[Final Audit Report on U.S. Fish and Wildlife Service Federal Assistance Grants Administered by the State of Wyoming, Game and Fish Department from July 1, 2000, through June 30, 2002]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. R-GR-FWS-0030-2003

Title: Final Audit Report on U.S. Fish and Wildlife Service Federal
       Assistance Grants Administered by the State of Wyoming,
       Game and Fish Department from July 1, 2000, through June
       30, 2002

  

Date:  April 22, 2004

**********DISCLAIMER**************************************DISCLAIMER**********
This file contains an ASCII representation of an OIG report.  No attempt has been made to display graphic images or illustrations.  Some tables may be included, but may not resemble those in the printed version.  A printed copy of this report may be obtained by referring to the PDF file or by calling the Office of Inspector General, Division of Acquisition and Management Operations at (202) 219-3841. 
**********DISCLAIMER**************************************DISCLAIMER**********

Memorandum

To:  Director, U.S. Fish and Wildlife Service

From:  Joe Ansnick, Director of External Audits

Subject:  Final Audit Report on U.S. Fish and Wildlife Service Federal Assistance Grants Administered by the State of Wyoming, Game and Fish Department from July 1, 2000, through June 30, 2002 (No. R-GR-FWS-0030-2003)

This report presents the results of our audit of costs incurred by the State of Wyoming Game and Fish Department (Department) under its hunting and fishing programs and costs claimed under Federal Assistance grants from the U.S. Fish and Wildlife Service (FWS) from July 1, 2000, through June 30, 2002 (see Appendix 1).

We found that the Department did not obtain FWS instructions or FWS Regional Director's approval before conveying real property interests that had been acquired with Federal Assistance funds; and did not ensure that all boating access facilities constructed with Federal Assistance funds were adequately maintained.

The Department and FWS Region 6 responded to a draft of this report on March 25, 2004.  The Department concurred with one recommendation, non-concurred with one recommendation, and did not state concurrence or non-concurrence with the remaining four report recommendations.  The Region 6 office did not state concurrence or non-concurrence with the six report recommendations.  Based on the responses we modified the findings as necessary to clarify the report.  We included the Department and FWS responses after our recommendations and summarized the status of recommendations in Appendix 4.

Please provide us with a written response to this report by July 26, 2004.  Your response should provide the information requested in Appendix 4.  If you have any questions regarding this report, please contact me at (703) 487-5345 or John Kerrins, Audit Team Leader, at (303) 929-3857.

cc:  Regional Director, Region 6, U.S. Fish and Wildlife Service

INTRODUCTION

Background and Scope

The Pittman-Robertson Wildlife Restoration Act, as amended (16ï¿½U.S.C. 669) and the Dingell-Johnson Sport Fish Restoration Act, as amended (16 U.S.C. 777), (the Acts) authorize FWS to provide Federal Assistance grants to states to enhance their sport fish and wildlife programs.  The Acts provide for FWS to reimburse the states up to 75 percent of the eligible costs incurred under the grants.  The Acts specify that state hunting and fishing license revenues cannot be used for any purpose other than the administration of the stateï¿½s fish and game agencies. 

We performed an audit of Federal Assistance grants to the Wyoming Game and Fish Department as requested by FWS.  The objective of our audit was to evaluate: (1) the adequacy of the Departmentï¿½s accounting system and related internal controls; (2)ï¿½the accuracy and eligibility of the direct and indirect costs claimed under the Federal Assistance grant agreements with FWS; (3) the adequacy and reliability of the Departmentï¿½s hunting and fishing license fees collection, certification, and disbursement process; and (4) the adequacy of the Departmentï¿½s asset management system and related internal controls with regard to purchasing, maintenance, control and disposal; and (5) the adequacy of the Departmentï¿½s compliance with the Actsï¿½ assent legislation requirements.  The audit also included an analysis of other issues considered sensitive and/or significant by FWS Regional staff.  The audit work at the Department covered claims totaling approximately $35 million on Federal Assistance grants from FWS that were open during the Stateï¿½s fiscal years ended June 30, 2001, and 2002 (see Appendix 1).

Our audit was performed in accordance with government auditing standards issued by the Comptroller General of the United States.  Accordingly, we included such tests of records and other auditing procedures that we considered necessary under the circumstances.  We relied on the work of the State of Wyoming Single Audit Report auditors to the extent possible in order to avoid a duplication of audit effort.  Our tests included an examination of evidence supporting selected expenditures charged by the Department to the grants; interviews with employees to ensure that all personnel costs charged to the grants were supportable; and a review of the Department's use of fishing and hunting license revenues to determine whether the revenues had been used for program purposes.  We did not evaluate the economy, efficiency, and effectiveness of the Departmentï¿½s operations.

Our audit was performed at the Departmentï¿½s headquarters in Cheyenne, Wyoming.  We also conducted work at selected regional offices, Wildlife Habitat Management areas, public access sites, hatcheries, a bird farm, and an animal disease research center (see Appendix 3). 

Prior Audit Coverage

On February 10, 1997, we issued audit report No. 97-E-440, ï¿½Audit of U.S. Fish and Wildlife Service Federal Assistance Grants to the State of Wyoming, Fiscal Years 1994 and 1995, Supplemental Report.ï¿½  We reviewed this report and followed up on all findings to determine whether they had been resolved prior to our review.  One finding in this report, relating to maintenance of boating access facilities, was previously reported and had not been addressed satisfactorily.  Accordingly, it is included in the Results of Audit section of this report as finding B. 

RESULTS OF AUDIT

Summary

We found that the Departmentï¿½s:

> Accounting system and related internal controls adequately and accurately accounted for grant and license fee receipts and disbursements.
> Costs were accurately reported and claimed. 
> Asset management system accurately identified and tracked personal and real property with regard to acquisition, maintenance, control, and disposal.  

In addition, the State of Wyoming had adequate legislation that assented to the provisions of the Acts and prohibited the use of license fees for anything other than the administration of the Department.
      
However, we concluded that the Department:

> Did not obtain FWS instructions or FWS Regional Director's approval before conveying real property interests that had been acquired with Federal Assistance funds.
> Did not ensure that all boating access facilities constructed with Federal Assistance funds were adequately maintained.  

A.  Real Property Disposals

During the period July 1, 1992, through June 30, 2002, the Department conveyed 34 real property interests to other entities (see Appendix 2).  Many of these conveyances were easements or rights-of-way.  Based on evidence1 made available to us, 25 of the 34 real property interests were acquired with Federal Assistance funds.  The Department obtained neither FWS instructions nor the approval of the FWS Regional Director before disposing of 23 of the 25 property interests.  The two remaining disposals received FWS instructions as well as Regional Director approval prior to their conveyance.  

The Department should obtain FWSï¿½s instructions or the Regional Directorï¿½s approval prior to conveying real property interests that were acquired with Federal Assistance funds.  When it is determined that real property acquired under a Federal Assistance grant is no longer needed for the originally authorized purpose, 43ï¿½CFR 12.71(c) requires the Department  to request disposition instructions from FWS.  In addition, the Service Manual requires approval from the Regional Director prior to granting easements through lands acquired with Federal Assistance funds (522 Service Manual 6.7E).  The Service Manual allows the Regional Director to grant blanket approval for easements, of which rights-of-way are one type, if the State has an adequate system for reviewing and granting easements that protects the Federal Assistance Program interests in the land.  Furthermore, 50 CFR 80.14 requires real property acquired with Federal Assistance funds to continue to serve the purpose for which it was acquired and  prescribes remedies when: (1) an agency loses control, (2) a use interferes with accomplishing the purpose of the acquisition, or (3) the real property is no longer needed.  

We identified several reasons why the Department did not notify FWS prior to disposing of land acquired with Federal Assistance funds: 

> The Departmentï¿½s database did not always indicate the source of funding and, when Federal Assistance funds were indicated, the Federal Assistance grant number was not always identified.  The Department began using Federal Assistance funds to acquire land more than 50 years ago.  Moreover, because the database was so old, staff may not have been convinced that specific parcels of land were acquired with Federal Assistance funds even though the Departmentï¿½s real property inventory system indicated that they had been acquired with Federal Assistance funds.

> The Departmentï¿½s disposal process did not include determining whether Federal Assistance funds were used in the acquisition, requesting FWS instructions, or obtaining FWS approval. 
> Some Departmental employees believed that since Wyoming is a comprehensive management state, the Department does not need to notify FWS prior to land disposal.

Some Departmental employees believed that transactions of little consequence, such as correcting mistakes, straightening boundaries, and granting easements along existing public roads, did not require the Department to request instructions or approval from FWS.

In addition, some staff within the Department and the FWS believed that land disposal procedures should be changed or clarified.  FWS approved an amendment to the Departmentï¿½s grant in 1998 with the understanding that additional procedures would be developed for granting easements or rights-of-way on property acquired with Federal Assistance funds.  However, no such additional procedures were developed.

Recommendations

We recommend that the FWS work with the Department to: 

1. Develop and maintain a list of real property for which it has management responsibility that identifies parcels as to how they were acquired; i.e., with license fees, Federal Assistance, or other funds.

2. Confirm that the 34 disposals of land interests listed in Appendix 2 involved real property acquired with Federal Assistance funds.

3. Apply the provisions of 50 CFR 80.14(b) and 43 CFR 12.71 (c) to each disposal of land interests in Appendix 2 that involved real property acquired with Federal Assistance funds. 

4. Ensure that the Departmentï¿½s real property disposal process includes procedures to determine whether Federal Assistance funds were used in the acquisition, and if so, request FWS instructions prior to transfer or sale, and obtain FWS Regional Directorï¿½s approval for the intended method of disposition.

5. Develop and clarify procedures for granting easements or rights-of-way on property acquired with Federal Assistance funds. 

Department Response

The Department indicated that it has taken action relating to Recommendations A.1, A.4, and A.5.  However, the Department did not concur with all of the properties and information included in Appendix 2 (pertaining to Recommendation A.2) and did not respond to finding A.3.  The Department took issue with the information in Appendix 2 because:

> Property disposals such as Greyï¿½s River occurred well before the audit period and therefore should not have been included in the audit scope without obtaining the permission of the Director, U.S. Fish and Wildlife Service.

> The prior audit covered the two-year period ending June 30, 1995, foreclosing any retroactive audit findings predating that audit period.

Despite these two contentions, in order to bring closure to these disposals, the Department would request retroactive authorization for disposal of the listed properties.  In addition, for future disposals, it intends to request the appropriate authorization. 

FWS Response

FWS requested that all the properties in Appendix 2 remain in the report because the entire list is relevant to the finding and should be resolved in the context of the audit.  FWS added that it would negotiate final resolution of each real property disposal during preparation of the corrective action plan. 

OIG Comments

All real property acquired with Federal Assistance funds, regardless of when it was acquired, must be properly accounted for and available for Federal Assistance purposes until it is disposed of in accordance with regulations.  All properties originally cited remain in Appendix 2.  Although we believe the Departmentï¿½s actions regarding Recommendations A.1, A.4, and A.5 may be acceptable solutions, we do not consider the responses sufficient to resolve any of the findings.  Accordingly, FWS should address these findings in its corrective action plan.

B.  Boating Access Facility Maintenance

Since 1989, the Department constructed 52 boating access projects using Federal Assistance funds.  Most of these projects (36 of 52) were located on lands managed by other entities, such as Wyoming State Parks and the U.S. Forest Service.  Prior to constructing these projects, the Department entered into agreements with these entities that made them responsible for the maintenance of the boating access facilities.  

During our site visits, we observed that most boating access facilities were adequately maintained.  However, maintenance at one location has been repeatedly deficient.  In our 1997 prior audit, we reported, ï¿½ï¿½the handicapped access at some facilities was inadequate or had deteriorated since site construction completion.ï¿½  In 2001, FWS officials found inadequate maintenance of boating access facilities on Fremont Lake.  Specifically, tall thick weeds impeded access to both a dock and comfort station constructed to be wheelchair accessible.  Responsible Department officials said that the 2001 maintenance deficiency at Fremont Lake had been discussed with the responsible land management agency, the U.S. Forest Service.   However, we found inadequate maintenance of the same boating access facility at Fremont Lake during our site visit in August 2003.

According to 50 CFR 80.20, the Department must ensure that other entities maintain capital improvement projects throughout the useful life of the facilities.  A reasonable process to achieve this would include performing periodic inspection of the facilities and requesting that the other entity perform better maintenance when deficiencies are found.  If the initial request fails to improve maintenance, the Department should take more aggressive action such as writing letters, disapproving future projects on entity managed areas, or performing the maintenance at Department expense.

The Department did not implement procedures to document inspections and to enforce compliance with its agreements when maintenance by other entities was found to be inadequate.  As a result, uncut vegetation at Fremont Lakes continued to compromise wheelchair accessibility.

Recommendation

We recommend that the FWS work with the Department to develop procedures to document inspections and enforce compliance with agreements with respect to boating access facility maintenance. 

Department Response

The Department concurred with the finding and recommendation and stated that it has already contacted the U. S. Forest Service Supervisor who has agreed to monitor the Forest Serviceï¿½s responsibilities.  In addition, the Department plans to inspect all boating access facilities for repairs and maintenance at least once during the 5-year grant period and include documentation in its files.  The Department also plans to strengthen compliance requirements in its contracts with other entities to define repair and maintenance requirements, establish time frames for compliance, and include other provisions to assist in enforcing such compliance. 

FWS Response

FWS will consider the Departmentï¿½s comments in preparing the corrective action plan.

OIG Comments

We consider the Departmentï¿½s actions to be appropriate.  FWS should address the finding in corrective action plan.

STATE OF WYOMING
FISH AND GAME DEPARTMENT
FINANCIAL SUMMARY OF REVIEW COVERAGE

Grant
Number
Grant
Amount
Claimed
Costs
Questioned Costs 

Total
Federal
Share
Note
FW-17-P-18
$10,072,920
$13,993,385
$0

1
FW-17-P-19
15,241,045
21,111,020
0

1
Totals
$25,313,965
$35,104,405
$0

Note:

    1. All costs claimed by the Department were incurred; however, the Department excluded costs for the acquisition of personal property from its Federal Assistance claims. 

STATE OF WYOMING
GAME AND FISH DEPARTMENT
REAL PROPERTY INTEREST DISPOSALS
JULY 1, 1992 THROUGH JUNE 30, 2002

Date
Unit
Conveyance
Purpose
Price or
Fair Market Value
Federal Assistance Acquired
Notes
05/21/2002
Ocean Lake
Bill of sale
Building disposal
$18,176
YES

04/08/2002
North Platte River Foote
Deed
Relinquish road right
of way 
0 
YES

02/25/2002
North Platte River Robertson Road
Easement
Overhead power 
line right-of-way
175 
NO

02/25/2002
North Platte River Robertson Road
Easement
Overhead telephone 
line right-of-way
175 
NO

02/25/2002
Rawhide
Easement
Road right-of-way across 0.4 acres
50 
NO

05/18/2000
Medicine Lodge
Easement
Telephone right-of-way to Department facilities
0 
YES

08/09/2000
Red Rim
Easement
Oil & gas pipeline 
right-of-way
10,000 
YES

02/22/2000
North Platte River Ft. Steele
Easement
Fiber optics right-of-way
300 
YES

12/28/1999
Wick
Easement
released
Wind towers on
13.906 acres
26,540 
YES

08/27/1999
Cow Creek Mountain
Deed
Sold 683 acres with some reservations
221,000 
NO

08/26/1999
Ocean Lake
Bill of sale
Building disposal
22,300
YES

08/24/1999
Wick
Deed
Sold 5.74 acres to WYDOT for sewage lagoon
1,725 
YES

08/03/1999
Wick
Easement
Fiber optics right-of-way 
210 
YES

07/12/1999
Laramie Peak
Deed
Real property exchange
18,600 
YES
1
05/20/1999
Red Rim
Easement
Fiber optics right-of-way
18,679 
YES

Ocean Lake
Bill of sale
Auction of cabin 
18,176 
YES

04/01/1999
North Platte River Speck
Easement
Road right-of-way 
to County 
3,835 
NO

03/10/1999
Rawhide
Easement
Nonexclusive use 
of existing public 
access road 
10 
NO

10/19/1998
Renner
Easement
Use of 2 acres for 
water catchment
500 
YES

07/20/1998
Pennock Mountain
Easement
Nonexclusive use 
of existing public 
access road
568 
YES
2
07/07/1998
Spence Moriarity
Easement
Replaces right-of-way access to Alexanders 
7,454 
NO

05/22/1998
Rawhide
Deed
Real property exchange to straighten boundary 
$71 
NO
3
04/03/1997
Johnson Reservoir
Deed
Department relieved of obligation to repair and maintain reservoir
(40,000)
YES

03/11/1997
Spence Moriarity
Easement
Realignment of 
County road
0 
NO

03/07/1997
Big Laramie River Jelm
Easement
Fiber optics box and line right-of-way
435 
YES

03/07/1997
Soda Lake
Easement
Road right-of-way 
to County 
7,922 
YES
4
12/19/1996
Wick
Easement
Nonexclusive right-of-way on existing road
420 
YES

11/06/1996
Red Rim
Agreement
Oil & gas pipeline 
right-of-way
520 
YES

05/30/1996
Salt River
Deed
Correct mistake on hunting and fishing easement
0 
YES

09/25/1995
Wick
Deed
Wind towers on about 
30 acres
1,350 
YES
5
12/18/1992
Greys River
Deed
Sold 65.84 acres to Riverview Meadows Company
377,000 
YES

11/19/1992
Greys River
Deed
Sold 31.68 acres 
to Town
38,000 
YES

11/19/1992
Greys River
Permit
Use of 17 acres for wastewater treatment and park
0 
YES

08/18/1992
Billy Miles
Deed
Fee title exchanged for conservation easements
56,559 
YES
6
08/05/1992
Greys River
Deed
Sold 46.25 acres 
to WYDOT
55,500 
YES

Notes:

1. The Department exchanged real property interests with a fair market value of $18,600 for real property interests of equal or greater value.
2. The Department exchanged vehicular right-of-way with a fair market value of $568 for road maintenance valued at $568.
3. The Department exchanged 0.354 acres to reestablish a portion of the boundary line between the parties.	
4. The Department did not charge the county for the road right-of-way because the Department would no longer incur costs to maintain the road.
5. The Department exchanged real property interests with a fair market value of $1,350 for other real property interests having a greater fair market value.
6. The Department exchanged real property interests with a fair market value of $56,559 for other real property interests of equal or greater value.

STATE OF WYOMING
GAME AND FISH DEPARTMENT
SCHEDULE OF SITES VISITED

Wildlife Habitat Management Areas

Greys River
Kirk Inberg/Kevin Roy
Red Canyon
Soda Lakes
Spence/Moriarity
Springer/Bump Sullivan
Table Mountain
Whisky Basin
Wick/Beumee

Public Access Areas

Little Popo Agie
Middle Popo Agie
North Platte River ï¿½ Various

Regional Offices

Casper
Jackson
Lander
Pinedale

Other Sites Visited

Alcova Reservoir
Auburn Fish Hatchery
Big Bend Ponds, Riverton WY
Boulder Rearing Station
Boyen State Park
Dan Speas Rearing Station
Downar Bird Farm
Fremont Lake
Glendo State Park
Lucky Ponds, Lander WY
Pathfinder Reservoir
Platte River Parkway
Sinks Canyon State Park
Sybille Wildlife Research and Education Center

STATUS OF AUDIT FINDINGS
AND RECOMMENDATIONS

Recommendation Status Action Required

A1, A2, A3, A4, A5 and B

Finding Unresolved and Recommendation Unimplemented

Provide a response to each recommendation that states concurrence or non-concurrence.  Provide a corrective action plan that includes a target date and the official responsible for implementation of each recommendation or alternative solution.  

Unresolved findings and unimplemented recommendations remaining at the end of 90ï¿½days (after July 16, 2004) will be referred to the Assistant Secretary for Policy, Management and Budget for resolution and/or tracking of implementation.