Klamath River Basin Conservation Area Restoration Program:
Limited Assurance Regarding the Federal Funding Requirements
(19-SEP-05, GAO-05-804).
The Klamath River Basin Fishery Resources Restoration Act (Act),
passed in October 1986, required the Secretary of the Interior to
establish and restore a conservation area in that river basin,
created a management council and a task force to assist and
advise the Secretary, and authorized $21 million until September
30, 2006. The restoration program reports that it had been
appropriated over $17 million by September 2005. In anticipation
of the authorization's expiration, GAO was asked to provide
information for fiscal years 2000 through 2004, the most recent
5-year period for which complete information is available, about
(1) funding for the program; (2) expenditures by the program for
restoration projects, travel expenses, administrative expenses,
overhead, and technical support; (3) expenditures by the
management council and the task force; and (4) whether the
Secretary complied with certain requirements of the Act. GAO
obtained funding and expenditure information from FWS but did not
audit that financial information.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-05-804
ACCNO: A37278
TITLE: Klamath River Basin Conservation Area Restoration
Program: Limited Assurance Regarding the Federal Funding
Requirements
DATE: 09/19/2005
SUBJECT: Budget outlays
Cost analysis
Fishes
Fund audits
Funds management
Program evaluation
Program management
Wildlife management
Bureau of Reclamation Klamath Project
(CA/OR)
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GAO-05-804
United States Government Accountability Office
GAO Report to Congressional Requesters
September 2005
KLAMATH RIVER BASIN CONSERVATION AREA RESTORATION PROGRAM
Limited Assurance Regarding the Federal Funding Requirements
a
GAO-05-804
[IMG]
September 2005
KLAMATH RIVER BASIN CONSERVATION AREA RESTORATION PROGRAM
Limited Assurance Regarding the Federal Funding Requirements
What GAO Found
The Secretary of the Interior and the U.S. Fish and Wildlife Service (FWS)
have taken a number of actions to formulate, establish, and implement the
Klamath River Basin Conservation Area Restoration Program, including
designating a conservation area, establishing the management council and
the task force, formulating a long-term plan, and funding restoration
projects in the Klamath River Basin. The restoration program reports
receiving a little over $9.8 million in cash and noncash contributions
during fiscal years 2000 through 2004 from federal and nonfederal sources.
The federal portion totaled almost $6.3 million and consisted of about
$5.1 million from FWS's lump-sum resource management appropriation
account, and almost $1.2 million in cash and noncash contributions from
federal entities that participated in restoration projects with FWS,
according to FWS records. FWS records also show that the nonfederal
portion consisted of almost $3.6 million in cash and noncash contributions
from nonfederal entities that participated in restoration projects.
During the same 5-year period, the restoration program spent about $7.6
million in cash and noncash contributions for restoration projects, about
$200,000 for travel reimbursements, about $1.1 million for administrative
expenses, and about $491,000 for overhead, according to information
provided by FWS officials. Information was not available on technical
support expenses incurred by the restoration program.
The management council and the task force serve solely in an advisory
capacity and do not directly select or manage projects. FWS officials told
GAO that they paid about $800,000 to cover operating costs of the
management council and the task force for the 5-year period.
Regarding the financial requirements of the Act, FWS officials have
correctly identified the need to fund some Restoration Program
expenditures from monies that are not subject to the Act's restrictions,
and FWS officials told GAO they believe they are in compliance with these
provisions. However, FWS has not yet incorporated into their accounting
procedures and recordkeeping sufficient controls to provide reasonable
assurance of compliance with those provisions of the Act.
In addition, the Act requires that half of the restoration program's costs
be funded by nonfederal sources. FWS officials collect some information on
restoration projects regarding any nonfederal contributions, but they do
not distinguish between cash and noncash contributions in project
documents, document their valuation decisions regarding the noncash
contributions, or take steps to verify that nonfederal contributions meet
the Act's criteria. Incorporating these additional controls into the
Restoration Program's operations would not be difficult or costly, and
would provide reasonable assurance of compliance with those provisions of
the Act.
United States Government Accountability Office
Contents
Letter 1
Results in Brief 3
Background 7
Funds Received by the Restoration Program 12
Purposes for which the Restoration Program 15
Spent Funds
Purposes for which the Task Force and the
Management Council
Spent Funds 21
No Reasonable Assurance of Compliance with the
Act's
Provisions 21
Conclusions 26
Recommendations 26
Agency Comments and Our Evaluation 27
Appendixes
Appendix I: Objectives, Scope and Methodology 30
Funding of Restoration Projects by Type of
Appendix II: Participant
Entity 35
Appendix III: Comments from the Department of the Interior 37
Appendix IV: GAO Contact and Staff Acknowledgments 39
Table 1: Sources and Amounts of Funding
Tables Received by the
Restoration Program Fiscal Years 2000 through 14
2004
Table 2: Purposes and Amounts of Restoration
Program
Expenditures from FWS Appropriations for
Fiscal Years
2000 through 2004 16
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A
United States Government Accountability Office Washington, D.C. 20548
September 19, 2005
Congressional Requesters
In October 1986, to assist in restoring the Klamath River's fish
resources, Congress passed the Klamath River Basin Fishery Resources
Restoration Act1 (the Act). The Act authorized $21 million to be
appropriated to the Department of the Interior and charged the Secretary
with implementing a 20-year program to designate and restore a
conservation area within the Klamath River Basin.2 To assist the
Secretary, the Act also established the Klamath Fishery Management Council
to monitor the fish population and recommend annual fish harvest limits,
and the Klamath River Basin Fisheries Task Force to advise the Secretary
regarding implementation of the Restoration Program.
Because the 1986 Act established a 20-year program and provided that the
$21 million authorization would expire on September 30, 2006, you asked us
to gather and analyze financial information about the Klamath River Basin
Conservation Area Restoration Program (Restoration Program), the
Management Council, and the Task Force for the most recent 5-year period
for which complete information is available. Specifically, you asked us to
provide information about (1) the sources and amounts of funding received
by and for the Restoration Program for fiscal years 2000 through 2004; (2)
how much of the funds received by and for the Restoration Program for
fiscal years 2000 through 2004 were spent for restoration projects, travel
reimbursements, administrative expenses, overhead, and technical support;
(3) the amounts of funding received by the Task Force and Management
Council for fiscal years 2000 through 2004 that were spent for restoration
projects, travel reimbursements, administrative expenses, overhead, and
technical support; and (4) whether the Secretary of the Interior complied
with specific requirements contained in the Act.
To answer these questions, we obtained and analyzed information from
officials of the Department of the Interior, the U.S. Fish and Wildlife
Service (FWS), the Task Force, and the Management Council. We reviewed the
Klamath Act, Task Force meeting minutes, Management Council meeting
1 Pub. L. No. 99-552, 100 stat. 3080 (Oct. 27, 1986) (codified, as
amended, at 16 U.S.C. S:S: 460ss -460ss-6).
2 The Klamath River is located partly in northern California and partly in
southern Oregon.
minutes, Federal Advisory Committee Act3 reports prepared by FWS officials
for the Task Force and the Management Council, budget and accounting
records maintained by FWS officials, and reports of studies and other
documents issued by the Task Force and the Management Council.
Regarding the information on funding for the Restoration Program,
expenditures by the Restoration Program, and expenditures made on behalf
of the Management Council and the Task Force, we noted that the
Restoration Program's financial information for the 5-year period has not
been subject to any external audit. Furthermore, the funding and
expenditure information for the program are maintained by FWS on several
different systems designed for various management purposes. As discussed
with your staff, we did not perform a financial audit on the financial
information we collected from FWS officials for various reasons. For
example, FWS's appropriations do not contain a discrete line item for the
Restoration Program and this prevented us from doing an independent
verification of the appropriated amounts. Likewise, limitations in FWS's
record-keeping systems for restoration projects, employee time and
attendance, and cost accounting prevented us from validating some project
and expenditure information. However, we did discuss the financial
information extensively with FWS officials, perform certain analytical
tests on the information, and in some cases, receive revised financial
information from the FWS officials. Based on these procedures, we
concluded that the financial information was sufficiently reliable for the
purposes of this report.
In addition to not auditing the financial information, we did not evaluate
the efficiency or effectiveness of the Restoration Program, of individual
restoration projects, or of actions taken by the Task Force and the
Management Council. For the most part, we limited the scope of our work to
fiscal years 2000 through 2004; however, some compliance information and
some historical financial information we gathered included earlier years,
going back to the passage of the Act in 1986. We performed our work
primarily at the headquarters offices of the Department of the Interior,
and the FWS in Washington, D.C. We also traveled to FWS's Yreka,
California, field office, which administers the Restoration Program, to
gather
3 The Federal Advisory Committee Act, codified, as amended, at 5 U.S.C.
Appx., and implementing governmentwide regulations, codified at 41 C.F.R.
pt. 102-3 (2004), set out certain reporting requirements for all federal
advisory committees.
information. Additional details of our scope and methodology are presented
in appendix I to this report.
We requested comments on a draft of this report from the Secretary of the
Interior or her designee. Written comments from the Acting Assistant
Secretary for Fish and Wildlife and Parks are included as appendix III to
this report. We also received a number of technical comments which we
considered and incorporated into the report as appropriate but did not
include as part of appendix III. We conducted our work from June 2004
through June 2005 in accordance with U.S. generally accepted government
auditing standards.
Results in Brief The Secretary of the Interior delegated responsibility
for formulating and implementing the Klamath River Basin Conservation Area
Restoration Program to the Director of FWS. In fiscal year 1987, the
Director established a new Fish and Wildlife office in Yreka, California,
to manage the operations of the Restoration Program and any FWS
appropriated funds used for those operations. For fiscal years 1988
through 2005 the Restoration Program reports having received more than $17
million from FWS's Resource Management appropriations.
For fiscal years 2000 through 2004, the most recent 5-year period for
which complete expenditure information is available, the Restoration
Program reports receiving a total of about $9.8 million in cash and
noncash contributions4 from federal and nonfederal sources. Information
provided by FWS officials shows that the federal portion, which totaled
$6.3 million, included about $5.1 million from FWS's Resource Management
appropriations that FWS has allocated for anadromous fish management
activities.5 Most of this funding came from about $5 million in
appropriations FWS allocated for the Restoration Program established by
the Klamath River Basin Fishery Resources Restoration Act and the rest, a
little over $135,000, came from other appropriations FWS allocated to
anadromous fish management activities for purposes related to the goals of
4 The Act specifically permits noncash contributions to count as financial
contributions, including the value of real and personal property and of
services, including the services of volunteers. See 16 U.S.C. S:
460ss-5(b)(2).
5 Anadromous fish are born in the river, migrate to the ocean or inshore
waters, and then return to the river to spawn. Species of anadromous fish
in the Klamath River include Fallrun and Spring-run Chinook salmon, coho
salmon, steelhead, sturgeon, lamprey, and shad.
the Restoration Program. In addition, according to FWS records, the
Restoration Program also received almost $1.2 million in cash and noncash
contributions during this period from other federal entities that
participated in restoration projects. The nonfederal portion consisted of
almost $3.6 million6 in cash and noncash contributions from nonfederal
entities that participated in restoration projects, according to the FWS
records.
Of the about $5.1 million received by the Restoration Program from FWS's
fiscal years 2000 through 2004 Resource Management appropriations, FWS
records show that about $2.9 million, or 57 percent, went to restoration
projects; about $615,000, or 12 percent, was used by FWS to manage
restoration projects, including planning, contracting, tracking
agreements, complying with environmental requirements, and providing
technical assistance to projects; about $1.1 million, or 23 percent, was
spent on program administration, including administrative and technical
support provided by FWS to the two federal advisory committees created by
the Act; and the remaining about $443,000, or 9 percent,7 was used for
overhead expenses incurred at the FWS headquarters and regional office
levels. Our analysis of the various cost categories maintained by Yreka
FWO officials and the office expenses that are allocated to the
Restoration Program by FWS officials showed that about $48,000 could be
classified as overhead expense incurred at the field office level. Using
that analysis, and other financial information provided by FWS officials
shows the total overhead expense incurred at the headquarters, regional
office, and field office levels for the Restoration Program was about
$491,000 for the 5-year period, or about 10 percent of the $5.1 million
received by the Restoration Program during that time period from FWS's
Resource Management appropriations.
The $4.7 million in cash and noncash contributions contributed to the
Restoration Program by other federal and nonfederal entities that
participated with FWS in restoration projects, according to FWS officials,
remained in the control of the participating entities for use on those
restoration projects in which they participated. Combining that $4.7
million in cash and noncash contributions brought to restoration projects
by
6 Due to the rounding of amounts, the sum of federal contributions and
nonfederal contributions seems to exceed total contributions.
7 Due to the rounding of percentage amounts, the sum of the percentages
for expenditure types exceeds 100 percent.
participating entities with the $2.9 million that FWS officials reported
FWS provided to projects from its Resource Management appropriations
brings the total amount provided to restoration projects during the 5-year
period to a little over $7.6 million. FWS's $2.9 million in project
funding provided almost $700,000 to three federal entities to help fund 26
restoration projects, and nearly $2.2 million to 18 nonfederal entities to
help fund 100 restoration projects, according to FWS officials.
The Klamath Fishery Management Council and the Klamath River Basin
Fisheries Task Force were chartered by the Secretary of the Interior as
federal advisory committees, and most of their operating costs8 are
covered by the Resource Management appropriations FWS has specifically
allocated to implement the Restoration Program, with some additional
funding coming from the same Resource Management appropriations that FWS
has allocated for other related anadromous fish management activities but
not pursuant to the Act. The FWS field office in Yreka, California, which
administers the Restoration Program, receives and expends funds to pay for
the committees' operating costs. According to FWS officials, about
$800,000 of the almost $5.1 million received by the Restoration Program
from FWS appropriations for fiscal years 2000 through 2004 was used to pay
for operating costs of the committees, for a yearly average of about
$160,000.
The Secretary of the Interior and FWS have taken a number of actions to
formulate, establish, and implement the Restoration Program, including
designating a conservation area, establishing the Management Council and
the Task Force, formulating a long-term plan, and funding over 350
restoration projects in the Klamath River Basin. However, Interior cannot
provide reasonable assurance that it has complied with all the financial
requirements of the Act. The Act required the Secretary to establish by
regulation the experience, training, and other qualifications volunteers
must have for their services to count as noncash contributions, and the
standards for determining the value of all types of noncash contributions.
According to an Interior official, the Secretary interpreted these
provisions of the Act to require Interior to follow its existing grants
management regulations, which address some aspects of those areas. Because
of this interpretation, new regulations specific to the Restoration
Program were
8 Operating costs for the Management Council and the Task Force primarily
consist of the salaries of federal staff who provide them with
administrative and technical services, travel costs for committee members
and federal staff, and meeting costs.
not issued, and FWS officials maintain that it is not necessary to issue
any. However, inadequate internal controls impair FWS's ability to provide
reasonable assurance of compliance with the existing Interior regulations.
The Act also places certain limitations on the use of appropriated funds.
For example, the Act precludes use of appropriations authorized by the Act
to reimburse federal employees who incur travel expenses as members of the
Task Force or the Management Council or to reimburse the federal
employees' agencies for salaries earned by the federal employees while
performing duties as members of the Task Force or the Management Council.
FWS officials have correctly identified the need to fund some Restoration
Program expenditures, such as certain travel and salary expenses for FWS
officials who are members of the Management Council or the Task Force,
from monies that are not subject to the Act's restrictions. Furthermore,
they told us they believe they are in compliance with these provisions
"because 1) the salary and travel of the FWS official who serves as chair
of the Task Force are charged to another account, and 2) funds provided to
the Restoration Program from other FWS sources exceed the salary and
travel costs related to the duties of the FWS official who serves on the
[Management] Council." However, compliance with these provisions of the
Act can be reasonably assured only by implementing adequate control
mechanisms, and they have not yet incorporated into their accounting
procedures and record-keeping practices sufficient controls to provide
reasonable assurance of compliance with those provisions of the Act. For
example, their accounting records do not distinguish between expenditures
made from funds allocated by FWS for the Restoration Program and
expenditures made from funds allocated by FWS for related purposes and
thus not subject to the Act's restrictions. As a result, compliance cannot
be demonstrated.
Also, the Act requires that 50 percent of the cost of the development and
implementation of the Restoration Program be provided by nonfederal
sources. FWS officials routinely collect information on nonfederal
contributions to restoration projects; however, they do not evaluate
whether 50 percent of the cost of the development and implementation of
the Restoration Program has been provided by nonfederal sources. In
addition, neither direct nor indirect contributions of federal funds by a
state or local government can be counted as contributions by a nonfederal
source in determining compliance with the 50 percent provision contained
in the Act. However, FWS officials have not formulated a methodology for
determining whether state or local government funds used for a restoration
project originated as federal money. Therefore, FWS officials cannot make
a determination on whether the Restoration Program is in compliance with
these provisions.
We are making five recommendations to the Secretary of the Interior to
address compliance with the financial-related requirements and limitations
in the Act. Interior generally agreed with our recommendations but noted
that there were costs associated with the added controls contemplated by
our recommendations. These efforts should not, if effectively implemented,
be overly burdensome. In our view, implementing these controls would be
beneficial to Interior and Congress as part of any deliberations on
extending the Restoration Program because these controls were an integral
part of the Program's statutory funding structure.
Background Congress passed the Klamath River Basin Fishery Resources
Restoration Act (the Act)9 in October 1986 to assist in restoring the
Klamath River's fish resources. The Act authorized $21 million to be
appropriated to the Department of the Interior, and it charged the
Secretary of the Interior with implementing a 20-year program to
designate10 and restore a conservation area within the Klamath River
Basin. The Secretary, in turn, delegated responsibility for implementing
the Klamath River Basin Conservation Area Restoration Program (Restoration
Program) to the Director of the U.S. Fish and Wildlife Service (FWS), a
bureau-level unit within the Department of the Interior. To facilitate
implementation and management of the Restoration Program, FWS established
under its Portland, Oregon, Regional Office a new field office in Yreka,
California.
The Act also established the Klamath Fishery Management Council
(Management Council) to monitor the fish population and recommend annual
fish harvest limits, and the Klamath River Basin Fisheries Task Force
(Task Force) to advise and assist the Secretary regarding implementation
of the Restoration Program. To implement these provisions in the Act, the
Secretary chartered the Management Council and the Task
9 Pub. L. No. 99-552, 100 Stat. 3080 (Oct. 26, 1986) (codified, as
amended, at 16 U.S.C. S:S: 460ss -460ss-6).
10 The Act requires the Secretary to designate "the anadromous fish
habitats and resources of the Klamath River basin as the Klamath River
Basin Conservation Area." 16 U.S.C. S: 460ss-1(a). The Secretary complied
with this requirement in December 1987 through a final rule published in
the Federal Register promulgating the designation. See 52 Fed. Reg. 45,694
(Dec. 1, 1987).
Force as federal advisory committees. Neither the Management Council nor
the Task Force receives or spends funds.11 Since their inception, the Fish
and Wildlife Office (FWO) at Yreka, California, has provided the financial
resources to cover the Management Council's and the Task Force's
operational expenses. In addition, staff from the Yreka FWO, along with
staff from the State of California's Department of Fish and Game, have
provided technical and administrative support to the Management Council
and the Task Force as required by the Act.12
Management Council In accordance with its charter, the Klamath Fishery
Management Council functions only in an advisory capacity and reports to
the Secretary of the Interior. The Management Council is responsible for
making recommendations to various federal, state, local, and Indian tribal
authorities regarding fish-harvesting regulations. In addition, the
Management Council was assigned responsibility to establish a
comprehensive long-term plan and policy for the management of the inriver
and ocean harvesting that affects or may affect Klamath and Trinity River
Basin anadromous fish populations.13 The Management Council's long-term
plan, published in 1992,14 lays out goals and objectives for fish
populations in the Conservation Area and strategic plans for meeting the
goals and objectives.
As prescribed by the Act, the Management Council is composed of 11
members, including representatives appointed by the Governors of
California and Oregon, Hoopa Valley Business Council, non-Hoopa Indians,
the Secretary of the Interior, and the Secretary of Commerce. The term of
a member is 4 years. The Management Council usually meets three or four
times a year (usually in February, March, April, and October) at various
11 The Task Force, through its Budget Committee and its Technical Work
Group, assists FWS officials in budgeting and allocating Restoration
Program funds for program administration and restoration projects.
12 The Act requires the Secretary and the Department Director to provide
sufficient technical and administrative support to the Management Council
and Task Force to enable them to function effectively.
13 Non-anadromous fish, such as resident trout, are not covered in the
Management Council's plan or recommendations.
14 Klamath Fishery Management Council, Long-Term Plan for Management of
Harvest of Anadromous Fish Populations of the Klamath River Basin (Final
Plan, 1992).
locations in California and Oregon. The Management Council publishes
notices of meetings in the Federal Register, posts its meeting agenda on
the Yreka FWO Internet Web page 2 to 3 weeks before each meeting, and
invites the public to attend its meetings.
From fiscal year 1987 through fiscal year 2004, the Management Council
held 73 meetings. Each meeting lasts from 3 to 5 days. The members discuss
ongoing fish population monitoring activities. They also discuss and make
recommendations on the regulation of ocean harvesting, recreational
harvesting, and harvesting in the Conservation Area by the Hoopa Valley
Indian Tribe and by non-Hoopa Indians. The Management Council's
recommendations must be consistent with its long-term plan and policy and
must pass the Management Council by unanimous vote. The public is invited
to attend all Management Council meetings, and public comment periods are
scheduled on the agenda throughout the meetings. Sometimes speakers are
invited to the meetings to make presentations on fish population studies.
The Management Council is provided with biological and statistical
expertise by the Technical Advisory Team, a subgroup created by the
Management Council, whose membership consists of individuals from entities
represented on the Management Council. The Technical Advisory Team advises
the Management Council on the status of anadromous fish stocks and the
impacts of fishery management options. This includes the development of
annual projections of fish stock size and development of fishery models
for use in the management of fish populations.
Task Force The Act provides for a 16-member Klamath River Basin Fisheries
Task Force to advise and assist the Secretary of the Interior in the
development and implementation of the Restoration Program. The Task Force
consists of members who represent a broad range of stakeholder interests
from throughout the Klamath River area. Members are appointed by, and
represent, the Governors of California and Oregon; the Secretary of the
Interior, the Secretary of Commerce, and the Secretary of Agriculture; the
California counties of Del Norte, Humboldt, Siskiyou, and Trinity; Klamath
County, Oregon; the Hoopa Valley, Karuk, Yurok, and Klamath Tribes;
inriver sport anglers; and commercial salmon fishermen.
According to its charter, the Task Force also functions only in an
advisory capacity and reports to the Secretary of the Interior. The
charter states that the Task Force has four objectives: (1) to assist the
Secretary of the Interior
in the formulation, coordination, and implementation of the Restoration
Program; (2) to assist and coordinate its activities with federal, state,
local government, and private anadromous fish restoration projects; (3) to
conduct any other activity necessary to accomplish the objectives of the
Restoration Program; and (4) to act as advisor to the Management Council.
The Task Force works by consensus to coordinate restoration planning,
recommend restoration project proposals for funding, and express opinions
on issues affecting the Klamath River Basin. In 1991, in conjunction with
an independent contractor, the Task Force developed the Long Range Plan
for the Restoration Program.15
The Task Force usually meets three times per year (in February, June, and
October) at various locations in California and Oregon. Like the
Management Council, the Task Force publishes notices of meetings in the
Federal Register, posts its meeting agenda at the Yreka FWO Internet Web
page 2 to 3 weeks before each meeting, and invites the public to attend
its meetings. Each meeting session lasts from 2 to 3 days. The members
discuss needs for managing Klamath River fish, ongoing and proposed
Klamath River Basin restoration projects, and the technical information
needs of the Management Council. They also discuss and make
recommendations regarding the funding of restoration projects.
Each spring the Task Force, in conjunction with FWS, issues a Request for
Proposals for restoration projects to be funded in the following fiscal
year with Restoration Program funds. When the project proposals are
received, they are evaluated for technical merit and scored by the Task
Force's Technical Work Group,16 using criteria published in the Request
for
15 Klamath River Basin Fisheries Task Force, Long Range Plan for the
Klamath River Basin Conservation Area Fishery Restoration Program (January
1991).
16 The Technical Work Group, a subgroup created by the Task Force,
consists of the same number of members as the Task Force. Each member of
the Task Force either serves on the Technical Work Group or selects an
individual, often from the entity that the member represents on the Task
Force, to serve, without pay, on the Technical Work Group.
Proposals.17 Then, using the amount of expected funding for the following
year as a guide for determining how many new restoration projects can be
funded, the Technical Work Group presents its analysis to the entire Task
Force. At its June meeting, the Task Force considers the Technical Work
Group's analysis, and by unanimous vote, selects the project proposals it
will recommend to the Secretary of the Interior18 for funding in the next
fiscal year. Approximately 25 projects were funded annually for fiscal
years 2000 through 2004.
Yreka FWO The Yreka FWO was established in fiscal year 1987 to facilitate
implementation and management of the Restoration Program. The Yreka FWO is
involved in administering several other FWS programs and activities, but
the Restoration Program comprises about one-half of the office's annual
funding. The Yreka FWO has 1 full-time contract employee who performs
administrative functions and 15 employees: a field supervisor, an
assistant field supervisor, 2 supervisory biologists, 6 staff biologists,
1 administrative supervisor, 2 administrative staff, and 2 parttime staff
biologists.
Eight of these individuals provide technical and administrative services
to the Management Council and the Task Force, perform restoration project
management functions, or haveRestoration Program administration duties.
Two of the employees (a supervisory biologist and one part-time staff
biologist) spend almost all of their time on Restoration Program
activities. The Field Supervisor, three administrative employees, one
staff biologist, and the contract employee spend part of their time on
Restoration Program activities. The assistant field supervisor, a
supervisory biologist, five staff
17 The RFP soliciting project proposals for fiscal year 2004 funding lists
six criteria for scoring the proposals along with the maximum score that
can be awarded for each of the criteria. The six criteria with maximum
scores in parentheses are (1) Employment of target groups (10 points); (2)
Benefits to priority fish species and stocks (10 points); (3) Ability of
the proposer to successfully implement the proposed project (10 points);
(4) Scientific validity and technical quality (25 points); (5) Conforms to
sub-basin objectives (25 points); and (6) Cost effectiveness; including:
pricing, resource benefits/costs, development of matching funds, and
willingness of the proposer to contribute funds or in-kind goods/services
(20 points). The RFP also states: "Proposals that do not meet the goals
and objectives of the Restoration Program... will not be evaluated or
ranked. These criteria are mandatory for all project proposals."
18 The Secretary of the Interior does not actually receive the Task
Force's list of recommended project proposals. Instead, an FWS official,
who has been delegated authority, approves the projects for funding.
biologists, and one part-time staff biologist do not spend any of their
time on Restoration Program activities. Until fiscal year 2004, Yreka FWO
was supervised by FWS's Portland Regional Office, but it is now supervised
by FWS's California-Nevada Operations Office.
Funds Received by the Restoration Program
There are a number of uncertainties in determining the amount of funds
received by the Restoration Program for fiscal years 2000 through 2004.
First, FWS's appropriations do not contain a discrete line item for the
Restoration Program. This prevented us from doing any independent
verification of the appropriated amounts. Second, FWS's restoration
project database does not distinguish between cash and noncash
contributions provided to the restoration project by project participants.
The restoration project database shows a single amount, called the
costshare amount, which is the sum of all contributions made by the
project participant to the project. For some projects, we could determine
the amount of cost share that consisted of cash and the amount that
consisted of noncash by looking in the contract file at the project
agreement, or at supporting documents, or even at the final report if the
project had been completed. However, for some restoration projects, even
those documents did not contain adequate information for us to make a
distinction between cash and noncash contributions. As a result, we were
unable to determine how much of contributions made by project participants
was cash and how much was noncash. Third, Restoration Program officials
did not routinely perform independent analysis to determine the value that
should be assigned to noncash contributions as called for by good
financial management practices. Rather, according to FWS officials, they
typically accepted the values assigned by the project participant as long
as the values appeared reasonable. They did this for various reasons,
including their lack of formal criteria for making such evaluations, and
their uncertainty about their authority to question the values. Therefore,
the composition and value of cost-share amounts maintained in FWS records
are subject to question.
For the 5 years from the beginning of fiscal year 2000 through the end of
fiscal year 2004, according to FWS officials, the Klamath River Basin
Conservation Area Restoration Program received about $9.8 million in cash
and noncash contributions: almost $6.3 million from federal sources and
almost $3.6 million from nonfederal sources.19 The federal funds included
about $5.1 million in appropriations derived from FWS's Resource
Management appropriation account,20 which includes a lump-sum
appropriation that FWS allocates to various program activities, including
the Fisheries Program.21 FWS operates several subprograms within the
Fisheries Program, including the Fish and Wildlife Management Program,
which administers several subactivity program elements, including
Anadromous Fish Management.
During the 5 years under review, FWS allocated about $5 million22 in
appropriations to the Klamath River Basin Conservation Area Restoration
Program established under the Klamath River Basin Fishery Resources
Restoration Act. In addition, according to FWS officials, FWS provided
about $135,000 more to the Restoration Program during the 5-year period
from appropriations FWS has allocated to support the Anadromous Fish
Management subactivity of the Fisheries Program's Fish and Wildlife
19 Due to the rounding of amounts, the sum of federal contributions and
nonfederal contributions seems to exceed total contributions.
20 In fiscal year 2004, for example, FWS's Resource Management
appropriation stated: "For necessary expenses of the United States Fish
and Wildlife Service, as authorized by law, and for scientific and
economic studies,...general administration, and for the performance of
other authorized functions related to such resources by direct
expenditure, contracts, grants, cooperative agreements, and reimbursable
agreements with public and private entities, $963,352,000, to remain
available until September 30, 2005,..." Department of the Interior and
Related Agencies Appropriations Act, 2004, Pub. L. No. 108-108, 117 Stat.
1241, 1245 (Nov. 10, 2003).
21 In the Budget of the United States Government-Appendix, Fiscal Year
2006, the Department of the Interior describes the Fisheries Program as
follows: "The Fisheries Program consists of 69 national hatcheries, 9 Fish
Health Centers, 7 Fish Technology Centers, 64 Fishery Resources Offices,
and a Historic National Fish Hatchery. Working with partners, the
Fisheries Program recovers, restores and maintains fish and other aquatic
resources at self-sustaining levels; provides technical assistance to
States, Tribes and others; and supports Federal migration programs for the
benefit of the American public." Id. at 613.
22 According to FWS officials, the amount of the Resource Management
appropriation FWS allocated for the Restoration Program for each of the 5
years was $1 million, less a rescission that varied between 0.38 percent
and 1.82 percent. The actual total amount received for the 5 years,
according to the FWS officials, was $4,955,716. We could not verify this
amount because the appropriations for FWS do not contain a discrete line
item for the Restoration Program. Instead, funding for the Restoration
Program is combined with other funding within the "General Program
Activities" sub-element of the "Anadromous Fish Management" program
element, which can be found under the "Fish and Wildlife Management"
activity of FWS's "Fisheries Program" account.
Management Program. Also, according to FWS records, the Restoration
Program benefited during that same time period from the almost $1.2
million in cash and noncash contributions23 from federal entities that
participated in restoration projects. The almost $3.6 million from
nonfederal sources came to the Restoration Program as cash and noncash
contributions from nonfederal entities that participated in restoration
projects, according to FWS records. See table 1 for a year-by-year
breakdown of the Restoration Program funding, based on unaudited financial
information provided by FWS officials.
Table 1: Sources and Amounts of Funding Received by the Restoration Program
Fiscal Years 2000 through 2004 Fiscal years
Total Source of funding 2000 2001 2002 2003 2004 funding
Fisheries Program allocation designated for the Restoration Program
- net appropriationsa $996,200 $994,008 $996,200 $987,547 $981,761
$4,955,716
Fisheries Program
allocation not designated
for the Restoration
Program (appropriations) 16,196 22,243 34,950 26,374 35,478 135,241
Cost share
provided to
restoration
projects
by federal 135,937 248,469 226,160 235,678 318,714 1,164,958
entities
Cost share
provided to
restoration
projects by
nonfederal 581,471 783,226 647,856 656,581 906,351 3,575,485
entities
Total
Restoration
Program
funding
from
all sources $
$1,729,804 $2,047,946 $1,905,166 $1,906,180 $2,242,304 9,831,400
Source: GAO computations based on unaudited FWS data.
aThe term net appropriations refers to the amount received after
accounting for any rescissions.
In addition to gathering financial information on the Restoration
Program's sources of funds for fiscal years 2000 through 2004, we gathered
the same information going back to the passage of the Act in 1986.
Specifically, from
23 FWS records show a "cost-share" amount for restoration projects. We
could not determine from the records the amount of cost share that
consisted of cash contributions and the amount that consisted of noncash
contributions.
the beginning of fiscal year 1988 through June 2005,24 FWS records show
that the Klamath River Basin Conservation Area Restoration Program
received over $17.0 million in funding from the Resource Management
appropriations that FWS has allocated for the Restoration Program
established by the Klamath River Basin Fishery Resources Restoration Act
and another $188,000 from FWS's Resource Management appropriations that
FWS allocated for other activities funded by the Fisheries Program. In
addition, according to FWS officials, the Restoration Program benefited
during that same time period from about $1.7 million in cash and noncash
contributions from federal entities that participated in restoration
projects and from $5.8 million in cash and noncash contributions from
nonfederal entities that participated in restoration projects. Although
the Act was passed on October 27, 1986, the Restoration Program did not
receive designated appropriations for fiscal year 1987. However, some
expenditures for the Restoration Program, amounting to about $57,000, were
funded during fiscal year 1987 from appropriations available to FWS for
Fisheries Program expenditures.
Purposes for which the Restoration Program Spent Funds
According to FWS records, the Restoration Program funded 126 restoration
projects during fiscal years 2000 through 2004, in addition to supporting
the operations of the Management Council and the Task Force, providing for
FWS project management services, paying for program administration
expenses, and contributing to the operational costs of FWS's Yreka field
office, Portland regional office, and Washington, D.C. headquarters
office.
Of the about $5.1 million received by the Restoration Program from FWS's
fiscal years 2000 through 2004 Resource Management appropriations, FWS's
records show about $2.9 million, or 57 percent, went to restoration
projects; about $615,000, or 12 percent, was used by FWS to manage
restoration projects, including planning, contracting, tracking
agreements, complying with environmental requirements, and providing
technical assistance to projects; about $1.1 million, or 23 percent, was
spent on program administration, including administrative and technical
support provided by FWS to the two federal advisory committees created by
the
24 For fiscal year 2005, the Klamath River Basin Conservation Area
Restoration Program received $970,928 in appropriations through June 30,
2005 ($1 million less a rescission of $29,072) for a total appropriation
of over $17 million for fiscal years 1988 through 2005.
Act; and the remaining about $442,000, or 9 percent,25 was used for
overhead expenses incurred at the FWS headquarters and regional office
levels.
In addition, the $4.7 million contributed to the Restoration Program by
federal and nonfederal project participants that participated in
restoration projects remained in the control of the project participants.
The project participants used the $4.7 million of cash and noncash
contributions on those restoration projects in which they participated. We
were not able to obtain adequate information on the project participants'
contributions to describe the purposes for which those amounts were spent.
See table 2 for a year-by-year breakdown of the purposes and amounts of
Restoration Program expenditures paid from FWS appropriations.
Table 2: Purposes and Amounts of Restoration Program Expenditures from FWS
Appropriations for Fiscal Years 2000 through Fiscal years
Purpose of Total
expenditure 2000 2001 2002 2003 2004 expenditures
Restoration
projects $571,838 $578,700 $578,700 $578,709 $578,130 $2,886,077
(obligated)a
Project 116,273 118,935 130,209 124,361 125,010 614,788
management
Support of
federal
advisory
committees 165,085 159,835 160,837 153,395 156,244 795,396
Program 70,339 69,693 72,762 69,439 70,313 352,546
administration
FWS Washington
office
overhead 9,962 10,439 33,926 73,759 87,542 215,628
Regional
officeb
overhead 78,899 78,649 54,716 14,258 0 226,522
Total annual
expenditures $1,012,396 $1,016,251 $1,031,150 $1,013,921 $1,017,239 $5,090,957
Source: GAO computations based on unaudited FWS data.
aWe used obligated amounts for restoration projects costs because the
amount is obligated for a restoration project from a single year's funds
but may be expended over a multiyear period. Therefore, the obligated
amount for a particular year better represents the amount from that year's
funds that is spent on projects than would the expended amount for that
year, which might consist of expenditures on several different years'
projects.
25 Due to the rounding of percentage amounts, the sum of the percentages
for expenditure types exceeds 100 percent.
bFWS's Portland Regional Office oversaw the operations of the Yreka FWO
for fiscal years 2000 through 2003. This responsibility was transferred to
the California-Nevada Operations Office in fiscal year 2004. However,
neither the Portland Regional Office nor the California-Nevada Operations
Office received an assessment from the Restoration Program appropriations
for fiscal year 2004.
We used the expenditure categories in table 2 to report how FWS's Resource
Management appropriations were spent because they represent the major
functions for which the Restoration Program spends funds and, with the
exception of overhead, are the major categories FWS officials use to track
the Restoration Program budget. However, to fulfill our engagement
objectives, we also sought to provide information about what amounts of
the FWS's Resource Management appropriations received by and for the
Restoration Program from the beginning of fiscal year 2000 through the end
of fiscal year 2004 were spent for the purposes of restoration projects,
travel reimbursements, administrative expenses, overhead, and technical
support.
Restoration projects. Table 2 shows that almost $2.9 million was committed
to restoration projects from FWS's Resource Management appropriations for
fiscal years 2000 through 2004. Combining that amount with the $4.7
million in cash and noncash contributions provided to restoration projects
by project participants brings the total invested by the Restoration
Program directly to restoration projects during the 5-year period to a
little over $7.6 million.
Of the $2.9 million in project funding from FWS's Resource Management
appropriations, the Restoration Program provided almost $700,000 to three
federal entities to help fund 26 restoration projects carried out by those
federal entities, and provided almost $2.2 million to 18 nonfederal
entities to help fund 100 restoration projects carried out by those
nonfederal entities.26 The three federal entities that carried out the 26
restoration projects are the same ones that brought cash and noncash
contributions totaling almost $1.2 million to the Restoration Program, and
the 18 nonfederal entities that carried out the 100 restoration projects
are the same ones that brought cash and noncash contributions totaling
almost $3.6 million to the Restoration Program. Thus, according to FWS
records, total investment from federal and nonfederal sources in
restoration projects amounted to a little over $7.6 million that funded
126 restoration projects from the beginning of fiscal year 2000 through
the end of fiscal
26 For more information on the types of entities that received project
funding from the appropriations that FWS allocated to the Restoration
Program, see appendix II.
year 2004. It should be recognized, however, that in addition to
Restoration Program projects, other restoration projects are undertaken in
the Klamath River Basin with funding from FWS through its other programs;
and other restoration projects still are undertaken in the Klamath River
Basin with funding from other federal entities, the states of California
and Oregon, and other nonfederal entities.
Travel reimbursement expenses. Travel reimbursement expenses are contained
in each of three expenditure categories (project management, program
administration, and support of federal advisory committees) shown in table
2, but they can be segregated. Specifically, total Restoration Program
travel reimbursement expenses amounted to about $200,000 for the 5-year
period, for an average of about $40,000 per year. This includes travel by
members of the two federal advisory committees,27 federal staff who
support the committees, and FWS officials who perform project management
and program administration activities.
Program administration expenses. Table 2 shows program administration
expenses for the 5-year period of about $350,000. Table 2 also shows
expenditures of about $800,000 in support of the two federal advisory
committees. Based on our discussions with FWS officials, we consider the
expenditures made in support of the federal advisory committees to also be
administrative expenses for the Restoration Program. Summing the amounts
for those two categories produces a total of about $1.1 million for
Restoration Program administrative expenses during fiscal years 2000
through 2004.
Overhead expenses. To provide information about what amounts of the funds
received by and for the Restoration Program from the beginning of fiscal
year 2000 through the end of fiscal year 2004 were spent for the
27 The Act permits Management Council members and Task Force members,
while away from their homes or regular places of business in the
performance of services for the Management Council or the Task Force, to
receive an allowance for travel expenses, including a per diem allowance
in lieu of subsistence, in the same manner as persons employed
intermittently in the government service are allowed travel expenses under
section 5703 of title 5 of the U.S. Code. However, the Act excludes from
such eligibility for travel expenses any Management Council member or Task
Force member who is an employee of an agency or governmental unit and is
eligible for reimbursement of travel expenses from that agency or unit for
performing services for the Management Council or the Task Force. This
latter group's travel expenses are reimbursed by their federal agencies.
The costs of travel for FWS officials who are members, which is reimbursed
from FWS's appropriations allocated for purposes related to the
Restoration Program's goals, are included in this report as Restoration
Program expenses.
purposes of overhead expenses, we examined the use of Restoration Program
funds at the FWS Washington, D.C., office level, the FWS regional office
level, and the Yreka FWO level. Each year during the 5-year period, the
FWS headquarters in Washington, D.C., received varying amounts of the
Restoration Program appropriations for "Cost Allocation Methodology," a
process through which rent and other FWS administrative costs are shared
by the programs. As can be seen in table 2, we considered the amount
received by FWS headquarters, about $216,000, to be Restoration Program
overhead.
The Portland Regional Office oversaw the operations of the Yreka FWO for
most of fiscal years 2000 through 2004 and during the first 4 of those
years it received a total of about $227,000 of Restoration Program
appropriated funds. According to an FWS official, an 8 percent assessment
is applied by the regional office to all Fisheries Program funds and used
to pay for office management, staff expertise, and support costs,
including data management; program oversight of the field office; budget
and finance services; human resources, external affairs, and employee
assistance services; as well as development and implementation of
fisheries policies, operating plans, evaluation methods, and
administrative procedures for field offices. Again, as seen in table 2, we
considered the amount received by the FWS regional office, about $227,000,
to be Restoration Program overhead.
To identify any Restoration Program overhead expenses incurred at the
Yreka FWO level, we analyzed the various cost categories maintained by
Yreka FWO officials and the office expenses that are allocated to the
Restoration Program. After discussing our analysis with the Yreka FWO
officials, we decided that Restoration Program overhead incurred at the
Yreka FWO level could best be represented by four categories of
expenses.28 During fiscal years 2000 through 2004, the amounts of these
expenses allocated to the Restoration Program by FWS totaled about
$48,000. This amount is not shown separately in table 2 because, like the
travel expenses category, components of this amount are contained in each
of three expenditure categories (project management, program
administration, and support of federal advisory committees). Adding
28 The four categories of Yreka FWO expenses that we added together to
represent Restoration Program overhead incurred at the Yreka FWO level
were allocated amounts of (1) utilities expenses, (2) computer maintenance
and repairs expenses, (3) training and tuition expenses, and (4)
capitalized property expenses.
together the Restoration Program overhead incurred at each of the three
FWS organizational levels (almost $216,000 at the FWS Washington, D.C.,
office level; almost $227,000 at the FWS regional office level; and about
$48,000 at the Yreka FWO level), we found that Restoration Program
overhead was about $491,000 during fiscal years 2000 through 2004.
Technical support expense. We also attempted to provide information about
what amounts of the funds received by and for the Restoration Program from
the beginning of fiscal year 2000 through the end of fiscal year 2004 were
spent for technical support. As provided for in the Act,29 staff from the
Yreka FWO, along with staff from the State of California's Department of
Fish and Game, provide technical and administrative support to the
Management Council and the Task Force. The technical support from FWS
comes primarily from three staff: the supervisory biologist and the
part-time staff biologist in the Yreka FWO, who spend almost all of their
time on Restoration Program activities, and the staff biologist in the
Yreka FWO, who spends part of his time on Restoration Program activities.
FWS is reimbursed from Restoration Program funds for the portion of FWS
staff salaries that is attributable to providing administrative and
technical support services30 to the two federal advisory committees. The
State of California is not reimbursed for its employees' salaries for the
time they spend providing administrative and technical support to the
committees. Neither FWS officials nor the Restoration Program's
representatives from the State of California could provide us with
estimates of the value of technical support they provide. In addition to
the support provided by FWS and the State of California, both the Task
Force, through its Technical Work Group, and the Management Council,
through its Technical Assistance Team, receive technical assistance from
many of the entities represented by the Task Force members and the
Management Council members, but information was not available on the value
of those technical services either.
29 The Act directs the Secretary of the Interior and the Director of the
California Department of Fish and Game to provide the Management Council
and the Task Force with relevant information concerning the Conservation
Area and with such administrative and technical support services as are
necessary for their effective functioning. See 16 U.S.C. S:S: 460ss-3(g),
460ss-2(h).
30 We could not calculate the amount of technical support costs for the
5-year period because FWS's records do not distinguish between
administrative support and technical support provided to the committees.
Purposes for which the Task Force and the Management Council Spent Funds
According to FWS officials, about $800,000 has been used to pay for the
committees' operating costs from the beginning of fiscal year 2000 through
the end of fiscal year 2004, a yearly average of about $160,000. The two
committees' operating costs are funded from FWS's Resource Management
appropriations. Officials in FWS's Yreka, California, field office, who
administer the Restoration Program, receive and expend the funds that pay
for the committees' operating costs. They provided us with information
that shows that the approximately $800,000 expended for the committees'
operating costs was spent for salaries of federal staff (about $520,000);
travel for committee members and federal staff (about $120,000); and
office costs, including vehicles, supplies, copies, and meeting rooms
(about $150,000). Neither of the advisory committees makes expenditures
for restoration projects, and as mentioned earlier, we consider all
expenditures for the operations of the advisory committees to represent
Restoration Program administrative expenses.
The Task Force and the Management Council submit Federal Advisory
Committee Act (FACA) reports each year showing expenditures related to
their operations. We obtained FACA reports produced by FWS officials for
the Task Force and the Management Council for fiscal years 2000 through
2004 for purposes of determining the types and amounts of expenditures
made by the Task Force and the Management Council. However, after
conducting some analytical testing procedures, and discussing the FACA
report financial information with the Designated Federal Officers for the
two federal advisory committees, we concluded that due to changes in
interpretations of the reporting instructions, the FACA data were not
reported on a consistent basis during the 5-year period. For example, some
amounts contained in the FACA reports for fiscal years 2001 and 2002, but
not for the other years, likely included some Restoration Program-related
expenses incurred and paid by the Department of Commerce and the
Department of Agriculture.
No Reasonable The Klamath River Basin Fishery Resources Restoration Act
imposes
several requirements upon the Secretary of the Interior as part of
theAssurance of Secretary's responsibility for implementing the
Restoration Program. It Compliance with the also places certain
limitations on the use of funds appropriated under the Act's Provisions
Act's authorization. We considered whether the Secretary and the
Restoration Program administrators have complied with the Act's
financialrelated requirements and limitations. We found that more complete
and timely action in complying with the Act's requirements would better
assure
that the requirements are fulfilled and that compliance with the Act's
limitations can be reasonably assured only by implementing control
mechanisms and record-keeping practices which are not yet in place.
Needed Actions Not Yet Taken on Nonfederal Match and Noncash Contributions
Requirements
In 1987, FWS officials drafted proposed regulations to address the
nonfederal match and noncash contribution provisions contained in the Act,
but the draft regulations were never formally promulgated. The Act
requires that 50 percent of the cost of the development and implementation
of the Restoration Program be provided, on a basis considered by the
Secretary of the Interior to be timely and appropriate, by one or more
nonfederal sources. The Act specifies that for purposes of determining
whether 50 percent of the cost is being provided by nonfederal sources,
the Secretary of the Interior should include the contributions of state
and local governments as long as such contributions do not entail the
expenditure of federal monies received by the state or local government.
The Act also directs the Secretary to consider as financial contributions
by nonfederal sources the value of noncash contributions (that is,
services, including volunteer services, and real and personal property)
provided by the nonfederal sources for the purposes of implementing the
Restoration Program.
The Act further requires the Secretary to establish by regulation (1) the
training, experience, and other qualifications that volunteers must have
in order for their services to be considered as noncash contributions; and
(2) the standards under which the Secretary will determine the value of
noncash contributions, that is, services, and real and personal
property.31
We found evidence that the Task Force, which is responsible for assisting
and advising the Secretary on the development and implementation of the
Restoration Program, had extensive discussions regarding the nonfederal
match and noncash contribution provisions of the Act, and the need for
regulations, during its public meetings in 1987, 1988, and 1989. We also
found that FWS officials drafted proposed regulations to address the
nonfederal match and noncash contribution provisions during that same
31 16 U.S.C. S: 460ss-5(b)(4). ("The Secretary shall by regulation
establish-(A) the training, experience, and other qualifications which
such volunteers must have in order for their services to be considered as
in kind contributions; and (B) the standards under which the Secretary
will determine the value of in kind contributions and real and personal
property for purposes of paragraph (2).")
time period and that the Task Force reviewed and approved of the draft
regulations. However, according to Interior officials, the draft
regulations were never formally promulgated because Interior decided it
was not necessary to issue separate regulations regarding qualifications
for volunteer services and the standards for valuing noncash
contributions. The Department of the Interior based this decision,
according to the Interior officials, on its determination that existing
Interior grants management regulations, which prescribe rules Interior
must follow to meet cost-share requirements in federal grants and other
federal awards,32 provided sufficient guidance.
Because of Interior's interpretation, new regulations specific to the
Restoration Program were not issued, and FWS officials maintain that it is
not necessary to issue any. However, inadequate internal controls impair
FWS officials' abilities to be reasonably assured of compliance with these
existing Interior regulations. For example, FWS officials told us that
they have not rejected any restoration project proposal due to the
proposal's lack of information on the values assigned or the methods for
valuing the proposed noncash contributions, even though our review of
project files identified several approved projects whose project documents
lacked such information. In addition, FWS officials told us that they
typically accept the values assigned to noncash contributions by those who
propose projects as long as the values appear reasonable, and that they do
not have formal criteria for making this reasonableness evaluation. This
lack of reasonable assurance of compliance prevents both congressional
overseers, who may seek information about program funding, and Restoration
Program administrators from being able to make consistent, reliable
decisions about when volunteers' services should count as noncash
contributions and how to value all types of noncash contributions to the
Restoration Program.
In addition to the potential problems associated with FWS's current
practices related to acceptance of volunteer services as noncash
contributions and valuation of noncash contributions, FWS officials have
not developed a methodology, or mechanism, for measuring whether 50
percent of the cost of the development and implementation of the
Restoration Program is being provided by nonfederal sources. In our
discussions with FWS officials, they expressed uncertainty about whether
certain nonfederal financial initiatives should be counted toward the
costshare requirement. For example, if the State of California provides
funding
32 See 43 C.F.R. S:S: 12.64, 12.923 (2005).
for restoration projects that have the same goals as the Restoration
Program's projects, but that do not involve any FWS participation, FWS
officials are unsure of whether the funding for those projects should be
counted toward meeting the nonfederal cost-share requirement.
Furthermore, even though expenditures of federal money by a state or local
government to carry out the Restoration Program do not qualify for meeting
the Act's criteria that 50 percent of costs be provided from nonfederal
sources, FWS officials have not developed a methodology for determining
whether state or local government contributions to the Restoration Program
actually constitute expenditure of federal money for purposes of the Act's
cost-share provision. Without having established such methodologies, FWS
officials cannot determine whether the Restoration Program is in
compliance with the nonfederal cost-share provision of the Act.
FWS officials have requested and collected limited financial data on each
restoration project funded by the Restoration Program. For example, FWS's
Request For Proposals (RFP) for restoration projects to be funded during
fiscal year 2004 states: "The Klamath Act recognizes in-kind
contributions33 by volunteers as contributions to the Klamath Restoration
Program." However, our review of documents in FWS's project files,
including project proposals, proposed budgets, project agreements, and
final reports, showed that the documents often do not contain detailed
information needed to determine (1) the amount of cash contribution, (2)
the type of noncash contribution, (3) the value of the noncash
contribution, and (4) the method of valuing the noncash contribution.
In addition, we found no indication in the project files that the data are
routinely analyzed and recorded concerning (1) the amount of a state or
local government's contribution that should be counted as nonfederal, (2)
whether the services of volunteers qualify as a noncash contribution, and
(3) whether the noncash contributions are properly valued. FWS officials
told us that they typically accept the values assigned to nonfederal
contributions by project participants. In their project records, FWS
officials record a single "cost-share" amount for each project, which they
extract from the project proposals submitted by project participants. The
costshare amount represents total contributions brought to the project by
project participants, but it does not distinguish between monetary
33 In-kind contributions are noncash contributions.
contributions and noncash contributions in the combined amount. In
addition, FWS officials do not maintain records on the value of any
nonfederal contributions to the Restoration Program that are not project
related, such as the State of California's contribution of technical
services to the Management Council and the Task Force. As a result, FWS
officials are not able to demonstrate that the Restoration Program is in
compliance with the Act's nonfederal match provision.
Improved Accounting Needed to Assure Compliance with the Act's Restrictions
Although FWS officials told us they believe they are in compliance with
other provisions of the Act that restrict reimbursing certain travel
expenses, such compliance cannot be assured or demonstrated because the
FWS accounting system does not distinguish between Resource Management
appropriations allocated for the Restoration Program and funds from the
same lump-sum appropriation allocated for related purposes. The Act places
some limitations on the purposes for which the money it authorizes to be
appropriated can be spent. For example, the funds appropriated for the
Restoration Program may not be used to reimburse any agency or
governmental unit whose employees are Management Council members or Task
Force members for time spent by any such employee performing Management
Council or Task Force duties. Likewise, the Act precludes the funds' use
for reimbursing travel expenses to federal employees who travel as members
of the Management Council or Task Force.
Both the Management Council and the Task Force have members who are
federal employees, and each has at least one member who is a FWS employee.
Our work did not find any instance of noncompliance with the above
restrictions. However, FWS offices that receive Restoration Program funds
also receive some funds FWS has allocated to the Anadromous Fish
Management activity of the Fisheries Program which are designated by the
same account code (1331) as the Restoration Program funds. Although, as
mentioned above, the Restoration Program funds may not be used for certain
purposes, the Anadromous Fish Management funds can be and are used for
those purposes. Since neither the Restoration Program funds nor the
Anadromous Fish Management funds are designated by an additional
subactivity or project code that would distinguish between the two types
of funds, the source of funds that have been used for specific
expenditures cannot be determined or verified from the accounting records.
As a result, FWS's accounting records do not provide the detailed
information needed to assure that the restrictions on the use of
Restoration Program appropriated funds are being complied with.
Conclusions Since passage of the Klamath River Basin Fishery Resources
Restoration Act in 1986, the Restoration Program established to carry out
the Act has received about $24.7 million in cash and noncash
contributions. Of the $24.7 million, the Restoration Program received
about $9.8 million during fiscal years 2000 through 2004. The Secretary of
the Interior and the Director of FWS have taken a number of actions to
formulate, establish, and implement the Restoration Program, including
designating a conservation area, establishing the Management Council and
the Task Force, formulating a long-term plan, and funding over 350
restoration projects in the Klamath River Basin. Regarding the financial
requirements of the Act, FWS officials have correctly identified the need
to fund some Restoration Program expenditures, such as certain travel and
salary expenses for FWS officials who are members of the Management
Council or the Task Force, from monies that are not subject to the Act's
restrictions. However, they have not yet incorporated into their
accounting procedures and record-keeping practices sufficient controls to
provide reasonable assurance of compliance with those provisions of the
Act. In addition, concerning the Act's requirement that 50 percent of the
Restoration Program's costs be provided by nonfederal sources, FWS
officials do collect some information regarding nonfederal contributions
to restoration projects, but they do not distinguish between cash and
noncash contributions in project documents, document their valuation
decisions regarding the noncash contributions, or take steps to verify
that nonfederal contributions meet the Act's criteria. Incorporating these
additional controls into the Restoration Program's operations would not be
difficult or costly, and would provide reasonable assurance of compliance
with those provisions of the Act.
Recommendations In order to enhance compliance with the Act, we recommend
that the Secretary of the Interior direct the Director of the Fish and
Wildlife Service to
o modify the standard project agreement language to distinguish between
cash and noncash contributions from the project participant;
o include a requirement in the standard project agreement that if any
contributor to the project is a state or local government, that
contributor must attest to how much, if any, of the contribution is from
federal monies received by that state or local government;
o develop standard operating procedures for reviewing and validating
contributor-supplied information regarding the determination and valuation
of noncash contributions and determination of nonfederal sources of funds;
o track Restoration Program funds requested and received through the
appropriations process by specifically identifying Klamath Restoration
Program funds; and
o track Restoration Program funds expenditures through FWS's Federal
Financial System by assigning a project code to the Klamath Restoration
Program funds.
Agency Comments and Our Evaluation
Interior generally agreed with the report's findings and recommendations
and stated that implementation of some recommendations has already begun.
Interior pointed out, however, that incorporating some of the Act's
requirements into the Restoration Program will likely require increased
staff involvement in negotiation and verification of noncash values, which
would cause increased diversion of restoration project funds to
administrative work. We agree that some increased staff involvement will
likely be necessary to determine the values of noncash contributions in
order to fully comply with the Act's key funding requirement that 50
percent of the cost of the development and implementation of the program
be provided by nonfederal sources. We encourage Interior to closely
monitor the costs associated with implementing the Act's requirements so
that it will be in a position to provide this information to Congress when
Congress considers reauthorization of appropriations for, or an extension
of, the 20-year Restoration Program.
Interior's comments are included as appendix III to this report. Interior
officials also provided some technical suggestions to our draft report,
which we did not reprint. We incorporated those technical suggestions as
appropriate.
We are sending copies of this report to the Secretary of the Interior, the
Director of the Fish and Wildlife Service, and other interested parties.
We will also make copies available to others upon request. In addition,
the report is available to others at no charge on the GAO Web site at
http://www.gao.gov.
Should you or your staff have any questions on matters discussed in this
report, please contact me at (202) 512-6906 or williamsm1@gao.gov. Contact
points for our offices of Congressional Relations and Public Affairs may
be found on the last page of this report. Major contributors to this
report are acknowledged in appendix IV.
McCoy Williams Director, Financial Management and Assurance
List of Congressional Requesters
The Honorable Richard W. Pombo
Chairman
Committee on Resources
House of Representatives
The Honorable Darrell Issa
Chairman
Subcommittee on Energy and Resources
Committee on Government Reform
House of Representatives
The Honorable Charles H. Taylor
Chairman
Subcommittee on Interior, Environment,
and Related AgenciesCommittee on Appropriations
House of Representatives
The Honorable John T. Doolittle
House of Representatives
The Honorable Wally Herger
House of Representatives
The Honorable Greg Walden
House of Representatives
Appendix I
Objectives, Scope and Methodology
The objectives of this engagement were to provide information about (1)
sources and amounts of funding received by and for the Restoration Program
for fiscal years 2000 through 2004; (2) amounts of funds received by and
for the Restoration Program for fiscal years 2000 through 2004 spent for
restoration projects, travel reimbursements, administrative expenses,
overhead, and technical support; (3) amounts of funding received by the
Task Force and Management Council for fiscal years 2000 through 2004 spent
for the purposes of restoration projects, travel reimbursements,
administrative expenses, overhead, and technical support; and (4) whether
the Secretary of the Interior has complied with specific requirements
contained in certain provisions of the Klamath River Basin Fishery
Resources Restoration Act.
For the most part, we limited the scope of our work to fiscal years 2000
through 2004; however, some compliance information and some historical
financial information we gathered included earlier years, going back to
the passage of the Act in 1986. We performed our work primarily at the
headquarters offices of the Department of the Interior, and the U.S. Fish
and Wildlife Service (FWS) in Washington, D.C. We also traveled to FWS's
Yreka, California, field office, which administers the Restoration
Program, to inspect files and gather information. We gathered additional
information from other locations through telephone contacts with FWS
officials in FWS's Portland Regional Office and its California-Nevada
Operations Office. We also interviewed by telephone Task Force and
Management Council members who represent various entities in California
and Oregon.
To provide information about what total amount of funding was received by
and for the Restoration Program from the beginning of fiscal year 2000
through the end of fiscal year 2004, and what were the sources of that
funding, we first defined the boundaries of the Restoration Program
because there were numerous restoration-type activities undertaken by
federal and nonfederal entities in the Klamath River Basin during the
5-year period we reviewed. After reviewing the provisions of the Act,
having preliminary discussions with FWS officials, and visiting the
Klamath River area, we defined the Restoration Program, for purposes of
our work, as consisting of all activities and projects that are at least
partially funded by appropriations FWS allocated for the Restoration
Program pursuant to the Act. Under the definition we adopted, the
Restoration Program funding also includes any cash or noncash
contributions provided by federal or nonfederal sources to those same
activities and projects.
Appendix I Objectives, Scope and Methodology
Having defined the Restoration Program, we interviewed FWS headquarters,
regional office, and field office officials to determine the types of
Restoration Program funding and expenditure information routinely
collected and the location and accessibility of that information. To
obtain information on the amount of Resource Management appropriations
that FWS allocated to the Restoration Program established pursuant to the
Act, we reviewed budget request documents and appropriations act documents
for FWS and the Department of the Interior, but did not find information
on funding specifically for the Restoration Program in those documents. We
discussed this with FWS headquarters, regional office, and field office
budget officials and were told by them that the appropriations for FWS do
not contain a discrete line item for the Restoration Program. Instead,
funding for the Restoration Program is combined with other funding within
the "General Program Activities" subelement of the "Anadromous Fish
Management" program element, which can be found under the "Fish and
Wildlife Management Program" activity of FWS's Fisheries Program account,
which is funded through an allocation from FWS's Resource Management
appropriation. A Portland Regional Office budget official, who oversaw
funding for the Yreka Fish and Wildlife Office (FWO), told us that FWS
considers there to be an appropriation for the Restoration Program for
each of the 5 years of $1 million, less a rescission each year that varied
between 0.38 percent and 1.82 percent. We obtained Office Fund Target
documents from the Yreka FWO that supported those amounts.
To provide information about the amounts and sources of other funding
contributed by federal and nonfederal sources to activities and projects
that are at least partially funded by those appropriations allocated by
FWS to the Restoration Program, we obtained from FWS officials an
electronic copy of their Restoration Projects Database, maintained in
FWS's Yreka, California, office. That database contains information on
only those restoration projects that are at least partially funded by
appropriations FWS allocated for the Restoration Program pursuant to the
Act. It also contains, among other things, information on the cost-share
contributions provided to those restoration projects by federal and
nonfederal entities. We also obtained and reviewed for some funded
restoration projects the project proposals and project completion reports
that had been prepared by the cooperators to determine if the amounts of
cost share reported in those documents are consistent with the information
in FWS's Restoration Projects Database.
Appendix I Objectives, Scope and Methodology
To provide information about whether other amounts of monetary funding or
noncash contributions are provided to any of the Restoration Program's
nonproject activities, we obtained FWS budget and expenditure information
to identify the other activities and interviewed Yreka FWO officials, Task
Force members, and Management Council members to learn of any other
funding. We were told that no other cash contributions are received by the
Restoration Program's nonproject activities but noncash contributions, in
the form of technical services, are provided by some federal and
nonfederal sources to the Task Force and the Management Council. However,
FWS officials do not maintain records on the value of those technical
services.
To provide information about what amounts of the funds received by and for
the Restoration Program from the beginning of fiscal year 2000 through the
end of fiscal year 2004 were spent for the purposes of restoration
projects, travel reimbursements, administrative expenses, overhead, and
technical support, we obtained budget and expenditure documents from the
Yreka FWO. We had several discussions with Yreka FWO officials to gain an
understanding of how the various financial amounts are derived and the
availability of source documents that support the amounts. Through
analysis of the financial information, we identified which items on the
financial documents represent the Restoration Program's restoration
projects, and which items represent travel reimbursements, administrative
expenses, and overhead. Through discussions with Yreka FWO officials, we
confirmed our interpretations of these amounts and confirmed Yreka FWO
officials do not maintain records on the value of technical services.
To provide information about what amounts of funding received by the Task
Force and Management Council from the beginning of fiscal year 2000
through the end of fiscal year 2004 were spent for the purposes of
restoration projects, travel reimbursements, administrative expenses,
overhead, and technical support, we obtained through the Internet, from a
Web site maintained by the General Services Administration, Federal
Advisory Committee Act (FACA) reports produced by the Task Force and the
Management Council showing expenditures related to those two federal
advisory committees for fiscal years 2000 through 2004. We considered
using the FACA report financial information for determining the amounts of
Restoration Program funds that were spent by the Management Council and
the Task Force for the purposes of restoration projects, travel
reimbursements, administrative expenses, overhead, and technical support.
However, after conducting some analytical testing procedures and
discussing the FACA report financial information with the Designated
Appendix I Objectives, Scope and Methodology
Federal Officers for the two federal advisory committees, we concluded
that the FACA report data would present a misleading picture of
Restoration Program expenditures.
Our discussions with the Designated Federal Officers for the two federal
advisory committees, Management Council members, Task Force members, and
Yreka FWO officials, coupled with our review of Management Council and
Task Force meeting minutes, charters, and operating procedures, showed
that the Management Council and the Task Force do not actually receive or
expend any federal or nonfederal funding. The funding that covers the
Management Council's and the Task Force's operational expenses comes from
FWS appropriations, and FWS officials in the Yreka FWO retain control of
that funding and pay those expenses.
To determine whether the Secretary of the Interior, the Management
Council, and the Task Force complied with specific duties and limitations
contained in the Act, we reviewed the Klamath River Basin Fishery
Resources Restoration Act and all of its amendments and identified the
provisions that require or prohibit specific actions or activities. We
then analyzed those provisions that contain mandates and restrictions to
identify the financial-related requirements and limitations contained in
the Act.
For each provision that contains a financial-related requirement, such as
the issuance of regulations to establish qualifications which volunteers
must have in order for their services to be considered as noncash
contributions, we asked FWS officials whether the required action had been
taken, and if so, for evidence of the action. For each provision that
contains a financial-related restriction, such as the limitations on the
purposes for which money appropriated pursuant to the Act's authorization
can be spent (for example, restricted money may not be used to reimburse
any agency or governmental unit whose employees are Management Council
members or Task Force members for time spent by any such employee
performing Management Council or Task Force duties), we asked FWS
officials and the Chairmen of the Task Force and Management Council
whether they are aware of the legal restrictions and whether they believe
the restrictions have been complied with.
To find corroborating or contradicting evidence regarding compliance with
the Act's financial-related provisions, we reviewed Federal Register
notices and existing Interior grants management regulations related to
cost-share requirements to determine if the necessary regulations had been
issued. We
Appendix I Objectives, Scope and Methodology
also inspected the Management Council's and Task Force's charters,
operating procedures, and minutes of meetings to identify any discussions
of the Act's provisions and any indications of an activity that indicates
compliance or noncompliance with the provisions. Where we identified any
indications of noncompliance, we discussed these indications with FWS,
Management Council, and Task Force officials for their explanations. We
also asked the Management Council's and Task Force's members if they are
aware of any instances of noncompliance with the Act or of improper use of
Restoration Program funds.
We did not perform a financial audit on the financial information
collected from FWS officials. In addition, we did not evaluate the
efficiency or effectiveness of the Restoration Program, of individual
restoration projects, or of actions taken by the Task Force or the
Management Council. Finally, we did not test compliance with all laws and
regulations applicable to this engagement but limited our tests of
compliance to financial-related provisions contained in the Klamath River
Basin Fishery Resources Restoration Act. We conducted our work from June
2004 through June 2005 in accordance with U.S. generally accepted
government auditing standards.
We requested comments on a draft of this report from the Secretary of the
Interior, or her designee. Interior generally agreed with the report's
findings and recommendations and stated that implementation of some
recommendations has already begun. Agency comments are included as
appendix III to this report. Interior officials also provided some
technical suggestions to our draft report, which we did not reprint in
appendix III. We incorporated those technical suggestions as appropriate.
Appendix II
Funding of Restoration Projects by Type of Participant Entity
Page 35 GAO-05-804 Klamath River Program Finances
Higher Subtotal Higher Subtotal Higher Subtotal
Number Funded Participants' Fiscal Type of projects appropriations cost Federal 3 $80,127 $135,937 State 1 15,106 5,000 Local 0 0 Indian 6 204,575 299,458 Not-for-profit 6 138,771 231,087 education 0 0 Business 5 127,737 44,626 Individuals 1 5,522 1,300 fiscal 22 $571,838 $717,408 State 1 17,809 11,556 Local 1 31,448 150,591 Indian 6 133,812 61,091 Not-for-profit 6 108,042 353,559 education 0 0 Business 4 128,319 206,429 Individuals 0 0 0 fiscal 23 $578,700 $1,031,695 State 1 17,809 11,556 Local 1 32,109 133,622 Indian 7 121,675 65,010 Not-for-profit 7 167,803 265,559 education 1 25,593 34,800 Business 4 73,542 137,308 Individuals 0 0 0 fiscal 26 $578,700 $874,015 State 1 16,617 3,800 Local 1 22,180 190,344 Indian 10 230,421 177,049 7
of by year Participant share agencies governments governments tribes organizations entities organizations year Federal $ governments governments tribes organizations entities organizations year Federal governments governments tribes organizations entities organizations year Federal governments governments tribes Not-for-profit
2000 agencies 5 $159,270 248,469 2001 2002 agencies 5 $140,169 $226,160 2002 2003 agencies 5 $107,749 $235,678 organizations 156,954 130,909
Appendix II
Funding of Restoration Projects by Type of
Participant Entity
(Continued From Previous Page)
Number of Funded by Participants'
Fiscal year Type of Participant projects appropriations cost share
Higher education entities 0 0
Business organizations 3 44,788 154,479
Individuals 0 0
Subtotal fiscal year 2003 27 $578,709 $892,259
Federal agencies 8 $160,553 $318,714
State governments 1 29,866 7,216
Local governments 1 34,250 116,685
Indian tribes 7 188,545 403,770
Not-for-profit organizations 11 164,916 378,680
Higher education entities 0 0
Business organizations 0 0
Individuals 0 0
Subtotal fiscal year 2004 28 $578,130 $1,225,065
2000-2004 Federal agencies 26 $647,868 $1,164,958
State governments 5 97,207 39,128
Local governments 4 119,987 591,242
Indian tribes 36 879,028 1,006,378
Not-for-profit organizations 37 736,485 1,359,795
Higher education entities 1 25,593 34,800
Business organizations 16 374,386 542,842
Individuals 1 5,522 1,300
Totals fiscal years 2000-2004 126 $2,886,077 $4,740,443
Source: GAO computations based on
unaudited FWS data.
Appendix III
Comments from the Department of the Interior
Appendix III
Comments from the Department of the
Interior
Appendix IV
GAO Contact and Staff Acknowledgments
GAO Contact McCoy Williams (202) 512-6906
Staff In addition to the contact listed above, Polly Cheung, Cherry
Clipper, Lisa Crye, Francis Dymond, Lauren Fassler, Michael Koury,
Tarunkant Mithani,
Acknowledgments and Debra Rucker made important contributions to this
report.
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