National Park Service: Maintenance Backlog Issues (Testimony, 02/04/98,
GAO/T-RCED-98-61).

Pursuant to a congressional request, GAO discussed: (1) the Park
Service's estimate of the maintenance backlog and its composition; (2)
how the agency determined the maintenance backlog estimate and whether
it is reliable; and (3) how the agency manages the backlog.

GAO noted that: (1) the Park Service's estimate of its maintenance
backlog does not accurately reflect the scope of the maintenance needs
of the park system; (2) the Park Service estimated, as of January 1997,
that its maintenance backlog was about $6.1 billion; (3) most of this
amount--about $5.6 billion, or about 92 percent--was construction
projects; (4) of this amount, over 21 percent or $1.2 billion was for
the construction of new facilities; (5) while GAO does not question the
need for these facilities, including these kinds of new construction
projects or projects that expand or upgrade park facilities in an
estimate of the maintenance backlog is not appropriate because it goes
beyond what could reasonably be viewed as maintenance; (6) as a result,
including these projects in the maintenance backlog contributes to
confusion about the actual maintenance needs of the national park
system; (7) the Park Service's estimate of its maintenance backlog is
not reliable; (8) its maintenance backlog estimates are compiled on an
ad hoc basis in response to requests from Congress or others; (9) the
agency does not have a routine, systematic process for determining its
maintenance backlog; (10) the most recent estimate, as of January 1997,
was based largely on information that was compiled by the Park Service
over 4 years ago and has not been updated to reflect changing conditions
in individual park units; (11) this fact, as well as the absence of a
common definition of what should be included in the maintenance backlog,
contributes to an inaccurate and out-of-date estimate; (12) the Park
Service does not use the estimated backlog in managing park maintenance
operations; (13) as such, it has not specifically identified its total
maintenance backlog; (14) since the backlog far exceeds the funding
resources being made available to address it, the Park Service has
focused its efforts on identifying the highest-priority maintenance
needs; (15) however, given that substantial additional funding resources
can be used to address maintenance--over $100 million starting in fiscal
year (FY) 1998--the Park Service should more accurately determine its
total maintenance needs and track progress in meeting them so that it
can determine the extent to which they are being met; (16) the Park
Service is beginning to implement the legislatively mandated management
changes in FY 1998; and (17) these changes could, if properly
implemented, help the Park Service develop more accurate data on its
maintenance backlog and track progress in addressing it.

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

 REPORTNUM:  T-RCED-98-61
     TITLE:  National Park Service: Maintenance Backlog Issues
      DATE:  02/04/98
   SUBJECT:  National parks
             National historic sites
             Facility construction
             Maintenance (upkeep)
             Historic preservation
             Maintenance costs
             Data integrity
             Federal agency accounting systems
IDENTIFIER:  National Park System
             
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Cover
================================================================ COVER


Before the Subcommittee on Interior and Related Agencies, Committee
on Appropriations, House of Representatives

For Release
on Delivery
Expected at
10 a.m.  EST
Wednesday
Feb.  4, 1998

NATIONAL PARK SERVICE -
MAINTENANCE BACKLOG ISSUES

Statement of Barry T.  Hill, Associate Director,
Energy, Resources, and Science Issues,
Resources, Community, and Economic
Development Division

GAO/T-RCED-98-61

GAO/RCED-98-61T


(141140)


Abbreviations
=============================================================== ABBREV

  SFFAS - Statement of Federal Accounting Standards

============================================================ Chapter 0

Mr.  Chairman and Members of the Subcommittee: 

We are pleased to be here today to discuss the maintenance backlog
situation in the National Park Service.  At the same time as new
parks are being added to the national park system and existing parks
are being further developed and improved, conditions in many parks
are deteriorating.  An indication of this deterioration has been the
increasingly large maintenance backlogs cited by the Park Service and
others.  The Park Service has reported that the maintenance backlog
has more than tripled over the past 10 years. 

For years, the Congress has been concerned about the growth of the
maintenance backlog at the same time that hundreds of millions of
dollars are being provided each year to deal with it.  In preparation
for today's hearing, you asked us to comment on (1) the Park
Service's estimate of the maintenance backlog and its composition,
(2) how the agency determined the maintenance backlog estimate and
whether it is reliable, and (3) how the agency manages the backlog. 
In addition, we will point out recent requirements that have been
placed on the Park Service and other federal agencies that may have a
positive impact on what is being done in this area. 

Our testimony today is based on ongoing work that will be completed
later this year.  As part of this effort, we conducted interviews and
obtained information from Park Service headquarters, two regional
offices, and four park units.\1

In summary, our work so far has shown the following: 

  -- The Park Service's estimate of its maintenance backlog does not
     accurately reflect the scope of the maintenance needs of the
     park system.  The Park Service estimated, as of January 1997,
     that its maintenance backlog was about $6.1 billion.  Most of
     this amount--about $5.6 billion, or about 92 percent--were
     construction projects.  Of this amount, over 21 percent or $1.2
     billion was for the construction of new facilities, such as a
     $24 million bike path at the Colonial National Historical Park
     in Virginia and $16.6 million to replace a visitor center and
     construct a park entrance at Acadia National Park in Maine. 
     While we do not question the need for these facilities,
     including these kinds of new construction projects or projects
     that expand or upgrade park facilities in an estimate of the
     maintenance backlog is not appropriate because it goes beyond
     what could reasonably be viewed as maintenance.  As a result,
     including these projects in the maintenance backlog contributes
     to confusion about the actual maintenance needs of the national
     park system. 

  -- The Park Service's estimate of its maintenance backlog is not
     reliable.  Its maintenance backlog estimates are compiled on an
     ad hoc basis in response to requests from the Congress or
     others; the agency does not have a routine, systematic process
     for determining its maintenance backlog.  The most recent
     estimate, as of January 1997, was based largely on information
     that was compiled by the Park Service over 4 years ago and has
     not been updated to reflect changing conditions in individual
     park units.  This fact, as well as the absence of a common
     definition of what should be included in the maintenance
     backlog, contributes to an inaccurate and out-of-date estimate. 

  -- The Park Service does not use the estimated backlog in managing
     park maintenance operations.  As such, it has not specifically
     identified its total maintenance backlog.  Since the backlog far
     exceeds the funding resources being made available to address
     it, the Park Service has focused its efforts on identifying the
     highest priority maintenance needs.  However, given that
     substantial additional funding resources can be used to address
     maintenance--over $100 million starting in fiscal year 1998--the
     Park Service should more accurately determine its total
     maintenance needs and track progress in meeting them so that it
     can determine the extent to which they are being met. 

  -- Recently, new accounting standards as well as management changes
     prompted by the Government Performance and Results Act have been
     imposed on federal agencies.  The Park Service is beginning to
     implement these changes in fiscal year 1998.  These changes
     could, if properly implemented, help the Park Service develop
     more accurate data on its maintenance backlog and track progress
     in addressing it. 


--------------------
\1 The two Park Service regional offices that we visited were
Philadelphia and Denver.  They have jurisdiction over the four parks
that we visited.  The parks were Acadia National Park, Colonial
National Historical Park, Delaware Water Gap National Recreation
Area, and Rocky Mountain National Park. 


   BACKGROUND
---------------------------------------------------------- Chapter 0:1

The national park system has 376 units.  These park units have over
16,000 permanent structures, 8,000 miles of roads, 1,500 bridges and
tunnels, 5,000 housing units, about 1,500 water and waste systems,
200 radio systems, over 400 dams, and more than 200 solid waste
operations.  According to the Park Service, these facilities are
valued at over $35 billion.  Needless to say, the proper care and
maintenance of the national parks and their supporting infrastructure
is essential to the continued use and enjoyment of our great national
treasures by this and future generations.  However, for years Park
Service officials have highlighted the agency's inability to keep up
with its maintenance needs.  In this connection, Park Service
officials and others have often cited a continuing buildup of unmet
maintenance needs as evidence of deteriorating conditions throughout
the national park system.  The accumulation of these unmet needs has
become commonly referred to by the Park Service as its "maintenance
backlog."

The reported maintenance backlog has increased significantly over the
past 10 years--from $1.9 billion in 1987 to about $6.1 billion in
1997.  Recently, concerns about the maintenance backlog situation
within the National Park Service, as well as other federal land
management agencies, have led the Congress to provide significant new
sources of funding.  These additional sources of funding were, in
part, aimed at helping the agencies address their maintenance
problems.  It is anticipated that new revenues from the 3-year
demonstration fee program will provide the Park Service over $100
million annually.\2 In some cases, the new revenues will as much as
double the amount of money available for operating individual park
units.  In addition, funds from a special one-time appropriation from
the Land and Water Conservation Fund may also be available for use by
the Park Service in addressing the maintenance backlog.  These new
revenue sources are in addition to the $300 million in annual
operating appropriations which are used for maintenance activities
within the agency. 


--------------------
\2 Beginning in fiscal year 1996, four federal land management
agencies, including the Park Service, have been authorized to have a
fee demonstration program.  Under this program, these agencies are
permitted to experiment at up to 100 areas with increasing existing
recreational fees and/or initiating new fees where none were in
place.  Each of the agencies can keep the revenue generated from this
program. 


   THE PARK SERVICE'S ESTIMATE AND
   THE COMPOSITION OF THE
   MAINTENANCE BACKLOG
---------------------------------------------------------- Chapter 0:2

In 1997, in support of its fiscal year 1998 budget request, the Park
Service estimated that its maintenance backlog was about $6.1
billion.\3 Maintenance is generally considered to be work done to
keep assets--property, plant, and equipment--in acceptable condition. 
It includes normal repairs and the replacement of parts and
structural components needed to preserve assets.  However, the
composition of the maintenance backlog estimate provided by the Park
Service includes activities that go beyond what could be considered
maintenance.  Specifically, the Park Service's estimate of its
maintenance backlog includes not only repair and rehabilitation
projects to maintain existing facilities, but also projects for the
construction of new facilities. 

Of the estimated $6.1 billion maintenance backlog, most of it--about
$5.6 billion, or about 92 percent--are construction projects.  These
projects, such as building roads and utility systems, are relatively
large and normally exceed $500,000 and involve multiyear planning and
construction activities.  According to the Park Service, the projects
are intended to meet the following objectives:  (1) repair and
rehabilitation; (2) resource protection issues, such as constructing
or rehabilitating historic structures and trails and erosion
protection activities; (3) health and safety issues, such as
upgrading water and sewer systems; (4) new facilities in older
existing parks; and (5) new facilities in new and developing parks. 
Appendix I of this testimony shows the dollar amounts and percentage
of funds pertaining to each of the project objectives. 

The Park Service's list of projects in the construction portion of
the maintenance backlog reveals that over 21 percent, or $1.2
billion, of the $5.6 billion is for new facilities.  We visited four
parks to review the projects listed in the Park Service's maintenance
backlog estimates for those parks and found that the estimates
included new construction projects as part of the backlog estimate. 
For example: 

  -- Acadia National Park's estimate included $16.6 million to
     replace a visitor center and construct a park entrance. 

  -- Colonial National Historical Park included $24 million to build
     a Colonial Parkway bicycle and walking trail. 

  -- Delaware Water Gap National Recreation Area included $19.2
     million to build a visitor center and rehabilitate facilities. 

  -- Rocky Mountain National Park included $2.4 million to upgrade
     entrance facilities. 

While we do not question the need for any of these facilities, they
are directed at either further development of a park or modifications
of and improvements to existing facilities in parks to meet the
visions that park managers wish to achieve for their parks.  These
projects are not aimed at addressing the maintenance of existing
facilities within the parks.  As a result, including these types of
projects in the maintenance backlog contributes to confusion about
the actual maintenance needs of the national park system. 

In addition to projects clearly listed as new construction, other
projects on the $5.6 billion list that are not identified as new
construction, such as repair and rehabilitation of existing
facilities, also include substantial amounts of new construction. 
Our review of the projects for the four parks shows that each
included large repair and rehabilitation projects that contained
tasks that would not be considered maintenance.  These projects
include new construction for adding, expanding, and upgrading
facilities.  For example, at Colonial National Historical Park, an
$18 million project to protect Jamestown Island and other locations
from erosion included about $4.7 million primarily for new
construction of such items as buildings, boardwalks, wayside
exhibits, and an audio exhibit. 

Beyond construction items, the remaining composition of the $6.1
billion backlog estimate--about 8 percent, or about $500
million--consists of smaller maintenance projects that include such
items as rehabilitating campgrounds and trails and repairing bridges,
and other items that recur on a cyclic basis, such as reroofing or
repainting buildings.  Excluded from the Park Service's maintenance
backlog figures is the daily, park-based operational maintenance to
meet routine park needs, such as janitorial and custodial services,
groundskeeping, and minor repairs. 


--------------------
\3 The Park Service's estimate ranged from $6.04 billion to $6.18
billion.  Throughout this statement, we used about $6.1 billion since
it approximately represents the midpoint of these numbers. 


   HOW IS MAINTENANCE BACKLOG
   DETERMINED?  IS IT RELIABLE? 
---------------------------------------------------------- Chapter 0:3

The Park Service compiles its maintenance backlog estimates on an ad
hoc basis in response to requests from the Congress or others; it
does not have a routine, systematic process for determining its
maintenance backlog.  The January estimate of the maintenance
backlog--its most recent estimate--was based largely on information
that was compiled over 4 years ago.  This fact, as well as the
absence of a common definition of what should be included in the
maintenance backlog, contributed to an inaccurate and out-of-date
estimate. 

Although documentation showing the maintenance backlog estimate of
$6.1 billion was dated January 1997, for the most part, the Park
Service's data were compiled on the basis of information received
from the individual parks in December 1993.  A Park Service official
stated that the 1993 data were updated by headquarters to reflect
projects that had been subsequently funded during the intervening
years.  However, at each of the parks we visited in preparing for
today's testimony, we found that the Park Service's most recent
maintenance backlog estimate for each of the parks was neither
accurate nor current. 

The four parks' estimates of their maintenance backlog needs ranged
from about $40 million at Rocky Mountain National Park to $120
million at Delaware Water Gap National Recreation Area.  Our analysis
of these estimates showed that they varied from the headquarters
estimates by about $3 million and $21 million, respectively.  The
differences occurred because the headquarters estimates were based
primarily on 4-year old data.  According to officials from the four
parks, they were not asked to provide specific updated data to
develop the 1997 backlog estimate.  The parks' estimates, based on
more current information, included such things as updated lists
reflecting more recent projects, modified scopes, and more up-to-date
cost estimates.  For example, Acadia's estimate to replace the
visitor center and construct a park entrance has been reduced from
$16.6 million to $11.6 million; the Delaware Water Gap's estimate of
$19.2 million to build a visitor center and rehabilitate facilities
has been reduced to $8 million; and Rocky Mountain's $2.4 million
project to upgrade an entrance facility is no longer a funding need
because it is being paid for through private means.  In addition, one
of the projects on the headquarters list had been completed. 

The Park Service has no common definition as to what items should be
included in an estimate of the maintenance backlog.  As a result, we
found that officials we spoke to in Park Service headquarters, two
regional offices, and four parks had different interpretations of
what should be included in the backlog.  In estimating the
maintenance backlog, some of these officials would exclude new
construction; some would include routine, park-based maintenance; and
some would include natural and cultural resource management and land
acquisition activities.  In addition, when the Park Service
headquarters developed the maintenance backlog estimate, it included
both new construction and maintenance-type items in the estimate. 
For example, nonmaintenance items, such as adding a bike path to a
park where none now exists or building a new visitor center, are
included.  The net result is that the maintenance backlog estimate is
not a reliable measure of the maintenance needs of the national park
system. 


   MANAGING THE BACKLOG
---------------------------------------------------------- Chapter 0:4

In order to begin addressing its maintenance backlog, the Park
Service needs (1) accurate estimates of its total maintenance backlog
and (2) a means for tracking progress so that it can determine the
extent to which its needs are being met.  Currently, the agency has
neither of these things.  Yet, the need for them is more important
now than ever before because in fiscal year 1998, over $100 million
in additional funding is being made available for the Park Service
that it could use to address its maintenance needs.  This additional
funding comes from the demonstration fee program.  Also, although the
exact amount is not yet known, additional funding may be made
available from the Land and Water Conservation Fund. 

Park Service officials told us that they have not developed a precise
estimate of the total maintenance backlog because the needs far
exceed the funding resources available to address them.  In their
view, the limited funds available to address the agency's maintenance
backlog dictate that managers focus their attention on identifying
only the highest priority projects on a year-to-year basis.  Since
the agency does not focus on the total needs but only on priorities
for a particular year, it cannot determine whether the maintenance
conditions of park facilities are improving or worsening. 
Furthermore, without information on the total maintenance backlog, it
is difficult to fully measure what progress is being made with
available resources. 

The recent actions by the Congress to provide the Park Service with
substantial additional funding, which could be used to address its
maintenance backlog, further underscores the need to ensure that
available funds are being used to address those needs and to show
progress in improving the conditions of the national park system. 
The Park Service estimates that the demonstration fee program could
provide over $100 million a year to address the parks' maintenance
and other operational needs.  In some parks, revenue from new and
increased fees could as much as double the amount of money that has
been previously available for operating individual park units.  In
addition to the demonstration fee program, fiscal year 1998 was the
first year that appropriations from the Land and Water Conservation
Fund could be used to address the maintenance needs of the national
park system.  However, according to Park Service officials, the exact
amount provided from this fund for maintenance will not be determined
until sometime later this month. 


   NEW REQUIREMENTS SHOULD HELP
   ADDRESS PROBLEMS
---------------------------------------------------------- Chapter 0:5

Two new requirements that have been imposed on the Park Service, and
other federal agencies, should, if implemented properly, help the
agency to better address its maintenance backlog.  These new
requirements involve (1) changes in federal accounting standards and
(2) the Government Performance and Results Act (the Results Act). 

Recent changes in federal accounting standards require federal
agencies, including the Park Service, to develop better data on their
maintenance needs.  The standards define deferred maintenance and
require that it be disclosed in agencies' financial statements
beginning with fiscal year 1998.\4 To implement these standards, the
Park Service is part of a facilities maintenance study team that has
been established within the Department of the Interior to provide the
agency with deferred maintenance information as well as guidance on
standard definitions and methodologies for improving the ongoing
accumulation of this information.  In addition, as part of this
initiative, the Park Service is doing an assessment of its assets to
show whether they are in poor, fair, or good condition.  This
condition information is essential to providing the Park Service with
better data on its overall maintenance needs.  Furthermore, it is
important to point out that as part of the agency's financial
statements, the accuracy of the Park Service's deferred maintenance
estimates will be subjected to annual audits.  This audit scrutiny is
particularly important given the long-standing concerns reported by
us and others about the validity of the data on the Park Service's
maintenance backlog estimates. 

The Results Act should also help the Park Service to better address
its maintenance backlog.  In carrying out the Results Act, the Park
Service is requiring its park managers to measure progress in meeting
a number of key goals, including whether and to what degree the
conditions of park facilities are being improved.  If properly
implemented, this requirement should make the Park Service as a
whole, as well as individual park managers, more accountable for how
it spends maintenance funds to improve the condition of park
facilities.  Once in place, this process should permit the Park
Service to better demonstrate what is being accomplished with its
funding resources.  This is an important step in the right direction
since our past work has shown that the Park Service could not hold
park managers accountable for their spending decisions because they
did not have a good system for tracking progress and measuring
results.\5


--------------------
\4 These standards are contained in the Statement of Federal
Financial Accounting Standards (SFFAS) No.  6, Accounting for
Property, Plant, and Equipment, recently developed by the Federal
Accounting Standards Advisory Board.  According to this standard,
deferred maintenance is defined as "maintenance that was not
performed when it should have been or was scheduled to be and which,
therefore, is put off or delayed for a future period."
Maintenance--described as the act of keeping fixed assets in
acceptable condition--includes preventive maintenance and normal
repairs including the replacement of parts and structural components
and other activities needed to preserve the asset so that it
continues to provide acceptable service and achieve its expected
life.  Modifications or upgrades that are intended to expand the
capacity of an asset are specifically excluded from the definition. 

\5 Park Service:  Managing for Results Could Strengthen
Accountability (GAO/RCED-97-125, Apr.  10, 1997). 


-------------------------------------------------------- Chapter 0:5.1

Mr.  Chairman, this completes my statement.  I would be happy to
answer questions from you or any other Members of the Subcommittee. 


COMPOSITION OF THE BACKLOG
=========================================================== Appendix I



                               Table I.1
                
                   Park Service's Estimates of Major
                Categories of Maintenance Backlog as of
                              January 1997

                         (Dollars in billions)

Objective                            Dollar amount             Percent
------------------------------  ------------------  ------------------
Repair and rehabilitation                   $2.143                  38
Resource protection                          1.237                  22
Health and safety                             .973                  18
New facilities--existing parks                .803                  14
New facilities--new parks                     .432                   8
======================================================================
Total                                     $5.588\a                 100
----------------------------------------------------------------------
\a This $5.6 billion estimate represents the construction portion of
the $6.1 billion estimated maintenance backlog.  The remaining $500
million consists of smaller projects that include repair and
rehabilitation and cyclic maintenance projects. 

Source:  National Park Service. 


*** End of document. ***