[Final Report Hawaii Volcanoes National Park: Improved Operations Should Enhance Stewardship and Visitor Experience]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. P-IN-NPS-0074-2004

Title: Final Report ï¿½ Hawaii Volcanoes National Park: Improved
       Operations  		Should Enhance Stewardship and Visitor Experience
        	



Date:  March 31, 2006

**********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 Operations Support, at (703) 487-5443.
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AUDIT REPORT


Memorandum


To:		Assistant Secretary for Fish, Wildlife and Parks

From:		Michael P. Colombo
	        Regional Audit Manager
       
Subject:	Final Report ï¿½ Hawaii Volcanoes National Park:  Improved Operations 
		Should Enhance Stewardship and Visitor Experience 
		(No. P-IN-NPS-0074-2004)


The attached report presents the results of our audit of the Hawaii Volcanoes National Park.  Our audit objective was to determine whether the Park effectively managed selected aspects of its administrative operations.  We concluded that by adopting a more business-like approach in its operations, the Park could significantly improve the quality of its commercial and interpretive services and maintenance operations, thereby enhancing Park stewardship and visitor experience.  

In its March 1, 2006 response (Appendix 4 of the attached report), NPS concurred with our recommendations.  Based on the response, we consider Recommendations 4 and 5 to be resolved and implemented and Recommendations 1, 2, 3, 6, 7, 8, 9, 10, 11, and 12 to be resolved but not implemented.  The status of our recommendations is shown in Appendixï¿½5 of the attached report.  Since the reportï¿½s recommendations are resolved, no further response to the Office of Inspector General is required.

The legislation, as amended, creating the Office of Inspector General requires that we report to Congress semiannually on all audit reports issued, the monetary effect of audit findings, actions taken to implement our audit recommendations, and recommendations that have not been implemented.  The monetary effect of the findings in this report is shown in Appendix 1.  
       
We appreciate the cooperation shown by the Park during our audit.  If you have any questions regarding this report, please call me at (916)ï¿½978-5653.

Attachment

cc:  Director, National Park Service 


Executive Summary

Hawaii Volcanoes National Park:  Improved Operations Should Enhance Stewardship and Visitor Experience


The Hawaii Volcanoes National Park (Park), located on the island of Hawaii and encompassing two of the worldï¿½s most active volcanoes, offers a dynamic environment that attracts over 1.3 million visitors annually.  This number is expected to grow substantially in 2005 and beyond.  The Park receives about $5.4ï¿½million in appropriated funds and $3 million in non-appropriated funds annually.  Our audit objective was to determine whether the Park effectively managed selected aspects of its administrative operations.  (The scope and methodology of our audit are detailed in Appendix 2.)  Our audit is part of a continuing focus on a results-oriented use of public resources and government accountability and the Department of the Interiorï¿½s (Department) emphasis on providing the best value to its constituents.  

We concluded that by adopting a more business-like approach in its operations, the Park could significantly improve the quality of its commercial and interpretive services and maintenance operations and by extension the quality of the visitor experience.  The blueprint for such an approach already exists in the National Park Serviceï¿½s (NPS) multi-tiered planning framework, which stipulates a series of increasingly detailed planning documents to define both the goals of a park and the means of accomplishing them.  At the Park, key documents comprising this framework were either outdated or nonexistent.  As a result, Park managers lacked the framework to effectively manage Park operations.  Specifically:

* The Parkï¿½s General Management Plan (GMP), which defines the Parkï¿½s long-term goals for resource preservation and visitor enjoyment and is the basis for management decisions, was issued in 1975.  It does not include changes, such as a 50ï¿½percent increase in acreage, which directly affect Park management and visitor enjoyment.  The Park cannot develop recently acquired acreage, for example, until the GMP is revised.  

* The Park lacked the detailed planning documents needed to oversee its commercial services, interpretive services, and maintenance operations, resulting in a loss of revenues that could have been used within the Park:  an estimated $2.7ï¿½million from commercial air tour operators, $85,000 from commercial bus tour operators, $38,800 in water payments from the Park concessioner, and a potential $50,000 in franchise fees.  In addition to the loss of these revenues, the lack of effective planning can negatively impact the quality of the visitor experience in terms of the commercial and interpretive services offered and the condition of facilities.  The Park could reduce its maintenance backlog by determining the true scope of maintenance needs, establishing funding priorities, and ensuring the timely completion of approved maintenance projects.  

* The Park could also strengthen its controls over government purchase cards, fee collections, and museum collection, thereby reducing financial exposure to loss from fraud, waste, and abuse in these areas.  For example, reducing excessive credit limits and the number of cards issued to staff, accepting credit cards (instead of cash only) as payment for entrance fees, and enforcing the requirement for reporting museum property losses would reduce risk and financial exposure.  

We made 12 recommendations regarding improved planning and oversight and believe that implementation of these recommendations would help the Park adopt a more business-like approach and could significantly improve the quality of its commercial and interpretive services and maintenance operations, thereby enhancing Park stewardship and visitor experience.  The Park concurred with and is implementing our recommendations.




Contents
										    Page

The Dynamic Environment									1
				
Results of Audit:  Adoption of a More Business-like Approach Could Transform Key 
Park Practices and Enhance Operations							4
       Outdated GMP								 	4
       Lack of Planning and Oversight							5
       Inadequate Internal Controls							12
       
Recommendations										15
       NPS Response and OIG Reply							16

Appendices

1 Classification of Monetary Amounts							17
2 Objective, Scope, Methodology, and Prior Audit Coverage				18
3 Purchase Card Expenditures and Credit Limits						21
4 National Park Service Response							23
5 Status of Audit Recommendations							29


Abbreviations
C.F.R.	Code of Federal Regulations 
CIP	Comprehensive Interpretive Plan
CSP	Commercial Services Plan
dba	Doing business as
Department	Department of the Interior
FAA	Federal Aviation Administration
Fee Demo	Recreational Fee Demonstration Program
GAO	Government Accountability Office
GMP	General Management Plan
NPS	National Park Service
OIG	Office of Inspector General, Department of the Interior
Park	Hawaii Volcanoes National Park
PMIS	Project Management Information System
U.S.C.	United States Code
Volcano House	Ken Direction Corporation dba Volcano House


The Dynamic Environment


The Park, established in 1916, represents 70 million years of volcanism and evolution in the Hawaiian Islands chain.  Astoundingly diverse, the Park encompasses about 333,000ï¿½acres, extending from sea level to the summit of the earthï¿½s most massive volcano, 13,677-foot Mauna Loa.

       
                Figure 1 
    Park in Relation to Island of Hawaii
    Map Courtesy Honolulu Advertiser


As home to two of the worldï¿½s most active volcanoes, Kilauea and Mauna Loa, the Park is a dynamic environment.  Kilauea has been erupting continuously since 1983 and is still adding land to the Big Island of Hawaii.  The Parkï¿½s volcanic environment offers awe-inspiring landscapes to visitorsï¿½over 1.3 million of them in 2004.  Much of the Park is designated as wilderness, providing unique hiking and camping opportunities. 

As steward of the nationï¿½s park system, NPS is charged with preserving the Parkï¿½s natural and cultural resources for the enjoyment of future generations.  To accomplish this mission, NPS relies on a multi-tiered park planning framework (Figureï¿½2), which focuses on why the park was established, defines desirable resource conditions and visitor experiences, identifies the management actions needed to achieve park goals over time, and provides a means for management to measure success in meeting these goals.  In effect, the framework is equivalent to a business planï¿½the blueprint of the actions and procedures necessary to build a successful company and assess not only where the company is currently, but where it is headed.

      Figure 2 (NPS Planning Network)
      Source:  National Park Service Program Standards:  Park Planning, issued by Associate Director of Park Planning, Facilities, and Lands, August 2004	                                                                           
                                                                                                  NPS Planning Framework

The foundation for planning and management document is a conceptual statement of why the Park was established, the resources to be preserved, and Park experiences that would benefit the public.  The GMP builds on the foundation document by looking at the Park holistically, both as a unit of the National Park System and as part of the surrounding region, for the long term.  It defines the Parkï¿½s long-term direction for resource conditions and the quality of visitor experiences and forms the foundation for decision making.  Strategic planning focuses on a shorter time frame than the GMP and targets measurable results.  

Implementation planning provides the detailed plans necessary to accomplish strategic goals.  Annual performance planning articulates annual goals for each fiscal year, and annual performance reports identify the progress made toward meeting these goals.  Collectively, these documents provide the basis from which Park managers oversee and monitor park operations and programs.  

The Park receives about $8.4 million each year:  $5.4 million in appropriated funds and about $3 million from Recreational Fee Demonstration (Fee Demo)1 program monies, franchise fees,2 and other non-appropriated sources.  Full-time Park employees total about 95.  


Results of Audit:

Adoption of a More Business-like Approach Could Transform Key Park Practices and Enhance Operations


The Park lacked the planning framework necessary to effectively manage the administrative aspects of the operations that we reviewed.  Specifically, the Park has not updated its GMP or developed the detailed implementation plans critical to effective oversight of its commercial services, interpretive services, and maintenance operations.  In addition, internal controls deficiencies in key areas increased the risk of fraud, waste, and abuse in accounting for federal monies.  With better planning and the adoption of a more business-like approach, the Park could significantly improve its operations, in terms of cost-effectiveness and quality of facilities and services.  


Outdated GMP


Contrary to NPS guidelines, the Park has not revised its GMP, issued in 1975, or revisited its foundation for planning and management document, issued in 1985.  According to NPS guidelines, GMPs should be reviewed and revised to keep them current.  NPS anticipates that such reviews are needed every 10 to 15 years or sooner if conditions change more rapidly.  Even in parks with strong traditions and entrenched patterns of use and development, decision makers will benefit from occasionally stepping back to reassess their overall goals, particularly if resources are threatened, sites are crowded, or park facilities require extensive rehabilitation or maintenance.  The Park needs to update these documents to incorporate significant changes that have already occurred or are projected to occur.  For example:

* A 2003 acquisition increased the Park by about 116,000ï¿½acres of woodlands and rainforests, lava flows, and ancient archeological sites (Figure 1).  The Park cannot develop this area until a revised GMP is prepared and approved.

* Since 1983, a continuous lava flow from the Kilauea Volcano has reshaped the east side of the Park and added over 506 acres.

* The growing number of inter-island cruise ships is expected to substantially increase the number of Park visitors in 2005 and beyond.


In light of these changes, it is critical that the Park begin the GMP planning process to re-evaluate desired future resource conditions and visitor experiences and develop appropriate plans to accomplish long-term goals.  


Lack of Planning and Oversight


We focused on the effectiveness of three key Park operationsï¿½commercial services, interpretive services, and maintenanceï¿½and found that without an adequate planning framework, Park managers lacked the direction necessary to achieve desired results.  For example, the Park had not developed two critical implementation plans, the Commercial Services Plan (CSP) and the Comprehensive Interpretive Plan (CIP).  A CSP is essential to ensuring an integrated planning approach that identifies the appropriate commercial services needed in the Park and the best practices to manage these services.  A CIP is equally essential to developing an integrated interpretive program that inspires visitor learning, provides recreational experiences, fosters a personal stewardship ethic, and broadens public support for preserving park resources to the fullest extent possible. In response to our audit findings, the Park began establishing the planning framework for the CSP by holding public meetings with the community in June 2005.  

Although the Park began developing a CIP in 1999, the draft CIP is still in a preliminary stage.


Commercial Services

The Parkï¿½s commercial services included air and bus tours and a concession operation.  The lack of oversight over air and bus tours was evident in unrealized revenues and amounts payable from commercial tour operations over the last 5 years.  These totaled an estimated $2.7ï¿½million that remains uncollected from air tour operators and $85,000 that was payable from tour bus operators as of September 2004.  The Park also did not (1)ï¿½ensure concessioner compliance with contract terms requiring payment of water service costs and provision of quality service or (2)ï¿½begin proactive planning for a new concessions contract when the current one expires in 2008. 

Commercial Air Tour Operators.  The Park has not established and implemented procedures to identify noncompliant air tour operators and validate the accuracy of overflight reporting through coordination with the Federal Aviation Administration (FAA).  As a result, the Park could only estimate the overflight fees due.  Figure 3 compares overflight revenues collected with the revenues the Park estimated it should have received and shows the $2.7 million that was uncollected.  In addition, 9 of 14 operators did not report and pay any of the $1 million owed to the Park between 2000 and 2004.  


       Figure 3 (graph - Commercial Air Tour Operator Revenues as of September 2004)
       Source:  Park-generated Air Tour Fees Report                        


NPS officials told us that FAA believed historical flight information was proprietary and could not be used to assess fees.  However, FAAï¿½s failure to provide information on overflights is contrary to the Congressional requirement that FAA and NPS coordinate the management of commercial air tour operators over national parks.  Further, our General Counselï¿½s Office is not aware of any law or regulation requiring FAA to collect information on park overflights with the condition that the information will not be used to assess fees.  Such a condition is contrary to ensuring that operators pay the required fees.  The Secretary of the Interior is authorized to assess fees on aircraft overflights.3  Information on overflights is clearly relevant to the accurate assessment and collection of fees.  Even if one were to assume that such information was commercial proprietary information subject to the provisions of 18 U.S.C. ï¿½ 1905, disclosure to NPS is authorized by law, as the information is necessary to assess fees 
and make informed decisions (in cooperation with FAA) on the number of authorizations to issue for commercial air tour operations over a national park.4  NPS has authority to require submission of overflight information as one of the relevant criteria for approval of operatorï¿½s proposals and to collect fees5 under its collection and enforcement authority. 

	Commercial Bus Tour Operators.  By the end of fiscal year 2004, bus tour operators owed the Park $85,000 in unpaid entrance fees.  The fees were unpaid because the Park allowed bus tour operators to pay fees after the fact, unlike visitors arriving by passenger vehicle, who pay fees upon entry to the Park.  Park officials stated that they recently started this practice because smaller operators had cash flow problems.  We believe the Park should discontinue the practice of allowing tour bus operators to pay after the fact and should accept credit cards as payment at the entrance fee station to alleviate cash flow concerns.  The benefits of credit cards are discussed under ï¿½Entrance Station Collections.ï¿½  

	Concessioner.  The Park did not require its sole concessioner, Ken Direction Corporation dba Volcano House,6 to comply with contract terms for (1)ï¿½paying a fair share of water service operating costs and (2)ï¿½providing consistent services at a quality equal to industry standards.  As a result:

* From 1995 to 2004, the Park undercharged Volcano House an estimated $38,800 for water.  The Park did not conduct required annual water rate studies for at least 9ï¿½years and, despite escalating water costs, continued to charge the base rate of $8.89 per 1,000 gallons. Water rate studies are essential to determining the tenant water rates necessary for recovery of water service operating costs and to maximizing the dollars available for mission related needs.  

* Park inspections and our observations revealed numerous deficiencies in the quality of concessioner facilities and services, including tables and chairs in disrepair, noisy pipes, and overall poor food and lodging service.  According to Park records, Park staff made only two inspections during the 13-month period ending October 2004.  Deficiencies could therefore have existed a significant amount of time before detection.  The Park should step up inspections and should include reviews of guest comment cards, which have long been recognized as a valuable tool in preventing and eliminating recurring problems.   


In addition to these problems, the Park needs to proactively plan for awarding a new concessions contract after the current one expires in 2008.  Specifically, the Park should address compensation issues related to concessioner improvements (ï¿½possessory interestï¿½)7 under the National Park Service Concessions Management Improvement Act of 1998.  Possessory interest is a legal obligation, and the current concessioner, if not awarded the new contract, is entitled to be compensated for its possessory interest by the successor concessioner or the U.S.ï¿½government.  


Historically, disagreement between NPS and concessioners on the value of possessory interest has delayed the award of new contracts.  In light of anticipated difficulties, the Park should proactively begin determining possessory interest for concessioner improvements to the Volcano House, employee dorm, and concessioner house. 


Interpretive Services

Interpretive services at the Park, which are essential to public understanding and appreciation of Park resources, lack oversight and are not integrated.  During our review, we noted three areas that reflected the lack of implementation planning, all of which could ultimately affect the quality of visitor experiences.   

   Inventory and Integration of Interpretive Services.  Inventorying and integrating the interpretive services provided within the Park are among the first considerations in a well-defined interpretive services operation.  Park staff, however, could not provide us with an inventory of either the type or the frequency of interpretive services provided or planned by Park employees and provider organizations.8  
   
   Use of Correct Legal Instrument.  In its implementation planning, the Park must clearly identify the desired roles of each interpretive service provider and ensure that the correct legal instrument is used to document the providerï¿½s relationship with the Park.  Selection of the correct instrument not only defines the mutual expectations of the Park and the provider, but also affects Park revenues.  For example, at the present time, the Volcano Art Center operates under a cooperative agreement.  The criteria9 for cooperative agreements are specific, requiring that NPS transfer money, property, or services to the cooperator to carry out a public purpose and that NPS be substantially involved in carrying out this purpose.  At the present time, however, the Center is operated autonomously as an art gallery, with little Park involvement.  For example, Park staff could not tell us what educational activities, demonstrations, or exhibits were sponsored by the Center, although they did state that such activities 
   were minimal.

Given the current operation of the Center, a concession contract appears to be the appropriate legal instrument.  While cooperative agreements identify those entities, or cooperators working closely with the Park to enhance visitor experience, contracts identify entities, such as concessioners, who operate to generate profits both for themselves and for the Park through franchise fees.  Had the Park awarded a concession contract instead of a cooperative agreement, it could have realized an estimated $50,000 annually in franchise fees.

   Partnerships with Nonprofit Organizations.  In developing its implementation plan, the Park should also consider partnerships with nonprofits, such as ï¿½friendsï¿½ groups or park-specific foundations, which a 2003 Government Accountability Office (GAO) report10 identified as profoundly enhancing the quality of service provided by parks.  According to the report, these partnerships can offer significant support in fund-raising and educating the public about the value of Park resources and activities.  GAO, for example, stated that from 1997 to 2001, these organizations contributed over $200ï¿½million toward educational programs, as well as substantial numbers of volunteers providing such services as maintaining trails, staffing visitor information kiosks, and cleaning campgrounds.  Within the Park, the Friends of Hawaii Volcanoes National Park, established in 1998, provide non-financial assistance for the Ainahou Ranch, a small section of the Park.  


Maintenance

As of September 2004, the Parkï¿½s maintenance backlog11 totaled an estimated $19ï¿½million.  Although funding availability affects the backlog, the backlog is also the result of the Parkï¿½s lack of planning and management emphasis in this area.  Specifically, the Park has not completed condition assessments of Park assets, developed strategies for addressing identified maintenance deficiencies, or ensured the timely completion of maintenance projects.  

	Comprehensive Condition Assessments.  The Park determines whether assets require maintenance through ongoing assessments, which identify obvious deficiencies, and comprehensive condition assessments, which monitor asset deterioration, determine the need for rehabilitation and replacement, and establish funding priorities for future maintenance.  The NPS Pacific West Region requires the Park to complete comprehensive condition assessments by 2006 for 251 of its over 400 assets.  The Park, however, had completed comprehensive condition assessments only for its trails, as shown on Table 1.  

			Table 1
			Status of Comprehensive Condition Assessments
			As of February 2005


To ensure progress, the Park should develop a plan outlining the strategy, priorities, and target dates for completing all comprehensive assessments.  The plan should be tailored to meet specific Park needs.  For example, the assessment of Volcano House, which was included with assets scheduled for comprehensive assessments in 2006, should be done earlier to allow time for completing and incorporating the assessment into the prospectus for a new Volcano House concession contract.  

	Maintenance Strategies.  Maintenance is funded by operational monies, NPS maintenance funds, and Fee Demo revenues and is performed by in-house staff or by contractors.  Effective oversight of maintenance operations requires the Park to determine the ï¿½best mixï¿½ of funding and delivery options to optimize visitor benefits.  In light of staffing shortages and potential cost savings, contracting out certain maintenance projects to the private sector could free up resources for other activities.


In fiscal years 2003 and 2004, the Park did contract out four projects, primarily because of their complexity.  Contracting out maintenance activities, when warranted, is a promising practice, which adds to the maintenance options available to Park management to deal with increased operating costs and limited dollars.  Thus, the Park should determine the feasibility, on a case by case basis, of contracting out maintenance projects.  

	Project Completion.  The majority of rehabilitation and replacement projects at the Park are funded with Fee Demo funds.  In fact, since implementing the Fee Demo program in 1997,12 the Park has collected about $24 million in revenues, of which it retained $19.5 million for on-site improvements, such as construction and repair of buildings, campgrounds, roads, trails, and the Kilauea Visitor Center.   


Between fiscal years 1997 and 2004, the Park obligated revenues timely, but completed only about one-third of the 141ï¿½projects funded.  A detailed analysis of 45ï¿½of these projects disclosed that as of January 2005, only 21ï¿½projects were completed, with 24 in varying stages of construction that had been ongoing an average of 4 years.


Significant delays between project funding and start dates occurred because maintenance staff were diverted to higher priority projects.  For example, construction on a project to rehabilitate a field research center did not begin until October 2000, although the project was funded in 1997.  Similarly, construction on a project to improve accessibility to an education center, approved in 2001, did not begin until October 2003.  
   

Better use of NPSï¿½s Project Management Information System (PMIS) to monitor project status could improve oversight of maintenance projects.  For most projects, we found key data fields, such as target completion dates and explanations for delays, were not entered into PMIS.  An interpretive rainforest walk project approved in 1997, for example, did not state a target completion date or a reason for delays.  Park officials stated that difficulties in creating an accessible walkway without disrupting the surrounding environment had delayed the project, which is about 50ï¿½percent complete.
 

Inadequate Internal Controls


During our review of the Parkï¿½s internal controls, we noted deficiencies in three areas:  purchase cards, fee collections, and management of the museum inventory.  To strengthen internal controls and reduce the risk of fraud, waste, and abuse in these areas, the Park should (1) limit purchase card issuance and credit limits to the legitimate needs of Park staff, (2) accept credit cards at the fee collection station, and (3) enforce requirements for reporting museum collection losses.  


Purchase Cards

During fiscal year 2004, the Park used charge cards to procure over $700,000 in goods and services, using the purchase business line of the government charge card program.  Although we did not find any questionable purchases, the excessive number of cardholders and the high credit limits increased the Parkï¿½s financial exposure.  As of June 2004, the Park had issued purchase cards to about 50ï¿½percent of its staff.  Appendix 3, which compares the monthly credit limits for 45ï¿½employees with their average monthly and fiscal year 2004 expenditures, shows that the credit limits were excessive, with about 1.5 percent of the overall credit available used.  The Park has not implemented recommendations in our 2001 report on the integrated charge card program,13 one of which advised the Department to ensure that purchase cardholders and credit limits were based on the minimum number and amounts needed for efficient operation.  

Federal purchase card programs have proven very beneficial in streamlining the small purchase acquisition process, reducing transaction processing costs, and providing greater flexibility in procuring needed goods and services.  However, an adequate control environment is essential to reduce the Governmentï¿½s financial exposure and risk.


Entrance Station Collections

The Park collects a significant amount of cash daily.  For example, in March 2004, the Park collected about $6,000 daily at its entrance station from commercial tour operators and visitors.  The Park, however, did not accept credit cards as payment for entrance fees as some other parks do, even though it considered cash collections as high risk and subject to fraud, waste, and abuse, such as embezzlement.

The Parkï¿½s non-acceptance of credit cards is counter to current business practices, in which credit cards are so commonplace that non-acceptance is the exception rather than the rule.  According to a recent survey conducted by BIGresearch,14 the average consumer has at least two credit cards.  Table 2 illustrates the benefits of credit cards from both a business and consumer perspective.  

		Table 2
		Credit Card Benefits


Business Perspective
Consumer Perspective

Improved Sales

Convenience
Reduced Expenses
Flexibility
Security
Security
Efficient Transaction Processing
Emergency Buying Power

We believe that by accepting credit cards, the Park can enjoy these same benefits, improve visitor satisfaction, increase National Park Pass sales, and expedite fee collections from commercial tour operators (see ï¿½Commercial Bus Tour Operatorsï¿½).

Museum Collections

Museum collections are part of the cultural resources that NPS is charged with preserving.  According to the NPS Museum Handbook, Parks must inventory 100 percent of their museum collections annually and promptly report losses to Park law enforcement officials for appropriate follow-up.  In its fiscal year 2004 inventory, the Park could not locate 7 items in its 172-item collection.  These items, which consisted of invaluable and irreplaceable paintings, stone objects, and scientific specimens, have been missing since prior to 1998.  Over these years, at no time did the Park report the missing items to law enforcement officials or convene a Board of Survey15 to adjust its inventory records.  Recovery of the items is doubtful because of the elapsed time since these items were last seen.


Recommendations 

	
We recommend that the Regional Director of the NPS Pacific West Region and the Park Superintendent:  

1.  Update and revise the Parkï¿½s GMP and related plans to verify the appropriateness of the Parkï¿½s strategic course and associated goals, thereby ensuring suitable efforts are made toward long-term resource preservation and visitor satisfaction.

We recommend that the Park Superintendent:  

2.  Develop an integrated CSP that identifies the appropriate commercial services needed and the best practices to manage these services.

3. Establish and implement procedures to ensure commercial air and bus tour operators accurately report and pay required fees on time.

4. Enforce concession contract terms that require the concessioner to pay its fair share of water service operating costs and to provide quality service.

5. Proactively plan for the new concession contract, including determining the value of the concessionerï¿½s capital improvements and resolving possessory interest issues.  

6. Develop an integrated CIP that identifies the interpretive service operations that are or should be available from the Park, and how interpretive service needs will be met through a combination of NPS staff, concessioners, and Park cooperators.

7. Develop and implement a plan to complete comprehensive condition assessments.  The plan should address strategy, priorities, and target dates for completing all assessments.

8. Determine the feasibility of contracting additional maintenance projects to the private sector to better use Park resources.

9. Fully use the PMIS to oversee maintenance projects.

10. Reduce the number of purchase cardholders and lower charge card limits based on a combination of historical use information and cardholder position responsibilities.

11. Accept credit cards as payment for entrance fees. 

12. Enforce the NPS requirement for reporting museum property losses.


NPS Response and OIG Reply

The March 1, 2006 NPS response was sufficient for us to consider all of the recommendations resolved, with recommendations 4 and 5 also considered implemented.  Overall, NPS agreed to develop or update park planning documents, enforce entrance and tour fees while streamlining collection efforts, integrate park interpretive services, and work to improve Park performance in several maintenance and administrative areas.  The status of all audit recommendations is shown in Appendix 5.




Appendix 1- Classification of Monetary Amounts 


Appendix 2 - Objective, Scope, Methodology, and Prior Audit Coverage 

Objective, Scope, and Methodology

The objective of our audit was to determine whether the Park effectively managed selected aspects of its administrative operations.  We conducted our audit from June 2004 to November 2005 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 considered necessary under the circumstances.  To accomplish our objective, we conducted the following activities:

* Reviewed internal controls and identified weaknesses relating to Park planning, commercial services, deferred maintenance, purchase cards, entrance station collections, and museum collections, as discussed in the Results of Audit section.  As part of our review, we determined the amount of water service undercharges related to the Volcano House concession operation by escalating the $8.89 base rate using the Hawaii consumer price index from 1995 to 2004 and applied the applicable rates to annual water usage and hauling costs.  Our recommendations, if implemented, should improve internal controls in these areas.

* Interviewed Park officials and staff.

* Reviewed various NPS references, including Management Policies, Directives, Museum Handbook, and Personal Property Management Handbook.  We also reviewed the Parkï¿½s budgetary and financial reports, contracts and agreements, and other relevant documents.

* Reviewed the Department of the Interiorï¿½s Report on Performance and Accountability for fiscal year 2004, including information required by the Federal Managerï¿½s Financial Integrity Act.  The Department reported inadequate maintenance management capability as a mission-critical material weakness.  
* Reviewed Government Performance and Results Act goals and measures related to the Fee Demo program to determine whether they were appropriate and outcome-based.  In response to our August 2002 Fee Demo audit, the Assistant Secretary for Policy, Management and Budget directed NPS to amend its Fee Demo performance measures to include (1) customer satisfaction with value for fee paid, (2) percent of fee revenue obligated to maintenance projects, and (3) percent of fee revenues spent on fee collection.

We did not evaluate Park policies and procedures over special permits, such as special events, commercial filming and still photography because of a recent GAO review in this area.

Prior Audit Coverage 

We reviewed the following audit coverage applicable to the Park.  

* May 2004, Federal Acquisition:  Increased Attention to Vehicle Fleets Could Result in Savings (GAO-04-664).  This report focused on the significant savings that could result if federal agencies ensured vehicle fleets were the appropriate size and composition to meet mission needs.

* February 2004, U.S. Department of Interior:  Fleet Management Operations (OIG Report No. C-IN-MOA-0042-2003).  This report concluded that the Department could achieve significant savings if its vehicle fleet was appropriate to mission needs.  During our audit, the Pacific West Region directed park units under its cognizance to re-assess fleet levels and to justify each vehicle in its fleet.  Based on its re-assessment, the Park proposed to reduce its fleet by five vehicles.  

* February 2004, Competitive Sourcing:  Greater Emphasis Needed on Increasing Efficiency and Improving Performance (GAO-04-367).  GAO discussed the need for agencies to (1) ensure consistency in classifying positions as inherently governmental or commercial, (2) identify functional areas for competition, and (3) focus competition plans on desired outcomes.    

* July 2003, Park Service:  Agency Needs to Better Manage the Increasing Role of Nonprofit Partners (GAO-03-585).  GAO emphasized the benefit of developing commercial service plans that defined the roles of concessioners and nonprofits in providing visitor services in minimizing conflicts and ensuring a more systematic basis for decision making. 

* March 2003, National Park Service:  Collection and Use of Franchise Fees (OIG No. 2003-I-0034).  The report stated that NPS may not have used franchise fees to fund the highest priority projects because project priority ranking scores were not entered into PMIS.

* January 2003, Department of the Interior:  Major Management Challenges and Program Risks (GAO-03-104).  The report identified the important Departmental performance and accountability challenges, such as improving management of the national parks and addressing the deferred maintenance backlog.  

* August 2002, National Park Service and Bureau of Land Management:  Recreational Fee Demonstration Program (OIG Report No. 2002-I-0045).  The report identified opportunities for NPS to improve Fee Demo accountability and project completion rate.  

* December 2001, Department of the Interior:  Integrated Charge Card Program (OIG Report No. 2002-I-0011).  The report disclosed that the Departmentï¿½s control environment for the integrated charge card program was not adequate to minimize abuse of the purchase card.  Specifically, the Department did not have an effective process to validate purchase transactions, adjust credit limits, or deactivate ex-employees cards.  

* March 2000, Park Service:  Need to Address Management Problems that Plague the Concessions Program (GAO/RCED-00-70).  This report identified long-standing concession problems related to the condition of lodging facilities.  Recommendations included (1) improving the qualifications of NPS concession staff (or contracting out to acquire the needed expertise) and (2)ï¿½establishing a formal process for performing periodic independent inspections of concessionersï¿½ lodging facilities throughout the park system. 


Appendix 3 - Purchase Card Expenditures and Credit Limits

Appendix 4- National Park Service Response

Appendix 5 - Status of Audit Recommendations

Recommendations:  4 and 5

Status:  Resolved and Implemented

Action Required:  No further response to the Office of Inspector General is required.


Recommendations:  1, 2, 3, 6, 7, 8, 9, 10, 11, and 12 

Status:  Resolved Not Implemented

Action Required:  We will refer the recommendations to the Assistant Secretary for Policy, Management and Budget for tracking of implementation.