    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-06-731R

    TITLE:     Fish and Wildlife Service: Federal Assistance Program
    Is Making Progress in Addressing Previously Identified Concerns

    DATE:   07/05/2006

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    GAO-06-731R

    July 5, 2006

    The Honorable Dave Camp

    Chairman Subcommittee on Select Revenue Measures

    Committee on Ways and Means

    House of Representatives

    Subject: Fish and Wildlife Service: Federal Assistance Program Is Making
    Progress in Addressing Previously Identified Concerns

    Dear Mr. Chairman:

    The U.S. Fish and Wildlife Service (Service), within the Department of the
    Interior, uses tax receipts from the sale of certain hunting, fishing, and
    boating equipment to fund the Wildlife and Sport Fish Restoration
    programs, which provide grants to state fish and wildlife management
    agencies to restore, conserve, manage, and enhance wildlife and sport fish
    resources. The Wildlife Restoration Program was established in 1938
    following the passage of the Federal Aid in Wildlife Restoration Act, now
    referred to as the Pittman-Robertson Wildlife Restoration Act. The Sport
    Fish Restoration Program was established in 1950 by the Dingell-Johnson
    Sport Fish Restoration Act. Since their inception, according to the
    Service, these programs have provided more than $9.5 billion in grants to
    states and U.S. territories through fiscal year 2005. In 1999 and 2000,
    GAO identified several instances of mismanagement in these grant programs.
    Following GAO's work, Congress and the Service acted to improve the
    programs. Enclosure I provides our April 2006 briefing to your
    Subcommittee containing relevant details about problems and corrective
    actions that the Service has taken since GAO's last review in 2000.
    Enclosure II shows funding history for these two programs.

    In 1999 and 2000, GAO testified on the Service's management and oversight
    of funds used to administer the Wildlife and the Sport Fish Restoration
    programs. These testimonies identified several instances of mismanagement
    of administrative funds. For example, in administering these programs, the
    Service did not have criteria for selecting some grant recipients, failed
    to provide adequate oversight of grantees, and did not maintain adequate
    grant files. In addition, GAO found that grant transactions could not be
    reconciled between regional and headquarter financial systems, resulting
    in millions of dollars in discrepancies.

    In response to our work and the work of others, Congress enacted the
    Wildlife and Sport Fish Restoration Programs Improvement Act (Improvement
    Act) in November

    2000. The Improvement Act amended the Pittman-Robertson Wildlife
    Restoration Act and the Dingell-Johnson Sport Fish Restoration Act by
    specifying, among other things, how administrative funds should be used
    and setting levels for how much the Service can spend on administration of
    the programs. Before the Improvement Act, the maximum amount of
    administrative funds that could be used for implementing the Wildlife and
    Sport Fish Restoration programs was calculated as a percentage of the
    total tax receipts for each program. On the basis of these calculations,
    in 2000, over $16 million was made available for administration of the
    Wildlife Restoration Program and about $15 million was made available for
    administration of the Sport Fish Restoration Program. Since the
    Improvement Act, funds for administrative costs were fixed in 2001 through
    2003 and, thereafter, have been determined by a formula that limits the
    annual funds available for administrative activities. In fiscal year 2005,
    the Service spent about $8.6 million per program on administration-about
    one-half of what was previously spent.

    On April 27, 2006, we briefed members of your Subcommittee on the extent
    to which the Service has taken corrective action to address the problems
    that GAO previously identified. In general, as a result of GAO's prior
    work and the Improvement Act in 2000, the Service has made changes that
    have had lasting impacts on the management of these programs. The Service
    has invested significant effort to make program and policy changes to
    address the concerns that we raised in our previous testimonies and to
    implement the Improvement Act. For example, in response to GAO's finding
    that the Service mismanaged grant programs, the Service terminated some
    programs and, for subsequent grant activity, has implemented new
    procedures for managing and auditing grants and maintaining grant files.
    To resolve problems involving reconciling grant transactions between
    regions and headquarters, the Service implemented improved financial
    systems and processes that include procedures for reconciling accounts
    across three national financial systems on a monthly basis. The regions no
    longer utilize separate tracking systems for their grants.

    While we found that the Service has implemented several new management
    policies and procedures aimed at addressing our previous concerns, a more
    definitive statement on the Service's progress would require additional
    review. Such reviews are routinely required by the Improvement Act, which
    directs the Department of the Interior's Office of Inspector General (OIG)
    to contract for biennial audits of the funds used to administer these
    programs. An audit of fiscal years 2001 and 2002 was completed and a
    report issued in 2005; the report did not identify any major weaknesses or
    concerns. Audits of subsequent years have not yet been done. Since we
    delivered our briefing to the Subcommittee, OIG officials stated that the
    OIG expects to solicit contract proposals for the audits of fiscal years
    2003 and 2004 and fiscal years 2005 and 2006 in the summer of 2006.

    The enclosed briefing document provides relevant details about problems
    and corrective actions that the Service has taken since GAO's last review
    in 2000 (see enc. I). We conducted our follow-up review in March and
    April, 2006, in accordance with generally accepted government auditing
    standards. However, we conducted only limited file reviews and
    field-testing to determine the implications of and compliance with the
    Service's new policies. Additionally, due to the timing and nature of our
    review, we did not conduct a full reliability assessment of the data we
    used as background information. Consequently, the background data we
    present are of undetermined reliability.

    We provided Interior with a draft of this report for review and comment.
    Interior generally agreed with our findings and conclusions and provided
    editorial and technical comments, which have been incorporated into this
    report as appropriate. Interior's letter is contained in enclosure III.

    _________________________________________________________________________
    As agreed with your office, unless you publicly announce the contents of
    this report earlier, we plan no further distribution until 7 days from the
    report date. At that time, we will make copies of this report available to
    interested parties upon request. This report will also be available on the
    GAO Web site at http://www.gao.gov . Should you or your staff have any
    questions, please contact me at (202) 512-3841 or Nazzaror@gao.gov.
    Contact points for our Offices of Congressional Relations and Public
    Affairs may be found on the last page of this report. Key contributors to
    this report were Wyatt R. Hundrup, Richard Johnson, Trish McClure, Alison
    O'Neill, and Becky Spithill.

    Sincerely yours,

    Robin M. Nazzaro

    Director, Natural Resources

    and Environment

    Enclosures - 3

                   Briefing for the House Committee on Ways and Means

                            Funding Distribution and History

    Figures 1 through 4 show the distribution of funding for fiscal year 2005
    and the 10-year distribution of funding for the Wildlife and Sport Fish
    Restoration programs. Tables 1 and 2 show the 6-year funding history by
    state and territory for each program.

    Figure 1: Wildlife Restoration Program Tax Receipts, Deductions, and
    Apportionment to States for Fiscal Year 2005

    Note: As required by law, deductions from excise tax receipts are for
    specific programs and funding levels. Data are of undetermined
    reliability.

    aTotal excise tax receipts available for fiscal year 2005 were collected
    in fiscal year 2004.

    Figure 2: Wildlife Restoration Program 10-Year Distribution of Funding

    Note: As required by law, deductions from excise tax receipts are for
    specific programs and funding levels. Data are of undetermined
    reliability.

    Figure 3: Sport Fish Restoration Program Tax Receipts, Deductions, and
    Apportionment to States for Fiscal Year 2005

    Note: As required by law, deductions from excise tax receipts are for
    specific programs and funding levels. Data are of undetermined
    reliability.

    aTotal excise tax receipts available for fiscal year 2005 were collected
    in fiscal year 2004 and include interest income.

    Figure 4: Sport Fish Restoration Program 10-Year Distribution of Funding

    Note: As required by law, deductions from excise tax receipts are for
    specific programs and funding levels. Data are of undetermined
    reliability. In commenting on a draft of this report, FWS provided new
    expenditure data for fiscal years 1996 through 2000. We did not
    incorporate these new data because the source of the new information was
    unclear. The new data indicate that an additional $174 million was
    provided as other deductions during these 5 fiscal years.

    Table 1: Wildlife Restoration Grant Apportionments, by State and Territory

                                            Apportionment, by fiscal year
    State/Territory         2000         2001         2002         2003         2004         2005
    Alabama           $3,439,539   $3,601,969   $3,338,621   $3,775,702   $3,663,087   $4,230,076
    Alaska             8,490,358    8,751,120    7,983,824    9,107,484    8,648,602    9,923,370
    Arizona            4,587,789    4,932,992    4,537,407    5,197,532    4,869,205    5,683,004
    Arkansas           3,378,040    3,913,825    3,508,655    4,010,228    3,918,697    4,445,118
    California         6,610,254    6,861,214    6,381,792    7,238,447    6,910,043    8,006,336
    Colorado           5,165,816    5,207,659    4,825,397    5,531,602    4,877,855    5,984,357
    Connecticut        1,377,963    1,468,648    1,385,216    1,546,663    1,486,607    1,742,114
    Delaware           1,111,848    1,203,184    1,124,412    1,262,950    1,210,263    1,408,838
    Florida            3,232,040    3,646,351    3,444,451    3,746,895    3,668,356    4,237,774
    Georgia            4,120,378    4,373,894    4,054,000    4,581,108    4,464,492    5,165,236
    Hawaii             1,111,848    1,203,184    1,124,412    1,261,676    1,207,123    1,405,099
    Idaho              3,646,285    3,846,148    3,541,687    4,040,511    3,843,730    4,472,883
    Illinois           3,923,826    4,176,153    3,891,429    4,400,997    4,139,926    4,857,279
    Indiana            3,381,836    3,605,023    3,359,147    3,757,147    3,552,883    3,890,090
    Iowa               3,359,777    3,442,710    3,156,428    3,581,704    3,330,454    4,037,099
    Kansas             3,476,842    3,593,167    3,313,795    3,788,859    3,492,399    4,130,946
    Kentucky           3,117,435    3,273,091    3,381,505    3,808,948    3,734,407    4,312,192
    Louisiana          3,269,918    3,568,107    3,364,827    3,707,453    3,516,769    4,108,925
    Maine              2,147,882    2,350,572    2,184,511    2,432,581    2,219,066    2,675,874
    Maryland           1,812,194    1,972,019    1,871,410    2,066,965    1,987,636    2,313,018
    Massachusetts      1,695,875    1,932,233    1,845,915    2,044,342    1,974,680    2,330,650
    Michigan           7,349,739    7,449,040    6,765,477    7,681,412    7,181,520    8,459,634
    Minnesota          5,633,453    6,097,120    5,742,969    6,431,784    6,203,606    7,168,249
    Mississippi        2,953,368    3,080,128    2,881,368    3,249,737    3,106,745    3,559,917
    Missouri           5,277,938    5,492,864    5,096,878    5,771,360    5,819,002    6,739,125
    Montana            5,549,783    5,655,957    5,168,420    5,958,327    5,372,411    6,266,710
    Nebraska           3,246,130    3,345,022    3,082,306    3,518,769    3,284,266    3,829,113
    Nevada             3,466,997    3,544,874    3,268,082    3,743,824    3,559,648    4,097,241
    New Hampshire      1,111,848    1,203,184    1,132,469    1,264,195    1,214,574    1,442,482
    New Jersey         1,695,875    1,932,233    1,845,915    2,044,342    1,974,680    2,330,650
    New Mexico         4,071,712    4,050,224    3,742,975    4,311,943    4,144,775    4,761,855
    New York           5,724,950    6,053,350    5,589,079    6,308,475    6,055,166    6,783,004
    North Carolina     4,153,277    4,624,376    4,370,014    4,829,534    4,920,679    5,642,181
    North Dakota       2,675,781    2,835,946    2,637,355    2,991,063    2,990,057    3,444,052
    Ohio               4,735,241    4,884,420    4,224,146    4,762,854    4,333,368    5,264,165
    Oklahoma           3,822,713    4,017,969    3,747,979    4,260,451    4,314,718    4,909,020
    Oregon             4,652,858    4,821,928    4,420,486    5,018,969    4,686,460    5,481,960
    Pennsylvania       7,602,373    7,872,824    7,047,696    8,020,697    7,837,535    8,980,993
    Rhode Island       1,111,848    1,203,184    1,121,404    1,261,676    1,207,123    1,405,099
    South Carolina     2,548,294    2,941,280    2,718,409    3,065,525    3,174,258    2,283,303
    South Dakota       3,242,050    3,450,120    3,272,354    3,737,508    3,440,127    4,015,800
    Tennessee          5,009,785    5,365,733    5,086,100    5,737,747    5,988,969    7,081,929
    Texas              9,074,385    9,480,169    8,678,260    9,877,416    9,384,766   10,811,538
    Utah               3,468,682    3,608,553    3,223,740    3,641,119    3,383,152    3,919,659
    Vermont            1,111,848    1,203,184    1,134,399    1,264,743    1,207,123    1,405,099
    Virginia           3,597,711    3,823,905    3,556,051    3,999,477    3,845,157    4,458,365
    Washington         3,712,928    4,377,113    3,730,039    4,199,436    3,930,101    4,588,931
    West Virginia      2,360,616    2,466,988    2,275,728    2,569,388    2,537,373    2,831,168
    Wisconsin          6,121,170    6,500,414    6,049,578    6,827,601    6,041,016    7,356,101
    Wyoming            3,519,514    3,618,365    3,355,160    3,860,291    3,577,733    4,193,838
    Puerto Rico          819,834      899,413      819,525      935,564      887,305    1,019,450
    American Samoa       321,947      340,307      313,426      355,336      338,410      391,236
    Guam                 321,947      340,307      313,426      355,336      339,456      391,236
    N. Mariana
    Islands              321,947      340,307      313,426      355,336      338,410      391,236
    U.S. Virgin
    Islands              321,947      340,307      313,426      355,336      338,410      391,236
    Total           $193,168,232 $204,184,371 $188,656,906 $213,456,365 $203,674,379 $235,455,853

    Source: Fish and Wildlife Service.

    Note: Data are of undetermined reliability.

    Table 2: Sport Fish Restoration Grant Apportionments, by State and
    Territory

                                            Apportionment,by fiscal year
    State/Territory         2000         2001         2002         2003         2004         2005
    Alabama           $3,607,904   $3,578,395   $4,344,357   $3,935,974   $3,977,923   $4,422,820
    Alaska             2,046,916   12,042,643   14,639,339   13,262,060   13,026,348   14,734,564
    Arizona            5,089,496    5,104,112    6,168,683    5,588,641    5,080,854    5,922,343
    Arkansas           3,968,596    4,608,841    5,492,558    4,976,294    4,888,967    5,642,674
    California        12,046,916   12,042,643   14,639,339   13,262,060   13,026,348   14,734,564
    Colorado           6,198,128    6,076,753    7,470,694    6,768,365    6,130,350    7,008,028
    Connecticut        2,409,383    2,408,529    2,927,868    2,652,413    2,605,270    2,946,913
    Delaware           2,409,383    2,408,529    2,927,868    2,652,413    2,605,270    2,946,913
    District of
    Columbia             803,128      802,843      975,956      884,137      868,423      982,304
    Florida            6,221,202    6,786,688    8,192,210    7,422,277    6,709,079    7,914,307
    Georgia            4,331,459    4,430,864    5,490,619    4,974,514    5,006,056    5,633,286
    Hawaii             2,409,383    2,408,529    2,927,868    2,652,413    2,605,270    2,946,913
    Idaho              4,114,980    4,184,546    5,054,689    4,579,437    4,346,375    5,001,608
    Illinois           4,963,612    4,846,195    5,890,316    5,336,662    5,348,978    5,892,633
    Indiana            3,820,091    3,640,742    4,509,106    4,085,311    3,956,407    4,043,934
    Iowa               3,318,153    3,235,203    3,976,820    3,602,952    3,547,516    4,232,551
    Kansas             3,666,601    3,583,933    4,343,909    3,919,441    3,787,002    4,262,230
    Kentucky           3,486,222    3,544,162    4,620,993    4,186,668    3,998,491    4,629,054
    Louisiana          4,103,273    4,161,257    5,216,669    4,726,339    4,095,828    5,200,984
    Maine              2,409,383    2,408,529    2,927,868    2,652,413    2,605,270    2,946,913
    Maryland           2,409,383    2,408,529    2,927,868    2,652,413    2,605,270    2,946,913
    Massachusetts      2,409,383    2,408,529    2,927,868    2,652,413    2,605,270    2,946,913
    Michigan           8,544,705    8,295,510    9,875,162    8,946,956    8,756,422    9,945,909
    Minnesota          8,928,236    9,006,160   11,109,195   10,065,088    9,839,478   11,165,735
    Mississippi        3,100,738    3,107,013    3,802,970    3,445,468    3,255,720    3,650,051
    Missouri           5,962,844    5,790,174    7,026,778    6,366,300    6,119,893    7,134,020
    Montana            5,579,059    5,582,909    6,841,449    6,198,060    6,107,345    7,019,722
    Nebraska           3,014,134    3,000,164    3,690,052    3,343,038    3,213,424    3,630,946
    Nevada             3,698,911    3,727,333    4,517,158    4,092,296    3,895,507    4,414,267
    New Hampshire      2,409,383    2,408,529    2,927,868    2,652,413    2,605,270    2,946,913
    New Jersey         2,409,383    2,408,529    2,927,868    2,652,413    2,605,270    2,946,913
    New Mexico         4,372,502    4,253,966    5,256,713    4,762,323    4,654,679    5,132,285
    New York           6,064,107    5,984,692    7,265,735    6,582,873    6,630,580    7,396,138
    North Carolina     3,813,798    4,213,868    5,156,759    4,672,046    5,137,132    5,494,411
    North Dakota       2,517,005    2,570,530    3,184,494    2,885,004    2,934,801    3,278,612
    Ohio               6,254,392    6,236,489    6,510,566    5,898,692    6,014,871    6,878,971
    Oklahoma           4,694,058    4,642,549    5,723,808    5,185,748    5,074,677    5,623,487
    Oregon             5,496,382    5,427,038    6,693,758    6,064,454    6,374,666    7,087,755
    Pennsylvania       6,046,806    5,948,640    7,269,800    6,586,588    6,628,025    7,489,335
    Rhode Island       2,409,383    2,408,529    2,927,868    2,652,413    2,605,270    2,946,913
    South Carolina     3,097,296    3,023,568    3,584,458    3,247,558    3,513,295    3,702,853
    South Dakota       3,087,681    3,129,186    3,652,826    3,309,311    3,335,006    3,699,812
    Tennessee          5,408,189    5,487,737    6,613,433    5,991,907    5,969,718    7,029,132
    Texas             12,046,916   12,042,643   14,639,339   13,262,060   13,026,348   14,734,564
    Utah               4,352,260    4,252,849    5,171,677    4,685,429    4,463,918    4,899,623
    Vermont            2,409,383    2,408,529    2,927,868    2,652,413    2,605,270    2,946,913
    Virginia           3,928,056    3,853,428    4,764,894    4,317,041    4,325,856    4,731,149
    Washington         4,908,353    4,883,821    6,054,262    5,485,151    5,808,249    6,124,056
    West Virginia      2,409,383    2,408,529    2,927,868    2,652,413    2,605,270    2,946,913
    Wisconsin          8,239,191    7,679,996    9,500,662    8,607,773    8,909,312   10,191,022
    Wyoming            3,870,908    3,929,060    4,816,330    4,363,414    4,006,180    4,687,372
    Puerto Rico        2,409,383    2,408,529    2,927,868    2,652,413    2,605,269    2,946,912
    American Samoa       803,128      802,843      975,956      884,137      868,423      982,304
    Guam                 803,128      802,843      975,956      884,137      868,423      982,304
    N. Mariana
    Islands              803,128      802,843      975,956      884,137      868,423      982,304
    U.S. Virgin
    Islands              803,128      802,843      975,956      884,137      868,423      982,304
    Total           $240,938,312 $240,852,863 $292,786,775 $265,241,214 $260,526,978 $294,691,282

    Source: Fish and Wildlife Service.

    Note: Data are of undetermined reliability.

                      Comments from the Department of the Interior

    (360678)
    *** End of document. ***