National Park Service: A More Systematic Process for Establishing
National Heritage Areas and Actions to Improve Their		 
Accountability Are Needed (30-MAR-04, GAO-04-593T).		 
                                                                 
The Congress has established, or "designated," 24 national	 
heritage areas to recognize the value of their local traditions, 
history, and resources to the nation's heritage. These areas,	 
including public and private lands, receive funds and assistance 
through cooperative agreements with the National Park Service,	 
which has no formal program for them. They also receive funds	 
from other agencies and nonfederal sources, and are managed by	 
local entities. Growing interest in new areas has raised concerns
about rising federal costs and the risk of limits on private land
use. GAO was asked to review the (1) process for designating	 
heritage areas, (2) amount of federal funding to these areas, (3)
process for overseeing areas' activities and use of federal	 
funds, and (4) effects, if any, they have on private property	 
rights. 							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-04-593T					        
    ACCNO:   A09607						        
  TITLE:     National Park Service: A More Systematic Process for     
Establishing National Heritage Areas and Actions to Improve Their
Accountability Are Needed					 
     DATE:   03/30/2004 
  SUBJECT:   Cooperative agreements				 
	     Eligibility criteria				 
	     Federal aid to localities				 
	     Federal funds					 
	     Funds management					 
	     Locally administered programs			 
	     Monitoring 					 
	     Property rights					 
	     National heritage areas				 

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GAO-04-593T

United States General Accounting Office

GAO Testimony

Before the Committee on Energy and

Natural Resources, U.S. Senate

For Release on Delivery

Expected at 2:30 p.m. EST NATIONAL PARK SERVICE

Tuesday, March 30, 2004

 A More Systematic Process for Establishing National Heritage Areas and Actions
                   to Improve Their Accountability Are Needed

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

GAO-04-593T

Highlights of GAO-04-593T, testimony before the Committee on Energy and
Natural Resources, U.S. Senate

The Congress has established, or "designated," 24 national heritage areas
to recognize the value of their local traditions, history, and resources
to the nation's heritage. These areas, including public and private lands,
receive funds and assistance through cooperative agreements with the
National Park Service, which has no formal program for them. They also
receive funds from other agencies and nonfederal sources, and are managed
by local entities. Growing interest in new areas has raised concerns about
rising federal costs and the risk of limits on private land use.

GAO was asked to review the (1) process for designating heritage areas,
(2) amount of federal funding to these areas, (3) process for overseeing
areas' activities and use of federal funds, and (4) effects, if any, they
have on private property rights.

GAO recommends that the Park Service (1) develop consistent standards and
processes for reviewing areas' management plans; (2) require regions to
review areas' financial audit reports, and (3) develop results-oriented
goals and measures for the agency's activities and require areas to adopt
a similar approach.

www.gao.gov/cgi-bin/getrpt?GAO-04-593T.

To view the full product, including the scope and methodology, click on
the link above. For more information, contact Barry T. Hill at (202)
512-3841 or [email protected].

March 30, 2004

NATIONAL PARK SERVICE

A More Systematic Process for Establishing National Heritage Areas and Actions
to Improve Their Accountability Are Needed

No systematic process currently exists for identifying qualified sites and
designating them as national heritage areas. While the Congress generally
has designated heritage areas with the Park Service's advice, it
designated 10 of the 24 areas without a thorough agency review; in 6 of
these 10 cases, the agency recommended deferring action. Even when the
agency fully studied sites, it found few that were unsuitable. The
agency's criteria are very general. For example, one criterion states that
a proposed area should reflect "traditions, customs, beliefs, and folk
life that are a valuable part of the national story." These criteria are
open to interpretation and, using them, the agency has eliminated few
sites as prospective heritage areas.

According to data from 22 of the 24 heritage areas, in fiscal years 1997
through 2002, the areas received about $310 million in total funding. Of
this total, about $154 million came from state and local governments and
private sources and another $156 million came from the federal government.
Over $50 million was dedicated heritage area funds provided through the
Park Service, with another $44 million coming from other Park Service
programs and about $61 million from 11 other federal sources. Generally,
each area's designating legislation imposes matching requirements and
sunset provisions to limit the federal funds. However, since 1984, five
areas that reached their sunset dates had their funding extended.

The Park Service oversees heritage areas' activities by monitoring their
implementation of the terms set forth in the cooperative agreements. These
terms, however, do not include several key management controls. That is,
the agency has not (1) always reviewed areas' financial audit reports, (2)
developed consistent standards for reviewing areas' management plans, and
(3) developed results-oriented goals and measures for the agency's
heritage area activities, or required the areas to adopt a similar
approach. Park Service officials said that the agency has not taken these
actions because, without a program, it lacks adequate direction and
funding.

Heritage areas do not appear to have affected property owners' rights. In
fact, the designating legislation of 13 areas and the management plans of
at least 6 provide assurances that such rights will be protected. However,
property rights advocates fear the effects of provisions in some
management plans. These provisions encourage local governments to
implement land use policies that are consistent with the heritage areas'
plans, which may allow the heritage areas to indirectly influence zoning
and land use planning in ways that could restrict owners' use of their
property. Nevertheless, heritage area officials, Park Service headquarters
and regional staff, and representatives of national property rights groups
that we contacted were unable to provide us with any examples of a
heritage area directly affecting-positively or negatively-private property
values or use.

Mr. Chairman and Members of the Committee:

I am pleased to be here today to discuss a number of issues concerning the
designation, funding, and oversight of national heritage areas. As you
know, over the past two decades, the Congress has established, or
"designated," 24 national heritage areas and provided them with millions
of dollars in financial assistance through the National Park Service. By
providing this designation, the Congress has determined that these areas'
local cultures, traditions, history, and resources are worthy of being
recognized and preserved because of their contributions to the nation's
heritage. These areas can encompass large tracts of land and incorporate
public as well as private property. The number of bills introduced to
study or designate new areas has grown considerably in recent years. In
the 108th Congress alone, as of early March 2004, over 30 bills had been
introduced to either study or establish new areas. This growing interest
in creating new heritage areas has raised concerns that their numbers may
expand rapidly and significantly increase the amount of federal funds
supporting them. In addition, private property rights advocates are
concerned that heritage area designations could increase the risk that
federal controls or other limits will be placed on private land use.

Once designated, heritage areas can receive funding through the National
Park Service's budget, although the agency has no formal heritage area
program. The Park Service provides technical assistance to the areas, and
the Congress appropriates the agency limited funds for these activities.1
The Park Service allocates funding to the areas through cooperative
agreements. These funds are considered to be "seed" money to assist each
area in becoming sufficiently established to develop partnerships with
state and local governments, businesses, and other nonfederal
organizations as their principal funding sources. Heritage areas also
receive funds from other federal agencies through a variety of programs,
primarily the Department of Transportation for road and infrastructure
improvements.

In this context, my testimony today focuses on the results of our work on
national heritage areas conducted at the request of this Committee.

1Although no heritage area program exists within the Park Service, the
Congress has provided the Park Service an annual appropriation for
administering its heritage area activities. The agency has allocated these
amounts to fund a national coordinator position in the Park Service's
headquarters, which directs and monitors the agency's heritage area
activities.

Specifically, it addresses the (1) process for identifying and designating
national heritage areas, (2) amount of federal funding provided to support
these areas, (3) process for overseeing and holding national heritage
areas accountable for their use of federal funds, and (4) extent to which,
if at all, these areas have affected private property rights.

To address these issues, we obtained information on the Park Service's
heritage area activities from the Heritage Area national coordinator and
program managers in the four Park Service regions that include heritage
areas. We also obtained funding information from 22 of the 24 existing
areas for fiscal years 1997 through 2002, and discussed this information
with the executive directors and staff of each area.2 In addition, we
visited 8 of the 24 heritage areas to view their operations and
accomplishments, and discussed various issues with their executive
directors. Finally, we discussed concerns about private property rights
with representatives of several organizations advocating property rights.
We conducted our work between May 2003 and March 2004 in accordance with
generally accepted government auditing standards. A more complete
description of our methodology is included in app. I.

Summary In summary, we found the following:

o  No systematic process exists for identifying qualified candidate sites
and designating them as national heritage areas. While the Congress
generally has made designation decisions with the advice of the Park
Service, it has, in some instances, designated heritage areas before the
agency has fully evaluated them. In this regard, the Congress designated
10 of the 24 heritage areas without a thorough Park Service review of
their qualifications; in 6 of these 10 cases, the agency recommended
deferring action. Furthermore, even when the Park Service fully studied
prospective sites' qualifications as heritage areas, it found that few of
these were unsuitable. The Park Service's criteria are not specific. For
example, one criterion states that a proposed area should reflect
"traditions, customs, beliefs, and folk life that are a valuable part of
the national story." Using these criteria, the agency has determined that
relatively few of the sites it has evaluated would not qualify as heritage
areas.

2As of mid-March 2004, two heritage areas had not provided us with funding
data.

o  According to data from 22 of the 24 heritage areas, in fiscal years
1997 through 2002, the areas received about $310 million in total funding.
Of this total, about $154 million came from state and local governments
and private sources and another $156 million came from the federal
government. About $51 million of the federal total was dedicated heritage
area funds provided through the Park Service. An additional $44 million
came from other Park Service programs and about $61 million from 11 other
federal sources. Generally, each area's designating legislation specifies
the total amount of federal funds that will be provided and imposes
certain conditions, such as matching requirements and sunset provisions,
to limit the amount of federal funds for each heritage area. However, the
sunset provisions have not been effective in limiting federal funding:
since 1984, five areas that reached their sunset dates received funding
reauthorization from the Congress.

o  In the absence of a formal program, the Park Service oversees heritage
areas' activities by monitoring the implementation of the terms set forth
in the cooperative agreements. These terms, however, do not include
several key management controls. Although the Park Service has primary
federal responsibility for heritage areas, the agency does not always
review data that it obtains from the areas on their sources and
expenditures of all federal funds. As a result, the agency cannot
determine how much federal funds have been provided to the areas or
whether these funds are being spent appropriately. Furthermore, the Park
Service has not yet developed clear and consistent standards and processes
for reviewing areas' management plans, even though this review is one of
the agency's primary heritage area responsibilities. As a result, staff in
each Park Service region use different approaches to review and approve
areas' plans. Finally, the Park Service has not yet developed
results-oriented performance goals and measures-consistent with the
requirements of the Government Performance and Results Act-for the
agency's heritage area activities, or required the areas to adopt a
similar results-oriented management approach. Such an approach would help
ensure the efficiency and effectiveness of the agency's heritage area
activities and enable both the areas and the agency to determine what is
being accomplished with federal funds. According to Park Service
officials, the agency has not taken these actions because, without a
formal program, it does not have the direction or funding it needs to
effectively carry out its national heritage area activities.

o  National heritage areas do not appear to have directly affected the
rights of property owners. To address property concerns, the designating
legislation of 13 of the 24 heritage areas and management plans of at
least 6 provide explicit assurances that the areas will not affect
property

owners' rights. However, some management plans encourage local governments
to implement land use policies that are consistent with the heritage
areas' plans and offer to aid their planning activities through matching
grants. Property rights advocates fear that such provisions may allow
heritage areas to indirectly influence zoning and land use planning in
ways that could restrict owners' use of their property. Nevertheless,
heritage area officials, Park Service headquarters and regional staff, and
representatives of national property rights groups who we contacted were
unable to provide us with any examples of a heritage area directly
affecting-positively or negatively-private property use.

To improve the heritage area designation process and the Park Service's
oversight of areas' use of federal funds, we are recommending that the
agency (1) develop consistent standards and processes for reviewing areas'
management plans; (2) require regions to review areas' financial audit
reports, and (3) develop results-oriented goals and measures for the
agency's activities and require areas to adopt a similar approach.

Background To date, the Congress has designated 24 national heritage
areas, primarily in the eastern half of the country (see fig. 1).

Figure 1: Locations of 24 Existing National Heritage Areas, as of March
2004

Generally, national heritage areas focus on local efforts to preserve and
interpret the role that certain sites, events, and resources have played
in local history and their significance in the broader national context.
For example, the Rivers of Steel Heritage Area commemorates the
contribution of southwestern Pennsylvania to the development of the
nation's steel industry by providing visitors with interpretive tours of
historic sites and other activities. Heritage areas share many
similarities- such as recreational resources and historic sites-with
national parks and other park system units but lack the stature and
national significance to qualify them as these units.

The process of becoming a national heritage area usually begins when local
residents, businesses, and governments ask the Park Service, within

  No Systematic Process Exists for Identifying and Designating National Heritage
  Areas

the Department of the Interior, or the Congress for help in preserving
their local heritage and resources. In response, although the Park Service
has no program governing these activities, the agency provides technical
assistance, such as conducting or reviewing studies to determine an area's
eligibility for heritage area status. The Congress then may designate the
site as a national heritage area and set up a management entity for it.
This entity could be a state or local governmental agency, an independent
federal commission, or a private nonprofit corporation. Usually within 3
years of designation, the area is required to develop a management plan,
which is to detail, among other things, the area's goals and its plans for
achieving those goals. The Park Service then reviews these plans, which
must be approved by the Secretary of the Interior.

After the Congress designates a heritage area, the Park Service enters
into a cooperative agreement with the area's management entity to assist
the local community in organizing and planning the area. Each area can
receive funding through the Park Service's budget-generally limited to not
more than $1 million a year for 10 or 15 years. The agency allocates the
funds to the area through the cooperative agreement.

No systematic process is in place to identify qualified candidate sites
and designate them as national heritage areas. In this regard, the Park
Service conducts studies-or reviews studies prepared by local
communities-to evaluate the qualifications of sites proposed for national
heritage designation. On the basis of these studies, the agency advises
the Congress as to whether a particular location warrants designation. The
agency usually provides its advice to the Congress by testifying in
hearings on bills to authorize a particular heritage area. The Park
Services' studies of prospective sites' suitability help the agency ensure
that the basic components necessary to a successful heritage area-such as
natural and cultural resources and community support-are either already in
place or are planned. Park Service data show that the agency conducted or
reviewed some type of study addressing the qualifications of all 24
heritage areas. However, in some cases, these studies were limited in
scope so that questions concerning the merits of the location persisted
after the studies were completed. As a result, the Congress designated 10
of the 24 areas with only a limited evaluation of their suitability as
heritage areas. Of these 10 areas, the Park Service opposed or suggested
that the Congress defer action on 6, primarily because of continuing
questions about, among other issues, whether the areas had adequately
identified goals or management entities or demonstrated community support.
Furthermore, of the 14 areas that were designated after a full evaluation,

the Congress designated 8 consistent with the Park Service's
recommendations, 5 without the agency's advice, and 1 after the agency had
recommended that action be deferred.

Furthermore, the criteria the Park Service uses to evaluate the
suitability of prospective heritage areas are not specific and, in using
them, the agency has determined that a large portion of the sites studied
qualify as heritage areas. According to the Heritage Area national
coordinator, before the early 1990s, the Park Service used an ad hoc
approach to determining sites' eligibility as heritage areas, with little
in the way of objective criteria as a guide. Since then, however, the Park
Service developed general guidelines to use in evaluating and advising the
Congress on the suitability of sites as heritage areas. Based on these
guidelines, in 1999, the agency developed a more formal approach to
evaluating sites. This approach consisted of four actions that the agency
believed were critical before a site could be designated as well as 10
criteria to be considered when conducting studies to assess an area's
suitability.

The four critical steps include the following:

o  complete a suitability/feasibility study;

o  involve the public in the suitability/feasibility study;

o  demonstrate widespread public support for the proposed designation; and

o  demonstrate commitment to the proposal from governments, industry, and
private, nonprofit organizations.

A suitability/feasibility study, should examine a proposed area using the
following criteria:

o  The area has natural, historic, or cultural resources that represent
distinctive aspects of American heritage worthy of recognition,
conservation, interpretation, and continuing use, and are best managed
through partnerships among public and private entities, and by combining
diverse and sometimes noncontiguous resources and active communities;

o  The area's traditions, customs, beliefs, and folk life are a valuable
part of the national story;

o  The area provides outstanding opportunities to conserve natural,
cultural, historic, and/or scenic features;

o  The area provides outstanding recreational and educational
opportunities;

o  Resources that are important to the identified themes of the area
retain a degree of integrity capable of supporting interpretation;

o  Residents, businesses, nonprofit organizations, and governments within
the area that are involved in the planning have developed a conceptual
financial plan that outlines the roles for all participants, including the
federal government, and have demonstrated support for designation of the
area;

o  The proposed management entity and units of government supporting the
designation are willing to commit to working in partnership to develop the
area;

o  The proposal is consistent with continued economic activity in the
area;

o  A conceptual boundary map is supported by the public; and

o  The management entity proposed to plan and implement the project is
described.

These criteria are broad and subject to multiple interpretations, as noted
by an official in the agency's Midwest region charged with applying these
criteria to prospective areas. Similarly, according to officials in the
agency's Northeast region, they believe that the criteria were developed
to be inclusive and that they are inadequate for screening purposes. The
national coordinator believes, however, that the criteria are valuable but
that the regions need additional guidance to apply them more consistently.
The Park Service has developed draft guidance for applying these criteria
but has no plans to issue them as final guidance. Rather, the agency is
incorporating this guidance into a legislative proposal for a formal
heritage area program. According to the national coordinator, some regions
have used this guidance despite its draft status, but it has not been
widely adopted or used to date.

The Park Service's application of these broad criteria has identified a
large number of potential heritage areas. Since 1989, the Park Service has
determined that many of the candidate sites it has evaluated would qualify
as national heritage areas.

  National Heritage Areas Annually Receive Millions in Federal Funding

According to data from 22 of the 24 heritage areas, about half of their
total funding of $310 million in fiscal years 1997 through 2002 came from
the federal government and the other half from state and local governments
and private sources. Table 1 shows the areas' funding sources from fiscal
years 1997 through 2002.

Table 1: National Heritage Area Funding from All Sources, Fiscal Years
1997-2002

                                            Source         Amount  Percentage 
                          Total Park Service funds  $95,393,506   
                    aDedicated heritage area funds   50,922,562   
                 Other Park Service support fundsb   44,470,944   
                         Total other federal funds  $60,545,816   
                      Department of Transportation   55,852,269   
                           Department of Education      2,000,000 
                         Department of Agriculture        547,009 
                     Housing and Urban Development        420,183 
                   Environmental Protection Agency        400,000 
                           Army Corps of Engineers        266,000 
                            Department of Commerce         96,555 
           National Railroad Passenger Corporation         23,800 
                   National Endowment for the Arts          5,000 
                      Federal earmarks and awardsc        935,000 
                            Total nonfederal funds  $154,078,203  
                                 State governments   61,404,323   
                                 Local governments   46,612,624   

             Nonprofit organizations             7,255,416             2.3 
               Private foundations               14,515,996            4.7 
                Corporate sponsors               2,126,870             0.7 
         Other nonfederal funding sources        22,163,473            7.2 
                      Total                     $310,017,525         100.0 

Source: GAO analysis of data obtained from 22 of the 24 heritage areas.

aThese funds were provided through the Park Service's Heritage Partnership
Program and Statutory and Contractual Aid budget line items. The Heritage
Partnership Program promotes the conservation of natural, historic,
scenic, and cultural resources. Statutory and Contractual Aid provides
financial assistance in the planning, development, or operation of
natural, historical, cultural, or recreation areas that are not managed by
the Park Service.

bThese are funds from other Park Service budget line items-including the
Land and Water Conservation Fund, Operation of the National Park Service,
and the Construction Fund-that are not typically reported as part of
heritage area funding, but include funding for specific projects
undertaken by heritage areas.

cFunds earmarked for Federal Government Pass-Through Awards ($610,000) and
Hugh Moore Historical Park & Museums, Inc. ($325,000).

As figure 2 shows, the federal government's total funding to these
heritage areas increased from about $14 million in fiscal year 1997 to
about $28 million in fiscal year 2002, peaking at over $34 million in
fiscal year 2000.

Figure 2: National Heritage Areas' Funding, By Major Source, Fiscal Years
1997 - 2002

The Congress sets the overall level of funding for heritage areas,
determining which areas will receive funding and specifying the amounts
provided. Newly designated heritage areas usually receive limited federal
funds while they develop their management plans and then receive
increasing financial support through Park Service appropriations after
their plans are established. The first heritage areas received
pass-through grants from the Park Service and funding through the agency's
Statutory and Contractual Aid appropriations. However, in 1998, the
Congress began

appropriating funds to support heritage areas through the Heritage
Partnership Program.

In addition, the Congress has placed in each area's designating
legislation certain conditions on the receipt of federal funds. While the
legislation designating the earliest heritage areas resulted in different
funding structures, generally those created since 1996 have been
authorized funding of up to $10 million over 15 years, not to exceed $1
million in any single year. In conjunction with this limit, the
designating legislation attempts to identify a specific date when heritage
areas no longer receive federal financial or technical assistance.
Although heritage areas are ultimately expected to become self-sufficient
without federal support, to date the sunset provisions have not limited
federal funding. Since the first national heritage area was designated in
1984, five have reached the sunset date specified in their designating
legislation. However, in each case, the sunset date was extended and the
heritage area continued to receive funding from the Congress.

Finally, the areas' designating legislation typically requires the
heritage areas to match the amount of federal funds they receive with a
specified percentage of funds from nonfederal sources. Twenty-two of the
24 heritage areas are required to match the federal funds they receive. Of
these 22 areas, 21 have a 50-percent match requirement-they must show that
at least 50 percent of the funding for their projects has come from
nonfederal sources-and one has a 25-percent match requirement.

In the absence of a formal program, the Park Service oversees heritage
areas' activities by monitoring the implementation of the terms set forth
in the cooperative agreements. According to Park Service headquarters
officials, the agency's cooperative agreements with heritage areas allow
the agency to effectively oversee their activities and hold them
accountable. These officials maintain that they can withhold funds from
heritage areas-and have, in some circumstances, done so-if the areas are
not carrying out the requirements of the cooperative agreements. However,
regional managers have differing views on their authority for withholding
funds from areas and the conditions under which they should do so.

Although Park Service has oversight opportunities through the cooperative
agreements, it has not taken advantage of these opportunities to help to
improve oversight and ensure these areas' accountability. In this regard,
the agency generally oversees heritage areas' funding through

  The Park Service Lacks an Effective Process for Ensuring that National
  Heritage Areas Are Accountable for Their Use of Federal Funds

routine monitoring and oversight activities, and focuses specific
attention on the areas' activities only when problems or potential
concerns arise. However, the Park Service regions that manage the
cooperative agreements with the heritage areas do not always review the
areas' annual financial audit reports, although the agency is ultimately
the federal agency responsible for heritage area projects that are
financed with federal funds.3 For example, managers in two Park Service
regions told us that they regularly review heritage areas' annual audit
reports, but a manager in another region said that he does not. As a
result, the agency cannot determine the total amount of federal funds
provided or their use. According to these managers, the inconsistencies
among regions in reviewing areas' financial reports primarily result from
a lack of clear guidance and the collateral nature of the Park Service
regions' heritage area activities-they receive no funding for oversight,
and their oversight efforts divert them from other mission-critical
activities.

Furthermore, the Park Service has not yet developed clearly defined,
consistent, and systematic standards and processes for regional staff to
use in reviewing the adequacy of areas' management plans, although these
reviews are one of the Park Service's primary heritage area
responsibilities. Heritage areas' management plans are blueprints that
discuss how the heritage area will be managed and operated and what goals
it expects to achieve, among other issues. The Secretary of the Interior
must approve the plans after Park Service review. According to the
national coordinator, heritage area managers in the agency's Northeast
region have developed a checklist of what they consider to be the
necessary elements of a management plan to assist reviewers in evaluating
the plans. While this checklist has not been officially adopted, managers
in the Northeast and other regions consult it in reviewing plans,
according to the national coordinator. Heritage area managers in the Park
Service regions use different criteria for reviewing these plans, however.
For example, managers in the regions told us that, to judge the adequacy
of the plans, one region uses the specific requirements in the areas'
designating

3Under regulations implementing the Single Audit Act, recipients spending
$500,000 or more of federal funds during a fiscal year are required to
have an audit conducted for that year. They are also required to (1)
maintain internal controls; (2) comply with laws, regulations, contracts,
and grant agreements; (3) prepare appropriate financial statements; (4)
ensure that audits are properly performed and submitted when due; and (5)
take corrective actions on audit findings. This act is intended to, among
other things, promote sound financial management of federally funded
projects administered by state and local governments and nonprofit
organizations. Prior to 2003, the dollar threshold for a single audit was
$300,000 or more in expenditures in a fiscal year.

legislation, another uses the designating legislation in conjunction with
the Park Service's general designation criteria, and a third adapts the
process used for reviewing national park management plans. While these
approaches may guide the regions in determining the content of the plans,
they provide little guidance in judging the adequacy of the plans for
ensuring successful heritage areas.

Finally, the Park Service has not yet developed results-oriented
performance goals and measures-consistent with the requirements of the
Government Performance and Results Act-that would help to ensure the
efficiency and effectiveness of its heritage area activities. The act
requires agencies to, among other actions, set strategic and annual goals
and measure their performance against these goals. Effectively measuring
performance requires developing measures that demonstrate results, which,
in turn, requires data. According to the national coordinator, the
principal obstacles to measuring performance are the difficulty of
identifying meaningful indicators of success and the lack of funding to
collect the needed data. With regard to indicators, the national
coordinator told us that the agency has tried to establish meaningful and
measurable goals both for their activities and the heritage areas. The
agency has identified a series of "output" measures of accomplishment,
such as numbers of heritage areas visitors, formal and informal partners,
educational programs managed, and grants awarded. However, the national
coordinator acknowledged that these measures are insufficient, and the
agency continues to pursue identifying alternative measures that would be
more meaningful and useful. However, without clearly defined performance
measures for its activities, the agency will continue to be unable to
effectively gauge what it is accomplishing and whether its resources are
being employed efficiently and cost-effectively.

The Park Service also has not required heritage areas to adopt a
results-oriented management approach-linked to the goals set out in their
management plans-which would enable both the areas and the agency to
determine what is being accomplished with the funds that have been
provided. In this regard, the heritage areas have not yet developed an
effective, outcome-oriented method for measuring their own performance and
are therefore unable to determine what benefits the heritage area- and
through it, the federal funds-have provided to the local community. For
example, for many heritage areas, increasing tourism is a goal, but while
they may be able to measure an increase in tourism, they cannot
demonstrate whether this increase is directly associated with the efforts
of the heritage area. To address these issues, the Alliance of National
Heritage Areas is currently working with Michigan State University to

  National Heritage Areas Do Not Appear to Have Affected Individual Property
  Rights

develop a way to measure various impacts associated with a national
heritage area. These impacts include, among others, the effects on tourism
and local economies through jobs created and increases in tax revenues.

According to Park Service officials, the agency has not taken actions to
improve oversight because, without a formal program, it does not have the
direction or funding it needs to effectively administer its national
heritage area activities.

National heritage areas do not appear to have affected private property
rights, although private property rights advocates have raised a number of
concerns about the potential effects of heritage areas on property owners'
rights and land use. These advocates are concerned that heritage areas may
be allowed to acquire or otherwise impose federal controls on nonfederal
lands. However, the designating legislation and the management plans of
some areas explicitly place limits on the areas' ability to affect private
property rights and use. In this regard, eight areas' designating
legislation stated that the federal government cannot impose zoning or
land use controls on the heritage areas. Moreover, in some cases, the
legislation included explicit assurances that the areas would not affect
the rights of private property owners. For example, the legislation
creating 13 of the 24 heritage areas stated that the area's managing
entity cannot interfere with any person's rights with respect to private
property or have authority over local zoning ordinances or land use
planning. While management entities of heritage areas are allowed to
receive or purchase real property from a willing seller, under their
designating legislation, most areas are prohibited from using appropriated
funds for this purpose.4 In addition, the designating legislation for five
heritage areas requires them to convey the property to an appropriate
public or private land managing agency.

As a further protection of property rights, the management plans of some
heritage areas deny the managing entity authority to influence zoning or
land use. For example, at least six management plans state that the
managing entities have no authority over local zoning laws or land use
regulations. However, most of the management plans state that local
governments' participation will be crucial to the success of the heritage

4The Shenandoah River Valley Battlefields National Historic District is
the only heritage area that has received authority and appropriations to
acquire land.

Conclusions

area and encourage local governments to implement land use policies that
are consistent with the plan. Some plans offer to aid local government
planning activities through information sharing or technical or financial
assistance to achieve their cooperation. Property rights advocates are
concerned that such provisions give heritage areas an opportunity to
indirectly influence zoning and land use planning, which could restrict
owners' use of their property. Some of the management plans state the need
to develop strong partnerships with private landowners or recommend that
management entities enter into cooperative agreements with landowners for
any actions that include private property.

Despite concerns about private property rights, officials at the 24
heritage areas, Park Service headquarters and regional staff working with
these areas, and representatives of six national property rights groups
that we contacted were unable to provide us with a single example of a
heritage area directly affecting-positively or negatively-private property
values or use.

National heritage areas have become an established part of the nation's
efforts to preserve its history and culture in local areas. The growing
interest in establishing additional areas will put increasing pressure on
the Park Service's resources, especially since the agency receives limited
funding for the technical and administrative assistance it provides to
these areas. Under these circumstances, it is important to ensure that
only those sites' that are most qualified are designated as heritage
areas. However, no systematic process for designating these areas exists,
and the Park Service does not have well-defined criteria for assessing
sites' qualifications or effective oversight of the areas' use of federal
funds and adherence to their management plan. As a result, the Congress
and the public cannot be assured that future sites will have the necessary
resources and local support needed to be viable or that federal funds
supporting them will be well spent.

Given the Park Service's resource constraints, it is important to ensure
that the agency carries out its heritage area responsibilities as
efficiently and effectively as possible. Park Service officials pointed to
the absence of a formal program as a significant obstacle to effective
management of the agency's heritage area efforts and oversight of the
areas' activities. In this regard, without a program, the agency has not
developed consistent standards and processes for reviewing areas'
management plans, the areas' blueprints for becoming viable and
self-sustaining. It also has not required regional heritage area managers
to regularly and consistently review the

areas' annual financial audit reports to ensure that the Park Service-the
agency with lead responsibility for these areas-has complete information
on their use of funds from all federal agencies as a basis for holding
them accountable. Finally, the Park Service has not defined
results-oriented performance goals and measures-both for its own heritage
area efforts and those of the individual areas. As a result, it is
constrained in its ability to determine both the agency's and areas'
accomplishments, whether the agency's resources are being employed
efficiently and effectively, and if federal funds could be better utilized
to accomplish its goals.

In the absence of congressional action to establish a formal heritage area
program within the National Park Service or to otherwise provide direction
and funding for the agency's heritage area activities, we recommend that
the Secretary of the Interior direct the Park Service to take actions
within its existing authority to improve the effectiveness of its heritage
area activities and increase areas' accountability. These actions should
include

                          Recommendations for �

  Executive Action�

o  developing well-defined, consistent standards and processes for
regional staff to use in reviewing and approving heritage areas'
management plans;

o  requiring regional heritage area managers to regularly and consistently
review heritage areas' annual financial audit reports to ensure that the
agency has a full accounting of their use of funds from all federal
sources, and

o  developing results-oriented performance goals and measures for the
agency's heritage area activities, and requiring, in the cooperative
agreements, heritage areas to adopt such a results-oriented management
approach as well.

Thank you, Mr. Chairman and Members of the Committee. This concludes my
prepared statement. I would be happy to respond to any questions that you
or Members of the Committee may have.

Contacts andFor more information on this testimony, please contact Barry
T. Hill at (202) 512-3841. Individuals making key contributions to this
testimony

Acknowledgments included Elizabeth Curda, Preston S. Heard, Vincent P.
Price, and Barbara Timmerman.

                   Appendix I: Scope and Methodology �

To examine the establishment, funding, and oversight of national heritage
areas and their potential effect on private property rights, we (1)
evaluated the process for identifying and designating national heritage
areas, (2) determined the amount of federal funding provided to support
these areas, (3) evaluated the process for overseeing and holding national
heritage areas accountable for their use of federal funds, and (4)
determined the extent to which, if at all, these areas have affected
private property rights.

To address the first issue, we discussed the process for identifying and
designating heritage areas with the Park Service's Heritage Area national
coordinator and obtained information on how the 24 existing heritage areas
were evaluated and designated. To determine the amount of federal funding
provided to support these areas, we discussed funding issues and the
availability of funding data with the national coordinator, the Park
Service's Comptroller, and officials from the agency's Northeast, Midwest,
Southeast, and Intermountain Regional Offices. We also obtained funding
information from 22 of the 24 heritage areas for fiscal years 1997 through
2002, and discussed this information with the executive directors and
staff of each area. As of mid-March 2004, two heritage areas had not
provided us with funding data. To verify the accuracy of the data we
obtained from these sources, we compared the data provided to us with data
included in the heritage areas' annual audit and other reports that we
obtained from the individual areas and the Park Service regions. We also
discussed these data with the executive directors and other officials of
the individual heritage areas and regional office officials.

To evaluate the processes for holding national heritage areas accountable
for their use of federal funds, we discussed these processes with the
national coordinator and regional officials, and obtained information and
documents supporting their statements.

To determine the extent to which, if at all, private property rights have
been affected by these areas, we discussed this issue with the national
coordinator, regional officials, the Executive Director of the Alliance of
National Heritage Areas-an organization that coordinates and supports
heritage areas' efforts and is their collective interface with the Park
Service-the executive directors of the 23 heritage areas that were
established at the time of our work, and representatives of several
private property rights advocacy groups and individuals, including the
American Land Rights Association, the American Policy Center, the Center
for Private Conservation, the Heritage Foundation, the National Wilderness
Institute, and the Private Property Foundation of America. In each of
these discussions, we asked the individuals if they were aware of any
cases in

which a heritage area had positively or negatively affected an
individual's property rights or restricted its use. None of these
individuals were able to provide such an example.

In addition, we visited the Augusta Canal, Ohio and Erie Canal, Rivers of
Steel, Shenandoah Valley Battlefields, South Carolina, Southwestern
Pennsylvania (Path of Progress), Tennessee Civil War, and Wheeling
National Heritage Areas to discuss these issues in person with the areas'
officials and staff, and to view the areas' features and accomplishments
first hand.

We conducted our work between May 2003 and March 2004 in accordance with
generally accepted government auditing standards.

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