National Park Service: Major Operations Funding Trends and How	 
Selected Park Units Responded to Those Trends for Fiscal Years	 
2001 through 2005 (05-APR-06, GAO-06-631T).			 
                                                                 
In recent years, some reports prepared by advocacy groups have	 
raised issues concerning the adequacy of the Park Service's	 
financial resources needed to effectively operate the park units.
This statement addresses (1) funding trends for park service	 
operations and visitor fees for fiscal years 2001-2005; (2)	 
specific funding trends for 12 selected high-visitation park	 
units and how, if at all, the funding trends have affected	 
operations; and (3) recent management initiatives the Park	 
Service has undertaken to address fiscal performance and	 
accountability of park units. This statement is based on GAO's	 
March 2006 report, National Park Service: Major Operations	 
Funding Trends and How Selected Park Units Responded to Those	 
Trends for Fiscal Years 2001 through 2005, GAO-06-431		 
(Washington, D.C.: March 31, 2006).				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-631T					        
    ACCNO:   A50917						        
  TITLE:     National Park Service: Major Operations Funding Trends   
and How Selected Park Units Responded to Those Trends for Fiscal 
Years 2001 through 2005 					 
     DATE:   04/05/2006 
  SUBJECT:   Appropriated funds 				 
	     Budget administration				 
	     Fees						 
	     Financial analysis 				 
	     Financial management				 
	     Funds management					 
	     Land management					 
	     National parks					 
	     Strategic planning 				 
	     User fees						 
	     Operating expenses 				 

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GAO-06-631T

     

     * Background
     * Appropriations for the Operation of the National Park System
     * Allocation Trends for Projects and Daily Operations at 12 Hi
     * The Park Service Has Undertaken Three Management Initiatives
     * GAO Recommendation and Agency Response
     * GAO Contact and Staff Acknowledgments
     * GAO's Mission
     * Obtaining Copies of GAO Reports and Testimony
          * Order by Mail or Phone
     * To Report Fraud, Waste, and Abuse in Federal Programs
     * Congressional Relations
     * Public Affairs

Statement for the Record for the Subcommittee on Interior, Environment,
and Related Agencies, Committee on Appropriations, House of
Representatives

United States Government Accountability Office

GAO

For Release on Delivery Expected at 10:00 a.m. EDT

Wednesday, April 5, 2006

NATIONAL PARK SERVICE

Major Operations Funding Trends and How Selected Park Units Responded to
Those Trends for Fiscal Years 2001 through 2005

Statement for the Record Robin M. Nazzaro, Director Natural Resources and
Environment

GAO-06-631T

Mr. Chairman and Members of the Subcommittee:

We are pleased to provide for the record a summary of our report on issues
surrounding the principle sources of funding for the operations of the
National Park Service (Park Service) from fiscal years 2001 through 2005,
and how the selected park units we visited responded to their allocations
of such funds. Congress provides funding for the Park Service through a
number of appropriations accounts; the largest is the Operation of the
National Park System (ONPS), which funds the management, operations, and
maintenance of park areas and facilities and the general administration of
the Park Service.1 Congress has made additional funding available by
permitting the Park Service to charge and retain recreation fees, referred
to in this report as "visitor fees." The Park Service also has, among
other sources, authority to charge and retain concessions fees and to
accept donations and voluntary services. As with any federal program, the
Park Service is expected to manage within whatever level of funding is
provided and to allocate resources to its park units in a way that is both
efficient and effective in delivering services.

The Park Service has chosen to allocate funds to its park units in two
categories-for daily operations, and another for specific, non-recurring
projects. Park managers use allocations for daily operations to pay for
visitor and resource protection, interpretation and education, and
facilities operations, among other things. About 80 percent or more of the
park units' daily operations allocations pay for salaries and benefits for
staff to carry out these mission components, while the remainder is used
for overhead expenses such as utilities, supplies, and training. The
project-related portion provides funds for non-recurring projects such as
replacing roofs on park facilities or rehabilitating campgrounds. Park
managers generally use these project allocations to pay temporary
employees or contractors to complete these projects.

In recent years, concerns over the deteriorating condition of the national
parks have received increasing attention. Some reports prepared by
advocacy groups cite a lack of sufficient staff and financial resources
necessary to effectively operate the park units. They report dwindling
visitor services, crumbling buildings, and threatened resources at many
park units including the Everglades, Gettysburg, Great Smoky Mountains,
Olympic, Yellowstone, and others. Some of these reports argue that the
purchasing power of the park units' funding has been weakened due to
inflation and required employee pay and benefit increases that were not
accounted for in their daily operations funding. However, the Department
of the Interior stated that the Park Service's operating funds have
increased significantly from 1980 through 2005, particularly when compared
to other domestic federal agencies.

1The Park Service has aseparate appropriation account for construction,
which includes major improvements and repairs; an appropriation account
for the U.S. Park Police; and other appropriation accounts, such as
National Recreation and Preservation, Historic Preservation, and Land
Acquisition and State Assistance. However, they are not the subject of
this report.

This statement, which is based on our recent report on the operating
condition of the national parks,2 addresses (1) funding trends for Park
Service operations and visitor fees for fiscal years 2001 through 2005;
(2) specific funding trends for several high-visitation park units and
how, if at all, these funding trends have affected operations, including
the park units' ability to provide services for fiscal years 2001 through
2005; and (3) recent management initiatives the Park Service has
undertaken to address the fiscal performance and accountability of park
units.

To identify funding trends for Park Service operations and visitor fees
from fiscal years 2001 through 2005, we obtained and analyzed
appropriations legislation, data on the Park Service's allocation of funds
from the ONPS account, and data on visitor fees.3 To determine funding
trends for selected individual park units and how these trends affected
the park units' ability to provide services to visitors, we selected 12
park units based on visitation, regional diversity, and preliminary data
on allocations for daily operations. We visited the 12 park units,
gathered and analyzed funding and cost data, and interviewed park
officials to determine allocation trends and their impact on operations
(including visitor services). To identify recent management initiatives
the Park Service has under way to address fiscal performance and
accountability for fiscal years 2001 to 2005, we gathered and reviewed
documentation on several management initiatives and interviewed Park
Service headquarters, regional office, and individual park unit officials.
A more detailed description of our scope and methodology is contained in
the report on which this statement is based. We performed our work from
January 2005 to March 2006 in accordance with generally accepted
government auditing standards.

2U.S. Government Accountability Office, National Park Service: Major
Operations Funding Trends and How Selected Park Units Responded to Those
Trends for Fiscal Years 2001 through 2005, GAO-06-431 (Washington, D.C.:
March 31, 2006).

3To remove the effects of inflation, we adjusted nominal dollars using the
Gross Domestic Product Price Index for Government Consumption Expenditures
and Gross Investment (federal nondefense sector), with 2001 as the base
year.

In summary we found that

           o  Overall, amounts appropriated to the Park Service in the ONPS
           account increased from fiscal years 2001 through 2005. The amounts
           appropriated rose from about $1.4 billion in fiscal year 2001 to
           almost $1.7 billion in fiscal year 2005-an average annual increase
           of about 5 percent, or about 1 percent when adjusted for
           inflation. The Park Service makes this appropriation available to
           park units by allocating amounts for daily operations and for
           projects. In inflation-adjusted terms, the Park Service's
           allocation for daily operations declined slightly while the
           project-related allocations increased. The amount the Park Service
           allocated to park units for daily operations increased from about
           $903 million in fiscal year 2001 to almost $1.03 billion in fiscal
           year 2005-an average annual increase of about 3 percent per year,
           but a slight decline of 0.3 percent per year when adjusted for
           inflation. In allocating resources to park units, the Park Service
           increased allocations for project-related activities at a higher
           rate than for daily operations. Project-related allocations
           increased overall in both nominal and inflation-adjusted dollars.
           Total project-related allocations rose from $478 million in 2001
           to $641 million in 2005, an average annual increase of about 8
           percent per year, or about 4 percent per year in
           inflation-adjusted dollars. In addition to this funding, the Park
           Service collected a total of about $717 million in visitor fees
           from fiscal years 2001 through 2005-or about $670 million when
           adjusted for inflation.
           o  All of the 12 high-visitation park units that we visited
           received project-related allocations between fiscal years 2001
           through 2005, but for most park units their allocations for daily
           operations declined in inflation-adjusted terms. Allocations of
           project-related funds at the 12 high-visitation park units we
           visited varied from year to year. Although allocations for daily
           operations increased in nominal terms from 2001 through 2005 at
           all 12 parks we visited, 8 of the 12 experienced a decline in
           inflation-adjusted allocations and 4 experienced an increase in
           inflation-adjusted allocations. Park managers at all 12 park units
           we visited reported their allocations were not sufficient to
           address increases in operating costs, such as salary and benefit
           increases and rising utility costs; and new Park Service
           requirements directed at reducing its deferred maintenance needs,
           implementing its asset management strategy, and maintaining law
           enforcement levels. Officials also stated that these factors
           reduced their management flexibility. For example, the Park
           Service set a goal to spend the majority of its visitor fees on
           deferred maintenance projects. While the Park Service may use
           visitor fees to pay salaries for permanent staff that administer
           projects funded with these fees, it has a policy prohibiting such
           use. Instead, these salaries are paid using allocations for daily
           operations, which reduces the amount of the allocation available
           for visitor services and other activities, and limits the park
           units' ability to maintain these services and activities. To
           alleviate the pressure on daily operations allocations, we believe
           it would be appropriate to use visitor fees to pay the salaries of
           employees working on visitor fee-funded projects.
           o  In response to daily operations allocation trends, increased
           costs, and new policy requirements, parks reported that they
           either eliminated or reduced some services; they also relied on
           other authorized funding sources and volunteers to pay for
           activities that have historically been paid for from the
           allocations for daily operations. Because allocations for daily
           operations did not increase commensurately with rising costs,
           officials at the park units we visited stated that they absorbed
           these additional costs by reducing spending on personnel and other
           expenditures. Park officials also told us that they reduced
           services including, reducing visitor center hours, educational
           programs, basic custodial duties, and law enforcement operations,
           such as back-country patrolling. Officials at the park units also
           stated that they increasingly relied on volunteers and nonprofit
           partner organizations to provide services that were traditionally
           offered by park rangers, including providing information and
           educational programs to visitors. In commenting on a draft of our
           report, the Department of the Interior said that the report
           creates a misleading impression concerning the state of park
           operations, claiming that (1) record high levels of funds are
           being invested to staff and improve parks and (2) the report does
           not examine the results achieved with these inputs. The department
           also believes that while employment levels at individual park
           units may have fluctuated for many reasons, employment servicewide
           was stable, including both seasonal and permanent employees. We
           believe, however, that the report provides a detailed analysis of
           the major funding trends affecting Park Service operations,
           including those at the 12 park units we visited, as well as the
           department's initiatives and efforts to achieve results.
           o  We identified three management initiatives that the Park
           Service has undertaken to address fiscal performance and
           accountability and to better manage within available resources:
           the Business Plan Initiative (BPI), the Core Operations Analysis
           (COA), and the Park Scorecard. These initiatives are in varying
           stages of development and implementation. For the most part, it is
           too soon to assess the effectiveness of these initiatives.

           The Park Service is the caretaker of many of the nation's most
           precious natural and cultural resources. Today, more than 130
           years after the first national park was created, the National Park
           System has grown to include 390 units covering over 84 million
           acres. These units include a diverse mix of sites-now in more than
           20 different categories.4 The Park Service's mission is to
           preserve unimpaired the natural and cultural resources of the
           National Park System for the enjoyment of this and future
           generations. Its objectives include providing for the use of the
           park units by supplying appropriate visitor services and
           infrastructure (e.g., roads and facilities) to support these
           services. In addition, the Park Service protects its natural and
           cultural resources (e.g., preserving wildlife habitat and Native
           American sites) so that they will be unimpaired for the enjoyment
           of future generations.

           The Park Service receives its main source of funds to operate park
           units through appropriations in the ONPS account. The Park Service
           chooses to allocate funds to its park units in two categories-one
           for daily operations, and another for specific, non-recurring
           projects. Daily operations allocations for individual park units
           are built on park units' allocation for the prior year. Park units
           receive an increased allocation for required pay increases and may
           request specific increases for new or higher levels of ongoing
           operating responsibilities, such as adding additional law
           enforcement rangers for increased homeland security protection. As
           is true for other government operations, the cost of operating
           park units will increase each year due to required pay increases,
           the rising costs of benefits for federal employees, and rising
           overhead expenses such as utilities. The Park Service may provide
           additional allocations for daily operations to cover all or part
           of these cost increases. If the continuation of operations at the
           previous year's level would require more funds than are available,
           park units must adjust either by identifying efficiencies within
           the park unit, use other authorized funding sources such as fees
           or donations to fund the activity, or reduce services. Upon
           receiving their allocations for daily operations each year, park
           unit managers exercise a great deal of discretion in setting
           operational priorities. Generally, 80 percent or more of each park
           unit's allocation for daily operations is used to pay the salaries
           and benefits of permanent employees (personnel costs). Park units
           use the remainder of their allocations for daily operations for
           overhead expenses such as utilities, supplies, and training, among
           other things.

           In addition to daily operations funding, the Park Service also
           allocates project-related funding to park units for specific
           purposes to support its mission. For example, activities completed
           with Cyclic Maintenance and Repair and Rehabilitation funds
           include re-roofing or re-painting buildings, overhauling engines,
           refinishing hardwood floors, replacing sewer lines, repairing
           building foundations, and rehabilitating campgrounds and trails.
           Park units compete for project allocations by submitting requests
           to their respective regional office and headquarters. Regional and
           headquarters officials determine which projects to fund. While an
           individual park unit may receive funding for several projects in
           one year, it may receive none the next.

           Park units are authorized to collect revenue from outside sources
           such as visitor fees and donations-although how they are used may
           be limited to specific purposes. Since 1996, the Congress has
           provided the park units with authority to collect fees from
           visitors and retain these funds for use on projects to enhance
           recreation and visitor enjoyment, among other things.5 Since 2002,
           the Park Service has required park units to spend the majority of
           their visitor fees on deferred maintenance projects, such as road
           or building repair. The Park Service also receives revenue from
           concessionaires under contract to perform services at park
           units-such as operating a lodge-and cash or non-monetary donations
           from non-profit organizations or individuals. These funds may vary
           from year to year and, in the case of donations, may be
           accompanied by stipulations on how the funds may be used.

           Overall appropriations for the ONPS account-including the amounts
           the Park Service allocated for daily operations and projects-rose
           in both nominal and inflation-adjusted dollars overall from fiscal
           year 2001 through 2005. Appropriations increased in nominal terms
           from about $1.4 billion in fiscal year 2001 to almost $1.7 billion
           in fiscal year 2005, an average annual increase of about 4.9
           percent (i.e., about $68 million per year). After adjusting these
           amounts for inflation, the average annual increase was about 1.3
           percent or almost $18 million per year. By contrast, the Park
           Service's overall budget authority increased to about $2.7 billion
           in 2005 from about $2.6 billion in 2001, an average increase of
           about 1 percent per year. In inflation adjusted dollars, the total
           budget authority fell by an average of about 2.5 percent per year.
           Figure 1 shows the appropriations for the ONPS account from fiscal
           years 2001 through 2005.

           Figure 1: Appropriations for the ONPS Account from Fiscal Years
           2001 through 2005

           Note: Totals for ONPS do not include Park Service spending
           authority for offsetting collections, in nominal terms, of $17
           million in fiscal year 2001, $18 million in fiscal year 2002, $17
           million in fiscal year 2003, $21 million in fiscal year 2004, and
           $21 million in fiscal year 2005. These offsetting collections are
           reimbursements from other federal or state entities that are
           credited to this account. Visitor fee revenues are deposited in a
           separate account.

           The Park Service's total allocation for daily operations for park
           units increased overall in nominal dollars but declined slightly
           when adjusted for inflation from fiscal year 2001 through 2005. As
           illustrated in figure 2, overall allocations for daily operations
           for park units rose from about $903 million in fiscal year 2001 to
           almost $1.03 billion in fiscal year 2005-an average annual
           increase of about $30 million, or about 3 percent. After adjusting
           for inflation, the allocation for daily operations fell slightly
           from about $903 million in 2001 to about $893 million in 2005-an
           average annual decline of about $2.5 million, or 0.3 percent. The
           fiscal year 2005 appropriation for the ONPS account included an
           additional $37.5 million over the amounts proposed by the House
           and Senate for the ONPS account, to be used for daily operations.
           The conference report accompanying the appropriation stated that
           the additional amount was to be used for (1) a service-wide
           increase of $25 million and (2) $12.5 million for visitor services
           programs at specific park units.

           Figure 2: Overall Allocations for Daily Operations for Park Units
           from Fiscal Years 2001 through 2005

           Note: Overall allocations for daily operations include amounts for
           park units only, and do not include allocations for the national
           trail system, other field offices, and affiliated areas.

           Allocations for projects and other support programs increased
           overall in both nominal and inflation-adjusted dollars.6 These
           allocations rose from about $478 million in 2001 to about $641
           million in 2005-an average annual increase of about 7.7 percent,
           or about $36.5 million. When adjusted for inflation, the increase
           was 3.9 percent, or about $18.7 million per year. Figure 3 shows
           allocation trends of projects and other support programs for the
           Park Service from fiscal years 2001 through 2005. Three programs
           that include project funding for individual park units-Cyclic
           Maintenance, Repair and Rehabilitation, and Inventory and
           Monitoring-account for over half of the increase for the project
           and support program allocations. As a percentage of total project
           and support program funding, funding for these programs rose to 31
           percent in 2005 from 23 percent in 2001. For example, Cyclic
           Maintenance program funding increased from $34.5 million in 2001
           to $62.8 million in 2005-an average annual increase of 16.2
           percent in nominal terms or 12.1 percent when adjusted for
           inflation. Increases in the Cyclic Maintenance and Repair and
           Rehabilitation programs reflect an emphasis on the effort for the
           Park Service to reduce its estimated $5 billion maintenance
           backlog. Increases in the Inventory and Monitoring Program reflect
           an emphasis on protecting natural resources primarily through an
           initiative called the Natural Resource Challenge.7

           Figure 3: Project and Other Support Program Allocations from
           Fiscal Years 2001 through 2005

           Visitor fees are also used to support park units. Overall, the
           Park Service collected about $717 million in visitor fees in
           addition to their annual appropriation for operations from 2001
           through 2005, increasing from about $140 million to about $147
           million in 2005 (an average annual increase of about 1 percent);
           however, in inflation-adjusted dollars, the Park Service collected
           about $670 million in visitor fees, falling from about $140
           million in 2001 to about $127 million 2005 (an average annual
           decline of over 2 percent). Overall, the Park Service collected an
           average of about $143 million per year in nominal terms or about
           $134 million per year when adjusted for inflation. Visitor fee
           revenue depends on several factors, including the number of
           visitors to each park unit, the number of national passes
           purchased, and the amount each park charges for entry and
           services.

           All 12 park units we visited received allocations for projects
           from fiscal years 2001 through 2005 that varied among years and
           among park units. Allocations for daily operations for the 12 park
           units we visited also varied. On an average annual basis, each
           unit experienced an increase in daily operations allocations, but
           most experienced a decline in inflation-adjusted terms. Officials
           at each park believed that their daily operations allocations were
           not sufficient to address increases in operating costs and new
           Park Service management requirements. To manage within available
           funding resources, park unit managers also reported that, to
           varying degrees, they made trade-offs among the operational
           activities-which in some cases resulted in reducing services in
           areas such as education, visitor and resource protection, and
           maintenance activities. Park officials also reported that they
           increasingly relied on volunteers and other authorized funding
           sources to provide operations and services that were previously
           paid with allocations for daily operations from the ONPS account.

           Park units use project-related allocations for such things as
           rehabilitating structures, roads, and trails; and inventorying and
           monitoring natural resources. The allocations for projects at the
           12 park units totaled $76.8 million from 2001 through 2005.
           Allocations varied from park to park and year to year because
           these allocations support non-recurring projects for which park
           units are required to compete and obtain approval from Park
           Service headquarters or regional offices. For example, at Grand
           Canyon National Park, allocations for projects between 2001 and
           2005 totaled $6.7 million. However, during that time, the amount
           fluctuated from $824,000 in 2001 to $1.9 million in 2004 and
           $914,000 in 2005. Appendix I shows project-related allocations and
           their fluctuations from fiscal years 2001 through 2005 for the 12
           parks we visited.

           All twelve park units experienced an annual average increase, in
           nominal terms, in allocations for daily operations; however, when
           adjusted for inflation, 8 of the 12 parks we visited experienced a
           decline ranging from less than 1 percent to approximately 3
           percent. For example, Yosemite National Park's daily operations
           allocations increased from $22,583,000 in 2001 to $22,714,000 in
           2005, less than an average of 1 percent per year. However, when
           adjusted for inflation, the park's allocation for daily operations
           fell by about 3 percent per year. Daily operations allocations at
           the remaining four parks increased after adjusting for inflation,
           ranging from less than 1 percent to about 7 percent. For example,
           Acadia National Park's daily operations allocations increased from
           $4,279,000 in fiscal year 2001 to $6,498,000 in fiscal year 2005,
           an average annual increase of about 11 percent in nominal terms
           and about 7 percent when adjusted for inflation. Park officials
           explained that although the daily operations allocation
           substantially increased over this period, most of the increase was
           for new or additional operations. To illustrate, in 2002, Acadia
           acquired the former Schoodic Naval Base. The increases in
           allocations for daily operations were to accommodate this added
           responsibility rather than for maintaining operations that were in
           existence prior to the acquisition.

           Park unit officials reported that required salary increases
           exceeded the allocation for daily operations, and rising utility
           costs have reduced their flexibility in managing daily operations
           allocations. Park Service headquarters officials reported that
           from 2001 through 2005, the Park Service paid personnel cost
           increases enacted by the Congress. For example, from fiscal years
           2001 through 2005, Congress enacted salary increases of about 4
           percent per year for federal employees.8 Park Service officials
           reported that the Park Service covered these salary increases with
           appropriations provided in the ONPS account. The Park Service
           allocated amounts to cover about half of the required increases,
           and park units had to reduce spending to compensate for the
           difference. As a consequence of the increases, park units had to
           eliminate or defer spending in order to accommodate the increases.
           Officials at several park units told us that since 2001, they have
           refrained from filling vacant positions or have filled them with
           lower-graded or seasonal employees. For example, in an effort to
           continue to perform activities that directly impact visitors-such
           as cleaning restrooms and answering visitor questions-officials at
           Sequoia and Kings Canyon National Parks stated that they left
           several high-graded positions unfilled in order to hire a lower
           graded workforce to perform these basic operational duties.
           Officials at most park units also told us that when positions were
           left vacant, the responsibilities of the remaining staff generally
           increased in order to fulfill park obligations.

           In addition to increasing personnel costs, officials at many of
           the parks we visited explained that rising utility costs caused
           parks to reduce spending in other areas. For example, at Grand
           Teton National Park, park officials told us that to operate the
           same number of facilities and assets, costs for fuel, electricity,
           and solid waste removal increased from $435,010 in 2003 to
           $633,201 in 2005-an increase of 46 percent, when adjusted for
           inflation. Officials told us that, as a result, their utility
           budget for fiscal year 2005 was spent by June 2005-three months
           early. In August, the park accepted the transfer requests of two
           division chiefs and used the salaries from these vacancies to pay
           for utility costs for the remaining portion of the year. Officials
           at some parks attributed increased utility costs to new
           construction that was generally not accompanied with a
           corresponding increase to their allocation for daily operations.

           Officials at most of the parks we visited also told us that their
           park units generally did not receive additional allocations for
           administering new Park Service policies directed at reducing its
           maintenance backlog, implementing a new asset management strategy,
           or maintaining specified levels of law enforcement personnel
           (referred to as its "no-net-loss policy"), which has reduced their
           flexibility in addressing other park priorities. While officials
           stated that these policies were important, implementing them
           without additional allocations reduced their management
           flexibility. For example, since 2001, the Park Service has placed
           a high priority on reducing its currently estimated $5 billion
           maintenance backlog. In response, the Park Service, among other
           things, set a goal to spend the majority of its visitor fees on
           deferred maintenance projects-$75 million in 2002 increasing to
           $95 million in 2005.9 Officials at several park units report that
           they have used daily operations allocations to absorb the cost of
           salaries for permanent staff needed to oversee the increasing
           number of visitor fee-funded projects. Park officials reported
           that the additional administrative and supervisory tasks
           associated with these projects add to the workload of an
           already-reduced permanent staff. Furthermore, while the Park
           Service may use visitor fees to pay salaries for permanent staff
           that manage and administer projects funded with visitor fees, it
           has a policy prohibiting such use. Instead, these salaries are
           paid using allocations for daily operations which reduce the
           amount of the allocation available for visitor services and other
           activities and limit the park units' ability to maintain these
           services and activities.

           To address differences between allocations for daily operations
           and expenses, officials at the park units we visited reported that
           they reduced or eliminated some services paid with daily
           operations allocations-including some that directly affected
           visitors and park resources. Park officials at some of the parks
           we visited told us that before reducing services that directly
           affect the visitor, they first reduced spending for training,
           equipment, travel, and supplies paid from daily operations
           allocations.10 However, most parks reported that they did reduce
           services that directly affect the visitor, including reducing
           visitor center hours, educational programs, basic custodial
           duties, and law enforcement operations, such as back-country
           patrolling. Furthermore, when funds allocated for daily operations
           were not sufficient to pay for activities that were previously
           paid with this source, the park units we visited reported that
           they deferred activities or relied on other authorized funding
           sources such as allocations for projects, visitor fees, donations
           from cooperating associations and friends groups, and concessions
           fees. From 2001 to 2005, some parks delayed performing certain
           preventative maintenance activities formerly paid with allocations
           for daily operations until other authorized funding sources, such
           as project funds (including funds for cyclic maintenance, repair
           and rehabilitation, and visitor fees) could be found and approved.

           Rather than eliminating or not performing daily operational
           activities, some parks used volunteers and funding from authorized
           sources such as donations from non-profit partners and
           concessionaires' fees to accomplish activities that were formerly
           paid with daily operations funds. Officials at several park units
           said that they increasingly depend on donations from cooperating
           associations to pay for training and equipment and rely on their
           staff and volunteers to provide information and educational
           programs to visitors that were traditionally offered by park
           rangers. Funds from these sources can be significant, but they are
           subject to change from year to year. Officials at several park
           units expressed concern about using funding from other authorized
           sources to address needs-not only because the funds can vary from
           year to year, but also because these partners' stipulations on how
           their donations can be used may differ from the parks' priorities.
           As a result, relying on these sources for programs that require a
           long term funding commitment could be problematic.

           We identified three management initiatives that the Park Service
           has undertaken to address the fiscal performance and
           accountability of park units and to better manage within their
           available resources: the Business Plan Initiative (BPI), the Core
           Operations Analysis (COA), and the Park Scorecard. Each initiative
           operates separately and is at various stages of development and
           implementation. Table 2 in appendix II summarizes each of the
           three initiatives and their stages of implementation.

           Through the BPI process, park unit staff-with the help of business
           interns from the Student Conservation Association-identify all
           sources and uses of park funds to determine funding levels needed
           to operate and manage park units.11 Using this information, park
           unit managers develop a 5-year business plan to address any gaps
           between available funds and park unit operational and maintenance
           needs. The process used in the BPI involves 6 steps, completed
           over an 11-week period. Park staff and the business interns (1)
           identify the park unit's mission; (2) conduct an inventory of park
           assets; (3) analyze park funding trends; (4) identify sources and
           uses of park funding; (5) analyze park operations and maintenance
           needs; and (6) develop a strategic business plan to address gaps
           between funds and park needs. All 12 of the park units we visited
           have completed a business plan.12 Many officials-both at the unit
           level and headquarters-stated that business plans are, among other
           things, useful in helping them identify future budget needs. Once
           completed, park managers often issue a press release to announce
           its completion. Park managers may also send copies to their
           legislators, local community councils, and park partners (such as
           cooperating associations) to communicate the results. A Park
           Service official stated, however, that the Park Service is still
           refining these business plans to serve as a better tool for
           justifying funding needs.

           The COA was developed in 2004 to help park managers evaluate their
           park unit's core mission, identify essential park unit activities
           and associated funding levels, and make fully informed decisions
           on staffing and funding. The COA is part of a broader Park
           Service-wide effort to integrate management tools to improve park
           efficiency. Park Service headquarters, regional officials, and
           park unit staffs work together in a step-by-step process to
           conduct the analysis. These steps include preparing a 5-year
           budget cost projection (BCP) to establish baseline financial
           information and help project future park needs, defining core
           elements of the park unit's mission, identifying park priorities,
           reviewing and analyzing activities and associated staff resources,
           and identifying efficiencies. Budget staff for each park unit
           first complete a 5-year BCP that uses the current year's funding
           level for daily operations as a baseline, and estimates future
           levels, increases in non-personnel costs, and fixed costs such as
           salaries and benefits. The general target of the analysis is to
           adjust personal services and fixed costs at or below 80 percent of
           the unit's funding levels for daily operations. Three of the
           twelve park units we visited have completed (or are in the process
           of completing) a COA, and three will begin the COA in fiscal year
           2006. The remaining six park units we visited have yet to be
           selected. Park unit officials told us that the preliminary results
           have helped them determine where efficiencies in operations might
           accrue. A Park Service regional official told us that the core
           operations process is still in its early development, noting that
           preliminary results are useful but too early to determine results
           to be realized by the park units.

           Park Service headquarters developed the Park Scorecard beginning
           in fiscal year 2004 to serve as an indicator of each park unit's
           fiscal and operational condition, and managerial performance. The
           scorecard is intended to provide an overarching summary of each
           park unit's condition by offering a way to analyze individual park
           unit needs. It also provides Park Service officials with
           information needed to understand how park units compare to one
           another based on broad financial, -organizational, -recreational,
           -and resource-management criteria. Although the Park Scorecard is
           still under development, the Park Service's headquarters budget
           office used it to validate and approve requests for increases in
           daily operations allocations for the highest priorities among park
           units to be funded out of a total of $12.5 million that was
           provided in 2005 for daily operations directed at visitor service
           programs. The Park Service approved requests for funding at 3 out
           of the 12 parks we visited (Badlands National Park, Grand Teton
           National Park, and Yellowstone National Park). Park Service
           headquarters officials, with the assistance and input of park unit
           managers, plan on refining the Park Scorecard to more accurately
           capture all appropriate park measurements and to identify,
           evaluate, and support future budget increases for park units. The
           Park Service also intends for park managers to use the Park
           Scorecard to facilitate discussions about their needs and
           priorities.

           In closing, we have found that overall, from 2001 through 2004,
           the Park Service increased allocations for support programs and
           project funding while placing less of an emphasis on funds for
           daily operations. In fiscal year 2005, this trend shifted, and as
           evidenced by our visits to 12 park units, appears to be going in
           the direction needed to help the units overcome some of the
           difficulties they have recently experienced in meeting operational
           needs. In responding to these trends, park unit officials found
           ways to reduce spending on their allocations for daily operations
           and to identify and use authorized sources other than these
           allocations to minimize some impacts on park operations and
           visitor services. While park units are relying more on other
           sources to perform operations, using such funds has its drawbacks
           because it usually takes parks longer, with more effort from park
           employees to obtain and use these sources. Visitor fees have been
           an important and significant source of funds for park units to
           address high priority needs such as reducing its maintenance
           backlog. However, Park Service policy prohibiting the use of
           visitor fees to pay salaries of permanent employees managing
           projects may reduce the flexibility in managing the use of funding
           for daily operations. While the Park Service is embarking upon
           three management initiatives that they believe will improve park
           performance and accountability, and better manage within available
           resources, it is too early to assess the effectiveness of these
           initiatives.

           To reduce some of the pressure on funding for daily operations, we
           recommended that the Secretary of the Interior direct the Director
           of the Park Service to revise its policy to allow park units to
           use visitor fee revenue to pay the cost of permanent employees
           administering projects funded by visitor fees to the extent
           authorized by law. In commenting on a draft of our report, the
           department generally agreed with the recommendation, but stated
           that it should clearly state that visitor fee revenue (and not
           other sources) be used to fund only a limited number of permanent
           employees and be specifically defined for the sole purpose of
           executing projects funded from fee revenue. We believe our
           recommendation, as written, gives the agency the flexibility
           sought. The department also said that our report creates a
           misleading impression concerning the state of park operations in
           that (1) record high levels of funds are being invested to staff
           and improve parks, and (2) the report does not examine the results
           achieved with these inputs. The department also believes that
           while employment levels at individual park units may have
           fluctuated for many reasons, employment servicewide, including
           both seasonal and permanent employees, was stable. We believe
           however, that our report provides a detailed analysis of the major
           funding trends affecting Park Service operations, including those
           at the 12 high-visitation park units we visited, as well as the
           department's initiatives and efforts to achieve results.

           This concludes our statement for the record.

           For further information on this statement, please contact Robin
           Nazzaro at (202) 512-3841 or [email protected] . Individuals making
           contributions to this testimony included Roy Judy, Assistant
           Director; Thomas Armstrong, Ulana Bihun, Denise Fantone, Doreen
           Feldman, Tim Guinane, Richard Johnson, Alison O'Neill, and Patrick
           Sigl.

                                   Background

4These include (1) national parks, such as Yellowstone in Idaho, Montana,
and Wyoming; Yosemite in California; and Grand Canyon in Arizona; (2)
national historic parks, such as Harper's Ferry in Maryland, Virginia, and
West Virginia; and Valley Forge in Pennsylvania; (3) national
battlefields, such as Antietam in Maryland; (4) national historic sites
such as Ford's Theatre in Washington, D.C.; and Carl Sandburg's home in
North Carolina; (5) national monuments, such as Fort Sumter in South
Carolina and the Statue of Liberty in New York and New Jersey; (6)
national preserves, such as Yukon-Charley Rivers in Alaska; and (7)
national recreation areas, such as Lake Mead in Arizona and Nevada.

5During the period of this review, the Park Service collected fees,
referred to as "offsetting collections," under the Recreational Fee
Demonstration Program authorized by Pub. L. No. 104-134, as amended, which
stipulated that uses for these funds include backlogged repair and
maintenance projects, interpretation, signage, habitat or facility
enhancement, resource preservation, annual operation (including fee
collection), maintenance, and law enforcement relating to public use.
Under this program at least 80 percent of the fees were retained by a park
unit and 20 percent went to a central fund managed by the Park Service.
Under current legislation (the Federal Lands Recreation Enhancement Act,
Pub. L. No. 108-447, enacted December 8, 2004), park units are allowed to
collect and use visitor fees in a generally similar fashion.

 Appropriations for the Operation of the National Park System Account Increased
 Overall from Fiscal Year 2001 to 2005; When Adjusted for Inflation, the Total
 Allocation for Daily Operations Declined Overall and the Total Allocation for
                           Projects Increased Overall

6Projects and other support programs include allocations from the ONPS
account other than allocations for daily operations. It includes overall
funding for numerous project-related sources such as Cyclic Maintenance,
Repair and Rehabilitation and other support programs such as allocations
for central offices (seven regional offices and the headquarters office),
field resource centers, and other external administrative costs such as
telecommunications and unemployment compensation payments.

7From 2001 through 2005, the Park Service allocated a total of about $62
million to Natural Resource Challenge related-programs from its ONPS
lump-sum appropriation, the majority of which was project-related funding.

 Allocation Trends for Projects and Daily Operations at 12 High-Visitation Park
Units Varied, but All 12 Parks Reported Reduced Services and an Increasing
Reliance on Other Authorized Sources to Supplement Daily Operations Allocations

8As reported on pages 8 and 9, appropriations for the ONPS account
increased from about $1.4 billion in fiscal year 2001 to almost $1.7
billion in fiscal year 2005, an average annual increase of about 4.9
percent.

9In both 2001 and 2005, visitor fee spending goals for deferred
maintenance were not met. In fiscal year 2001, the amount of visitor fees
obligated for deferred maintenance was $61 million. In fiscal year 2005,
the amount was $73.1 million.

10While these reductions do not directly affect a visitor's experience,
they also may hinder the park's ability to carry out operational duties.
For example, officials at several park units explained that equipment,
such as maintenance trucks, were old and in need of replacement. For
several of the park units, certain divisions' personnel costs account for
such a large percentage of their allocation for daily operations that
reductions in other areas are not an option. At Grand Canyon National
Park, for instance, the interpretive division had approximately $75,000
available in their allocation for daily operations in 2001 to pay for
non-personnel costs such as travel and supplies. By 2005, approximately 99
percent of the division's allocation for daily operations was spent on
personnel, relying on other authorized funding sources to make up the
difference.

 The Park Service Has Undertaken Three Management Initiatives to Address Fiscal
                  Performance and Accountability of Park Units

11The Student Conservation Association provides high school and college
students (among others) with conservation service internships and
volunteer opportunities in the National Parks, National Forests, and other
public lands.

12Park Service officials said that 2 out of the 12 parks we visited (Grand
Canyon and Yosemite National Parks) completed a BPI through contracting
external consultants on their own.

                     GAO Recommendation and Agency Response

                     GAO Contact and Staff Acknowledgments

Appendix I: Project Allocations for 12 Selected Park Units, Fiscal Years
2001 through 2005

Table 1: Project Allocations for 12 Selected Park Units, Fiscal Years 2001
through 2005 (dollars in thousands)

                                           Fiscal years
Park unit                             2001  2002  2003   2004  2005  Total 
Acadia NP         Nominal             $385  $772  $699 $1,237  $481 $3,574 
                     Inflation-adjusted   385   747   659  1,119   417  3,327 
Badlands NP       Nominal              217   130   689    647 1,394  3,077 
                     Inflation-adjusted   217   126   649    585 1,210  2,787 
Bryce Canyon NP   Nominal              531   365   357    433   402  2,088 
                     Inflation-adjusted   531   353   336    391   349  1,943 
Gettysburg NMP    Nominal            7,551   638   753  1,296 1,324 11,562 
                     Inflation-adjusted 7,551   618   709  1,172 1,150 11,200 
Grand Canyon NP   Nominal              824 1,550 1,173  2,125 1,053  6,725 
                     Inflation-adjusted   824 1,500 1,106  1,922   914  6,266 
Grand Teton NP    Nominal              861   423 1,327  1,233 2,070  5,914 
                     Inflation-adjusted   861   409 1,250  1,115 1,797  5,432 
Mount Rushmore    Nominal              271   118   113    146   696  1,344 
NMem                                                                
                     Inflation-adjusted   271   114   107    132   604  1,228 
Shenandoah NP     Nominal            1,409   781   647    862 2,393  6,092 
                     Inflation-adjusted 1,409   756   610    779 2,078  5,632 
Sequoia and Kings Nominal            2,038 2,859 3,364  2,927 2,760 13,948 
Canyon NP                                                           
                     Inflation-adjusted 2,038 2,768 3,171  2,647 2,396 13,020 
Yellowstone NP    Nominal               43     4     9     12 3,128  3,196 
                     Inflation-adjusted    43     4     8     11 2,716  2,782 
Yosemite NP       Nominal            3,620 2,718 4,034  3,532 3,778 17,682 
                     Inflation-adjusted 3,620 2,631 3,802  3,194 3,280 16,527 
Zion NP           Nominal                0   103   310    195 1,000  1,608 
                     Inflation-adjusted     0   100   292    176   868  1,436 

Legend

NP=National Park

NMP=National Military Park

NMem=National Memorial

Source: GAO analysis of Park Service data.

Appendix II: Park Service Management Initiatives to Address Park Units'
Fiscal Performance and Accountability

Table 2: Park Service Management Initiatives to Address Park Units' Fiscal
Performance and Accountability

Management                                         Development and         
initiative       Description                       implementation          
Business Plan    Park managers, with the help of   Park Service            
Initiative (BPI) business interns, identify all    headquarters and        
                    sources and uses of park funding  regional offices seek   
                    and operational requirements to   voluntary participation 
                    determine levels needed to        in the BPI process      
                    operate and manage their park.                            
                    From this, a plan is developed to First BPI was prepared  
                    address any gaps between          in 1997 by Yellowstone  
                    available funds and park unit     National Park           
                    needs.                                                    
                                                      About 12 parks units    
                                                      participate in a BPI    
                                                      every year              
                                                                              
                                                      As of January 2006, 25  
                                                      percent of all park     
                                                      units have participated 
Core Operations  A step-by-step process where park Developed in 2004       
Analysis (COA)   unit, regional, and headquarters                          
                    officials evaluate the park       The Park Service        
                    unit's core mission and identify  intends to have all     
                    essential park unit activities    park units complete a   
                    and associated funding needs.     COA by 2011             
                                                                              
                                                      To achieve this goal,   
                                                      the Park Service will   
                                                      select 50 park units    
                                                      per year to participate 
Park Scorecard   Headquarters officials use a      Park Scorecard is in    
                    series of indicators to compare   the development stage   
                    each park unit's fiscal and                               
                    operational condition, and        Used to justify park    
                    managerial performance.           units' budget increases 
                                                      for daily operations in 
                                                      2005                    
                                                                              
                                                      To be used to support   
                                                      and evaluate park       
                                                      operations in the       
                                                      future                  

Source: GAO analysis of Park Service data.

(360696)

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Highlights of GAO-06-631T, a statement for the record to the Subcommittee
on Interior, Environment, and Related Agencies; Committee on
Appropriations; U.S. House of Representatives

April 5 2006

NATIONAL PARK SERVICE

Major Operations Funding Trends and How Selected Park Units Responded to
Those Trends for Fiscal Years 2001 through 2005

In recent years, some reports prepared by advocacy groups have raised
issues concerning the adequacy of the Park Service's financial resources
needed to effectively operate the park units.

This statement addresses (1) funding trends for park service operations
and visitor fees for fiscal years 2001-2005; (2) specific funding trends
for 12 selected high-visitation park units and how, if at all, the funding
trends have affected operations; and (3) recent management initiatives the
Park Service has undertaken to address fiscal performance and
accountability of park units. This statement is based on GAO's March 2006
report, National Park Service: Major Operations Funding Trends and How
Selected Park Units Responded to Those Trends for Fiscal Years 2001
through 2005, GAO-06-431 (Washington, D.C.: March 31, 2006).

What GAO Recommends

GAO recommends that the Department of the Interior allow park units to use
visitor fee revenues to pay the costs of permanent employees administering
projects funded by visitor fees.

Overall, amounts appropriated to the National Park Service (Park Service)
in the Operation of the National Park System account increased from 2001
to 2005. In inflation-adjusted terms, amounts allocated by the Park
Service to park units from this appropriation for daily operations
declined while project-related allocations increased. Project-related
allocations increased primarily in (1) Cyclic Maintenance and Repair and
Rehabilitation programs to reflect an emphasis on reducing the estimated
$5 billion maintenance backlog and (2) the inventory and monitoring
program to protect natural resources through the Natural Resource
Challenge initiative. Also, on an average annual basis, visitor fees
collected increased about 1 percent-a 2 percent decline when adjusted for
inflation.

All park units we visited received project-related allocations, but most
of the park units experienced declines in inflation-adjusted terms in
their allocations for daily operations. Each of the 12 park units reported
their daily operations allocations were not sufficient to address
increases in operating costs, such as salaries, and new Park Service
requirements. In response, officials reported that they either eliminated
or reduced some services or relied on other authorized sources to pay
operating expenses that have historically been paid with allocations for
daily operations. Also, implementing important Park Service
policies-without additional allocations-has placed additional demands on
the park units and reduced their flexibility. For example, the Park
Service has directed its park units to spend most of their visitor fees on
deferred maintenance projects. While the Park Service may use visitor fees
to pay salaries for permanent staff who administer projects funded with
these fees, it has a policy prohibiting such use. To alleviate the
pressure on daily operations allocations, we believe it would be
appropriate to use visitor fees to pay the salaries of employees working
on visitor fee funded projects. Interior believes that, while employment
levels at individual park units may have fluctuated for many reasons,
employment servicewide was stable, including both seasonal and permanent
employees.

GAO identified three initiatives-Business Plan, Core Operations Analysis,
and Park Scorecard-to address park units' fiscal performance and
operational condition. Of the park units with a business plan we visited,
officials stated that the plan, among other things, have helped them
better identify future budget needs. Due to its early development stage,
only a few park units have participated in the Core Operations Analysis;
for those we visited who have, officials said that they are better able to
determine where operational efficiencies might accrue. Park Service
headquarters used the Scorecard to validate and approve increases in
funding for daily operations for fiscal year 2005.
*** End of document. ***