goals
with headquarters and local priorities, the Forest Service has not
established clear linkages between its strategic goals and field units*
local priorities, which makes it harder for the Forest Service to achieve
performance accountability. In particular, budget instructions for fiscal
years 2003 and Forest Service Has Developed Two Systems

That Should Be Part of a Performance Accountability System, but It Has Not
Established Clear Linkages between These Systems and Its Strategic Goals
and Performance Results

Page 12 GAO- 03- 503 Forest Service

2004 attempted to guide field units on how to make these linkages.
According to these instructions, as field units planned their activities
and associated funding, they were to weigh the agency*s strategic goals in
making budgetary trade- offs between competing local priorities. In fiscal
year 2003, field units found it impossible to deal effectively with the
large number of priorities* 50* headquarters identified. For fiscal year
2004, the agency*s guidance did not provide a formal process to document
such

linkages. Field managers used their *professional judgment* to draw these
linkages. Consequently, for both fiscal years 2003 and 2004, field units
used BFES estimates to set local priorities based on incremental
adjustments to their previous year*s funding. Such a process does not meet
the criteria for performance accountability because it is not clearly
based on the strategic plan and associated outcomes. However, according to
senior budget officials, the BFES approach to budget formulation for these
years represents an improvement over the Forest Service*s previous
process, a more arbitrary practice based almost entirely on the previous
year*s funding.

Although the Forest Service*s budget formulation effort for fiscal year
2005 is an improvement over the budget formulation process for the prior 2
fiscal years, it once again falls short of establishing clear linkages
between the agency*s strategic goals and field unit priorities. In
December 2002, the

National Leadership Team* 60 senior executives in the agency* reviewed a
set of draft management objectives 7 developed by the planning staff and
tentatively approved 11 of them for field units to consider in developing
their fiscal year 2005 budget submissions. Field units have been
instructed to use these management objectives in integrating local forest
plan

priorities with agency objectives. Agency officials reported this initial
step was intended to have field staff become *comfortable* in seeing
budget and strategic goals together and to begin linking performance goals
to the

budget. However, staff in the planning office as well as some senior
executives questioned the extent to which the fiscal year 2005 management
objectives mirrored strategic goals, primarily because National Leadership
Team members did not have sufficient time to carefully review the draft
management objectives.

The Forest Service decided to replace its work- planning system in August
2001, when conversion to new computer hardware caused the existing

7 Management objectives define intermediate outcomes toward strategic
goals. They are tangible objectives against which progress toward
strategic goals can be measured.

Page 13 GAO- 03- 503 Forest Service

work- planning system to lose some of its usefulness. The agency sought a
national work- planning system to, among other things, help field units
plan and manage work activities at the project level. According to agency
officials, the new work- planning system* called WorkPlan* will be

completed and implemented in two phases. The first phase is scheduled to
be completed by May 1, 2003, but it will include only a planning
component. WorkPlan should be available to field units in time to help
them develop their fiscal year 2004 work plans. The agency expects to
complete the second phase in October 2003, which is to add tracking
completed activities and reporting accomplishments to WorkPlan*s
capabilities. According to the draft performance accountability system
implementation plan, WorkPlan may eventually link field units* work
activities to Forest Service planning, budgeting, and results reporting
functions. These linkages, if established, could assist program managers
in, among other things, reporting accomplishments and their related
expenditures and integrating these functions with the Forest Service*s
strategic goals* key functions in a performance accountability system.

However, it is not clear whether the agency will be able to establish the
necessary linkages that would enable WorkPlan to meet these expectations.
For example, it is unclear how accurately the Forest Service will be able
to report on the actual costs of individual work activities. Currently,
the agency*s financial information system reports actual expenditures only
at the budget line item level, while WorkPlan is being designed to provide
the planned costs of individual work activities at the project level. The
Forest Service is planning to develop linkages to bridge this discrepancy
between levels of reporting and thus to provide estimates of project
activities* actual costs. Forest Service officials believe that such
estimates could provide sufficient detail and clarity to adequately
address

performance accountability concerns. However, until such linkages are, in
fact, established and evaluated, it is uncertain that the agency will ever
be able to accurately report the actual cost of project activities.
WorkPlan*s future ability to report accomplishments depends heavily on the
Forest Service making significantly more progress on developing outcome
performance measures for all of its goals and objectives. While we
understand the difficulty in developing meaningful performance measures,
the Forest Service is in the process of developing such measures only for
its wildfire program. For example, in Forest Service*s fiscal year 2005
draft Performance Management Plan, the measure for reducing hazardous
fuels is expressed in terms of how much the risk of catastrophic fire has
been reduced, an outcome- based performance measure. However, officials
from the wildfire, wildlife and fish,

Page 14 GAO- 03- 503 Forest Service

engineering, and water and air programs told us that relating work
activities, such as those that will likely be reported in WorkPlan, to
achieving results requires systematic monitoring of the changing
conditions in the forests over time in order to validate the effects of
these different work activities. These program officials told us that with
the exception of the wildfire program, currently they do not have plans to
undertake this systematic monitoring for their other programs.

Other federal agencies with land management responsibilities have made
more progress in developing and implementing performance accountability
systems. The Natural Resources Conservation Service (NRCS) and the Bureau
of Land Management (BLM) have developed Webbased performance
accountability systems that link planning, budgeting, and results. Both
agencies continue to improve their systems and processes, and the
Department of the Interior plans to implement BLM*s system departmentwide
as part of Interior*s vision for effective program management.

According to NRCS and BLM officials, the primary factor driving the
development and implementation of their performance accountability systems
was a strong desire to report accurately on what they had accomplished
with the dollars they received. Furthermore, strong leadership commitment
enabled the agencies to develop and begin implementing their systems with
existing resources within a few years* 4 years for NRCS and 3 years for
BLM. Finally, several other factors also contributed to the agencies*
success: taking the risk of investing time and resources into developing a
performance accountability system, using the strategic plan to guide their
efforts, and having an implementation plan with time frames for completing
steps throughout the development and implementation phases.

Both NRCS and BLM believe that their accountability systems have produced
multiple benefits. Specifically, managers can make more informed decisions
on resource allocation because the systems align actual costs with program
work. For example, BLM officials report they can track actual costs to
projects and tasks. In addition, their budget can show how these tasks and
associated costs link with the agency*s strategic plan. NRCS officials can
also report on the actual costs of the agency*s programs as well as how
workload and time frames will change as resources change. Both agencies
also told us that their Web- based systems enable them to know what they
are accomplishing with the money they spend at any given moment. As a
result, BLM officials report that they can Other Federal Land Management
Agencies

Have Implemented Performance Accountability Systems

Page 15 GAO- 03- 503 Forest Service

reallocate dollars as priorities shift because it is easy to determine
where dollars are available. At both agencies, transparent data promoted
competition among units in the agency to improve performance because
performance data can be viewed by anyone in the agency.

Three key challenges continue to keep the Forest Service from resolving
its performance accountability problems: (1) establishing clear authority
and responsibility within the current organizational structure, (2) making
and implementing decisions in an agency culture that relies on consensus,
and (3) establishing sufficient leadership emphasis and making performance
accountability a higher priority.

Organizationally, several senior executives have been assigned
responsibilities for components of performance accountability, but none of
them has overall responsibility and authority for ensuring that these
components are properly linked or that the agency achieves performance
accountability. For example, the Deputy Chief for Programs, Legislation,
and Communications is in charge of the strategic planning component, while
the Deputy Chief for Budget and Finance is responsible for the budget and
finance components. The agency will find it difficult to make progress in
achieving performance accountability if the decisions and activities of
the separate staffs responsible for the various accountability system
components are not effectively coordinated. However, effective
coordination continues to be a challenge within the Forest Service*s
existing organizational structure. The fact that the agency*s efforts
since our last report have not resulted in an approved performance
accountability plan underscores the importance of addressing the issue of
fragmentation and the need for more effective coordination. Culturally,
the Forest Service makes and implements major decisions by

obtaining consensus throughout all levels of the agency* headquarters,
regions, and local units. At times, this approach slows the agency*s
ability to make progress on important issues. According to senior Forest
Service officials, the agency has a collaborative leadership management
style* senior managers from all levels moving forward together* so that
progress depends on a collective acceptance of any new proposal. These
officials added that progress on new proposals could slow or even stop if
consensus cannot be achieved in the developmental process. The Forest
Service has been unable to develop and implement a performance
accountability system, largely because it cannot agree on an integrated
approach. The executive steering team*s current effort to study available
options for a performance accountability system is an indication that the
Forest Service*s

Inability to Address Organizational, Cultural, and Leadership Challenges
Continues to Impede Its Progress on Performance Accountability

Page 16 GAO- 03- 503 Forest Service

draft plan for implementing such a system does not have broad support
throughout the agency. According to one deputy chief, the executive
steering team must build support throughout the agency in order to make
progress toward implementing a performance accountability system.

Finally, agency leadership has not given the emphasis and priority to
performance accountability that is needed to overcome the Forest Service*s
organizational and cultural challenges. Currently, the Chief and the Under
Secretary of Agriculture for Natural Resources and Environment, who both
have held their positions for less than 2 years, are emphasizing other
priorities. The Chief is focusing on achieving financial accountability,
while the Under Secretary counts performance accountability as his third
priority, behind improvements to the agency*s decision- making process and
financial accountability. Furthermore, the Under Secretary stated that,
without progress on the first two priorities, performance accountability
would be meaningless. Both the Chief and the Under Secretary acknowledge
that the emphasis on performance accountability has lagged behind other
priorities. However, the Chief told us that he intends to review GAO and
USDA Inspector General*s

recommendations to see whether the agency had taken actions as promised
and also intends to include accountability for results in agency managers*
contracts.

Our analysis of the Forest Service*s actions with respect to performance
accountability shows that the agency is essentially in the same position
it was more than a decade ago* studying how it might achieve performance
accountability. By establishing another task force to again *review
options* for implementing a performance accountability system, the agency
has delayed any real action on this important front. Moreover, the Chief*s
intentions* to review GAO and Inspector General reports to see if the
agency had taken promised actions and to consider incorporating
performance accountability into the managers* contracts* are not new. The
1994 task force performed the same review and made the same recommendation
on making performance accountability part of senior

managers* contracts. We understand that the Forest Service has important
competing priorities* improving financial and performance accountability
as well as its decision- making process* but we do not believe that these
priorities need to be addressed sequentially. To the contrary, progress on
these priorities is interdependent and can be and should be achieved
concurrently so that both may be used to assess the overall performance
Conclusions

Page 17 GAO- 03- 503 Forest Service

of the agency. Accountability requires not only accurately informing
Congress and the public on expenditures but also reporting the results of
these expenditures. Without senior leadership*s placing sufficient
emphasis, however, we believe that the Forest Service will continue to
take only small, slow steps, if any, toward achieving performance
accountability.

If the future is to be different than the past, the challenges we
identified have to be addressed aggressively. The Chief and the senior
leadership have to decide to make performance accountability a reality,
not a subject of continued study. To achieve more progress, the Forest
Service will need to assign overall authority and responsibility for a
performance accountability system to one official and then hold that
person accountable for the effort. It is also crucial for Congress to
monitor the

Forest Service*s progress in developing a performance accountability
system. Unlike other land management agencies that have developed and
implemented performance accountability systems within the last 3 years,
the Forest Service has yet to come to this commitment on its own.

To ensure progress in achieving performance accountability, we recommend
that the Secretary of Agriculture direct the Chief of the Forest Service
to appoint a senior executive with decision- making authority and
responsibility for developing a comprehensive plan, with milestones, to

ensure the timely implementation of an effective performance
accountability system. This executive should be held accountable for

 ensuring that the Forest Service*s performance accountability system
clearly links the key components needed to manage for results* plans,
performance measures, budgets, work activities, expenditures, and
accomplishments;  meeting specific milestones for implementing the
system; and  ensuring full implementation of the performance
accountability system

throughout all levels of the agency. The Secretary of Agriculture should
also direct the Chief of the Forest Service to report, beginning in 2004,
on the agency*s (1) progress in implementing a performance accountability
system and the additional milestones to be accomplished in the agency*s
annual performance plans and (2) accomplishments in implementing its
performance accountability

system in its annual performance report to the Congress. Recommendations
for

Executive Action

Page 18 GAO- 03- 503 Forest Service

We provided a draft of this report to USDA for its review and comment. In
response, the Forest Service stated that it agrees with the report*s
findings and recommendations. Specifically, the Forest Service stated that
it would propose a comprehensive plan by May 30, 2003, to ensure the
timely implementation of an effective performance accountability system.

The Forest Service*s written comments are presented in appendix III. To
assess the progress the Forest Service has made in addressing previously
identified performance accountability problems and key challenges impeding
its ability to resolve these problems, we interviewed the Chief of the
Forest Service, members of the executive steering team, and officials in
various offices, including the Office of Budget and Program Analysis, the
Office of Strategic Planning and Resource Assessment, and

selected field offices. The Office of Strategic Planning and Resource
Assessment and the Office of Budget and Program Analysis are responsible
for designing and implementing the agency*s performance accountability
system. The Office of Budget and Program Analysis and selected field
offices are responsible for the budget formulation and execution system,
and work- planning system. We also reviewed reports, planning documents,
USDA OIG audits, and other documents on past performance accountability
problems in the Forest Service and on the status of the development and
implementation of the agency*s efforts to improve its planning, budgeting,
performance measurement, and accomplishment reporting processes.
Additionally, we interviewed officials at NRCS and BLM about their efforts
to develop and implement Web- based accountability systems and reviewed
related documents. Finally, we reviewed recent OMB directives related to
agency performance management and budgeting and their recent PART analysis
of two Forest Service programs.

We conducted our review from August 2002 through March 2003 in accordance
with generally accepted government auditing standards.

As agreed with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report for 30 days after
the date of this letter. At that time, copies of this report will be sent
to the Agency Comments

Scope and Methodology

Page 19 GAO- 03- 503 Forest Service

congressional committees with jurisdiction over the Forest Service and its
activities; the Honorable Ann Veneman, Secretary of Agriculture; and the
Honorable Mitchell E. Daniels, Jr., Director, Office of Management and
Budget. This report will also be available at no charge on GAO*s home page
at http:// www. gao. gov.

If you have any questions about this report, please contact me at (202)
512- 3841. Key contributors to this report are listed in appendix V. Barry
T. Hill

Director, Natural Resources and Environment

Appendix I: Forest Service*s Progress on GAO- Reported Performance
Accountability Problems

Page 20 GAO- 03- 503 Forest Service

GAO*s reported performance accountability problems at the Forest Service
Date( s) reported Forest Service*s progress as of

April 1, 2003 Related key

challenges

Forest Service budgets and allocates appropriated funds on the basis of
historic funding levels. June 29, 2000 October 13, 1999

Forest Service's Budget Formulation and Execution System partially
addresses this problem.

Leadership Organization

Forest Service also budgets and allocates funds on the basis of its
programs, many of which are not linked to the agency's strategic plan or
how work is actually done in the national forests. June 29, 2000

February 16, 2000 April 26, 1994

Forest Service attempted to link budget formulation and the agency's
strategic plan with the FY05 budget instructions. Forest Service is
developing a national work- planning system for national forests to plan
work.

Leadership Organization

Forest Service intends for forest plans to serve as the basis of future
budgets, but it is unclear how national forests will blend agencywide
goals with local priorities.

June 29, 2000 October 13, 1999 No progress has been made to link

forest plans to budgets. The Forest Service attempted to blend agencywide
goals with local priorities for its fiscal year 2005 budget.

Leadership Organization

Forest Service relies on performance measures that are not always clearly
linked to strategic goals and objectives because

they do not always assess outputs, service levels, and outcomes the agency
intends to achieve.

June 29, 2000 February 16, 2000 October 13, 1999

Forest Service is developing performance measures it believes better link
to the agency's strategic goals. However, the performance measures still
need improvement.

Culture Leadership

Forest Service is working to refine its performance measures so they
better reflect strategic goals, but the agency has not determined how long
it will take to gather and analyze the needed data. February 16, 2000 No
progress in this area. Culture

Leadership Forest Service's line managers cannot be held accountable for
achieving strategic goals and objectives because of poor performance
measures.

October 13, 1999 March 26, 1998 April 26, 1994

No progress in this area. Culture Leadership Organization

Even when performance accountability improvements are adopted by Forest
Service management, implementation is often left to

field units which often leaves uneven and mixed results.

March 26, 1998 No progress in this area. Culture Leadership Organization

Agreement does not exist within the Forest Service on its long- term
strategic goals. This is the result of broader disagreement over the
agency's priorities under its multiple- use and sustained- yield mandate.

April 29, 1997 The National Leadership Team is discussing long- term goals
for the Forest Service's Strategic and Performance Management Plans.

Culture Leadership

Source: GAO. Appendix I: Forest Service*s Progress on GAO- Reported
Performance Accountability

Problems

Page 21 GAO- 03- 503 Forest Service

Appendix II: Detailed Forest Service Organizational Chart

Page 22 GAO- 03- 503 Forest Service

Appendix II: Detailed Forest Service Organizational Chart

Appendix II: Detailed Forest Service Organizational Chart

Page 23 GAO- 03- 503 Forest Service

Appendix III: Comments from the Forest Service

Page 24 GAO- 03- 503 Forest Service

Appendix III: Comments from the Forest Service

Appendix IV: GAO Contacts and Staff Acknowledgments

Page 25 GAO- 03- 503 Forest Service

Andrea Wamstad Brown (202) 512- 3319 Eugene W. Wisnoski (202) 512- 6545 In
addition to those named above Chester M. Joy, Carol Herrnstadt

Shulman, and Kelli Ann Walther made key contributions to this report.
Appendix IV: GAO Contacts and Staff

Acknowledgments GAO Contacts Acknowledgments

Related GAO Products Page 26 GAO- 03- 503 Forest Service

Major Management Challenges and Program Risks: Department of Agriculture.
GAO- 03- 96. Washington, D. C.: January 2003.

Wildland Fire Management: Reducing the Threat of Wildland Fires Requires
Sustained and Coordinated Effort. GAO- 02- 843T. Washington, D. C.: June
13, 2002.

Wildland Fire Management: Improved Planning Will Help Agencies Better
Identify Fire- Fighting Preparedness Needs. GAO- 02- 158. Washington, D.
C.: March 29, 2002.

Severe Wildland Fires: Leadership and Accountability Needed to Reduce
Risks to Communities and Resources. GAO- 02- 259. Washington, D. C.:
January 31, 2002.

The National Fire Plan: Federal Agencies Are Not Organized to Effectively
and Efficiently Implement the Plan. GAO- 01- 1022T. Washington, D. C.:
July 31, 2001.

Major Management Challenges and Program Risks: Department of Agriculture.
GAO- 01- 242. Washington, D. C.: January 2001.

Forest Service: Actions Needed for the Agency to Become More Accountable
for Its Performance. GAO/ T- RCED- 00- 236. Washington, D. C.: June 29,
2000.

Natural Resources Conservation Service: Additional Actions Needed to
Strengthen Program and Financial Accountability. GAO/ RCED- 00- 83.
Washington, D. C.: April 7, 2000.

Forest Service: Status of Efforts to Improve Accountability. GAO/ TRCED/
AIMD- 00- 93. Washington, D. C.: February 16, 2000.

Forest Service: A Framework for Improving Accountability.

GAO/ RCED/ AIMD- 00- 2. Washington, D. C.: October 13, 1999.

Western National Forests: A Cohesive Strategy is Needed to Address
Catastrophic Wildfire Threats. GAO/ RCED- 99- 65. Washington, D. C.: April
2, 1999.

Major Management Challenges and Program Risks: Department of Agriculture.
OCG- 99- 2. Washington, D. C.: January 1, 1999. Related GAO Products

Related GAO Products Page 27 GAO- 03- 503 Forest Service

Managing for Results: The Statutory Framework for Performance- Based
Management and Accountability. GGD/ AIMD- 98- 52. Washington, D. C.:
January 28, 1998.

Forest Service Decision- Making: A Framework for Improving Performance.
GAO/ RCED- 97- 71. Washington, D. C.: April 29, 1997.

Forest Service: Status of Efforts to Achieve Cost Efficiency. GAO/ RCED94-
185FS. Washington, D. C.: April 26, 1994.

Performance Measurement: An Important Tool in Managing for Results.

T- GGD- 92- 35. Washington, D. C.: May 5, 1992.

Wilderness Management: Accountability for Forest Service Funds Needs
Improvement. GAO/ RCED- 92- 33. Washington, D. C.: November 4, 1991.

(360222)

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