Waters and Wetlands: Corps of Engineers Needs to Ensure That	 
Permit Decisions Made Using Funds from Nonfederal Public Entities
Are Transparent and Impartial (16-MAY-07, GAO-07-478).		 
                                                                 
When a nonfederal public entity such as a city or county wants to
build a public works project that could degrade or damage	 
federally regulated waters and wetlands, it must obtain a permit 
from the U.S. Army Corps of Engineers (Corps) before proceeding. 
To help expedite the permit process for these entities, the	 
Congress enacted section 214 of the Water Resources and 	 
Development Act of 2000, providing the Corps with temporary	 
authority to receive funds from such entities and use the funds  
to process permits. To ensure the impartiality and transparency  
of section 214 permit decisions, the Corps requires its districts
to adhere to all existing permit review processes, as well as	 
some additional requirements. GAO was asked to identify (1) how  
many districts have used the section 214 authority, (2) the	 
amount of funds they have received, (3) how permit processing	 
times have changed, (4) the extent to which districts have	 
adhered to the existing review processes and the additional	 
requirements.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-478 					        
    ACCNO:   A69694						        
  TITLE:     Waters and Wetlands: Corps of Engineers Needs to Ensure  
That Permit Decisions Made Using Funds from Nonfederal Public	 
Entities Are Transparent and Impartial				 
     DATE:   05/16/2007 
  SUBJECT:   Federal regulations				 
	     Funds management					 
	     Harbors						 
	     Policy evaluation					 
	     Program evaluation 				 
	     Public lands					 
	     Public works					 
	     Wetlands						 
	     Transparency					 

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GAO-07-478

   

     * [1]Results in Brief
     * [2]Background
     * [3]Four Corps Districts Have Evaluated Projects Using Section 2

          * [4]Four Districts Have Evaluated Permit Applications Using Sect
          * [5]The Districts' Use of Section 214 Authority Is Likely to Exp

     * [6]Corps Districts Received More Than $2 Million in Section 214
     * [7]Changes in Permit Processing Times Have Varied Since the Dis

          * [8]Processing Times Have Both Increased and Decreased Since the
          * [9]Officials Cited Other Benefits of Using the Section 214 Auth
          * [10]District Officials Also Identified Several Challenges to Imp

     * [11]When Using Section 214 Funds, the Districts Generally Follow

          * [12]Two of the Three Districts That Processed Standard Permit Ap
          * [13]Lack of Documentation for Projects Approved Using Nationwide

     * [14]The Districts Varied in Their Compliance with the Corps' Add
     * [15]Conclusions
     * [16]Recommendations for Executive Action
     * [17]Agency Comments and Our Evaluation
     * [18]Appendix I: Objectives, Scope, and Methodology
     * [19]Appendix II: Results of GAO's Review of Corps Permit Files f
     * [20]Appendix III: Comments from the Department of Defense
     * [21]Appendix IV: GAO Contact and Staff Acknowledgments

          * [22]GAO Contact
          * [23]Staff Acknowledgments

               * [24]Order by Mail or Phone

Report to the Chairman, Committee on Transportation and Infrastructure,
House of Representatives

United States Government Accountability Office

GAO

May 2007

WATERS AND WETLANDS

Corps of Engineers Needs to Ensure That Permit Decisions Made Using Funds
from Nonfederal Public Entities Are Transparent and Impartial

GAO-07-478

Contents

Letter 1

Results in Brief 3
Background 6
Four Corps Districts Have Evaluated Projects Using Section 214 Funds, and
Use of This Authority is Likely to Expand in the Future 11
Corps Districts Received More Than $2 Million in Section 214 Funds That
Were Used to Primarily Cover Personnel-Related Costs 16
Changes in Permit Processing Times Have Varied Since the Districts Started
Using Section 214 Funds, but Officials Agree That the Authority Provides
Many Benefits 19
When Using Section 214 Funds, the Districts Generally Followed the Permit
Review Process for Standard Permits, but It Is Unclear Whether They Did So
for Nationwide Permits 24
The Districts Varied in Their Compliance with the Corps' Additional
Requirements for Ensuring Impartiality of Decisions Made Using Section 214
Funds 26
Conclusions 28
Recommendations for Executive Action 29
Agency Comments and Our Evaluation 29
Appendix I Objectives, Scope, and Methodology 31
Appendix II Results of GAO's Review of Corps Permit Files for Districts
That Used Section 214 Authority Between 2001 and 2006 36
Appendix III Comments from the Department of Defense 38
Appendix IV GAO Contact and Staff Acknowledgments 40

Tables

Table 1: District Agreements with Nonfederal Public Entities to Receive
Section 214 Funds and the Date of the Agreements 11
Table 2: Permit Applications Approved Using Section 214 Funds, by Type of
Permit and by District, as of August 2006 12
Table 3: Types of Projects Approved by the Four Corps Districts That
Processed Permit Applications with Section 214 Funds, as of August 2006 13
Table 4: Examples of Projects Evaluated and Approved by Four Corps
Districts Using Section 214 Funds 14
Table 5: Total Section 214 Funds Provided by the 13 Nonfederal Public
Entities to Four Corps Districts from December 2001 through September 2006
17
Table 6: Number of Additional Project Managers Hired Using Section 214
Funds and the Full-time Equivalent Staff Used by the Corps Districts to
Process Permits Using Section 214 Funds, Fiscal Year 2001 through Fiscal
Year 2006 18
Table 7: Extent to Which Four Corps Districts Adhered to the Additional
Requirements for Processing Section 214 Permits 27
Table 8: Permit Files Reviewed by GAO at the Four Corps Districts That
Used Section 214 Funds to Evaluate Permit Applications Between December
2001 and August 2006 32
Table 9: Number of Permit Files GAO Reviewed for Evidence of Adherence to
the Corps' Existing Permit Review Processes and the Two Additional
Requirements for Permit Applications Evaluated Using Section 214 Funds 35
Table 10: Information GAO Extracted from Section 214 Permit Files 35
Table 11: Results of GAO's Review of the Districts' Adherence to Six Key
Steps in the Permit Review Process When Using Section 214 Funds to
Evaluate Standard Permit Applications 36
Table 12: Results of GAO's Review of the Districts' Adherence to Two Key
Steps in the Permit Review Process when Using Section 214 Funds to
Evaluate Nationwide Permit Applications 37

Figures

Figure 1: Section 214 Funds Received by the Four Corps Districts from
December 2001 through September 2006 16
Figure 2: Median Processing Times for Nationwide Permits Before and After
Three Districts Began Using the Section 214 Authority 20

Abbreviations

CEFMS Corps of Engineers Financial Management System
DCI data collection instrument
FWS Fish and Wildlife Service
NMFS National Marine Fisheries Service

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separately.

United States Government Accountability Office
Washington, DC 20548

May 16, 2007

The Honorable James L. Oberstar
Chairman
Committee on Transportation and Infrastructure
House of Representatives

Dear Mr. Chairman:

When cities, counties, or other nonfederal public entities propose public
works projects, such as road construction and sewer line construction or
maintenance, that could degrade or damage federally regulated waters and
wetlands, they must obtain a permit from the U.S. Army Corps of Engineers
(Corps) before proceeding. The Corps is responsible for regulating
activities that may impact wetlands, streams, and other waters throughout
much of the United States and decides whether to allow such activities to
occur. To obtain the Corps' approval, the nonfederal public entity, like
any other property owner, must submit a permit application that contains a
description of the proposed project, including its purpose and location,
and other information the Corps needs to evaluate how the project will
impact wetlands and other federally regulated waters. Once the Corps
receives all of the required information from the applicant, the permit
review process begins. This process varies depending on the complexity of
the proposed project, the extent of the resources likely to be impacted,
and the type of permit required. When cities, counties, or other
nonfederal public entities propose public works projects, such as road
construction and sewer line construction or maintenance, that could
degrade or damage federally regulated waters and wetlands, they must
obtain a permit from the U.S. Army Corps of Engineers (Corps) before
proceeding. The Corps is responsible for regulating activities that may
impact wetlands, streams, and other waters throughout much of the United
States and decides whether to allow such activities to occur. To obtain
the Corps' approval, the nonfederal public entity, like any other property
owner, must submit a permit application that contains a description of the
proposed project, including its purpose and location, and other
information the Corps needs to evaluate how the project will impact
wetlands and other federally regulated waters. Once the Corps receives all
of the required information from the applicant, the permit review process
begins. This process varies depending on the complexity of the proposed
project, the extent of the resources likely to be impacted, and the type
of permit required.

Some policymakers and others have expressed concerns that the Corps'
permit process takes too long and has significantly delayed some public
works projects. In 2000, the Congress included a provision in the Water
Resources and Development Act to expedite permit processing for nonfederal
public entities. Specifically, section 214 of the act authorizes the
Secretary of the Army, after providing public notice, to accept and expend
funds from nonfederal public entities to expedite the evaluation of permit
applications that fall under the jurisdiction of the Department of the
Army. The act also requires the Secretary to ensure that the funds
accepted will not impact impartial decision making with respect to permit
approvals. Originally set to expire at the end of fiscal year 2003, this
temporary authority has been extended four times and is currently set to
expire in December 2008. The Secretary of the Army has delegated this
authority to the Corps and, in turn, the Corps has delegated day-to-day
Some policymakers and others have expressed concerns that the Corps'
permit process takes too long and has significantly delayed some public
works projects. In 2000, the Congress included a provision in the Water
Resources and Development Act to expedite permit processing for nonfederal
public entities. Specifically, section 214 of the act authorizes the
Secretary of the Army, after providing public notice, to accept and expend
funds from nonfederal public entities to expedite the evaluation of permit
applications that fall under the jurisdiction of the Department of the
Army. The act also requires the Secretary to ensure that the funds
accepted will not impact impartial decision making with respect to permit
approvals. Originally set to expire at the end of fiscal year 2003, this
temporary authority has been extended four times and is currently set to
expire in December 2008. The Secretary of the Army has delegated this
authority to the Corps and, in turn, the Corps has delegated day-to-day
responsibility for implementing the section 214 authority to its 38
districts that have responsibility for processing permit applications.

To accept funds under the section 214 authority, a Corps district
typically enters into a legal agreement with a nonfederal public entity
that specifies the duration of the arrangement, the amount of funds to be
received, and how the funds are to be used. Although the agreements are
generally between the Corps and one nonfederal public entity, such as a
city or county, various departments within an entity may submit permit
applications for expedited review under the agreement.

To ensure the transparency and impartiality of permit decisions when using
section 214 funds, Corps districts must not only follow the same basic
permit processing procedures applicable to all applicants but also meet
two additional requirements. The basic permit processing procedures that
all districts must adhere to depends upon the type of permit that is being
considered for a project. For example, for those projects that are likely
to have only minimal impacts on water and wetland resources, the Corps
generally grants approvals under its "nationwide" category of permits.
Applications for these types of projects generally only undergo a limited
review process, which includes two key steps. In contrast, some projects
could have substantial impacts on water and wetland resources, and for
these projects the Corps generally issues what is known as a "standard"
permit. The review process for standard permits is more extensive and
includes six key steps. In addition to these basic review processes,
permit decisions that are made using section 214 funds must also (1)
undergo a "higher level" review--in other words, a Corps official senior
to the decision maker must review the decision and (2) be posted on the
district's Web site.

In this context, you asked us to review the (1) extent to which Corps
districts have entered into agreements with nonfederal public entities to
receive section 214 funds since 2001 and how many permit applications the
Corps has evaluated using these funds, (2) amount of section 214 funds the
Corps has received and how it has used these funds, (3) extent to which
permit processing times have changed since the Corps began using section
214 funds, (4) extent to which the Corps districts have followed the basic
permit review processes when evaluating applications using section 214
funds, and (5) extent to which the districts have met the additional
requirements for ensuring that permit decisions made using the section 214
funds are impartial and transparent.

We contacted each of the 38 Corps districts that have responsibilities for
issuing permits to identify those districts that had entered into
agreements with nonfederal public entities and used section 214 funds to
process permit applications. We also surveyed districts that had not used
the section 214 authority to determine their reasons for not doing so, and
their plans, if any, to use the authority in the future. We also visited
each of the districts that had entered into section 214 agreements and
processed permit applications with these funds to obtain and review
financial and processing time data. We found the financial data related to
the use of the section 214 authority to be sufficiently reliable for our
purposes, and while the processing time data were generally reliable, it
was not reliable for one district that had recently participated in a
pilot program for a new permit database. We also reviewed permit files to
determine the number and types of projects the districts had evaluated
with section 214 funds between 2001 and the time of our review. To
determine the extent to which Corps districts followed the basic review
process when approving projects using section 214 funds, we first
identified key steps for processing permits, in general. These steps were
identified by the Corps as being important "safeguards" for ensuring
objectivity in its permit decisions and must be completed before a permit
is issued. In each district, we reviewed permit files to determine whether
they contained evidence that the Corps followed each of these steps. We
also reviewed the files for evidence that the Corps met the two additional
requirements it had established to ensure that decisions for permits
processed with section 214 funds are made impartially and were
transparent. A more detailed description of our objectives, scope, and
methodology is presented in appendix I. We performed our work between
April 2006 and April 2007 in accordance with generally accepted auditing
standards.

Results in Brief

Four Corps districts had entered into agreements with 11 nonfederal public
entities to receive section 214 funds and had evaluated permit
applications using these funds, as of August 2006 when we conducted our
file reviews. These districts--Jacksonville, Fla.; Los Angeles and
Sacramento, Calif.; and Seattle, Wash.--had received, evaluated, and
approved 187 permit applications using section 214 funds. The types of
projects for which applicants sought permits using section 214 funds
varied. For example, nearly half of the projects in Seattle were for
ecological restoration and pier and port repair, while the projects in Los
Angeles were mainly for maintaining sewer lines. Almost all of the section
214 permit applicants were city or county departments, port authorities,
or regional water authorities. However, two applicants in the Sacramento
District were private companies that were allowed to submit permit
applications for expedited review under nonfederal public entities'
section 214 agreements with the Corps. The legislation does not expressly
prohibit private companies from submitting permit applications under a
nonfederal public entity's section 214 agreement with the Corps. We also
determined that the use of the section 214 authority may become more
prevalent in the future. Of the 34 Corps districts with regulatory
responsibilities that had not yet used the section 214 authority,
officials from 7 told us they had begun negotiations to enter into such
agreements or had entered into such agreements, but had not yet processed
any permit applications under this authority, at the time of our review.
Moreover, officials from an additional 19 districts told us that they
would consider using the authority if it were made permanent.

The Corps received more than $2 million in section 214 funds between
December 2001 and September 2006 and used these funds primarily to hire
additional project managers to process permits. Specifically, about 61
percent of the funds were used to cover personnel costs associated with
the project managers who were designated to process section 214 permit
applications; about 37 percent of the funds were used to cover overhead
costs such as the cost of office space, utilities, and administrative
support directly attributable to implementing the section 214 authority;
and about 1 percent of the funds were used to cover other costs such as
equipment, transportation, and the cost of site visits, as well as legal
advice related to the processing of section 214 permits.

Since the Corps began using section 214 funds, permit processing times
have increased in some districts and decreased in others for both section
214 applicants and non-section 214 applicants. A goal of using the section
214 authority was to expedite permit processing for section 214
applicants; however, we found that the processing times for these
applicants have not consistently decreased in all four districts. For
example, although the median processing times for some permits processed
with section 214 funds decreased by 37 percent in the Sacramento District
they increased by 21 percent in the Seattle District. Another goal of
using the section 214 authority was to ensure that the use of the
authority did not result in processing delays for non-section 214
applicants. However, we found that processing times for these applicants
have not consistently remained the same since section 214 funds have been
available. For example, while the median processing time for permits
processed without section 214 funds remained constant in the Los Angeles
District, it increased by 29 percent in the Sacramento District. However,
it is difficult to attribute the changes in processing time directly to
the section 214 authority because many other factors may have influenced
processing times and may have masked the effects of the authority. For
example, Seattle officials told us that section 214 applications are
considerably more complex than applications submitted by other permit
applicants, and the extra time needed to process these applications has
contributed to the overall processing time increases. Generally, Corps
officials and nonfederal public entities in each of the four districts
told us that they believe the authority has expedited permit processing
and has had other benefits as well. For example, they said that because
permit applicants communicate earlier and more frequently with the Corps
during the permit review process, applicants are able to avoid submitting
project designs that might otherwise have required costly revisions in
order to obtain Corps approval.

One Corps district did not follow all the required steps of the basic
project review process for standard permits, and it is unclear whether two
districts followed the review process for nationwide permits because of
lack of documentation in the permit files. Specifically, we determined
that three districts used section 214 funds to review projects that were
seeking a standard permit. Two of the three districts--Jacksonville and
Seattle--followed the established permit review process for standard
permits. One district--Sacramento--followed most of the steps in the
established standard review process but did not complete one key step,
which requires officials to balance the project's benefits against the
project's detriments and ensure that the project is not contrary to the
public interest. In addition, we found that all four districts used
section 214 funds to approve projects with nationwide permits. Two
districts--Jacksonville and Seattle--generally followed the established
permit review process for approving projects with nationwide permits, but
we could not make a similar determination for the Los Angeles and
Sacramento districts because their permit files contained limited
documentation supporting their permit decisions. Corps headquarters has
recently recognized that maintaining consistent documentation of the
districts' permit decisions would help ensure that the decisions are
transparent and legally defensible and has begun to develop Corps-wide
standards to address this issue. We are recommending that the Corps
clearly identify the steps district officials must complete when approving
projects under a standard permit and clarify the information that needs to
be documented to justify and support permit approval decisions for
nationwide permits in the standards that are currently under development.
In commenting on a draft of this report, the agency generally concurred
with our recommendation.

The four districts varied in the extent to which they met the two
additional requirements for ensuring that permit decisions made using
section 214 funds are impartial and transparent. With regard to the Corps
requirement that permit decisions made using section 214 funds are to
receive a higher level review, we found that the Sacramento and Seattle
districts more frequently met this requirement for standard and nationwide
permit decisions, 87 and 65 percent, respectively, than did the
Jacksonville and Los Angeles districts, who met the requirement only 8 and
9 percent, respectively. With regard to the second requirement to post
final decisions to the district's Web site, both the Sacramento and
Seattle districts generally posted the permit decisions made using section
214 funds to their district's Web site, but the Jacksonville and Los
Angeles districts did not. According to district officials, variations in
their compliance with the additional section 214-related requirements were
caused by the lack of specificity in the Corps guidance, causing some
districts to believe that the requirements did not apply to projects that
were approved with nationwide permits. In other cases, some project
managers told us that they were simply unaware of one or both of the
requirements. To monitor the districts' implementation of the section 214
authority, the Corps' guidance requires that annual reports be submitted
to headquarters on their implementation processes. However, no reports
have been submitted since the districts began using the section 214
authority in 2001. We believe if these reports had been filed Corps
headquarters may have become aware that some districts were not meeting
the additional section 214 requirements and could have taken corrective
actions needed to resolve these omissions. We are recommending that the
Corps clarify which additional requirements districts must adhere to when
evaluating projects with the section 214 authority, provide training to
ensure that district officials are aware of the additional requirements,
and develop an effective oversight approach to ensure that the districts
are following required procedures when evaluating projects under the
authority. In commenting on draft of this report, the agency generally
concurred with our recommendation.

Background

Section 404 of the Clean Water Act is the principal federal program that
provides regulatory protections for wetlands, which include bogs, swamps,
and marshes. It generally prohibits the discharge of dredged or fill
material into waters of the United States, which include certain wetlands,
without a permit from the Corps. In addition, under the Rivers and Harbors
Act of 1899, the construction, excavation, or deposition of materials in,
over, or under any navigable water of the United States, or any work which
would affect the course, location, condition, or capacity of those waters
is prohibited without a permit from the Corps. The Corps receives
thousands of permit applications each year from individuals, businesses,
and public agencies seeking to build houses, golf courses, and
infrastructure projects, or to perform other activities that could destroy
or degrade wetlands, streams, and rivers. The Corps' decisions to allow
particular activities to occur--and if so, under what conditions--are to
reflect the national concern for both the use and protection of these
important water resources. The Corps must balance the impacts that
proposed projects may have on many factors, from wetlands and wildlife to
recreation and the economy, and authorize projects only if it finds the
projects are in the public interest.

The Corps' regulatory program is highly decentralized. Most of the
authority to issue permits has been delegated from the Secretary of the
Army to the Chief of Engineers who, in turn, has delegated the authority
to 38 Corps districts. Regulatory program management and administration is
focused at the district office level, with policy oversight at higher
levels--including the Corps' 8 division offices and headquarters.

To obtain a permit, project proponents, who may be the property owner or
the owner's authorized agent, such as a consultant, must submit an
application to the Corps. The application details the proposed project,
its purpose, location, and likely impacts to the aquatic environment. The
Corps reviews the application to ensure it contains the minimum required
information. The amount and type of information the Corps requests from
the applicant may vary by the type of applicant and project, as well as
the extent and functional values of the water resources that may be
impacted. If the information submitted does not sufficiently identify the
location or nature of the project, the Corps will request additional
information.

Once the permit application is complete, the permit review process begins.
This process is governed by federal regulations and guidance documents
from Corps headquarters. The regulations set the overall review framework
by describing the factors the districts must consider when deciding
whether to issue a permit and the general evaluation procedures.^1 The
guidance documents, including the Corps' "Standard Operating Procedures"
and "Regulatory Guidance Letters," describe in more detail the steps the
districts must follow to implement the regulations, including
documentation that should be maintained in the administrative record to
support the permit decisions. The regulations allow the districts to issue
different types of permits--including nationwide permits, letters of
permission, and standard permits--depending on the scope and likely
impacts of the proposed projects. The specific steps the districts must
follow to review a permit application depend on the type of permit the
Corps uses to approve the proposed project.

^133 C.F.R. Parts 320-331.

The Corps approves most projects using nationwide permits. These permits
authorize classes of activities throughout the nation such as minor
dredging, road crossings, and bank stabilization that the Corps has
determined are likely to have minimal impacts to water and wetland
resources. The Corps has developed nationwide permits for 49 different
classes of activities. Each permit contains specific terms and conditions
that a proposed project must meet to ensure its impacts will be minimal.
The purpose of nationwide permits is to allow certain activities to be
performed in an expeditious manner with limited, if any, delay or
paperwork. Most prospective permittees may proceed with their activity
without ever contacting the Corps; they simply review the terms of the
different nationwide permits and self-certify that their activity falls
within the restrictions of one or more of the permits. However, for some
nationwide permits, a prospective permittee must notify the Corps if the
impacts of their proposed activity exceed a certain threshold, for example
filling in more than 1/10 acre of wetlands or other federally regulated
waters. The Corps then reviews the project outlined in the permit
application to determine whether it meets the terms and conditions of one
or more of the classes of activities authorized by nationwide permits. If
it does, the Corps notifies the applicant that the project is approved
under certain nationwide permit(s). The Corps can combine two or more
different nationwide permits to approve a single project. The Corps can
also approve projects using regional general permits--which are similar to
nationwide permits, but cover smaller geographic areas, such as a single
state. In fiscal year 2006, the Corps issued about 67,000 nationwide and
regional permit authorizations.

For projects likely to have more substantial impacts on waters and
wetlands, the Corps can issue standard permits. Given the potentially
larger impacts of these projects, federal regulations and related guidance
require a more extensive review for these permits. Specifically, the Corps
must evaluate the proposed activity's impact on a wide range of factors,
from wetlands and fish habitat to public safety and energy needs. If the
proposed project will adversely impact one or more of these factors, the
Corps can place conditions on the issued permit, such as limiting work
during particular times of the year to reduce impacts on wildlife or
requiring the applicant to undertake mitigation activities to compensate
for wetlands they damage or degrade. The Corps may issue a permit only if
it concludes, after carefully weighing the project's costs and benefits,
that the project is not contrary to the public interest. As part of this
public interest review, the Corps must notify the public of the proposed
project, request comments, and incorporate any comments they receive into
their review of the overall public value of the project. In addition, the
Corps must determine that the proposed project will (1) not adversely
impact endangered or threatened species, (2) not discharge pollutants into
federally regulated waters that violate state water quality standards, and
(3) comply with guidelines developed by the Environmental Protection
Agency to protect wetlands and other federally regulated waters.^2 In
making these determinations, the Corps often coordinates with other
federal and state agencies, such as the U.S. Fish and Wildlife Service. In
fiscal year 2006, the Corps issued about 4,000 standard permits.

The Corps may use letters of permission in lieu of a standard permit when
it determines that the proposed work would be minor, not have significant
individual or cumulative impacts on the environment, and is not expected
to be controversial. In these situations, an abbreviated standard permit
review process, involving coordination with other federal and state
regulatory agencies and adjacent property owners--but not the general
public--is used to expedite the permit's approval.

Some concerns have been expressed that the Corps' permitting process takes
too long and has significantly delayed public works projects, such as
constructing and repairing ports. For example, the Pacific Northwest
Waterways Association, which represents ports and businesses, believes
that delays in permit processing in the Northwest have put U.S. ports at a
competitive disadvantage to ports in Canada, where they argue permit
requirements are not as strict. In 2000, the Congress included a provision
in the Water Resources and Development Act to expedite permit processing
for nonfederal public agencies. Specifically, section 214 of the act
authorizes the Secretary of the Army, after public notice, to accept and
expend funds contributed by nonfederal public entities, such as cities and
port authorities, to expedite the evaluation of permit applications under
the jurisdiction of the Department of the Army. The act also requires the
Secretary to ensure that the funds accepted will not impact impartial
decision making with respect to permits. Originally set to expire at the
end of fiscal year 2003, this authority has been extended four times and
is currently set to expire in December 2008. The authority to accept
section 214 funds has been delegated to the Corps' 38 districts that have
regulatory responsibilities.

^2EPA has overall authority and responsibility for carrying out the Clean
Water Act.

In 2001, and again in 2004, Corps headquarters issued guidance that
described the procedures that Corps districts must follow to accept and
use section 214 funds. Specifically, the guidance directs any district
accepting such funds to

           o issue for public comment notices announcing the Corps' intent to
           accept funds from a nonfederal public entity that include the
           reasons for accepting the funds and what activities the funds will
           be expended on,
           o after review of comments, notify the public of the District
           Commander's decision to accept these funds, and
           o establish separate accounts to track the acceptance and
           expenditure of these funds.

           The guidance also calls for strict upward reporting to ensure that
           the section 214 funds will be used for their intended purpose.
           Specifically, the Corps' divisions are to submit annual reports to
           headquarters that (1) document the acceptance and expenditure of
           funds, along with any public notices, (2) assess how the use of
           the funds expedited the permit review process, and (3) highlight
           any issues regarding impartial decision making.

           The guidance also specifies two steps that Corps districts must
           take to ensure that the permit decisions they make using section
           214 funds are impartial and transparent. In addition to following
           the permit review process described above, the districts must (1)
           ensure that a Corps official senior to the decision maker reviews
           the final permit decision before issuing the permit and (2) post
           permit decisions to the district's Web site. Finally, the guidance
           requires that section 214 funds be expended only to expedite the
           final permit decision; funds cannot be expended on the higher
           level review.
		   
		   Four Corps Districts Have Evaluated Projects Using Section 214
		   Funds, and Use of This Authority is Likely to Expand in the Future

           Four of the 38 Corps districts that have regulatory
           responsibilities had entered into agreements with 11 nonfederal
           public entities to receive section 214 funds and had evaluated 187
           projects using these funds as of August 2006. Almost all of the
           section 214 applicants were city or county departments, port
           authorities, or regional water authorities. However, two
           applicants were private companies that were allowed to submit
           permit applications for expedited review under a nonfederal public
           entity's agreement with the Corps. In addition, of the 34 Corps
           districts with regulatory responsibilities that had not used
           section 214 authority to evaluate permit applications, 7 had
           entered into agreements, or had begun negotiations to enter into
           such agreements, with nonfederal public entities at the time of
           our review. An additional 19 districts told us that they would
           consider using the authority if it were made permanent.
		   
		   Four Districts Have Evaluated Permit Applications Using Section 214 Funds

           Since 2000 when Congress gave the Corps the authority to accept
           funds from nonfederal public entities, four Corps
           districts--Jacksonville, Fla.; Los Angeles and Sacramento, Calif.;
           and Seattle, Wash.--have entered into agreements with 11
           nonfederal public entities and processed permit applications using
           funds received from these entities. These agreements generally
           specify the duration of the agreement, the amount of funds to be
           received, and how the funds are to be used. Although the
           agreements are generally between the Corps and one entity, such as
           a city or county, various departments within that entity may
           submit permit applications for expedited review under the
           agreements. The Seattle District was the first to enter into an
           agreement with a nonfederal public entity and has entered into
           more agreements than the other three districts. Table 1 shows the
           nonfederal public entities with whom the four districts have
           agreements and the effective dates of the agreements.

           Table 1: District Agreements with Nonfederal Public Entities to
           Receive Section 214 Funds and the Date of the Agreements
		   
District     Nonfederal public entity                Date of agreement 
Jacksonville South Florida Water Management District August 2005       
Los Angeles  City of San Diego                       September 2004    
Sacramento   City of Elk Grove                       October 2004      
                City of Redding                         October 2004      
                City of Lathrop                         November 2004     
                Sacramento County                       November 2004     
Seattle      City of Seattle                         December 2001     
                Port of Seattle                         February 2002     
                Port of Tacoma                          February 2002     
                King County                             October 2002 ^a   
                Snohomish County                        April 2003^a      		   

           Source: GAO generated from Corps data.

           aThis agreement expired on September 30, 2005, and was not
           renewed.

           Using the funds received under the section 214 authority, the four
           districts evaluated and approved 187 permit applications, as of
           August 2006. As table 2 shows, 82 percent of these applications
           were for projects seeking approval under a nationwide permit. The
           districts approved the remaining applications with standard
           permits, regional permits, or letters of permission. The districts
           did not deny any permit applications processed using section 214
           funds. According to district officials, the Corps rarely denies
           any permit applications, regardless of the source of funding used
           to evaluate the applications. Instead, the Corps frequently
           requires applicants to redesign their projects to reduce impacts
           to the aquatic environment before receiving permit approvals.

           Table 2: Permit Applications Approved Using Section 214 Funds, by
           Type of Permit and by District, as of August 2006
		   
		         Number of applications approved using section 214           
                                        funds                                 
                      Nationwide     Standard   Letters of permission         
District              permits      permits    and regional permits   Total 
Jacksonville               10            2                       0      12 
Los Angeles                11            0                       3      14 
Sacramento                 29            2                       0      31 
Seattle                   103           23                       4     130 
Total               153 (82%)     27 (14%)                  7 (4%)     187 
                                                                       (100%) 

           Source: GAO analysis of Corps data.

           The types of projects for which permits were sought under the
           section 214 authority varied by Corps district. For example,
           nearly half the projects evaluated and approved by the Seattle
           District were for ecological restoration and pier and port repair,
           while the projects evaluated and approved by the Los Angeles
           District were mainly for maintaining sewer lines. Table 3 shows
           the number of projects that fell into each category, and table 4
           provides examples of the different types of projects evaluated by
           the Corps districts using section 214 funds.

           Table 3: Types of Projects Approved by the Four Corps Districts
           That Processed Permit Applications with Section 214 Funds, as of
           August 2006
		   
Type of project          Jacksonville Los Angeles Sacramento Seattle Total 
Bank stabilization                  0           0          0      14    14 
Dredging                            0           0          0       4     4 
Pier repair                         0           0          0      22    22 
Port construction                   0           0          0      16    16 
Residential and                                                            
commercial development              0           0          1       0     1 
Ecological restoration              4           2          2      25    33 
Sewer line maintenance                                                     
and construction                    0          10          3       1    14 
Survey activities                   4           0          2       8    14 
Transportation                      0           1         10      17    28 
Water storage, supply,                                                     
and treatment                       4           1         10      14    29 
Other construction and                                                     
maintenance                         0           0          1       3     4 
Other utility line                                                         
maintenance and                                                            
construction                        0           0          2       5     7 
Total                              12          14         31   129^a   186 	   

           Source: GAO analysis of Corps permit files.

           aWe were unable to determine the purpose of one of the projects
           approved by the district because district staff were unable to
           locate the permit file.

Table 4: Examples of Projects Evaluated and Approved by Four Corps
Districts Using Section 214 Funds

District     Project                                                       
Jacksonville In December 2005, the Corps approved a request from the South 
                Florida Water Management District to construct two temporary  
                storage reservoirs, approximately 30 acres each. These        
                temporary reservoirs will provide data that will guide design 
                and construction of a future water storage project in         
                southwest Florida that is part of the Everglades restoration  
                initiative. As a condition of the permit, the Corps required  
                the applicant to implement measures to prevent harm to        
                endangered species, including the Florida panther, that might 
                be found within the project area. Because the loss of almost  
                28 acres of federally regulated waters caused by this project 
                is expected to be offset by the construction of the larger    
                water storage project, the Corps did not require the          
                applicant to mitigate for the acres impacted, pending         
                completion of that project.                                   
Los Angeles  In July 2005, the Corps approved a request from the City of   
                San Diego's Engineering and Capital Projects Department to    
                temporarily dewater approximately 0.1 acres of the San Diego  
                River to conduct an emergency repair/reconstruction of a      
                river crossing. To ensure that impacts of the project were    
                temporary, the Corps required that the department comply with 
                19 special conditions, including that all disturbed areas be  
                replanted with preexisting or native vegetation and that a    
                qualified biologist be on-site during project construction to 
                ensure compliance with the permit.                            
Sacramento   In July 2005, the Corps issued a permit to the City of Elk    
                Grove, Calif., authorizing the fill of .46 acres of wetlands  
                and other federally regulated waters to construct a new       
                roadway and intersection. As a condition of the permit, the   
                Corps required the applicant to implement measures to prevent 
                harm to endangered species that might be found within the     
                project area and to undertake mitigation activities to        
                compensate for the wetlands destroyed by the project.         
Seattle      In September 2002, the Corps issued a permit to the Port of   
                Seattle to repair and upgrade port piers to meet new seismic  
                and building codes and increase port capacity. The project,   
                encompassing 215 acres of urban waterfront, required the      
                placement of fill and riprap and was expected to have         
                short-term impacts on some fish and wildlife species and      
                water quality. The Corps concluded that the proposed project  
                represented the least environmentally damaging practicable    
                alternative and would not result in the unacceptable          
                degradation of the aquatic environment. The Corps also placed 
                several conditions on the issued permit, including limiting   
                when the work could be performed and implementing measures to 
                protect endangered species that might be present in the       
                project area, to mitigate the project's effects.              

Source: GAO analysis of Corps permit files.

Under the section 214 authority, the Corps received applications from 31
different applicants. Most of the permit applications were from city or
county departments, port authorities, or regional water authorities. In
general, the applicants were either the entities, or departments within
the entities, that entered into the section 214 agreement with the Corps.
For example, San Diego's Department of Engineering and Capital Projects
and Metropolitan Waste Water Department both submitted applications for
expedited review under the city's agreement with the Corps' Los Angeles
District. However, in the Corps' Sacramento District, we found that two
applications were submitted by private companies that were not part of the
nonfederal public entities with whom the Corps had an agreement. One
project was for a large, multiuse development that would fill 1.8 acres of
wetlands. The other project was to fill in .46 acres of streams as part of
a larger ecological restoration effort to compensate for wetlands and
other waters that may be modified or destroyed by other construction
projects. According to Corps officials, in each case, a nonfederal public
entity requested that the Corps process the private company's application
under the section 214 agreement. The legislation does not expressly
prohibit the practice of allowing private companies from requesting permit
approval under a nonfederal public entity's section 214 agreement with the
Corps.

The Districts' Use of Section 214 Authority Is Likely to Expand in the Future

Thirty-four Corps districts had not yet used the section 214 authority to
evaluate permit applications at the time of our review, but many are
considering doing so in the future. Officials from 28 Corps districts that
had not entered into section 214 agreements cited two primary reasons for
not yet doing so: (1) nonfederal public entities in their districts had
not expressed an interest in entering into such agreements and (2) the
districts were concerned that the section 214 authority was not permanent
and could expire in the future. In addition, district officials identified
two other disadvantages of using the section 214 authority. First,
officials were concerned about the public's perception of the objectivity
of permit decisions made using section 214 funds. Second, officials were
concerned that because the authority was not permanent and they could not
guarantee a prospective employee's tenure, it would be difficult for them
to hire and retain qualified staff to process these types of applications.

Despite these concerns, many of the districts are considering the use of
the section 214 authority soon or in the future. Seven
districts--Huntington, W.Va.; Louisville, Ky.; Mobile, Ala.; Omaha, Neb.;
Portland, Ore.; San Francisco, Calif.; and Savannah, Ga.--had already
entered into agreements or had begun negotiations with nonfederal public
entities but had not completed the evaluation of any permit applications
at the time of our review. Nineteen districts told us that they would
consider entering into agreements with nonfederal public entities if the
section 214 authority were made permanent. In addition, two of the four
districts included in our review that had used section 214 funds to review
permit applications have expanded their use of the authority. The Los
Angeles District has entered into three new agreements--San Bernardino
County in September 2006 and Port of Los Angeles and San Diego Water
Authority in October 2006. The Sacramento District entered into two new
agreements--one with the City of Roseville in September 2006 and one with
the City of Rancho Cordova in October 2006.

Corps Districts Received More Than $2 Million in Section 214 Funds That Were
Used to Primarily Cover Personnel-Related Costs

From December 2001 through September 2006, nonfederal public entities
provided over $2 million in section 214 funds to the four Corps districts
with whom they had section 214 agreements. The districts hired additional
project managers to process permit applications and primarily used the
section 214 funds received to cover personnel-related costs, such as
salaries and benefits.

As figure 1 shows, of the four districts that received section 214 funds
from nonfederal public entities from December 2001 through September 2006,
the Sacramento District received the most, $932,000, and the Jacksonville
District the least, $225,324. Table 5 shows the amounts provided by each
of the 13 nonfederal public entities.

Figure 1: Section 214 Funds Received by the Four Corps Districts from
December 2001 through September 2006

Table 5: Total Section 214 Funds Provided by the 13 Nonfederal Public
Entities to Four Corps Districts from December 2001 through September 2006

District     Nonfederal public entity                Amount provided 
Jacksonville South Florida Water Management District        $225,324 
Los Angeles  City of San Diego                               240,000 
                San Bernardino County                         150,000^a 
Sacramento   City of Elk Grove                               178,000 
                City of Redding                                 220,000 
                City of Lathrop                                 178,000 
                Sacramento County                               178,000 
                City of Roseville                             178,000^a 
Seattle      Port of Seattle                                 130,000 
                Port of Tacoma                                  150,000 
                City of Seattle                                 200,000 
                Snohomish County                                  8,539 
                King County                                    $145,000 

Source: GAO analysis of Corps data.

aThis nonfederal public entity entered into an agreement with the Corps
district and provided section 214 funds in September 2006 after we
conducted our file reviews.

Each of the four Corps districts that received section 214 funds was able
to increase its regulatory staff by either (1) combining the section 214
funds with appropriated funds to hire new project managers to process
section 214 applications or (2) paying existing employees to process
section 214 applications and using the offsets in regular program
expenditures to hire new project managers to process non-section 214
applications. Although the districts initially thought that project
managers would work full-time on section 214 permits, this has not
happened. None of the project managers added using section 214 funds
worked full-time on processing section 214 permits; instead they split
their time between evaluating section 214 permits and permits for other
applicants. Table 6 shows the number of additional project managers added
using section 214 funds and the full-time equivalent staff devoted to
processing section 214 permits in each of the four districts.^3

3A full-time equivalent staff generally consists of one or more employed
individuals who collectively complete 2,080 work hours in a given year.
Therefore, either one full-time employee, or two half-time employees,
equal one full-time equivalent staff.

Table 6: Number of Additional Project Managers Hired Using Section 214
Funds and the Full-time Equivalent Staff Used by the Corps Districts to
Process Permits Using Section 214 Funds, Fiscal Year 2001 through Fiscal
Year 2006

                Total number of additional             FY   FY   FY   FY   FY 
District         project managers hired FY 2001^a 2002 2003 2004 2005 2006 
Jacksonville                          1       N/A  N/A  N/A  N/A   .2   .7 
Los Angeles                           1       N/A  N/A  N/A  N/A   .9   .5 
Sacramento                            4       N/A  N/A  N/A  N/A  2.2  1.5 
Seattle                             4^b       N/A   .6  1.5   .6  1.4   .5 
Total                                10             .6  1.5   .6  4.7  3.2 

Source: GAO generated from Corps data.

aAlthough Seattle entered into agreements in 2001, it did not expend any
funds from these agreements until fiscal year 2002.

bUnlike the other three districts, Seattle does not have designated
section 214 positions. Instead, these project managers are assigned
section 214 workload periodically.

Through September 2006, the districts used $1.398 million of the section
214 funds that they received for costs associated with the project
managers assigned to process section 214 permits. Specifically the funding
was used for the following purposes: $858,000, or 61.4 percent, was used
to pay for personnel costs, including the salaries and cost of benefits,
for project managers processing section 214 permits; $522,000, or 37.3
percent, was used to cover overhead costs, such as office space,
utilities, and administrative support associated with the section 214
authority; and $18,000, or 1.3 percent, was used to pay for equipment,
transportation costs associated with site visits, and legal advice from
the Corps for processing applications under the section 214 authority.

Changes in Permit Processing Times Have Varied Since the Districts Started Using
Section 214 Funds, but Officials Agree That the Authority Provides Many Benefits

Permit processing times have increased in some districts and decreased in
others since the Corps began using section 214 funds. Although officials
from both the Corps and nonfederal public entities said they believe the
use of the section 214 authority has been effective in expediting permit
applications of nonfederal public entities, other factors may have also
impacted processing times. Nonetheless, officials from both the Corps and
nonfederal entities believe the authority provides significant other
benefits. In addition, Corps officials identified some challenges in
implementing the section 214 authority in their districts.

Processing Times Have Both Increased and Decreased Since the Use of the Section
214 Authority Began

Although a main goal of the Corps in using the section 214 authority is to
expedite permit processing for section 214 applicants, the processing
times for these applicants have not consistently decreased. For example,
the median processing times for nationwide permits decreased by 37 percent
in the Sacramento District, from 41 to 26 days, but increased by 21
percent in the Seattle District, from 76 to 92 days. Similarly, another
Corps goal is to ensure that the section 214 program does not delay permit
processing for non-section 214 applicants; however, the processing times
for these applicants have not consistently remained the same. For example,
the median times for permits processed without section 214 funds remained
constant in the Los Angeles District but increased by 29 percent in the
Sacramento District, from 41 days to 53 days. Figure 2 shows changes in
nationwide permit processing times for the three districts that had data
sufficiently reliable for this analysis: Los Angeles, Sacramento, and
Seattle. The data in the Jacksonville District were not reliable because
the district experienced difficulties entering data during its
participation in a pilot project for a new permit database. We did not
conduct a similar analysis for standard permits because the districts had
not processed enough of these permits using section 214 funds to calculate
a reliable estimate of processing times under the authority.

Figure 2: Median Processing Times for Nationwide Permits Before and After
Three Districts Began Using the Section 214 Authority

Note: The median is the midpoint, with half of the permits taking more
days to process and half taking fewer.

aAccording to Corps officials, because some section 214 agreements in the
Seattle District had temporarily expired, some permits may have been only
partially processed using section 214 funds.

We believe that several factors may have influenced the permit processing
times and masked the effect, if any, that the use of the section 214
authority had on them. Specifically:

           o Seattle District officials told us that the applications from
           section 214 permittees were considerably more complex than typical
           applications. For example, these officials said the section 214
           applicants frequently sought permission for activities in or near
           Superfund sites, which required the Corps to consult with the
           Environmental Protection Agency before issuing the permits.
           According to Seattle officials, these consultations add several
           weeks or months to the typical permit review process. These
           officials said the extra time the Corps needed to process these
           applications because of their complexity exceeded the time savings
           that resulted from the section 214 authority. As a result, they
           said, the net processing times for these applicants increased,
           obscuring the benefit of the authority to section 214 applicants.
           o Seattle District officials also told us that there are many
           threatened and endangered species within their district and that
           they must consult with the Fish and Wildlife Service (FWS) or the
           National Marine Fisheries Service (NMFS) for almost every permit
           the district issues to ensure that the proposed activity will not
           harm these species. According to these officials, the consultation
           process can add several months to the overall permit review
           process. In 2000, the district entered into agreements with FWS
           and NMFS to streamline the consultation process for endangered
           species. Seattle officials said that this streamlined consultation
           is the main reason the permit processing times for non-section 214
           applications decreased--as compared with the median processing
           time for the 3 years prior to the section 214 program. Therefore,
           while the decrease for these applicants appears consistent with
           the goal of ensuring that the section 214 authority does not
           introduce delays for non-section 214 applicants, it is not
           necessarily proof that the district met this goal. The section 214
           authority may have introduced delays, but these delays could have
           been more than offset by the streamlined consultation process that
           began close to when the section 214 authority became available.
           o The Los Angeles District had processed only 11 permit
           applications using section 214 funds at the time of our review.
           These few permits may be outliers and may not accurately represent
           what processing times will be in the long-term for permits
           processed using section 214 funds. The impact the section 214
           authority has, if any, on processing times may become more
           apparent as the district processes a larger number of permit
           applications using section 214 funds.
		   
		   Officials Cited Other Benefits of Using the Section 214 Authority

           Officials from the Corps and from nonfederal public entities that
           entered into section 214 agreements with the Corps told us that
           they believe the use of the section 214 authority has
           significantly expedited processing of permits for these
           applicants. For example, Sacramento officials said the project
           managers dedicated to working on section 214 applications
           typically work on two to three times fewer permits, at any given
           time, than the other project managers. As a result, they have more
           time to review section 214 permit applications and determine more
           quickly whether they are complete. These officials said that, by
           contrast, it can take several weeks for other project managers to
           review permit applications for completeness.

           Officials from the Corps and nonfederal public entities that we
           spoke with also cited other benefits of the section 214 authority
           including the following:

           Project prioritization. Nonfederal public entities that enter into
           section 214 agreements with the Corps may specify which permit
           applications they want the Corps to complete first and which
           projects can wait. Officials from participating nonfederal public
           entities told us that being able to set priorities for projects in
           this manner has allowed them to receive permits for their most
           important projects quickly. For example, officials from Elk Grove,
           Calif., said that, in 2004, city employees discovered that an old
           culvert was at risk of collapsing during a heavy rainstorm. City
           officials told the Corps' Sacramento District that repairing the
           culvert was a top priority for them and, as a result, were able to
           get the permit needed to complete the repairs before the next
           large storm.

           Enhanced communication. Officials from both the Corps and
           nonfederal public entities said that the section 214 authority has
           helped improve communication between them. For example, Corps
           officials in the Seattle District said that the section 214
           funding has enabled project mangers to meet with the applicants
           before they submit their applications. During these preapplication
           meetings, the Corps officials and the applicants discuss ways to
           design the project to avoid impacting important resources and
           increasing the likelihood of receiving a permit. Officials from
           participating entities said that these conversations have reduced
           the overall costs of completing their projects because these
           conversations have enabled them to submit initial project designs
           that are more likely to receive approval, thereby avoiding costly
           revisions and project delays.

           Increased staffing. Corps district officials said the section 214
           funds have provided a valuable way for them to augment their
           regulatory staff, particularly given the large permit workloads
           these districts face. As we discussed earlier, each district has
           used the section 214 funds received from the nonfederal public
           entities to add between one and four project managers to its
           regulatory staff.
		   
		   District Officials Also Identified Several Challenges to
		   Implementing the Section 214 Authority

           Corps officials have faced the following challenges when
           implementing the section 214 authority:

           Insufficient permit workloads. Officials in each of the four
           districts said that, when they first started using the section 214
           authority, they expected each participating entity to submit
           enough applications to keep one project manager busy full-time.
           However, this has not happened in any of the four districts.
           Insufficient section 214 permit workloads have caused particular
           problems in two districts. In the Seattle District, the permit
           workloads have been so small from some entities that the revenues
           generated from the agreement have not justified the costs of
           negotiating and establishing the agreement to accept section 214
           funds. As a result, the Seattle District decided eventually not to
           renew agreements with some entities and is considering not
           entering into any new agreements unless they can sustain at least
           half a full-time equivalent staff worth of work from each
           agreement. Similarly, in the Sacramento District, an insufficient
           section 214 permit workload has meant that section 214 project
           managers have had to work on some non-section 214 permit
           applications to maintain a full workload. According to officials
           in the Sacramento District, this arrangement has meant that
           non-section 214 applications experienced some processing delays
           because project managers stopped working on them when higher
           priority section 214 applications came in. To avoid the need to
           make choices between section 214 and other applications, the
           Sacramento District is currently considering assigning all section
           214 applications to a small pool of project managers who will work
           exclusively on section 214 permit applications.

           Delays in replacing project managers. Officials in the Sacramento
           District said that they were unable to hire new project managers
           to replace the ones they had transferred to work primarily on
           section 214 applications as quickly as they had anticipated. This
           lag in hiring project managers delayed permit processing for some
           non-section 214 applications because it meant that fewer staff
           hours could be devoted to processing these applications. According
           to these officials, one main reason for the hiring lag was that
           the district did not begin looking for new employees until after
           it had signed the section 214 agreements and transferred
           experienced project managers into the new positions. The district
           is considering adjusting its hiring policy to transfer experienced
           project managers into the new section 214 positions only after it
           has hired employees to fill the non-section 214 positions.

           Decrease in project manager expertise. The Corps districts that
           received section 214 funds typically replaced more experienced
           project managers that were transferred to work primarily on the
           section 214 permit applications with new staff. Sacramento
           District officials said that this practice has decreased the
           overall level of expertise devoted to processing non-section 214
           permit applications, which has both delayed processing for some of
           these applications and overburdened the experienced project
           managers who have remained to process non-section 214
           applications. To help increase the skill level of the new staff,
           the district now requires experienced project managers to mentor
           new employees. Officials from the Seattle and Los Angeles
           districts said that, while their section 214 application workload
           is not yet large enough to significantly deplete the expertise
           devoted to non-section 214 applications, this could become a
           problem if the number of applications and agreements continues to
           rise.
		   
		   When Using Section 214 Funds, the Districts Generally Followed
		   the Permit Review Process for Standard Permits, but It Is Unclear
		   Whether They Did So for Nationwide Permits

           Three districts that used section 214 funds to process standard
           permits generally followed the permit review process, but one
           district did not follow all the required steps. Specifically, the
           Sacramento District did not comply with the Corps' process that
           requires the districts to sufficiently demonstrate why the
           projects they approve are in the public interest. The four
           districts also used section 214 funds to approve projects using
           nationwide permits, however, we could only confirm that the
           Jacksonville and Seattle districts had generally followed the
           review process for these types of projects and could not make this
           determination for the Los Angeles and Sacramento districts because
           their files had limited permit documentation. Detailed results of
           our file reviews are presented in appendix II.
		   
		   Two of the Three Districts That Processed Standard Permit
		   Applications under the Section 214 Authority Generally Followed
		   the Permit Review Process

           The Jacksonville and Seattle districts followed all of the six key
           steps in the permit review process for standard permit
           applications that they processed using section 214 funds.
           Specifically, these districts (1) ensured that the project
           proposed in the permit application would not harm threatened or
           endangered species; (2) analyzed whether alternative designs that
           would have fewer impacts to aquatic resources were feasible; (3)
           ensured the project would not violate state water quality
           standards; (4) evaluated likely impacts to historic properties;
           (5) evaluated likely impacts to a wide range of other factors,
           from recreation to energy needs; and (6) balanced the project's
           benefits against its detriments, when applicable, and concluded
           that the project would not be contrary to the public interest. In
           contrast, the Sacramento District followed five of the six steps
           but did not follow the last step for the standard permits it
           processed using section 214 funds. As a result, for the projects
           for which it approved standard permits, the Sacramento District
           did not show that the adverse effects of the projects were
           outweighed by the positive impacts of the projects and did not
           conclude that the projects were in the public interest.

           Officials in the Sacramento District recognize that they did not
           complete the sixth step of the review process, as required, and
           said that this happened because the section 214 project managers
           who processed these applications were relatively new to the
           district and were not fully aware of the requirement. These
           officials also said that a major reason why the project managers
           were unaware of the requirement is that, while the Corps guidance
           describes documentation requirements for standard permits in
           general terms, Corps headquarters has not provided explicit
           guidance that would clearly show project managers how to document
           their decisions. Corps headquarters recognizes that more explicit
           guidance would help ensure consistency across its districts and is
           in the process of developing a template for a standard decision
           document for all districts to use. However, since the template is
           not yet complete, we could not assess whether it will provide
           sufficient detail to prevent the types of lapses we observed in
           the Sacramento District from occurring again.
		   
		   Lack of Documentation for Projects Approved Using Nationwide
		   Permits Inhibits the Assessment of the Process for Two of the
		   Four Districts

           For the projects that the four districts reviewed and approved
           using section 214 funds under the Corps' nationwide permits, we
           found that the Jacksonville and Seattle districts generally
           followed the steps that are key to the review process.
           Specifically, of their nationwide permit decisions, the
           Jacksonville and Seattle districts (1) evaluated 100 percent and
           79 percent, respectively, of the proposed projects to ensure they
           met the terms and conditions of the relevant nationwide permit(s)
           and (2) ensured that 90 percent and 96 percent, respectively, of
           the projects they evaluated would not harm endangered species. For
           the remaining permit applications, there was not enough
           documentation in the permit files for us to determine whether
           Jacksonville and Seattle district officials had complied with
           these two requirements. In contrast, we were unable to make a
           determination of the extent to which the Los Angeles and
           Sacramento districts had evaluated projects for compliance with
           the terms and conditions of the nationwide permit(s) because only
           3 percent of their files contained enough evidence. In addition,
           31 percent of the permit files in the Sacramento District also did
           not contain evidence that the district had considered the impacts
           of the proposed projects on endangered species. In the Los Angeles
           District, however, most files did contain evidence that officials
           had considered the impacts of the proposed projects on endangered
           species.

           We found that the districts vary in their level of documentation
           for projects approved using nationwide permits because, unlike
           standard permits, Corps headquarters has not developed uniform
           documentation standards for the districts to follow when making
           these decisions. In the absence of such guidance, the Seattle and
           Jacksonville districts have developed local standards that are
           more stringent than those in Los Angeles or Sacramento. Corps
           headquarters officials recognize that consistent documentation is
           needed to ensure permit decisions are both transparent and legally
           defensible and have begun to develop Corps-wide standards.
           However, because the Corps has not completed these standards, we
           could not determine to what extent they will require districts to
           fully document the basis for their determinations that the
           projects meet the terms and conditions of the nationwide permit(s)
           they used to approve the projects, and whether these requirements
           will alleviate the concerns we identified.
		   
		   The Districts Varied in Their Compliance with the Corps' Additional
		   Requirements for Ensuring Impartiality of Decisions Made Using
		   Section 214 Funds

           The districts were uneven in their adherence to the additional
           requirements established by the Corps to ensure that permit
           decisions made using section 214 funds were impartial and
           transparent. Two of the districts--Sacramento and Seattle--more
           often met both requirements, while the Jacksonville and Los
           Angeles districts rarely did. Corps officials cited several
           reasons for the variance in their adherence to the additional
           requirements.

           In addition to following the established permit review processes
           discussed in the prior section of this report, Corps districts
           must meet two other requirements designed to ensure the
           impartiality and transparency of decisions made using section 214
           funds. First, a Corps official senior to the decision maker must
           review the final permit decision (higher level review) and second,
           the district must post its final decision to the district's Web
           site. However, as shown in table 7, our review of the applications
           reviewed and approved by the four districts that used section 214
           funds, indicates significant variations in the extent to which
           each district complied with these two additional requirements.

           Table 7: Extent to Which Four Corps Districts Adhered to the
           Additional Requirements for Processing Section 214 Permits
		   
Requirement                    Jacksonville Los Angeles Sacramento Seattle 
Higher level review-standard                                               
permits                                 50%          ^a       100%      0% 
Higher level review-nationwide                                             
permits                                  0%          9%        86%     78% 
Higher level review-both                                                   
permit types                             8%          9%        87%     65% 
Post permit decisions to Web                                               
page                                     0%          0%        74%     85% 

           Source: GAO analysis of Corps data.

           aThe Los Angeles District had not processed any standard permits
           using section 214 funds at the time of our review.

           According to district officials, the following factors contributed
           to why the districts varied in the extent to which they adhered to
           the additional Corps requirements for ensuring that section 214
           permit decisions are impartial.

           o Different interpretations of the applicability of the
           requirements. Officials in the Los Angeles and Jacksonville
           districts told us that they had believed the additional
           requirements did not apply to projects approved using nationwide
           permits, which constitute the bulk of the permit applications
           processed in their districts using section 214 funds. According to
           these officials, they had believed the requirements applied only
           to new permit decisions and, since approvals under existing
           nationwide permits did not count as new permit decisions, the
           requirements did not apply to such approvals. Corps headquarters
           officials and legal counsel do not agree with the districts'
           interpretation and said that the additional requirements apply to
           all permit types including approvals using nationwide permits. Los
           Angeles District officials told us that they have subsequently
           changed their position and plan to apply the requirements to
           nationwide permits in the future, but Jacksonville District
           officials have not changed their position.
           o Varying awareness of the requirements. The project manager
           responsible for processing section 214 permit applications in the
           Los Angeles District told us that he was unaware of the higher
           level review requirement and, therefore, did not adhere to it.
           Similarly, the project manager responsible for section 214
           applications in the Jacksonville District told us she was unaware
           of the Web-posting requirement. In contrast, project managers in
           the other two districts were aware of both of the requirements
           and, as a result, did comply with them more often.
           o Lack of specificity as to what higher level review entails.
           Corps headquarters guidance does not specify which documents the
           senior level officials must review and sign to meet the higher
           level review requirement. While Seattle District officials thought
           that it was sufficient for senior officials to review and sign the
           documents supporting standard permit decisions, Corps headquarters
           officials told us that it is the final permit document itself--not
           the supporting documents--that must be reviewed and signed. We
           noted during our review, that while many standard permits in the
           Seattle District did not receive higher level review in accordance
           with headquarters requirements, they frequently did have decision
           documents reviewed by a Corps official senior to the official who
           would typically review those documents. According to Seattle
           District officials, it is more important for a reviewer to review
           the decision documents than the issued permit since the decision
           documents provide the rationale for why the project manager
           arrived at the decision to issue the permit while the permit
           itself is largely pro forma.
           o Lack of compliance with annual reporting requirement. Corps
           guidance calls for annual reports on the districts' implementation
           of the section 214 authority to be submitted to headquarters.
           However, according to the head of the Corps' Regulatory Branch, no
           reports have been submitted since the section 214 authority was
           first used in 2001. If this guidance had been followed, we believe
           that Corps headquarters may have been alerted to the fact that
           some districts were not fully meeting the additional requirements
           and could have taken actions needed to resolve this lack of
           compliance.
		   
		   Conclusions

           When the Congress enacted the section 214 authority in 2000, it
           was to help expedite the permit review process for nonfederal
           public entities. Since that time, a handful of nonfederal public
           entities have taken advantage of the authority and believe that it
           has been beneficial to them. These nonfederal entities had entered
           into agreements with four Corps districts that had actually
           received and used section 214 funds to process permit applications
           at the time of our review. However, the experiences of these four
           districts indicate that implementation of the section 214
           authority has been uneven. We identified a number of areas where
           improved oversight is needed to ensure that decisions made using
           the authority adhere to established permit processing regulations
           and guidance and are also impartial and transparent. Specifically,
           we found evidence to suggest that the district officials do not
           know what guidance they are to follow, do not know how to document
           the decisions that they make, and do not know which special
           requirements apply to the permit applications that they review
           under the section 214 authority. Because it appears that there is
           significant potential for many more Corps districts to begin
           accepting funds under the section 214 authority, and many are
           already poised to do so, we believe that it is imperative for
           Corps headquarters to address the concerns that have already been
           identified at the four districts that have used the section 214
           authority to process permit applications.
		   
		   Recommendations for Executive Action

           To ensure that the permits processed under the section 214
           authority comply with federal regulations and guidance, we are
           recommending that the Secretary of the Army direct the Corps of
           Engineers to take the following four actions:

           o clarify the guidance that the districts must follow when
           evaluating permit applications under the section 214 authority,
           o clarify the documentation that district officials must include
           in project files to justify and support their decisions,
           o provide training to district officials to ensure that they are
           aware of the requirements that apply to permits processed under
           the section 214 authority, and
           o develop an effective oversight approach that will ensure that
           the districts are following all the appropriate requirements when
           evaluating projects under the section 214 authority.
		   
		   Agency Comments and Our Evaluation

           We provided a draft of this report to the Secretary of the
           Department of Defense for review and comment. The Department of
           Defense generally concurred with the report's recommendations and
           described actions that it is implementing to address them. In its
           written comments, the department stated that by December 2007 the
           Corps plans to issue revised guidance for the districts to follow
           when using section 214 funds that clarifies, among other things,
           the types of permit decisions that require higher level review and
           what documents must be reviewed and signed by an official senior
           to the decision maker. The department also indicated that the
           Corps is developing a national template that standardizes the
           documentation required to support standard permit decisions and
           will develop similar documentation requirements for projects
           approved with nationwide permits. In addition, the department
           noted that project managers that evaluate permit applications
           using section 214 funds and their management will be required to
           attend annual briefings on Corps guidance for implementing section
           214 and that the Corps will conduct annual reviews that will focus
           on the districts' compliance with the guidance and documentation
           protocols. The Department of Defense's written comments are
           presented in appendix III.

           As agreed with your office, unless you publicly announce the
           contents of this report earlier, we plan no further distribution
           for 30 days from the report date. At that time, we will send
           copies of this report to the Secretary of Defense; the Secretary
           of the Army; the Chief of Engineers and Commander, U.S. Army Corps
           of Engineers; and interested congressional committees. We will
           also make copies available to others upon request. In addition,
           the report will also be available at no charge on the GAO Web site
           at http://www.gao.gov .

           If you or your staff have any questions about this report, 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. GAO staff who made major
           contributions to this report are listed in appendix IV.

           Sincerely yours,

           Anu K. Mittal
		   Director, Natural Resources and Environment
		   
		   Appendix I: Objectives, Scope, and Methodology

           In 2000, the Congress, through section 214 of the Water Resources
           and Development Act, authorized the Secretary of the Army, after
           providing public notice, to accept and expend funds from
           nonfederal public entities to expedite the evaluation of permit
           applications that fall under the jurisdiction of the Department of
           the Army. The act also requires the Secretary to ensure that the
           funds accepted will not impact impartial decision making with
           respect to permit approvals. This responsibility has been
           delegated by the Department of the Army to the Corps of Engineers
           (Corps). In this context, we were asked to review the (1) extent
           to which Corps districts have entered into agreements with
           nonfederal public entities to receive section 214 funds since 2001
           and how many permit applications the Corps has evaluated using
           these funds, (2) amount of section 214 funds the Corps has
           received and how it has used these funds, (3) extent to which
           permit processing times have changed since the Corps began using
           section 214 funds, (4) extent to which the Corps districts have
           followed the basic permit review processes when evaluating
           applications using section 214 funds, and (5) extent to which the
           districts have met the additional requirements for ensuring that
           permit decisions made using the section 214 funds are impartial
           and transparent.

           To determine the extent to which Corps districts entered into
           section 214 agreements with nonfederal public entities, we
           contacted each of the 38 Corps districts responsible for issuing
           regulatory permits under section 404 of the Clean Water Act to
           identify those districts that had entered into such agreements
           since the authority was available. We visited each of the four
           districts that had entered into such agreements and evaluated the
           permit applications that had been processed under these agreements
           as of August 2006. These districts were Jacksonville, Fla.; Los
           Angeles and Sacramento, Calif.; and Seattle, Wash. At each
           district, we reviewed the legal agreements between the Corps and
           nonfederal entities to identify the entities that had entered into
           such agreements and the date the agreements went into effect. To
           determine how many permit applications the districts evaluated
           using section 214 funds, we obtained and reviewed the Corps' files
           for all but one of the permit applications that the districts
           evaluated using section 214 funds. We did not review one of the
           applications because the Seattle District was unable to locate the
           file. Table 8 shows the number of permit files we reviewed at each
           of the four districts. We used a data collection instrument (DCI)
           to extract key pieces of information from each permit file,
           including the name of the applicant, the type of project seeking
           approval, and the type of permit the Corps used to authorize the
           proposed project. An independent analyst verified the accuracy of
           the data we entered for each permit file. We also interviewed
           Corps officials in each of the four districts, as well as
           representatives from at least one of the nonfederal entities
           participating in the section 214 program in each district, to gain
           their perspectives on the benefits and any challenges of
           implementing the section 214 authority.

           Table 8: Permit Files Reviewed by GAO at the Four Corps Districts
           That Used Section 214 Funds to Evaluate Permit Applications
           Between December 2001 and August 2006

Corps district Number of files reviewed 
Jacksonville                         12 
Los Angeles                          14 
Sacramento                           31 
Seattle                             129 
Total                               186 

           Source: GAO analysis of Corps permit files.

           To determine whether the use of the section 214 authority may
           expand in the future, we surveyed the 34 districts that had not
           used section 214 funds to evaluate permit applications to
           determine their reasons for not doing so and their plans, if any,
           for using such funds in the future; 28 districts (82 percent)
           responded to our survey. The practical difficulties of conducting
           any survey may introduce errors, commonly referred to as
           nonsampling errors. For example, differences in how a particular
           question is interpreted can introduce unwanted variability into
           the survey results. To minimize nonsampling error, an independent
           survey specialist reviewed the survey for clarity and independence
           before we sent it out. We also pretested the survey with Corps
           officials in two districts. During these pretests, we asked each
           official to complete the survey as they would when they received
           it. We then solicited feedback to ensure that the questions were
           clear and unambiguous and that the survey was independent and
           unbiased. Based on pretest feedback, we made changes to the
           survey, as appropriate.

           To determine the amount of section 214 funding the Corps has
           received and how it has used these funds, we obtained and analyzed
           financial data covering fiscal years 2001 through 2006 from each
           of the four participating districts. The data, which came from the
           Corps of Engineers' Financial Management System (CEFMS), specify
           the amounts of section 214 funding the districts had received
           since the program began and the major categories of expenditures.
           District officials told us the number of full-time-equivalent
           staff the districts procured using these funds. A
           full-time-equivalent staff generally consists of one or more
           employed individuals who collectively complete 2,080 work hours in
           a given year. Therefore, either one full-time employee, or two
           half-time employees, equal one full-time equivalent staff. We
           reviewed the financial data related to the receipt and expenditure
           of section 214 funds and determined they were sufficiently
           reliable for our purposes. We did not, however, audit the Corps'
           financial statements to verify that the Corps expended funds as
           recorded in the CEFMS reports.

           To determine the extent to which permit processing times have
           changed since the Corps began using section 214 funds, we obtained
           permit processing data from three of the four participating
           districts: Los Angeles, Sacramento, and Seattle. The data in these
           districts, which came from the Corps' Regulatory Analysis and
           Management System database, were sufficiently reliable for our
           purposes. We did not analyze processing times in the Jacksonville
           District because officials in this district told us their
           processing time data were for not reliable for permits issued in
           2002 and 2003.^1 The processing time data that we used from the
           three districts that had reliable data included permits that each
           district issued in the 3 years prior to the district's first use
           of section 214 funds to the time of our review. We calculated
           median permit processing times before and after the districts
           began using section 214 funds. We chose the median over the mean
           because the median is more resistant to the effects of outliers;
           for example, a few permits that took a relatively longer amount of
           time to process will impact the mean more than the median. We
           assigned a permit to the before or after category by comparing the
           date a Corps district issued a permit with the date it first began
           using the section 214 authority--permits that a district issued
           after it began using the authority were assigned to the after
           category. We also analyzed an alternative approach: assigning
           before or after based on the date that the Corps began processing
           the permit. However, we determined this method made the
           post-section 214 processing times appear artificially low because
           it excluded permits that were still ongoing at the time of our
           review. Therefore, we did not present the results from this
           alternative analysis in the report.

           Our results show the processing time for nationwide permits, which
           constituted 82 percent of the total number of permits the
           districts processed using section 214 funds. We did not analyze
           processing times for other types of permits (e.g., standard or
           letters of permission) since the Corps had not processed enough of
           permits of these types for us to calculate accurate processing
           times under the section 214 authority. We defined processing times
           to be the number of days between when the Corps first received a
           permit application and when it issued a final permit. This
           definition is different from the Corps' because the Corps defines
           processing time as the number of days between when it receives a
           complete application and when it issues a permit. We chose a
           definition that would allow us to maximize our chances of
           observing the effects of the section 214 program.

^1The district participated in a pilot project for a new database during
those years and, according to district officials, project managers were
unable to enter processing time data during that time.

           To determine the extent to which the Corps followed the existing
           permit review processes, we first identified key steps for
           processing permits. Specifically, we identified six key steps for
           standard permits and two key steps for nationwide permits. We
           selected these steps because the districts must complete each one
           before issuing a permit and, for the standard permits, the Corps
           identified the steps as important "safeguards" for ensuring
           objectivity in its permit decisions. We did not include some steps
           that the Corps identified as "safeguards" because (1) the
           districts do not have to complete these steps for every permit
           application or (2) the steps are outside of the districts'
           responsibility, e.g., the Environmental Protection Agency can, at
           its discretion, review and revoke the Corps' permit decisions. In
           each district, we reviewed all but two of the files for projects
           the Corps authorized using nationwide and standard permits. We did
           not review one file because the Corps processed the permit
           application under emergency procedures, which are substantially
           different from the regular review procedures. We did not review
           the other file because the Seattle district was unable to locate
           the file. Table 9 shows the number of permit files reviewed for
           adherence to existing Corps review processes. Table 10 presents a
           complete list of the information we collected with our DCI. We did
           not review the files for other types of permits that the Corps may
           also use--letters of permission and regional general
           permits--because they undergo different review procedures and
           constituted less than 5 percent of permits evaluated using section
           214 funds. During our file reviews, we used our DCI to record
           whether the permit file contained evidence that the district
           followed each of the key steps in the permit review process. We
           also reviewed the files for evidence that the Corps met the two
           additional requirements to ensure that decisions for permits
           processed with section 214 funds were made impartially and were
           transparent--that is, that the permit decision received higher
           level review and was posted to the Corps district's Web site. An
           independent analyst verified the accuracy of the data entered for
           each permit file.

           Table 9: Number of Permit Files GAO Reviewed for Evidence of
           Adherence to the Corps' Permit Review Processes and the Two
           Additional Requirements for Permit Applications Evaluated Using
           Section 214 Funds
		   
Corps district Number of files reviewed 
Jacksonville                         12 
Los Angeles                          11 
Sacramento                           31 
Seattle                             124 
Total                               178 		   

           Source: GAO analysis of Corps permit files.

Table 10: Information GAO Extracted from Section 214 Permit Files

Type of permit files        Information collected                          
All files                      o Name of applicant                         
                                  o Name of nonfederal entity under whose     
                                  agreement the permit application received   
                                  expedited review                            
                                  o Corps district that processed the         
                                  application                                 
                                  o Type of project described in the permit   
                                  application                                 
                                  o Date permit was issued                    
                                  o Type of permit issued                     
Files for projects             o Whether the signatures on the final       
authorized using nationwide    permit indicate that the permit was         
or standard permits            reviewed by a Corps official senior to the  
                                  decision maker                              
                                  o Whether the permit decision was posted on 
                                  the Corps district's Web site               
Only files for projects        o Whether there was evidence that the Corps 
authorized using nationwide    followed each of two steps we identified as 
permits                        key to the review process for nationwide    
                                  permits, and, if so, the type of evidence   
Only files for projects        o Whether there was evidence that the Corps 
authorized using standard      followed each of six steps we identified as 
permits                        key to the review process for standard      
                                  permits, and, if so, the type of evidence   

Source: GAO.

We performed our work between April 2006 and April 2007 in accordance with
generally accepted government auditing standards.

Appendix II: Results of GAO's Review of Corps Permit Files for Districts
That Used Section 214 Authority Between 2001 and 2006

This appendix presents the results of our file review at the four Corps
districts--Jacksonville, Fla.; Los Angeles and Sacramento, Calif.; and
Seattle, Wash.--that used section 214 funds to evaluate permit
applications between December 2001 and August 2006. The results of our
review for permit applications approved using standard permits are
presented in table 11. The Los Angeles District is not included in table
11 because it had not used section 214 funds to evaluate any standard
permit applications at the time of our review. Results of our review for
permit applications approved using nationwide permits are presented in
table 12.

Table 11: Results of GAO's Review of the Districts' Adherence to Six Key
Steps in the Permit Review Process When Using Section 214 Funds to
Evaluate Standard Permit Applications

                               Number of permit files with evidence that the
                               district followed the key step in the standard
                                           permit review process
Key step in the standard                                                   
permit review process            Jacksonville      Sacramento      Seattle 
Ensured the project would                                                  
not harm threatened or                                                     
endangered species                          2               2           22 
Analyzed whether                                                           
alternative project                                                        
designs that would have                                                    
fewer impacts to aquatic                                                   
resources were feasible                     2               2         20^a 
Ensured the project would                                                  
not violate state water                                                    
quality standards                           2               2           22 
Evaluated the project's                                                    
likely impacts to historic                                                 
properties                                  2               2           22 
Analyzed impacts to a                                                      
range of other factors,                                                    
from recreation to energy                                                  
needs                                       2               2           22 
Demonstrated that the                                                      
benefits of the proposed                                                   
project outweigh its                                                       
detriments (when                                                           
applicable^b) and that the                                                 
project was not contrary                                                   
to the public interest                      2               0           22 
Number of permit files                                                     
reviewed                                    2               2           22 

Source: GAO analysis of Corps permit files.

aThis analysis of alternative project designs was not relevant for two
permit files. Specifically, this analysis is only required for permits
issued under authority of section 404 of the Clean Water Act. Two permit
files were issued under authority of section 10 of the Rivers and Harbors
Act and did not require such an analysis.

bAn analysis showing that a project's benefits outweighs its detriments is
only relevant if the Corps has concluded that the project will have some
detrimental effects. Twenty-four of the twenty-six Corps permit files
avoided the need for such balancing by arguing that the project would only
have positive or minimal effects after considering mitigation that the
applicant proposed to compensate for impacts that would otherwise be
detrimental.

Table 12: Results of GAO's Review of the Districts' Adherence to Two Key
Steps in the Permit Review Process when Using Section 214 Funds to
Evaluate Nationwide Permit Applications

                              Number of permit files with evidence that the
                            districts followed the key step in the nationwide
                                          permit review process
Key step in the                                                            
nationwide permit                                                          
review process             Jacksonville   Los Angeles  Sacramento  Seattle 
Evaluated proposed                                                         
project to ensure it                                                       
met terms of the                                                           
nationwide permit(s)                                                       
used to authorize the                                                      
project^a                            10             0           1       81 
Ensured the project                                                        
would not harm                                                             
threatened or                                                              
endangered species^a                  9            10          20       98 
Number of permit files                                                     
reviewed                             10            11          29      102 

Source: GAO analysis of Corps permit files.

aLack of evidence is not proof that the Corps failed to follow this step
in the permit review process. Neither federal regulations nor Corps
headquarters' guidance requires districts to document their adherence to
these steps. The districts may have followed the steps without documenting
that they did so.

Appendix III: Comments from the Department of Defense

Appendix IV: GAO Contact and Staff Acknowledgments

GAO Contact

Anu K. Mittal, (202) 512-3841, or [email protected]

Staff Acknowledgments

In addition to the individual named above, Sherry McDonald, Assistant
Director, and Greg Peterson made key contributions to this report. Nancy
Crothers, Melinda Cordero, Brian Chung, Jonathan Dent, Doreen Feldman,
Diana Goody, Janet Frisch, Laura Kisner, Amanda Randolph, and Rebecca Shea
also made important contributions to this report.

We also wish to give special tribute to our dear friend and colleague,
Curtis Groves, who died many years too soon after a long battle with
multiple myeloma near the conclusion of our work.

(360692)

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Highlights of [34]GAO-07-478 , a report to the Chairman, Committee on
Transportation and Infrastructure, House of Representatives

May 2007

WATERS AND WETLANDS

Corps of Engineers Needs to Ensure That Permit Decisions Made Using Funds
from Nonfederal Public Entities Are Transparent and Impartial

When a nonfederal public entity such as a city or county wants to build a
public works project that could degrade or damage federally regulated
waters and wetlands, it must obtain a permit from the U.S. Army Corps of
Engineers (Corps) before proceeding. To help expedite the permit process
for these entities, the Congress enacted section 214 of the Water
Resources and Development Act of 2000, providing the Corps with temporary
authority to receive funds from such entities and use the funds to process
permits. To ensure the impartiality and transparency of section 214 permit
decisions, the Corps requires its districts to adhere to all existing
permit review processes, as well as some additional requirements.

GAO was asked to identify (1) how many districts have used the section 214
authority, (2) the amount of funds they have received, (3) how permit
processing times have changed, (4) the extent to which districts have
adhered to the existing review processes and the additional requirements.

[35]What GAO Recommends

GAO recommends that the Corps improve its guidance and oversight of
districts' use of the section 214 authority. The agency generally
concurred with our recommendations.

As of August 2006, 4 of the Corps' 38 districts had agreements with 11
nonfederal public entities to receive section 214 funds, which have been
used to evaluate permit applications. These districts received, evaluated,
and approved 187 applications using section 214 funds. The types of
projects for which permits were requested included ecological restoration,
water storage, transportation, and port construction. Most of the section
214 applicants were city or county departments, port authorities, or
regional water authorities, but two applicants were private companies that
were allowed to submit applications under section 214 agreements with the
Corps. The legislation does not expressly prohibit private companies from
submitting applications under section 214 agreements. The use of the
section 214 authority may become more prevalent in the future because 7
additional districts are in the process of entering into such agreements,
and 19 other districts told GAO that they would consider using the
authority if the Congress makes it permanent.

The Corps received more than $2 million in section 214 funds from
nonfederal public entities between December 2001 and September 2006 and
used these funds primarily to hire additional project managers to process
permits. About 61 percent of the funds were used to cover personnel costs
for the project managers who processed section 214 permits; the remainder
covered overhead and other costs incurred to implement the authority.

Since the Corps began using the section 214 authority, permit processing
times have increased in some districts and decreased in others for both
section 214 applicants and non-section 214 applicants. However, it is
difficult to attribute the changes in processing time directly to the use
of the section 214 authority because many other factors may have
influenced processing times and may have masked the effects of the
authority. For example, the complexity of 214 permit applications may have
resulted in greater processing time for these applicants. Generally, Corps
officials and nonfederal public entities who used the authority believe
that it has expedited permit processing, saved them cost and time, and
improved communication between the Corps and the section 214 applicants.

The four districts varied in the extent to which they adhered to the
existing permit review process and the additional requirements to ensure
impartiality of section 214 permit decisions. For example, one district
did not follow a key step in reviewing certain types of section 214
permits because officials did not know they were required to do so. In two
other districts, lack of documentation in the permit files prevented GAO
from determining whether they followed the existing review processes for
another type of permit. With regard to the additional requirements imposed
by the Corps for section 214 permits, some districts did not comply with
these requirements because they were not aware of them, and others did not
comply with them because they interpreted the requirements differently
than Corps headquarters intended.

References

Visible links
  34. http://www.gao.gov/cgi-bin/getrpt?GAO-07-478
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