-------------------------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 [email protected].
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. ***