[Audit Report on Miscellaneous Receipts, U.S. Fish and Wildlife Service]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 00-i-50

Title: Audit Report on Miscellaneous Receipts, U.S. Fish and Wildlife
       Service



Date:  November 9, 1999




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U.S. Department of the Interior
Office of Inspector General




AUDIT REPORT
MISCELLANEOUS RECEIPTS,
U.S. FISH AND WILDLIFE SERVICE


REPORT NO. 00-I-50

NOVEMBER 1999




                                                  E-IN-FWS-005-98


Memorandum

     To:  Assistant Secretary for Fish and Wildlife and Parks

   From:  Robert J. Williams
          Assistant Inspector General for Audits

Subject:  Audit Report on Miscellaneous Receipts,
          U.S. Fish and Wildlife Service (No. 00-i-50)

This report presents the results of our audit of miscellaneous
receipts collected by the U.S. Fish and Wildlife Service. We
initiated this audit in response to a June 1997 memorandum from
the Service's Acting Director, who requested that we review
payments for the mitigation of damages caused by oil and gas
exploration activities on Service lands (specifically, refuges in
coastal Louisiana) and determine whether the payments were
"calculated correctly and commensurate with the damage done."  We
expanded the objective to determine whether the Service (1)
established adequate guidance and controls over the assessment,
collection, and use of fees that are charged at national wildlife
refuges; (2) applied consistent fees or charges that provide a
reasonable return to the Government and that enable the Service
to recover related administrative costs; and (3) complied with
applicable Government requirements. 

At 31 refuges contacted and 15 refuges visited, we found that the
Service had set fees for the use of refuge resources at amounts
that provided a reasonable return to the Government.  While more
than $32.8 million in fees was assessed by five refuges in
Louisiana and Texas during fiscal years 1990 through 1998, we
found that only $26 million was deposited into U.S. Treasury
accounts, as required by law.

At the five refuges, where mineral rights generally were
privately held, the Service charged fees for the mitigation of
potential damages from oil and gas exploration activities, even
though the Service did not have authority to assess such fees to
mineral rights holders.  These fees totaled $6.8 million from
fiscal years 1990 through 1998 (see Appendix 1).  The Service
arranged for these fees to be retained for refuge use.  That is,
the five refuges directed exploration companies to deposit the
fees into accounts maintained by a nonprofit organization (the
Fish and Wildlife Foundation), to remit the fees to the Service
for deposit into the refuges' contributed funds accounts, or to
pay the fees to refuge suppliers or grantees.

Had the Service been authorized to assess fees for the mitigation
of damages to refuges, the fees should have been deposited into
U.S. Treasury accounts, in accordance with the Refuge Revenue
Sharing Act and the Miscellaneous Receipts Act.  Rather, having
arranged for the unauthorized assessment of damage mitigation
fees, the Service improperly spent fees of about $2.3 million to
augment refuge operations.  For example, the Service used
receipts of $596,737 to finance grants to universities that
conducted research on the refuges, $175,000 to pay the salaries
of two refuge employees, and $33,322 to buy a vehicle.  In buying
these goods and services, the Service did not follow Federal
procurement procedures that provide safeguards against improper
and wasteful expenditures. 

Service officials collected mitigation fees without authorization
and retained and used the fees for refuge operations because they
considered the assessment of such fees to be a standard industry
practice and the receipts to be donations/gifts or the payment of
claims.  In our opinion, however, the payments were not donations
or gifts because they were not conveyed gratuitously without
consideration, nor were they payments of claims because the
amount of the damages had not been determined.

Finally, we found that the Service made a deduction from the
receipts it deposited into the Treasury fund for its costs to
administer economic use activities on the refuges.  The Refuge
Revenue Sharing Act does authorize the Service to pay
administrative costs from the receipts, but Service  regulations
require that the administrative cost deduction be based on the
actual or estimated costs of administration.  However, the
Service had not established policies or procedures for
determining its administrative costs.  As such, the Service
retained receipts of about $21.3 million from fiscal years 1990
through 1998 for undetermined administrative expenses.  It may
have overrecovered or underrecovered its administrative costs and
may not have deposited the appropriate amounts into the U.S.
Treasury fund. 

We made five recommendations to the Service to help ensure that
receipts from economic activities on refuges are assessed,
collected, and deposited properly, in accordance with  applicable
Federal laws and Service regulations.  We made another
recommendation that the Service develop and implement procedures
and policies to ensure that cost deductions for administering
economic use activities on refuges are based on a supportable and
reasonable method of estimating such costs. 

In the September 1, 1999, response (Appendix  4) to the draft
report from the Acting Director, U.S. Fish and Wildlife Service,
the Service concurred with Recommendations A.4, A.5, and B.1.
Based on the response, we consider these recommendations resolved
but not implemented.  Accordingly, the recommendations will be
referred to the Assistant Secretary for Policy, Management and
Budget for tracking of implementation.  The Service did not
concur  with  Recommendations  A.1, A.2, and A.3 and included
with the response an August 16, 1999, memorandum from the Acting
Regional Solicitor, Southeast Region, to the Service's Southeast
Regional Director, in which the Solicitor discussed the legal
basis for the Service's nonconcurrence with these
recommendations.  Based on the response, we revised
Recommendation A.1 and request that the Service respond to the
revised recommendation.  We urge the Service to reconsider its
responses to Recommendations A.2 and A.3, which are unresolved
(see Appendix 5).

In accordance with the Departmental Manual (360 DM 5.3), we are
requesting a written response to this report by January 7, 2000.
The response should include the information requested in
Appendix 5.

Section 5(a) of the Inspector General Act (Public Law 95-542, as
amended) requires the Office of Inspector General to list this
report in its semiannual report to the Congress.  In addition,
the Office of Inspector General provides copies of audit reports
to the Congress.

We appreciate the assistance of Service personnel in the conduct
of our audit.

CONTENTS
                                                     Page
INTRODUCTION............................................1

BACKGROUND..............................................1
OBJECTIVE AND SCOPE.....................................1
PRIOR AUDIT COVERAGE....................................3
FINDINGS AND RECOMMENDATIONS............................4
A.MISCELLANEOUS RECEIPTS................................4
A.COST DEDUCTIONS......................................16

APPENDICES

1. CLASSIFICATION OF MONETARY AMOUNTS..................18
2. REFUGE REVENUE SHARING ACT RECEIPTS AND PAYMENTS
   RELATED TO ECONOMIC ACTIVITIES ON NATIONAL WILDLIFE
   REFUGES, FISCAL YEARS 1990 THROUGH 1998.............19
3. SITES VISITED OR CONTACTED..........................20
4. U.S. FISH AND WILDLIFE SERVICE RESPONSE.............22
5. STATUS OF AUDIT REPORT RECOMMENDATIONS..............32

INTRODUCTION

BACKGROUND

The U.S. Fish and Wildlife Service's mission is to conserve,
protect, and enhance fish and wildlife and their habitats.  To
perform this mission, the Service administers the National
Wildlife Refuge System, which consists of 516 national wildlife
refuges, 38 wetland management  districts,  and 50  coordination
areas,  all  of  which  encompass  more  than 93 million acres of
land.  The Service conducts a variety of land, fish and wildlife,
and public use management activities on these lands.  One such
land management activity is the economic development of natural
resources on refuge lands.  Through the issuance of special use
permits and other authorizations, the Service provides for the
economic use of refuge resources and for the payment of fees or
other compensation for resource use.

The Refuge Revenue Sharing Act of 1935 (16 U.S.C. 715s) and the
Service's Refuge Manual (5 RM 17) provide guidance on the types
of special use activities that are authorized on refuges.
Specifically, the Refuge Manual (5 RM 17.3) states that
"specialized use of a national wildlife refuge may be permitted
only when determined to be compatible with the purpose(s) for
which the refuge was established" and "consistent with refuge
objectives and applicable laws and policies."  Also, the Refuge
Manual (5 RM 17.11) describes the policies and procedures for
administering economic activity on refuges, including permittee
selection procedures, fee approval authority, documentation
processes, and fee disposition. 

Regarding compensation for economic use activities on refuges,
the Service's Refuge Manual (5 RM 17.7) requires refuges to
establish the rates or fees to be charged for the use of refuge
resources.  The Refuge Revenue Sharing Act requires the Service
to deposit the receipts from the economic use of refuge
resources[1] into a separate U.S. Treasury fund (the National
Wildlife Refuge Fund) and allows the Service to deduct from these
deposits its cost of administering economic use activities on the
refuges.  The amounts deposited into the Treasury fund are
required to be distributed as revenue-sharing payments to the
counties in which the refuges are located. In addition to the
Refuge Revenue Sharing Act, the Miscellaneous Receipts Statute
(31 U.S.C. 3302) provides for the deposit of receipts into the
General Fund of the Treasury when there is no statutory authority
for alternative disposition.  

OBJECTIVE AND SCOPE 

The objective of the audit was to determine whether the U.S. Fish
and Wildlife Service (1) established adequate guidance and
controls over the assessment, collection, and use of fees that
are charged at the national wildlife refuges; (2) applied
consistent fees or charges that provide a reasonable return to
the Government and that enable the Service to recover related
administrative  costs;  and (3) complied with applicable
Government requirements.  

In particular, we reviewed damage mitigation fees paid by
companies that conducted oil and gas exploration activities in
response to a June 4, 1997, request from the Service's Acting
Director, who asked that we determine whether the payments "were
calculated correctly and commensurate with damages done."
Miscellaneous receipts from economic activities on refuges that
were deposited into the U.S. Treasury account and disbursed in
accordance with the Refuge Revenue Sharing Act (fiscal years 1990
through 1998) are listed in Appendix 2.

In addition to damage mitigation payments for oil and gas
exploration activities, we selected for review, on a judgmental
basis, certain categories of miscellaneous receipts (such as
grazing, farming, and time harvesting) at geographically
dispersed refuges.  In total, we reviewed miscellaneous receipts
totaling about $8.7 million received by 29 refuges or refuge
complexes during the period of fiscal years 1990 through 1998.
Because the Service did not maintain a complete, centralized
database on all receipts from economic use activities (such as
the number of permits issued) and did not record all receipts
from economic activities  conducted on refuges (as discussed in
Finding A of this report), we could not determine the total
number of permits issued or the total amount of the receipts at
the 46 refuges or refuge complexes included in our review.

We conducted our audit at the locations listed in Appendix 3.  To
accomplish our objective, we reviewed laws, regulations,
Department of the Interior policies, and Service regulations and
accounting records pertaining to economic activities conducted on
Service lands.  We also interviewed Service personnel at the
Service's headquarters, regional, and refuge offices; officials
from the Solicitor's office; and representatives of the National
Fish and Wildlife Foundation.  At our request, our Office of
General Counsel reviewed the laws and regulations governing the
disposition and use of receipts collected by the Service for
mitigation of damages from oil and gas exploration activities and
issued a legal opinion on these issues.  In addition, we reviewed
and analyzed the accounting records of the National Fish and
Wildlife Foundation, which administered some of the funds
collected from parties engaged in the use of refuge resources. 

The audit was made, as applicable, in accordance with the
"Government Auditing Standards," issued  by  the  Comptroller
General of  the  United  States.  Accordingly,  we  included
such tests of records and other auditing procedures that were
considered necessary under the circumstances.  As part of the
audit, we reviewed the Service's internal controls to the extent
considered necessary to accomplish our objective.  We found
weaknesses in the areas of assessing, depositing, and controlling
miscellaneous receipts from oil and gas exploration activities
and other uses of refuge resources.  These weaknesses are
discussed in the Findings and Recommendations section of this
report.  If implemented, our recommendations should improve the
internal controls in these areas.  We also reviewed the
Departmental Report on Accountability for fiscal year 1998, which
included information required by the Federal Managers' Financial
Integrity Act, and the Service's annual assurance statement on
management controls for fiscal year 1998.  Based on these
reviews, we determined that none of the reported weaknesses were
directly related to the objective and scope of this audit. 

PRIOR AUDIT COVERAGE

During the past 5 years, the General Accounting Office has not
issued any reports on the Service's miscellaneous receipts.
However, the Office of Inspector General issued the survey report
"Farming Operations on National Wildlife Refuges, Region 1, U.S.
Fish and Wildlife Service" (No. 94-I-408) in March 1994.  The
report stated that the Sacramento River National Wildlife Refuge
in California was authorizing a farmer, through a cooperative
agreement, to harvest and sell crops and to use the proceeds to
restore Refuge lands to riparian habitat[2] but that this action
was not in conformance with Service policies and the requirements
of the Refuge Revenue Sharing Act.  The report further stated
that Refuge management established a cooperative farming program
with a nonprofit conservation organization to use proceeds from
the sale of excess crops to finance habitat restoration, which
was estimated to cost $10,000 per acre.  The report contained
four recommendations,  of which three recommendations were
considered resolved and implemented and one recommendation was
considered resolved but not implemented.

**FOOTNOTES**

[1]: Receipts covered by the Act include revenues from the sale
or other disposition of hay, timber, minerals, sand, gravel, and
animals and from leases of public accommodations or facilities.

[2]:According to the report, riparian habitats are woodland
regions adjacent to streams, sloughs, rivers, or lakes where
animals live and plants grow.

FINDINGS AND RECOMMENDATIONS

A.  MISCELLANEOUS RECEIPTS 

The U.S. Fish and Wildlife Service established fees for the use
of refuge resources at amounts that provided a reasonable return
to the Government.  During the survey phase of our audit, we
reviewed the methods used by the Service to set fees for the use
of refuge resources and found that, in general, at the 31 refuges
contacted and 15 refuges visited, the Service conducted surveys
to determine local comparable rates for resource use and
established fees and charges based on the surveys.  However, the
Service did not implement adequate controls to ensure that
officials at five refuges[3] in Louisiana and Texas assessed,
collected, and used miscellaneous receipts from certain economic
activities on the refuges in accordance with Federal laws and in
compliance with Service regulations.  Specifically, at the five
refuges, the Service (1) assessed mineral rights holders fees for
potential damages to the refuges, even though Federal laws and
Service regulations did not authorize such assessments; (2) did
not deposit all receipts from economic  activities into U.S.
Treasury funds, as required by law and the Service's Refuge
Manual; and (3) did not spend the receipts in compliance with
procurement regulations.  Also, refuges in two regions did not
fully comply with Service guidance on issuing economic use
permits.  Service officials at the five refuges said that they
did not comply with applicable laws and regulations because they
considered the assessments of fees to mineral rights holders to
be "standard industry practices" and that they did not deposit
the receipts into Treasury funds because they considered the
receipts to be donations which could be retained for refuge use.
Also, refuge officials said that the receipts were needed to
compensate the refuges for the adverse effects of oil and gas
exploration activities.  As a result, receipts of $6.8 million
were not deposited into U.S. Treasury accounts or made available
to make payments to counties, as required by the Refuge Revenue
Sharing Act, of which a portion of these receipts were
unauthorized assessments to mineral rights holders who conducted
oil and gas exploration activities on the refuges.  In addition,
the Service spent receipts of about $2.3 million to augment
refuge operations, buying good and services without following
Federal procurement procedures that provide safeguards against
improper and wasteful expenditures.

Assessing Fees to Mineral Rights Owners

We  found that officials at the five refuges without
authorization assessed fees to entities that held the subsurface
rights to mineral on the refuges.  These rights are referred to
as reserved or excepted mineral rights.[4]  To protect refuges
from damage caused by oil and gas exploration activities, the
U.S. Fish and Wildlife Service Manual (612 FW 2.9C) requires
operators to obtain a performance bond or certificate of
insurance for exploration, development, and production activities
associated with Federally owned mineral rights.  Further the
Manual (612 FW 2.9B) and the Code of Federal Regulations (50 CFR
29) state that mineral rights owners are responsible for
restoring the area in which they operate "as nearly as possible
to its condition prior to commencement of operations" (50 CFR
29.32), and the Manual (612 FW 2.9D) provides for the Service "to
take legal action for damages, secure an injunction, and where
appropriate, seek criminal penalties" if the mineral rights
holder "exceeds the boundaries of what is reasonably necessary"
to recover minerals and does not restore the area.  However, the
Manual and the Code do not authorize the Service to assess fees
for potential damages to refuges from oil and gas exploration
activities, particularly if the exploration is conducted by or on
behalf of mineral rights holders.  Specifically, the Manual (612
FW 2.9D) states that while the Service is authorized to assess
fees for the privilege of conducting explorations for Federally
owned minerals, "the Service has no legal authority to charge an
owner for the right to develop outstanding or reserved oil and
gas rights." (Emphasis added.) Also, the Service's Southeast
Regional Solicitor, in a February 16, 1982, memorandum to the
Southeast Regional Director, stated that "there does not appear
to be any legal basis for charging a fee to mineral owners, their
lessees, and assigns for the use of refuge lands in their
exercise and enjoyment of the mineral rights which were reserved
or excepted from the title acquired by the government to the
lands so long as the surface use is reasonably necessary to the
enjoyment of their rights."  Our General Counsel, in an August
1998 legal opinion, supported the Regional Solicitor's position,
stating, "The FWS [Fish and Wildlife Service] does not have the
general authority to impose charges for potential damages to the
surface caused by exploration activities where private entities
own the oil and gas rights in the underlying lands."  Our General
Counsel  further stated:

While the regulation also states that "[p]ersons conducting
mineral operations on refuge areas must comply with all
applicable Federal and State laws and regulations for the
protection of wildlife and the administration of the area," the
regulation does not establish a permitting process or fee
structure for exploration activities conducted by mineral rights
owners.  In contrast, . . . FWS [Fish and Wildlife Service]
regulations do establish fees and charges for the grant of
privileges on wildlife refuge areas and require that any economic
use of natural resources of any wildlife refuge areas must be
authorized by appropriate permit.  These regulations do not apply
to privately held mineral interests since owners who exploit
their mineral interests are exercising their rights, not
privileges. [Emphasis added.]

We also found that the refuges did not maintain documentation to
show mineral ownership when they recorded mitigation payments.
Thus, although officials at the five refuges said that refuge
minerals generally were privately held, we could not determine
what portion of the receipts for the mitigation of potential
damages ($6.8 million was paid from fiscal years 1990 through
1998) were attributable to payments made by or on behalf of
companies that held mineral rights.  For example, in December
1996, the Southeast Louisiana Refuge Complex issued a permit to a
company that was authorized to conduct exploration activities by
an oil company which held subsurface rights to minerals on a
portion of the Complex.  Under the terms of the permit, the
exploration company paid the Complex $739,200 and received
authorization to explore mineral deposits on the entire Delta
National Wildlife Refuge, of which about 90 percent (according to
Southeast Regional officials) of the Refuge consisted of acquired
lands where the subsurface mineral rights were privately held.

According to Service officials, mineral rights holders were
charged fees for potential damages caused by their exploration
activities because the Service was authorized to do so under a
Louisiana law.  However, our General Counsel found that the law,
Landowner Mitigation Rights (Louisiana Revised Statute
49:214:41.E), does not authorize such assessments.  Rather, the
law states that surface owners may require compensatory
mitigation.  Also, our General Counsel said that Louisiana and
other state laws provide that mineral rights owners must exercise
their rights with reasonable regard for the rights of surface
owners (Louisiana Revised Statute 31.11) and that they will be
liable for damages only if they breach this duty. Service
officials also said that they assessed fees for the mitigation of
potential damages to the refuges because the assessments were a
standard industry practice that was not prohibited by law.

Depositing Receipts

In addition to having no authorization to assess mineral rights
holders fees for the mitigation of potential damages to refuges
from oil and gas exploration activities, the Service also
improperly retained the fees.  According to our General Counsel,
had the fees been authorized, the payments should have been
deposited into U.S. Treasury funds, either the General Fund of
the Treasury, under the Miscellaneous Receipts Act, or into the
National Wildlife Refuge Fund, under the Refuge Revenue Sharing
Act.  At the five refuges, however, the Service retained the
receipts for refuge use rather than depositing the fees into
Treasury accounts.  During fiscal years 1990 through 1998,
Service officials at the five refuges collected receipts for
economic activities on refuges totaling over $32.8 million.  Of
this amount, refuge officials improperly deposited receipts of
$1.5 million into National Fish and Wildlife Foundation[5]
accounts, deposited receipts of $5.1 million into contributed
funds accounts, and used receipts of $.2 million to pay vendors
for goods and/or services for the refuges.  The remaining
receipts, totaling $26 million, were properly deposited into a
Treasury account, as required by law.

National Fish and Wildlife Foundation Accounts.  From July 1990
through September 1998, the Southeast Louisiana Refuge Complex[6]
and the Cameron Prairie and Lacassine National Wildlife Refuges
in Louisiana and the Santa Ana National Wildlife Refuge in Texas
improperly arranged for the National Fish and Wildlife Foundation
to establish accounts for the deposit and use of receipts
collected for oil and gas exploration and other activities.  As
of September 1998, deposits to these accounts totaled $1,923,463
(see Table 1), of which $1,510,972 was collected for the use of
refuge resources (the remaining amount, $412,491, was
attributable to Service receipts from sources other than economic
use activities).

Table 1. Revenues Deposited Into U.S. Fish and Wildlife
Foundation Accounts
----------------------------------------------------
|                        |         | Less    |Refuge
|                      |         |Other    |Resource
|      Refuge         |Deposits*|Revenues**|Deposits
----------------------------------------------------
Cameron Prairie         $81,800   $60,000  $21,800
----------------------------------------------------
Lacassine                70,625         0   70,625
----------------------------------------------------
Santa Ana               114,942         0  114,942
----------------------------------------------------
Southeast Louisiana   1,656,096   352,4911,306,605
----------------------------------------------------
Total                |$1,923,463|$412,491|$1,510,972
----------------------------------------------------
________________________
*Deposits were made between January 1990 and September 1998.
**Other revenues (that is, revenues from sources other than
economic use activities) include amounts that were deposited into
U.S. Fish and Wildlife Foundation accounts which benefited the
refuges.  These amounts include court-ordered payments to refuges
from private parties ($60,000), matching funds and interest
accrued on Foundation accounts ($57,927), revenue that could not
be verified as being paid for economic uses ($127,293), payments
from private landowners for damages to private wetlands under an
arrangement with the U.S. Army Corps of Engineers ($164,271), and
payments received from a permit issued by the Corps of Engineers
($3,000).

The Project Leader at the Southeast Louisiana Refuge Complex
stated that the deposit of receipts into Foundation accounts was
justified because the receipts were donations or gifts and, as
such, were not subject to the Act's requirement that the funds
should be deposited into the Treasury fund.  However, an August
1998 legal opinion from our Office of General Counsel concluded
that the receipts did not meet the legal definition of donations
or gifts.  Specifically, the legal opinion found that the
receipts, whether collected for exploration of Federally owned
mineral rights or pursuant to permitting arrangements or
contracts with mineral rights owners, could not be considered
donations because they were not gratuitous conveyances made
without consideration. Our General Counsel further stated that
even if the receipts could be considered donations, the
arrangement with the Foundation would violate the Department of
the Interior's Donation Activity Guidelines, which forbid
agencies or employees from accepting or soliciting donations from
prohibited sources under a cooperative foundation program.

The Laccassine Refuge Manager stated that the Refuge did not
deposit these receipts into the Treasury fund because the
companies paying the fees said that the receipts should be used
to pay for Refuge improvements.  Refuge officials also said that
expenditures made from  Foundation accounts were not subject to
Federal procurement regulations and that the funds in Foundations
accounts were used to supplement refuge operating budgets.
Service headquarters officials said that the refuges needed to
retain the receipts to pay cost of  damages caused by oil and gas
exploration activities, which they described as extensive.
However, the officials provided no documentation to show the
amount of such damages or the cost of restoration. The officials
also said that reimbursements for damages through other means was
undesirable because it would entail high costs for personnel and
potential litigation. 

Contributed Funds Accounts.  During fiscal years 1990 through
1998, the four refuges in Louisiana improperly deposited receipts
of $5,146,496 for the mitigation of potential damages caused by
oil and gas exploration and other activities into contributed
funds accounts reserved for refuge use, as shown in Table 2.

Table 2.  Revenues Deposited Into Contributed Funds Accounts

---------------------------------------------------------
|   Refuge      |Deposits |    Less Other   |  Total
|               |         |  Revenues*      | Deposit
---------------------------------------------------------
Cameron         $730,980  0                     $730,980
Prairie
---------------------------------------------------------
Lacassine       883,560   0                 883,560
---------------------------------------------------------
Sabine          3,397,465 0                 3,397,465
---------------------------------------------------------
Southeast                          $21,546       112,945
Louisiana        134,491
---------------------------------------------------------
Total        |$5,146,496        $21,546    $5,124,950
---------------------------------------------------------
*"Other Revenues"  includes amounts  that were not
generated from the issuance of economic use permits. We
could not determine whether deposits of $21,546 were
paid for the economic use of refuge resources. 

According to the Fish and Wildlife Service Manual (260 FW 4,
"Contributed Funds"), contributed funds  received "from outside
sources are gratuitous conveyances or transfers of money or
ownership in property (real or personal) to the Service without
consideration."  Because the receipts deposited into the
contributed funds accounts were not "gratuitous conveyances" but
rather compensation for potential damages to refuge lands, we
believe that the refuges should have deposited these receipts
into the Treasury funds pursuant to the provisions of the Refuge
Revenue Sharing Act and/or the Miscellaneous Receipts Act.
During our audit, we asked Service headquarters officials to
provide information demonstrating that the Service was authorized
to retain the receipts in refuge-specific accounts.  However, the
Service did not provide any documentation to support the
authorization. 

Fees Paid to Refuge Vendors and Grantees.  From August 1990 to
September 1997, officials at the Sabine, Cameron Prairie, and
Lacassine National Wildlife Refuges improperly directed that
companies pay fees of $200,038 for the mitigation of damages from
oil and gas exploration activities directly to Service vendors
and grantees. 

Using Receipts

At the five refuges, Service officials spent receipts of $2.1
million, which had been deposited into Foundation and contributed
funds accounts, to purchase a variety of goods and services for
refuge operations.   From  Foundation accounts,  for example,
the  Service directed that  payments of $1.1 million be used for
the following purposes:  $75,580 for equipment purchases and
repairs, $10,279 for supplies, $184,882 for a research grant,
$186,950 for marine-related purchases for a
Government-confiscated boat,  $47,328 for  aerial monitoring,
$17,301 for computer equipment, $33,322 for a sport utility
vehicle, $47,294 for Foundation administrative expenses, and
$493,503 for other expenses.[7]  From funds deposited into the
refuges' contributed funds accounts, the Service spent funds of
more than $1 million as follows: $411,855 on research grants, of
which $343,765 was paid for research on alligator nesting habits;
$293,230 for equipment and equipment repairs; $10,990 for
construction and lumber; $40,300 for supplies; $3,439 for fuel;
$2,088 for utilities; $11,237 for bankcard charges; $37,545 for
payroll; $1,565 for travel; and $232,558[8] for other expenses.
In addition, the receipts of $200,038, which were directly paid
to vendors and grantees, were used for the following purposes:
$113,238 for a research grant to a university to evaluate the
impact on vegetation of a seismic project,  $82,000 to a
university for an animal migration study, and $4,800 for water
control structures.

By using receipts in Foundation and contributed funds accounts to
buy goods and services, the Service was able to make  purchases
without following Federal procurement procedures that require
supervisory reviews and approvals of purchases, limit the amount
of purchases that can be authorized by contracting officials,
and promote competitive procurement practices.  Moreover, in
purchasing items with the receipts, two of the refuges did not
comply with procurement regulations contained in the Fish and
Wildlife Service Manual (302 FW 1.9A) that limited a refuge's
procurement authority to amounts of $5,000 or less.  For example,
officials at the Southeast Louisiana Refuge Complex made 26
individual purchases between November 1991 and June 1998 that
exceeded the Refuge's $5,000 procurement limitation.
Specifically, by spending funds that should have been deposited
into Treasury accounts, four refuges augmented their operating
budgets without the benefit of Congressional and Service
management oversight.

A Region 4 District Manager attributed the refuges' retention and
use of miscellaneous receipts to their need for additional
funding and insufficient Regional oversight.  This official
stated that refuges in the Lower Mississippi were "very
underfunded" and that he believed the refuges retained and used
the receipts to finance needed refuge improvements.  This
official also stated that refuge managers made decisions on the
use of fees "without policy direction from the regional or
headquarters offices."  Another Regional official stated that
regions differed in their interpretation of the proper
disposition of fees for the use of refuge resources.  However, a
February 6, 1984, memorandum from the Service's Acting Associate
Director to the Regional Director, referring to a Solicitor's
opinion that had been issued in January 1984, stated that
receipts from oil and gas exploration activities "should be
deposited in accordance with the Revenue Sharing Act."

Controls Over Permit Issuance 

We found that officials at the five refuges had not fully
implemented Refuge Manual (5 RM 17) procedures for issuing
economic use permits.  Specifically, the Manual requires that (1)
fee schedules be established for economic use activities; (2)
fees exceeding the refuge manager's warrant authority[9] (as
established by the regional office) be approved by the regional
office; (3) economic use permits include the limitations and
conditions under which the permit is granted, the exact fees
charged, and the manner in which the fees should be paid; (4)
prenumbered permits be used; and (5) the receipt and/or
disposition of funds be recorded in logs.

We reviewed 123 permits and 25 other transactions issued by the
five refuges between October 1989 and September 1998 and found
that none of the permits were processed fully in accordance with
these requirements.  Although the refuges generally established
fees in compliance with the Refuge Manual requirements,
maintained logbooks to record the funds received or ledgers to
record expenditures, and included the limitations and conditions
under which the permits were granted, Service officials in
Regions 2 and 4 had not established a warrant authority level for
refuges in Louisiana and Texas, as required by the Manual, and
neither region had issued prenumbered economic use permits to
these refuges. 

Recommendations

We recommend that the Director, U.S. Fish and Wildlife Service:

1. Discontinue the practice of charging fees for the mitigation
of potential damages to national wildlife refuges from oil and
gas exploration activities associated with privately held
subsurface mineral rights.

2. Discontinue the practice of establishing accounts with the
National Fish and Wildlife Foundation and of depositing into the
accounts funds received for economic use activities, including
fees for the mitigation of damages, on national wildlife refuges.
In addition, any funds remaining in Foundation accounts should be
deposited into the U.S. Treasury funds, as required by law.

3. Discontinue the practice of establishing contributed funds
accounts with proceeds received for the economic use of national
wildlife refuge resources, including fees for the mitigation of
potential damages to refuges.  In addition, any funds remaining
in contributed funds accounts should be deposited into the U.S.
Treasury funds, as required by law.

4. Establish and implement controls to ensure that miscellaneous
receipts from economic activities on national wildlife refuges
(including fees for the mitigation of potential damages to
refuges) are assessed, collected, and deposited in accordance
with applicable laws and Service regulations.

5. Establish procedures and processes to ensure that the regions
and refuges comply with the requirements of the Refuge Manual (5
RM 17) regarding economic activities conducted on refuge lands,
including the establishment of warrant authorities for permits
issued by refuges, the use of prenumbered permits, and the proper
disposition of refuge receipts.

U.S. Fish and Wildlife Service Response and Office of Inspector
General Reply

In the September 1, 1999, response (Appendix 4) to the draft
report from the Acting Director, U.S. Fish and Wildlife Service,
the Service concurred with Recommendations 4 and 5 and did not
concur  with  Recommendations  1, 2,  and 3.   The  Service  also
included an August 16, 1999, memorandum from the Acting Regional
Solicitor, Southeast Region, to the Service's Southeast Regional
Director, in which the Solicitor discussed the legal basis for
the Service's nonconcurrence with Recommendations 1, 2, and 3.
Based on the response, we revised Recommendation 1 and request
that the Service provide a response to the revised recommendation
and that it reconsider its responses to Recommendations 2 and 3,
which are unresolved (see Appendix 5).

Recommendation 1.  Nonconcurrence.

U.S. Fish and Wildlife Service Response.  The Service stated that
it differed with our legal interpretations "regarding authorities
to collect and use fees associated with oil and gas seismic
activities on the refuges."  The Service also said that "under
State law," it had the right to restore the surface or to require
operators to pay for surface damages to the refuges and that
"clarification of legal authorities related to collection and use
of receipts from environmental damages caused predominantly by
oil and gas seismic activities on refuges is crucial to [the
Service's] ability to respond to the concerns raised in the
audit."  The Service also said, "Since we have a difference of
opinion over legal authorities, we recommend that this question
be remanded to the Solicitor's Office . . . for clarification."

The Service's Acting Regional Solicitor agreed that the Service
"has no authority to grant a seismic permit with respect to
privately owned minerals" but said that the Service has
"consistently asserted" that its collections do not "constitute
authorization to conduct seismic operations." The Acting Regional
Solicitor said that the legal opinion provided by our General
Counsel (a finding that the collections were unauthorized) was
"not based upon any recitation of law or precedent" and that
"there are sound legal reasons for disputing [the Office of
Inspector General's] conclusion that the Service lacks authority
to collect for surface damages in the form of shot hole
fees."[10]  The Acting Regional Solicitor cited the United States
Code (31 U.S.C. 3711 (a)), which provides for the collection
and/or compromise of claims by Federal agencies, as support for
its statement.  The Acting Regional Solicitor noted that the
Service reserves the right to "assert additional claims over and
above the shot hole fees, if such fees do not cover all of the
damages."  The Acting Regional Solicitor also stated that the
Service's fees were "nothing more than a standardized means of
calculating the amount of the surface owner's claim arising from
damages caused by the seismic operation."

The Acting Regional Solicitor said that if the Service were to
seek correction of damages by the operator and, failing that,
institute litigation for monetary damages, "an intolerable
burden" would be placed on Service personnel, the Office of the
Solicitor, and the Department of Justice "to try cases that could
more easily be resolved administratively."

Office of Inspector General Reply.  We revised the
recommendation, deleting reference to the need for the
identification of mineral rights ownership in permit issuance
because this matter is not essential to the underlying issue of
whether the Service is authorized to assess fees to holders of
mineral rights.  Regarding the Service's comments on its "right
under State law" to seek restoration or payment for surface
damages to refuges, our recommendation did not address the
Service's efforts to seek restoration or its collection of
payments for the actual costs of damages.  Rather, the
recommendation pertained to the practice of seeking payment for
the "potential" cost of mitigating damages when they may not have
occurred and/or when the actual cost of the damages had not been
determined.  Even if the Service is authorized to assess
"upfront" fees, we believe that the fees are Federal receipts
that should be deposited into U.S. Treasury accounts.

Regarding the Acting Regional Solicitor's comment that we did not
cite "law or precedent" in finding that the Service was not
authorized to assess fees, we provided the Service with a
memorandum from our General Counsel which contained numerous
references to Federal laws, regulations, case authority, and
prior Solicitors' opinions that stated that the Service could not
assess fees to mineral rights holders under a permitting process.
Because the Service obtained the receipts by issuing special use
permits that  referred to the operators as permittees, we
consider the fees to be payments made under a permitting process.
Also, we cited the Fish and Wildlife Service Manual (612 FW 2.9),
which provides for the issuance of a permit for mineral
exploration only when the deed to the property recognizes the
right to require a permit.  With respect to fees for exploration,
the Manual (612 FW 2.9D) states that the Service "has no legal
authority to charge an owner for the right to develop outstanding
or reserved oil and gas rights.  However, charges can be assessed
if other than reasonable surface damage occurs." (Emphasis
added.)

We disagree with the Acting Regional Solicitor's statement that
the Service is authorized to collect fees for the mitigation of
potential damages because the damages "fall within the definition
of a `claim,'" which the Service has the right to collect.
According to the Code of Federal Regulations (4 CFR 101.2), to
qualify as a claim, "an appropriate agency official" must
determine the amount of funds or property that is "owed to the
United States from any person, organization, or entity."We found
that the fees cannot be considered as payments of claims because
the Service has not determined the extent and cost of damages
caused by the oil and gas exploration activities.  Furthermore,
Title 31, Section 3711, of the United States  Code, cited by the
Regional Solicitor, establishes general procedures for agencies
to follow in collecting claims but does not authorize the Service
to receive or to collect payments for the mitigation of potential
damages to the refuges.  

We also disagree that the collection of fees for potential
damages to refuges is a standard industry practice, as
illustrated by IP Timberlands Operating Co., Ltd. v. Denmiss
Corp., 657 So.2nd 282 (La. Ct. App. 1995), which was cited by the
Acting Regional Solicitor in the response.  The Acting Regional
Solicitor stated that in this case, the Court acknowledged that
the collection of shot hole fees for surface damages was a
"common practice." However, our General Counsel reviewed the case
and found that the Court had ruled that the payment of a "shot
hole fee" as  compensation for damages caused by mineral rights
holders under a permitting arrangement was not authorized.
Although the Court recognized that the assessment of upfront shot
hole fees was a method of payment used to compensate mineral
lessees or mineral rights holders for the right to explore their
minerals, the Court made no determination that this was an
appropriate method of compensating surface owners for surface
damage.

We consider seeking restoration or monetary compensation for the
actual cost of damages to be the Service's only currently
authorized options for remediating damage to refuges caused by
mineral rights holders.  Also, existing laws and regulations only
authorize the Service to exercise these options when mineral
rights holders conduct exploration activities in a negligent
manner.  If the Service finds that its current authorization does
not adequately protect the Government's interest, it should seek
legislative authorization to charge mineral rights holders fees
for the mitigation of potential damages to the refuges.

Recommendation 2.  Nonconcurrence.

U.S. Fish and Wildlife Service Response.   The Service said that
there is "no basis for considering this practice [the
establishment of accounts with the National Fish and Wildlife
Foundation] as beyond our legal authority."  The Service further
stated that the matter should be referred to the Office of the
Solicitor.

The Acting Regional Solicitor said that although "monetary fees
received directly by the Service must be deposited in the
miscellaneous receipts of the Treasury," fees for the mitigation
of potential damages were not revenues from the sale of minerals
"or other privileges" and thus were not subject to the
requirement that they should be deposited into a U.S. Treasury
account.  The Acting Regional Solicitor referred to shot hole
fees as "a surrogate for the seismic operator's obligation to
correct the damages done to refuge resources" and said that the
operator could "discharge this obligation by actually correcting
the damages or contracting with a third person to perform the
corrective action."  The Acting Regional Solicitor said that an
investigation should be undertaken "to ascertain whether the
Foundation possesses the legal authority to serve as the seismic
operator's agent for the correction of surface damages on the
refuge."  The Acting Regional Solicitor further said that the
Service did not "believe that the monies collected for surface
damages have to be actually spent correcting the damages done."

Office of Inspector General Reply.    Under the basic principles
of appropriations law, all monies received for the Government
from any source must be deposited into U.S. Treasury accounts
unless there is specific statutory authority for alternative
disposition.  Because the collections were related to oil and gas
exploration activities on Federal land, we consider the fees to
be Federal receipts.  Since we did not locate nor did the Service
provide us with any statutory authority for alternative
disposition of these receipts, the monies must be deposited into
Treasury accounts, as required by Federal law.

We also disagree with the Acting Regional Solicitor's statement
that the Foundation acted as the "agent" for the oil and gas
exploration companies.  The operators did not enter into
agreements with the Foundation to perform refuge restoration work
on their behalf.  Rather, the Foundation, under an agreement with
the Service, served as the Service's agent, accepting receipts
from oil and gas exploration companies and financing the refuges'
operations.  We also consider  the deposit of Federal receipts
into a non-Governmental account to be inconsistent with Federal
appropriations law.

Recommendation 3.  Nonconcurrence.

U.S. Fish and Wildlife Response.  The Service requested that the
issue of whether contributed funds accounts should be
discontinued and the account funds deposited into Treasury funds
be "remanded to the Office of the Solicitor for resolution."  The
Service also said that it was authorized to accept gifts and
other contributions under the Fish and Wildlife  Act (16 U.S.C.
742 f(b)(1)). The Service further stated, "Unless we are advised
otherwise by the Solicitor's office, we believe this provision to
be adequate legal authority for acceptance of conditional
contributions such as those that have been accepted for oil and
gas seismic activities."

Office of Inspector General Reply.

We do not consider the receipts to be donations or contributions
that can be deposited into contributed funds accounts because the
fees were paid by companies that conducted mineral exploration
activities on the refuges and the payments were made under
agreements related to these activities. According to our General
Counsel, to be considered contributions, the receipts would have
to represent gifts, donations, or bequests that were conveyed
gratuitously without consideration (that is, without providing
for the donor's economic interests). Also, Volume 2, Chapter 6,
of "Principles of Federal Appropriations Law," issued by the
General Accounting Office in 1992, states that the "statutory
authority to accept gifts does not include fees and assessments
exacted involuntarily."  We found that the fees generally were
associated with the issuance of special use permits, which
established the terms and conditions for the conduct of oil and
gas exploration activities on the refuges, and we found no
indication that the payments were made voluntarily and apart from
the exploration activities conducted by mineral rights holders.
Further, the payors were "prohibited sources" because their
activities were monitored by the Service; thus, the Service was
not allowed to solicit or accept the payments as contributions.

**FOOTNOTES**

[3]:The five refuges are the Sabine National Wildlife Refuge in
Hackberry, Louisiana; the Southeast Louisiana Refuge Complex in
Slidell, Louisiana; the Cameron Prairie National Wildlife Refuge
in Bell City, Louisiana; the Lacassine National Wildlife Refuge
in Lake Arthur, Louisiana;and the Santa Ana National Wildlife
Refuge in Alamo, Texas. 

[4]:According to the Service Manual (612 FW 2.6), reserved rights
are rights under which the owner of oil and gas rights, when
selling the land to the United States, reserves in the deed of
conveyance the right to sell, lease, explore for, and remove
minerals on that land.  Excepted rights are oil and gas rights
that were outstanding to third parties when the United States
acquired title to the lands.

[5]:The National Fish and Wildlife Foundation is a charitable and
nonprofit corporation and is not an agency or establishment of
the United States. 

[6]:The Southeast Louisiana Refuge Complex consists of the
Atchafalaya, Big Branch Marsh, Shell Keys, Bogue Chitto, Bayou
Sauvage, Breton, and Delta National Wildlife Refuges.

[7]:Consists of 203 disbursements, the nature of which could not
be identified from disbursement records.

[8]:Consists of 57 disbursements, the nature of which could not
be identified from disbursement records. 

[9]:According to the Refuge Manual (5 RM 17.11(B)), a warrant
authority is a set amount of revenue a refuge manager is
authorized to collect through the issuance of an economic use
permit.

[10]:"Shot hole fees" are defined by the Acting Regional
Solicitor as the exploration fees charged by the Service to
seismic operators for conducting oil and gas exploration
activities on Service lands. 

B.  COST DEDUCTIONS

The U.S. Fish and Wildlife Service retained a portion of its
miscellaneous receipts to pay  administrative costs without
determining or estimating the costs of processing permits and
administering special use activities on refuges.  The Refuge
Revenue Sharing Act states that expenses incurred in connection
with the administration of revenue-producing and revenue-sharing
activities may be deducted from payments made to the U.S.
Treasury fund.  However, the Service did not collect and analyze
data to determine its administrative costs and had not
established policies and procedures for administrative fee
determinations.  As a result, the Service, which retained
receipts totaling about $21.3 million from fiscal years 1990
through 1998 for administrative expenses, did not know whether it
had overrecovered or underrecovered its costs of administering
economic use activities on refuges or deposited the appropriate
amount into the Treasury fund.

Administering Economic Uses

Refuge officials perform several administrative functions related
to the oversight of economic use activities on the refuges.
Guidance on these administrative functions is contained in the
Refuge Manual (5 RM 17 and 20), which requires regional directors
to provide oversight of economic use activities on the refuges to
ensure that the activities are conducted in compliance with
Service regulations.  Specifically, the Refuge Manual requires
refuge managers to develop and maintain lists of parties
interested in using refuge resources, perform compatibility
determinations, award permits for specialized uses, perform fee
determinations, monitor specialized uses to ensure compliance
with permit provisions, and nominate refuge collection officers
who are responsible for controlling and managing receipts.  The
Refuge Manual (5 RM 17.9B) also provides guidance on the refuge
manager's determination of  the cost of administering specialized
uses as follows:

Costs will be determined or estimated from the best available
records (additional cost accounting systems should not be
developed solely for this purpose).  The cost computation shall
cover the proportionate share of direct and indirect costs to the
refuge carrying out the activity, including but not limited to:

(1) Salaries, employee leave, travel expense, rent, cost of fee
collection, postage, maintenance, operation and depreciation of
buildings and equipment;

(2) A proportionate share of the refuge's overhead costs; and

(3) The costs of law enforcement, research, establishing
standards, and regulation, to the extent they are determined to
be properly chargeable to the activity.

We found that the Service had no procedures or processes for
estimating the cost of administering economic use activities on
refuges.  According to a Service headquarters official, the
Service's Division of Realty directed the Service's finance
center to deduct  from the miscellaneous receipts deposited into
the Treasury fund "about $2.4 million" per year as compensation
for the Service's cost to administer economic use activities on
the refuges.  The official also said that because the Service had
"no formula" or "clear cut way" of determining the cost of
administering refuge economic use activities, it  had not imposed
a requirement that the refuges should compute or estimate such
costs.  Also, the official said that "the amount of recovered
costs had been artificially capped" to minimize the amount
deducted from receipts that were deposited into the Treasury
fund.  Based on Service records, we determined that deductions of
$21.3 million were made during fiscal years 1990 through 1998
from receipts subject to deposit into the Treasury fund.  Because
the amount of these deductions was not based on estimated or
actual administrative costs, the Service may have underrecovered
or overrecovered its administrative costs or not remitted the
appropriate amount to the United States Treasury.

Recommendation

We recommend that the Director, U.S. Fish and Wildlife Service,
develop and implement procedures and policies to ensure that cost
deductions made from Refuge Revenue Sharing Act receipts are
based either on the Service's actual cost of administering
economic use activities on national wildlife refuges or on a
supportable and reasonable method of estimating such costs. 

U.S. Fish and Wildlife Service Response and Office of Inspector
General Reply

In the September 1, 1999, response (Appendix 4) to the draft
report from the Acting Director, U.S.  Fish   and   Wildlife
Service,   the   Service  concurred  with  the  recommendation.
Based on  the  response,  we consider the recommendation resolved
but not implemented  (see Appendix 5). 

APPENDIX 1

CLASSIFICATION OF MONETARY AMOUNTS

Funds To Be Put To
Finding Area                      Better Use           
Oil and gas exploration 
and other fees               $6.8 million

APPENDIX 2

REFUGE REVENUE SHARING ACT RECEIPTS AND PAYMENTS RELATED TO
ECONOMIC ACTIVITIES ON 
NATIONAL WILDLIFE REFUGES,
FISCAL YEARS 1990 THROUGH 1998

-----------------------------------------------------------------
Amount of    Total      Total
Payment    Payment    Payment
Gross       Cost      Net         From     to Local  Due Local
Percent
FY             Deductions
AppropriationGovernment*Government   Paid  
Receipts              Receipts  
-----------------------------------------------------------------
90  $5,935,083$2,209,121 $3,725,962
$8,904,000$12,629,962$16,221,621  77.9
-----------------------------------------------------------------
91   7,090,000  2,245,489 4,844,511  10,942,800  15,787,311
16,875,311 93.6
-----------------------------------------------------------------
92   6,746,380  2,446,545 4,299,835  11,848,800  16,148,635
18,030,646 89.6
-----------------------------------------------------------------
93   6,452,514  2,434,412 4,018,102  11,748,283  15,766,385
19,309,148 81.7
-----------------------------------------------------------------
94   5,920,317  2,183,707 3,736,610  12,000,000  15,736,610
20,208,042 77.9
-----------------------------------------------------------------
95   7,062,504  2,391,764 4,670,740  11,977,000  16,647,740
21,588,652 77.1
-----------------------------------------------------------------
96   6,681,411  2,446,769 4,234,642  10,779,000  15,013,642
22,846,549 65.7
-----------------------------------------------------------------
97   8,995,000  2,347,699 6,647,301  10,779,000  17,426,301
24,048,949 72.5
-----------------------------------------------------------------
98   9,559,000  2,624,000 6,935,000  10,779,000  16,604,174
26,674,150 62.0
-----------------------------------------------------------------
$64,442,209$21,329,506$43,112,703$99,757,883$141,760,760$185,803,
068  76.3
-----------------------------------------------------------------
____________________
*Actual payments are made after the close of the fiscal year
using carryover net receipts and appropriated funds (if
necessary) to compensate for any shortfall in payments to
counties, as discussed in the "Background" section of this
report.

APPENDIX 3
Page 1 of 2

SITES VISITED OR CONTACTED

Site                                          Location           

Southeast Region                                 Atlanta, Georgia
Southeast Louisiana Refuges Complex            Slidell, Louisiana
Sabine NWR                                   Hackberry, Louisiana
Cameron Prairie NWR                          Bell City, Louisiana
Lacassine NWR                              Lake Arthur, Louisiana
Piedmont NWR                                   Round Oak, Georgia
Bayou Cocodrie NWR*                           Ferriday, Louisiana
Catahoula NWR*                               Rhinehart, Louisiana
Lake Ophelia NWR*                           Marksville, Louisiana
North Louisiana NWR Complex*               Farmerville, Louisiana
Tensas River NWR*                             Tallulah, Louisiana
Noxubee NWR*                              Brooksville,Mississippi
Bon Secour NWR*                              Gulf Shores, Alabama
Okefenokee NWR*                                 Folkston, Georgia

Southwest Region*                         Albuquerque, New Mexico
Lower Rio Grande /Santa Ana NWR Complex              Alamo, Texas
Attwater Prairie Chicken NWR*                   Eagle Lake, Texas
Anahuac NWR*                                       Anahuac, Texas
Hagerman NWR*                                      Sherman, Texas
Bosque del Apache NWR*                        Socorro, New Mexico
Wichita Mountains NWR*                        Indiahoma, Oklahoma
Salt Plains NWR*                                    Jet, Oklahoma

Pacific Region                                   Portland, Oregon
Malheur NWR                                     Princeton, Oregon
Modoc NWR                                     Alturas, California
Klamath Basin NWR Complex                    Tulelake, California
Ridgefield NWR Complex*                    Ridgefield, Washington
Sacramento NWR Complex*                       Willows, California
Stillwater NWR*                                    Fallon, Nevada
San Francisco Bay NWR Complex*                 Newark, California
Nisqually NWR Complex*                        Olympia, Washington
Southeast Idaho NWR Complex*                     Pocatello, Idaho
Turnbull NWR*                                  Cheney, Washington
Deer Flat NWR*                                       Nampa, Idaho
Sheldon/Hart Mountain NWR Complex*               Lakeview, Oregon
_____________
*Contacted only.

APPENDIX  3
Page 2 of 2

Site                                          Location           

Rocky Mountain Region*                           Denver, Colorado
Fort Niobrara-Valentine NWR Complex           Valentine, Nebraska
J. Clark Salyer NWR Complex                   Upham, North Dakota
Charles M. Russell NWR                         Lewistown, Montana
Audubon NWR                              Coleharbor, North Dakota
Devils Lake WMD                         Devils Lake, North Dakota
Arrowwood NWR                               Pingree, North Dakota
Medicine Lake  NWR Complex*                Medicine Lake, Montana

Midwest Region                           Fort Snelling, Minnesota
Tamarac NWR*                                   Rochert, Minnesota
Ottawa NWR*                                      Oak Harbor, Ohio
Morris Wetland Management District*             Morris, Minnesota
Mingo NWR*                                       Puxico, Missouri
DeSoto NWR*                                 Missouri Valley, Iowa
Crab Orchard, NWR*                               Marion, Illinois

Northeast Region*                           Hadley, Massachusetts
Chincoteague NWR*                          Chincoteague, Virginia

APPENDIX 5

STATUS OF AUDIT REPORT RECOMMENDATIONS

Finding/Recommendation
Reference

A.1

A. 2 and A.3

A.4, A.5, and B.1

Status

Unresolved 

Unresolved.

Resolved; not
implemented.

Actions Required

Provide a response to the revised recommendation.  If concurrence
is indicated, provide an action plan that includes a target date
and the title of the official responsible for implementation.  If
nonconcurrence is indicated, provide reasons for the
nonconcurrence.

Reconsider the recommendations, and provide action plans that
include target dates and titles of the officials responsible for
implementation.

No further response to the Office of Inspector General is
required.  The recommendations will be referred to the Assistant
Secretary for Policy, Management and Budget for tracking of
implementation.




ILLEGAL OR WASTEFUL ACTIVITIES SHOULD BE REPORTED

TO THE OFFICE OF INSPECTOR GENERAL BY:

Sending written documents to:



Within the Continental United States

U.S. Department of the Interior
Office of Inspector General
1849 C Street,N.W.
Mail Stop 5341
Washington, D.C. 20240

Calling:

Our 24 hour
Telephone HOTLINE
1-800-424-5081 or
(202) 208-5300

TDD for hearing impaired
(202) 208-2420 or
1-800-354-0996



Outside the Continental United States


Caribbean Region

U.S. Department of the Interior
Office of Inspector General
Eastern Division- Investigations
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Suite 410
Arlington, Virginia 22209

Calling:
(703) 235-9221


North Pacific Region

U.S. Department of the Interior
Office of Inspector General
North Pacific Region
238 Archbishop F.C. F'lores Street
Suite 807, PDN Building
Agana, Guam 96910


Calling:
(700) 550-7428 or
COMM 9-011-671-472-7279