[Final Report on Follow-up Evaluation of Policies and Procedures Related to  the Rural Development Act of 1972]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 2003-I-0060

Title: Final Report on Follow-up Evaluation of Policies and Procedures
       Related to  the Rural Development Act of 1972

 
Date:  August 20, 2003

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August 20, 2003

Evaluation Report

To:	Assistant Secretary, Policy, Management and Budget
                                                        
From:	William J. Dolan, Jr. 	
	Regional Audit Manager, Eastern Region

Subject:	Final Report on Follow-up Evaluation of Policies and Procedures Related to 
the Rural Development Act of 1972 (No. 2003-I-0060)


Summary of Evaluation

This report presents the results of our follow-up evaluation of the Department of the 
Interiorï¿½s (DOI) policies and procedures related to the Rural Development Act of 1972 
(RDA).   Our objective was to determine  what policies and procedures DOI had in place 
to give first priority to the location of new offices and other facilities in rural areas, as 
required by RDA.  We performed a similar evaluation in 2002 (Attachment).

We determined that since our 2002 evaluation:

>	DOI and the U.S. Geological Survey (USGS) did not revise their existing RDA 
policies in keeping with the new definition of ï¿½ruralï¿½ and ï¿½rural areaï¿½ as found in 
the ï¿½Farm Security and Rural Investment Act of 2002,ï¿½ Section 6020 (Public Law 
107-171).  DOI and USGS still did not have procedures to ensure compliance 
with the policies.  

>	The National Park Service (NPS) issued a new policy under Directorï¿½s Order 89 
in March 2003.  The new policy requires a brief justification if new facilities and 
offices cannot be located in rural areas, but does not include a citation for the 
definition of ï¿½ruralï¿½ and ï¿½rural area.ï¿½

>	The U.S. Fish and Wildlife Service (FWS) and the Bureau of Indian Affairs (BIA) 
are developing their policies for RDA.  However, the revised versions do not 
reflect the new definition of ï¿½ruralï¿½ and ï¿½rural areaï¿½ as stated in the ï¿½Farm 
Security and Rural Investment Act of 2002,ï¿½ Section 6020 (Public Law 107-171.)  
Both policies do require a justification if the facilities or offices cannot be located 
in rural areas. 

>	The Bureau of Reclamation (BOR), the Bureau of Land Management (BLM), the 
Minerals Management Service (MMS), and the Office of Surface Mining (OSM) 
do not have policies on procedures and follow the guidance issued by the 
Department.


Background 

The RDA directed the heads of all executive departments and agencies of the 
Government to establish and maintain departmental policies and procedures giving first 
priority to the location of new offices and other facilities in rural areas. DOIï¿½s policy on 
RDA is found in the Departmental Manual (DM), Part 101, Chapters 3 and 4, which 
describe the requirements to obtain approval for making organizational changes to 
headquarters and to first- and second-level field offices.  
      
In March 1996, the General Services Administration (GSA) issued Interim Rule D-1,  
which defined ï¿½rural areaï¿½ to mean:
       
Any area that (i) is within a city or town if the city or town has a 
population of less than 10,000, or (ii) is not within the outer boundaries of 
a city or town if the city or town has a population of 50,000 or more and if 
the adjacent urbanized and urbanizing areas have a population density of 
more than 100 inhabitants per square mile.
      
In April 1996, the Federal Agriculture Improvement and Reform Act of 1996  redefined 
ï¿½ruralï¿½ and ï¿½rural areasï¿½ to mean ï¿½a city, town, or unincorporated area that has a 
population of no more than 10,000 inhabitants.ï¿½
      
In December 2001, DOI updated 101 DM Chapter 3, but incorporated language on RDA 
from GSAï¿½s Interim Rule D-1, rather than language from the 1996 Act.   

In May 2002, Congress enacted the ï¿½Farm Security and Rural Investment Act of 2002ï¿½ 
that clarified the definition of ï¿½ruralï¿½ and ï¿½rural areaï¿½ to mean:  ï¿½any area other than (i) a 
city or town that has a population of greater than 50,000 inhabitants; and (ii) the 
urbanized area contiguous and adjacent to such a city or town.ï¿½  This definition 
eliminates the confusion between interpretations of the existing language.


Scope 

We surveyed DOI, and 34 of its bureaus and offices, to identify new or revised policies 
and procedures for giving first priority to rural locations.  

We conducted our evaluation in accordance with the Presidentï¿½s Council on Integrity and 
Efficiency Quality Standards for Inspections.  Accordingly, we conducted tests or 
reviews of records that we considered necessary under the circumstances.


Discussion

Our evaluation revealed the following:

Policy for RDA.   DOI and USGS have policies in place relating to the 
requirements of the Rural Development Act of 1972.  However, neither DOI nor 
USGS have updated their policies to reflect the definition of ï¿½ruralï¿½ and ï¿½rural 
areasï¿½ as found in the ï¿½Farm Security and Rural Investment Act of 2002,ï¿½ Section 
6020 (Public Law 107-171).   After the completion of our evaluation in 2002, we 
sent a copy of the legislation to the Office of Planning and Performance 
Management to notify them of the changes in the definition.  At the time of our 
2003 evaluation, however, the DM had not been changed to reflect the new 
definition.  The DM reflects the definition as found primarily in the GSA Interim 
Rule D-1.   NPS has established a new policy this year.  FWS and BIA are in the 
process of developing policies.  The NPS, FWS, and BIA policies will require a 
brief justification as to why new facilities and offices cannot be located in a rural 
location.

>	BOR, BLM, MMS, and OSM have no separate policies and follow the guidance 
issued by the Department.

>	Procedures for RDA.  DOI still does not have procedures to ensure that rural 
areas are given first priority when locations are selected for new offices and other 
facilities.  We believe that DOI should either develop procedures for 
implementing RDA requirements or direct the bureaus to develop those 
procedures.  To ensure compliance with RDA, DOI should have a process to 
document that first consideration is given to rural areas.  The justification for not 
selecting rural areas should also be documented.  
 

Recommendation

We recommend that the Assistant Secretary, Policy, Management and Budget (1) update 
101 DM Chapters 3 and 4 to reflect the revised definition of ï¿½ruralï¿½ and ï¿½rural areaï¿½ as 
found in the Farm Security and Rural Investment Act of 2002 and (2) develop or direct 
the bureaus to develop procedures for implementing the policies related to RDA. 

In the August 13, 2003, exit conference, the Office of Acquisition and Property
Management concurred with the recommendation.

As required by the Departmental Manual (360 DM 5.3), please provide your written 
comments to this report by September 22, 2003. Your response should be addressed to 
Mr. Roger La Rouche, Assistant Inspector General for Audits (MS-5341-MIB) and 
should state concurrence or non-concurrence with the finding and recommendations, 
including specific reasons for any non-concurrence, and provide information on actions 
taken or planned, including target dates and titles of officials responsible for 
implementation.

This report will be listed in our semiannual report to Congress, as required by Section 
5(a) of the Inspector General Act (5 U.S.C. app. 3).


Attachment













       May 8, 2002

Advisory Report

To:	Assistant Secretary, Policy, Management and Budget

From:	Robert Romanyshyn
	Regional Audit Manager, Eastern Region

Subject:	Final Advisory Report on Evaluation of Policies and Procedures Related to the 
Rural Development Act of 1972 (No. 2002-I-0034)


Summary of Evaluation

This report presents the results of our evaluation of the Department of the Interiorï¿½s (DOI) 
policies and procedures related to the Rural Development Act of 1972 (RDA).   Our 
objective was to determine  what policies and procedures DOI had in place to give first 
priority to rural areas when locating new offices and other facilities, as required by RDA.  

We determined that:

>	DOI and the U.S. Geological Survey (USGS), 1 of 35 bureaus and offices surveyed, 
had policies (see the Appendices) regarding RDA.  They did not, however, have 
procedures to ensure compliance with the policies.  

>	DOI had established 396 facilities in 270 locations in the last 5 years.  Of the 270 
locations, 197 (73 percent) were located in rural areas (areas with a population of 
50,000 or less).  DOIï¿½s decision to place facilities in rural areas was influenced by its 
mission, rather than any awareness of the requirements of the RDA.





Background 

The RDA directed the heads of all executive departments and agencies of the Government to 
establish and maintain departmental policies and procedures giving first priority to rural areas 
when determining the location of new offices and other facilities. DOIï¿½s policy on RDA is 
found in the Departmental Manual (DM), Part 101, Chapters 3 and 4, which describe the 
requirements to obtain approval for making organizational changes to headquarters and to 
first- and second-level field offices.  The October 1990 DM policy on RDA defined ï¿½rural 
areasï¿½ as:
      
An area outside the outer boundary of any city having a population of 50,000 
or more, and any adjacent urban areas with a population density of more than 
100 persons per square mile.  

In March 1996, the General Services Administration (GSA) issued Interim Rule D-1,  which 
defined ï¿½ruralï¿½ and ï¿½rural areaï¿½ to mean:
       
Any area that (i) is within a city or town if the city or town has a population of 
less than 10,000, or (ii) is not within the outer boundaries of a city or town if 
the city or town has a population of 50,000 or more and if the adjacent 
urbanized and urbanizing areas have a population density of more than 100 
inhabitants per square mile.
      
In April 1996, the Federal Agriculture Improvement and Reform Act of 1996  redefined 
ï¿½ruralï¿½ and ï¿½rural areasï¿½ to mean ï¿½a city, town, or unincorporated area that has a population 
of no more than 10,000 inhabitants.ï¿½
      
In December 2001, DOI updated 101 DM, but incorporated language on RDA from GSAï¿½s 
Interim Rule D-1, rather than language from the 1996 Act.   
      

Scope 

We surveyed DOI and 35 bureaus and offices to identify policies and procedures for giving 
first priority to rural locations.  We also requested information on new offices and other 
facilities that were leased or constructed between October 1, 1996 and December 31, 2001.  
We defined ï¿½facilityï¿½ to be any unit that had staff assigned full time.  We asked whether 
consideration was given to RDA in the selection of new locations.  We also asked whether 
there was any documentation supporting that consideration was given to RDA and any 
written justification if rural areas were not selected.  

We received responses from eight bureaus and four offices within DOI.  We matched the city 
and state from the responses to data from the 2000 census to determine the populations of the 
areas where new facilities were located.  We noted that in some instances, multiple facilities 
had been located in the same places, which explained the difference between the number of 
facilities and the number of locations.  

We conducted our evaluation in accordance with the Presidentï¿½s Council on Integrity and 
Efficiency Quality Standards for Inspections.  Accordingly, we conducted tests or reviews of 
records that we considered necessary under the circumstances.


Discussion

Our evaluation revealed the following:

>	Policy for RDA.  The current DOI policy is a restatement of RDA requirements and 
GSAï¿½s Interim Rule.  The DOI policy should declare that DOI will give first 
consideration to rural areas when locating all new offices and other facilities and 
clearly direct the bureaus to consider RDA when establishing new offices and other 
facilities.  The USGS policy is outdated.  USGS has a 1993 policy similar to the DOI 
policy in the DM prior to the December 2001 revision.  USGS did not update its 
policy when the DM was revised in December because USGS officials were not 
aware of the revision.  

>	Procedures for RDA.  DOI and its bureaus do not have procedures to ensure that 
rural areas are given first priority when locations are selected for new offices and 
other facilities.  We believe that DOI should either develop procedures for 
implementing RDA requirements or direct the bureaus to develop those procedures.  
To ensure compliance with RDA, DOI should have a process to document that first 
consideration is given to rural areas.  The justification for not selecting rural areas 
should also be documented.

>	DOI Consideration of RDA.  Of the 270 locations selected for new offices or other 
facilities within the past 5 years, 197 locations, or 73 percent, had populations of 
50,000 or less (the general definition of ï¿½rural areaï¿½ in pending legislationï¿½HR 
2646, the Agriculture, Conservation, and Rural Enhancement Act of 2002).  The 
mission of DOI influenced the placement of the facilities in rural areas rather than the 
requirements of RDA.  

>	Updating RDA Policy.  DOI did not update the DM regarding policy on RDA in a 
timely manner.  In fact, DOI did not have a process for updating the DM to reflect 
changes resulting from the 1996 Act.  Rather, DOI updated its policy in December 
2001as part of revising the DM for the DOI website.  When making the December 
2001 revision, however, DOI used GSAï¿½s Interim Rule D-1 instead of the provisions 
in the 1996 Act.  We also determined that the process for revising the DM in 
December 2001 was not clearly defined.  Two employees in the Office of Planning 
and Performance Management (PPP) maintain the DM.  Other offices and bureaus, 
however, did not notify PPP of all legislative changes affecting the DM.  The Office 
of Acquisition and Property Management commented on the December 2001 revision 
at the request of PPP, although it is not clear which office should have been 
responsible for revising the DM in 1996.

>	Pending Revisions to RDA.  The enactment of proposed legislation and changes to 
GSAï¿½s Interim Rule are anticipated within the coming months.  Congress has 
proposed legislation that will affect the definition of ï¿½ruralï¿½ and ultimately require 
revisions to the DM.  The Agriculture, Conservation, and Rural Enhancement Act of 
2002 (HR 2646) proposes a general definition of ï¿½rural and rural area [to] mean a 
city, town, or unincorporated area that has a population of 50,000 inhabitants or less.ï¿½  
This definition eliminates the confusion between interpretations of the existing 
language.  In addition, GSA has indicated that it plans to revise its definition of 
ï¿½ruralï¿½ and ï¿½rural areaï¿½ in the spring of 2002.  These two proposed changes should be 
monitored and the final versions used to revise the DM to reflect the new definitions.


In the April 25, 2002 exit conference, the Office of Acquisition and Property Management 
concurred with the contents of the report.  A response to the Office of Inspector General is 
not required, since this report does not contain any recommendations.

This advisory report will be listed in our semiannual report to Congress, as required by 
Section 5(a) of the Inspector General Act (5 U.S.C. app. 3).


NOTE:  The Office of Inspector General has removed the two Appendices from Report 
No. 2002-E-0034 included here as an attachment.
  P.L. 92-419, as amended
  The Consolidated Appropriations Resolution, 2003 (Public Law 108-7, ï¿½638) requires the Inspector 
General of each department to submit a report to the Committee on Appropriations detailing the 
departmentï¿½s policies and procedures to give first priority to the location of new offices and other facilities 
in rural areas.
3 41 CFR Ch 101, Subchapter D, Appendix - Temporary Regulations
4 7 U.S.C. 1926
  42 U.S.C. 3122
  The Treasury and General Government Appropriations Act of 2002 (P.L. 107-67, ï¿½ 647, 115.Stat. 
514(codified at 5 U.S.C. ï¿½ 5303 note)) requires the Inspector General of each department to submit a report to 
the Committee on Appropriations detailing the departmentï¿½s policies and procedures to give first priority to 
rural areas when locating new offices and other facilities.
3 41 CFR Ch 101, Subchapter D, Appendix - Temporary Regulations
4 7 U.S.C. 1926


4


ATTACHMENT