Forest Service: Actions Needed for the Agency to Become More Accountable
for Its Performance (Testimony, 06/29/2000, GAO/T-RCED-00-236).

Pursuant to a congressional request, GAO discussed the: (1) status of
efforts by the Forest Service to become more accountable for what it
accomplishes with appropriated funds; and (2) actions still needed for
the agency to provide Congress and the public with a better
understanding of its performance.

GAO noted that: (1) to become more accountable for its performance, the
Forest Service will need to link its budget and organizational
structures as well as its budget allocation criteria, forest plans, and
performance measures to its strategic goals, objectives, and strategies;
(2) however, the agency is still years away from completing these
linkages; (3) for example, the Forest Service continues to budget and
allocate most of its appropriated funds to its field offices on the
basis of nine separate programs, many of which are not linked to either
its strategic plan or the way that work is routinely accomplished on the
national forests; (4) in addition, even though forest plans are intended
to serve as a basis for developing future budget proposals, the Forest
Service has not determined how or if the national forests will blend
agencywide objectives and strategies with local priorities in revising
their plans; (5) moreover, instead of developing new performance
measures and improving existing ones to better align them with its
strategic goals and objectives and its on-the-ground projects and work
activities, the agency is relying on old program-based performance
measures; (6) many of these measures are not clearly linked to the
Forest Service's strategic goals and objectives and do not always
adequately assess the outputs, service levels, and outcomes that the
agency intends to achieve; (7) as a result, Congress and other
interested parties do not have an adequate measure of the Forest
Service's funding needs or of its progress toward achieving its
strategic goals and objectives; (8) to provide Congress and the public
with a better understanding of what it accomplishes with appropriated
funds, the Forest Service will need to make performance accountability a
priority within the agency; (9) to do so, the Forest Service will need
to provide a strong leadership, a cohesive strategy, and firm deadlines
for correcting known deficiencies; (10) one component of such a strategy
would be to replace the agency's current program structure with one that
is better linked to its strategic goals and objectives, proposed budget
structure, and the way of accomplishing work routinely on the national
forests; (11) Congress could provide an incentive to the Forest Service
to become more accountable for its performance by requiring that any
further revisions to the agency's budget coincide with actions by the
Forest Service to correct known performance-related deficiencies; and
(12) Congress could also help to expedite the process by requiring that
the agency develop a firm schedule to implement these actions.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-RCED-00-236
     TITLE:  Forest Service: Actions Needed for the Agency to Become
	     More Accountable for Its Performance
      DATE:  06/29/2000
   SUBJECT:  Accountability
	     Appropriated funds
	     Performance measures
	     Mission budgeting
	     Strategic planning
	     Forest management
	     Agency missions

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GAO/T-RCED-00-236

FOREST SERVICE Actions Needed for the Agency to Become More Accountable for
Its Performance Statement of Jim Wells, Director, Energy, Resources, and
Science Issues Resources, Community, and Economic Development Division

United States General Accounting Office

GAO Testimony Before the Subcommittee on Forests and Forest Health,

Committee on Resources, House of Representatives

For Release on Delivery Expected at 2: 00 p. m., EDT Thursday, June 29, 2000

GAO/ T- RCED- 00- 236

1 Madam Chairman and Members of the Subcommittee:

We are pleased to be here today to discuss (1) the status of efforts by the
Department of Agriculture's Forest Service to become more accountable for
what it accomplishes with appropriated funds and (2) the actions still
needed for the agency to provide the Congress and the public with a better
understanding of its performance. Our comments are based on products issued
over the last 3 years as well as on our ongoing work. 1

In summary, Madam Chairman:

ï¿½ To become more accountable for its performance, the Forest Service will
need to link its budget and organizational structures as well as its budget
allocation criteria, forest plans, and performance measures to its strategic
goals, objectives, and strategies. However, the agency is still years away
from completing these linkages. For example, the Forest Service continues to
budget and allocate most of its appropriated funds to its field offices on
the basis of nine separate programs, many of which are not linked to either
its strategic plan or the way that work is routinely accomplished on the
national forests. In addition, even though forest plans are intended to
serve as a basis for developing future budget proposals, the Forest Service
has not determined how or if the national forests will blend agencywide
objectives and strategies with local priorities in revising their plans.
Moreover, instead of developing new performance measures and improving
existing ones to better align them with its strategic goals and objectives
and its on- the- ground projects and work activities, the agency is relying
on old program- based performance measures. Many of these measures are not
clearly linked to the Forest Service's strategic goals and objectives and do
not always adequately assess the outputs, service levels, and outcomes that
the agency intends to achieve. As a result, the Congress and other
interested parties do not have an adequate measure of the Forest Service's
funding needs or of its progress toward achieving its strategic goals and
objectives.

1 See app. I for relevant GAO products on performance accountability within
the Forest Service.

2

ï¿½ To provide the Congress and the public with a better understanding of what
it accomplishes with appropriated funds, the Forest Service will need to
make performance accountability a priority within the agency. To do so, the
Forest Service will need to provide strong leadership, a cohesive strategy,
and firm deadlines for correcting known deficiencies. One component of such
a strategy would be to replace the agency's current program structure with
one that is better linked to its strategic goals and objectives, proposed
budget structure, and the way of accomplishing work routinely on the
national forests. The Congress could provide an incentive to the Forest
Service to become more accountable for its performance by requiring that any
further revisions to the agency's budget coincide with actions by the Forest
Service to correct known performance- related deficiencies. The Congress
could also help to expedite the process by requiring that the agency develop
a firm schedule to implement these actions.

Background

Twice in the last 13 years, the Congress has given the Forest Service
greater discretion in deciding where to spend appropriated funds after the
agency has promised to become more accountable for its performance. In
neither instance did the Forest Service fulfill its promise. For example, in
acting on the agency's appropriations for fiscal year 1995, the Congress
consolidated line items in the Forest Service's budget for which specific
amounts of funds are allocated. The simplified budget provided larger pools
of funds and, thus, greater discretion to the agency's field and program
managers in deciding where to spend the money. However, as recently as
October 1999, we observed that the Forest Service could not accurately
report its expenditures and accomplishments and that its budgetary,
financial, and performance systems and data were not linked.

For fiscal year 2001, the Forest Service proposed significant changes to
simplify its budget structure. The proposed budget structure would have
reduced 21 existing budget line items and extended budget line items within
the National Forest System appropriation- the agency's largest discretionary
appropriation- to 3 budget line items.

3 The Forest Service's proposed budget structure was intended to better link
the National

Forest System appropriation with two goals in the agency's 2000 strategic
plan 2 and with the way that work is routinely accomplished in the field.
Over time, the link between how funds are appropriated and how they are
spent has weakened as the agency's field offices have been required to
address issues or problems that are not aligned with the agency's budget
structure. For example, a full range of projects and activities- including
timber sales, thinning, wildlife habitat treatments, prescribed fires, and
mechanical treatments- are often necessary to restore and protect land
health and forest resources. To fund this integrated approach to land
management, field offices must now use funds from multiple appropriations
and from multiple budget line items and extended budget line items within
appropriations.

In May 2000, the House Committee on Appropriations simplified the Forest
Service's budget structure by reducing the 21 existing budget line items and
extended budget line items within the National Forest System appropriation
to 10 budget line items, thus giving the agency greater discretion in
deciding where to spend the funds. In doing so, the Committee chose to
retain the appropriation's program- specific budget structure and noted that
neither the Congress nor the agency seemed prepared to reduce the
appropriation to the three budget line items proposed by the Forest Service.

The Forest Service Is Still Years Away From Achieving Performance
Accountability

On February 7, 2000, the Forest Service asked the Congress to simplify its
budget structure. In February 16, 2000, testimony before the Subcommittee on
Interior and Related Agencies, House Committee on Appropriations, the Chief
of the Forest Service stated that he would not ask the Congress to continue
to support the agency's efforts to simplify its budget unless the Forest
Service could clearly show how taxpayer money is being used to conserve and
restore the health, diversity, and resiliency of lands and

2 Draft USDA Forest Service Strategic Plan (2000 Revision), U. S. Department
of Agriculture, Forest Service (Nov. 1999).

4 waters and provide services to the American people. 3 However, the agency
is still years

away from providing the Congress and the public with a clear understanding
of what is being accomplished with taxpayer dollars.

Budget and Organizational Structures as well as Budget Allocation Criteria
Are Not Linked to Strategic Goals, Objectives, and Strategies

Becoming more accountable for its performance will require the Forest
Service to, among other things, link its budget and organizational
structures as well as its budget allocation criteria to its strategic goals,
objectives, and strategies. However, the Forest Service has not completed
these linkages. For example, the agency's proposed budget structure was
intended to provide better links to its strategic goals and the way field
offices routinely carry out their work. However, the Forest Service
continues to develop its annual budgets and to allocate most appropriated
funds to its field offices primarily on the basis of its nine National
Forest System programs. (See fig. 1.) These programs are not linked to the
Forest Service's strategic goals, objectives, or strategies or to the way
that work is routinely accomplished on the national forests.

3 Managerial Accountability In the Forest Service: A Review of the NAPA and
GAO Reports on Accountability, Testimony of Mike Dombeck, Chief, Forest
Service, U. S. Department of Agriculture.

5

Figure 1: The Forest Service's Organizational Structure for Natural
Resources Programs

Chief Associate Chief, Natural Resources

Deputy Chief, Research and

Development Deputy Chief,

National Forest System

Deputy Chief, State and

Private Forestry

9 regional offices 123 forest offices About 600 district

offices

Engineering Lands Recreation, Heritage, and Wilderness Resources Minerals
and Geology Range Management Forest Management Watershed and Air Management
Wildlife, Fish, and Rare Plants Ecosystem Management

National Forest System programs

Source: Forest Service At the February 16, 2000, hearing, the Chief of the
Forest Service stated that the agency's 2000 strategic plan would drive the
development of budget proposals beginning in fiscal year 2002. An April 2000
cover letter from the Forest Service's Deputy Chief, Chief Financial
Officer, conveying instructions to the agency's field offices for developing
the fiscal year 2002 budget states that the budget must be clearly linked to
the goals and objectives in the 2000 strategic plan. However, the
instructions themselves do not provide for such a link, emphasizing other
priorities instead, including those for each of the agency's nine separate
programs.

6 In June 2000, Forest Service officials informed us that the agency's
schedule to link its

budget proposals to the 2000 strategic plan had slipped a year and that the
strategic plan will not drive the development of budget proposals until
fiscal year 2003. Thus, the earliest that the Congress will be able to see a
clear link between the Forest Service's budget proposal and its strategic
goals and objectives is when the agency submits its fiscal year 2003 budget
justification in February 2002.

In the interim, the Forest Service will continue to develop its budget and
allocate its appropriations primarily on the basis of historical program
funding levels rather than on the levels needed to accomplish its strategic
goals, objectives, and strategies. The national forests, in turn, will often
need to combine projects and activities from multiple programs and funding
from multiple sources to accomplish stewardship objectives and strategies--
such as restoring the health of large watersheds, reducing the risk of
catastrophic wildfires, suppressing damage from insects and diseases, and
slowing the spread of noxious weeds.

How or If Forest Plans Will Be Linked to Strategic Goals and Objectives Has
Not Been Determined

In his February 16, 2000, testimony, the Chief of the Forest Service said
that the agency expects that “forest plan goals, objectives, and
performance measures will be aligned with the agency's goals, objectives,
and performance measures.” Similarly, officials within the Forest
Service's headquarters office responsible for the agency's strategic plan-
Strategic Planning and Resource Assessment- believe that field units' goals
and objectives must be linked to the agency's strategic goals and objectives
and that strategic goals and objectives must drive those of all other plans.

In October 1999, the Forest Service proposed new planning regulations. 4
Since that time, the proposed rules have undergone numerous revisions.
Today, as best we can determine, the Forest Service has not decided how or
if the national forests will blend agencywide objectives and strategies with
local priorities in revising their plans.

4 64 Fed. Reg. 54074 (Oct. 5, 1999).

7 Annual Performance Measures Are Not Linked to Strategic Goals and
Objectives

Becoming more accountable for its performance will also require the Forest
Service to accurately assess the results of its activities. For fiscal year
2001, the agency justified its budget for the first time primarily on the
basis of annual performance measures. According to the Forest Service, these
performance measures link land health and other outcomes to its strategic
plan and budget and fully display the on- the- ground outcomes of its
management and services to the public. However, instead of developing new
performance measures and improving existing ones to better align them with
the goals and objectives in its strategic plan and on- the- ground projects
and work activities, the agency is relying on old performance measures
developed by its programs. Many of these annual performance measures (1) are
not clearly linked to the goals, objectives, and long- term measures in the
agency's 2000 strategic plan and (2) do not always adequately assess the
outputs, service levels, and outcomes that the agency intends to achieve.

For example, the Forest Service's annual measure of progress toward reducing
the threat of catastrophic wildfires on the national forests and its basis
for justifying each future fiscal year's funding is the number of acres
treated. Thus, the agency's field offices have an incentive to focus on the
easiest and least costly areas, rather than on those that present the
highest risks but are often costlier to treat. Moreover, an annual
performance measure focused on the total acreage treated rather than on
reducing hazards to nearby communities, watersheds, and species at risk is
not clearly linked to the long- term measure and 5- year milestone in the
Forest Service's 2000 strategic plan to decrease the number of acres at
extreme risk of catastrophic losses from wildfire.

The “disconnect” between the Forest Service's strategic goals
and objectives and its annual performance measures and the inadequacy of
those measures become even more critical because the system being developed
by the agency to report costs and performance uses the old program- specific
performance measures to display the relationship between expenditures and
results.

8

Actions Needed for the Forest Service to Provide the Congress and the Public
With a Better Understanding of Its Performance

In April 1997, we reported that inefficiency and waste within the Forest
Service resulted, in part, from the agency's culture of indifference toward
accountability and its failure to hold managers accountable for their
performance. Forest Service managers believed that the Congress should
increase the agency's flexibility in fiscal decision- making but should not
expect the agency to be accountable for its performance.

Almost 3 years later, the Chief of the Forest Service observed that the
change in culture had not occurred. In his February 16, 2000, testimony he
stated that, to restore the agency's credibility with the Congress and the
American people, the Forest Service must change its culture, recognizing
that it cannot be an effective resource manager if it is not first
accountable for taxpayer money and for its own actions on the landscape.

What the Forest Service Could Do To provide the Congress and the public with
a better understanding of what it accomplishes with appropriated funds, the
Forest Service will need to make performance accountability a high priority
within the agency. However, historically, agency officials have not viewed
performance accountability as a priority and have thus not provided the
strong leadership, cohesive strategy, and firm deadlines necessary to
correct known deficiencies.

Comparing the actions that the Forest Service has taken to improve its
financial management and reporting with its lack of progress in becoming
more accountable for its performance illustrates the low priority that the
agency has assigned to providing the Congress and the public with a better
understanding of its performance. On the one hand, the Forest Service has
provided the needed financial accountability leadership by consolidating the
responsibility for financial management under its Deputy Chief, Chief
Financial Officer. By contrast, the responsibility for performance
accountability is currently fragmented among three Deputy Chiefs: the Deputy
Chief, Programs and

9 Legislation, is responsible for the agency's strategic goals, objectives,
strategies, and

long- term performance measures; the Deputy Chief, Chief Financial Officer,
is responsible for the Forest Service's fiscal year budget development and
annual goals, objectives, strategies, and performance measures; and the
Deputy Chief, National Forest System, is responsible for the agency's
proposed new planning regulations. (See fig. 2.)

Figure 2: Forest Service Offices Responsible for Performance Accountability

Source: GAO's analysis of documents from the Forest Service. On the basis of
our work to date, we believe that organizationally isolating decisions on
strategic planning from decisions on budget development and allocation,
annual performance goals, and forest planning has contributed substantially
to the continuing lack of progress in establishing the close linkages among
these activities that are essential for the agency to become more
accountable for its performance. Overcoming this isolation will require that
the Forest Service (1) make clear that strategic goals, objectives, and
strategies must drive, rather than be isolated from, budget and planning

10 decisions and (2) design an organizational structure to ensure that the
needed linkages

are completed. Besides consolidating the responsibility for financial
management, the Forest Service has also devised a strategy with goals,
objectives, time frames, and measures to strengthen its financial
accountability. However, the agency has not developed a similar strategy to
improve its performance accountability.

The Forest Service is also redesigning its organizational structure to
correct longstanding financial management and reporting deficiencies and to
provide a nucleus around which financial accountability can be built.
However, the agency has no plan to replace its program structure with one
that is better linked to its strategic goals and objectives, its proposed
new budget structure, and the way that work is routinely accomplished on the
national forests. Moreover, the agency has no plan to better link its
research division and state and private programs (see fig. 1) to the
national forests to identify and address stewardship issues-- such as
wildfires, insects and diseases, and noxious weeds-- that do not recognize
the forests' administrative boundaries.

What the Congress Could Do The Congress could provide an incentive for the
Forest Service to become more accountable for its performance by requiring
that any further simplification or other revision to the agency's budget
coincide with, rather than precede, actions by the Forest Service to become
more accountable for its performance. For instance, the Congress could
require that any reduction in the number of budget line items coincide with,
rather than precede, actions by the agency to link its budget and
organizational structures, budget allocation criteria, forest plans, and
performance measures to its strategic goals, objectives, and strategies. In
addition, the Congress could help to expedite the Forest Service becoming
more accountable for its performance by requiring the agency to replace 13
years of promises and false starts with a strategy that includes clear goals
and objectives, firm deadlines, and measurable indicators of progress.

11 ----

Madam Chairman, this concludes my formal statement. We will be pleased to
respond to any questions that you or other Members of the Subcommittee may
have.

Contact and Acknowledgment

For future contacts regarding this testimony, please contact Jim Wells on
(202) 512- 3841. Individuals making key contributions to this testimony
include Charles S. Cotton and Chester M. Joy.

12 Appendix I

Relevant GAO Reports and Testimonies on Performance Accountability Within
the Forest Service

Forest Service Decision- Making: A Framework for Improving Performance( GAO/
RCED97- 71, Apr. 29, 1997).

The Results Act: Observations on the Forest Service's May 1997 Draft Plan(
GAO/ TRCED- 97- 223, July 31, 1997).

Forest Service: Lack of Financial and Performance Accountability Has
Resulted in Inefficiency and Waste( GAO/ T- RCED/ AIMD- 98- 135, Mar. 26,
1998).

Forest Service Management: Little Has Changed as a Result of the Fiscal Year
1995 Budget Reforms( GAO/ RCED- 99- 2, Dec. 2, 1998).

Western National Forests: A Cohesive Strategy Is Needed to Address
Catastrophic Wildfire Threats( GAO/ RCED- 99- 65, Apr. 2, 1999).

Forest Service: A Framework for Improving Accountability( GAO/ RCED/ AIMD-
00- 2, Oct. 13, 1999).

Forest Service: Status of Efforts to Improve Accountability( GAO/ T- RCED/
AIMD- 00- 93, Feb. 16, 2000).

(141458)

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