[Final Audit Report, "Department of the Interior, Modified Water Deliveries to Everglades National Park"]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. C-IN-MOA-0006-2005

Title: Final Audit Report, "Department of the Interior, Modified
       Water Deliveries to Everglades National Park"



Date:  March 31, 2006


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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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Memorandum

To:  P. Lynn Scarlett
     Deputy Secretary

From:  Earl E. Devaney /signed/
       Inspector General

Subject:  Final Audit Report, "Department of the Interior, Modified Water Deliveries to Everglades National Park" (No. C-IN-MOA-0006-2005)



EXECUTIVE SUMMARY

WHAT WE FOUND

The Department of the Interior (Department) has not effectively participated in the Modified Water Deliveries to Everglades National Park Project (Project).  The Departmentï¿½s participation has been ineffective because it has not developed and communicated a comprehensive and unified restoration strategy and clearly defined its consultation role for the Project.  This has contributed to Project delays and cost increases.  Additionally, we found that the Department has taken little action to monitor or obtain Project status information from the agency charged with designing and constructing the Project, the U.S. Army Corps of Engineers (Corps).

Authorized in 1989, the Project was originally intended to improve water flows into Everglades National Park (Park).  The Congress directed the Corps to plan and implement the Project in consultation with the Department.  Although the Corps has overall responsibility for the Project, appropriations for the Project pass through the Departmentï¿½s National Park Service.

Since its inception, the Project has been subject to significant delays and escalating costs.  Public controversies and conflict have resulted in litigation and further contributed to Project re-designs.  The Project is currently eight years behind schedule and the projected price tag is approaching $400 million, nearly five times its original estimate. 

There are many factors that have resulted in these Project delays and cost increases that are outside the Departmentï¿½s direct responsibility and control.  Some of these delays and cost increases are caused by the Corps and other Project stakeholders.  Our audit was limited to the Departmentï¿½s participation in the Project.  We did not audit the Corpsï¿½ management of the Project or other stakeholdersï¿½ involvement in the Project.  We also limited our audit to the Modified Water Deliveries Project and did not audit the Departmentï¿½s involvement in the Comprehensive Everglades Restoration Plan that involves additional projects to be performed after completion of the Modified Water Deliveries Project.

(page i on a text box to the left of the page, Executive Summary)
WHY WE DID THIS AUDIT  
We audited the Departmentï¿½s participation in the Project because of its importance to the overall restoration of natural hydrologic conditions in the Everglades.  As of fiscal year 2005, about $192 million had been appropriated for the Project.  This is the first review of this Project by the Office of Inspector General.   Government Accountability Office audits of overall Everglades restoration efforts have identified weaknesses including strategic planning and coordination.  Our objective was to determine whether the Department has effectively participated in the Project.  


(page ii, continuation of Executive Summary)
This report presents actions aimed at ensuring that the Department effectively participates in the Project.  Effective participation can best be achieved by the Department utilizing a project management approach to guide its participation, including:

> A clearly defined Department-level consultation plan. 

> A unified Departmental approach to restoration. 

> A single line of communication with the Corps. 

> Improved coordination and communication with Project stakeholders.

> Improved Departmental monitoring and reporting of the Project.  

We concluded that if the Department does not improve its participation in the Project, there is a risk that it may contribute to:

> further delays. 

> cost increases.

> failure to achieve Project benefits.

> environmental degradation. 

> diminished public support.

> litigation.

> continued strain on limited federal resources.

> delays in implementation of other Everglades restoration projects.



CONTENTS					
The Modified Water Deliveries Projectï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½...      		1

Results of Audit
	Develop a Plan to Guide the Departmentï¿½s Participationï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½..	5
	Develop a Unified Approach to Restorationï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½..       	8
	Establish a Single Line of Communication with the Corpsï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½...	9
	Improve Coordination and Communication with Project Stakeholdersï¿½ï¿½ï¿½ï¿½ï¿½	9
	Improve Monitoring and Reportingï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½...			11
Recommendationsï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½					15

Appendices

1	Objective, Scope, and Methodologyï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½..			19
2	Prior Auditsï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½				23
3	Managementï¿½s Comments on Draft Report.ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½..			27
4	Status of Audit Recommendationsï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½....			45

									

THE MODIFIED WATER DELIVERIES PROJECT

The Modified Water Deliveries Project to Everglades National Park (Project) is a critical component in achieving environmental restoration in the South Florida Everglades.  The Projectï¿½s purpose is to remove impediments to natural water flows into Everglades National Park (Park) by altering or removing existing water management structures, such as levees and canals.  The Department of the Interior has identified the Project as one of its highest priorities. 

The Project was authorized in the Everglades National Park Protection and Expansion Act of 1989 (1989 Act) to improve water deliveries to the Park and, to the extent possible, restore the natural hydrological conditions within the Park.  The Project is expected to provide significant benefits directly to the Park.

The Project is unusual in several respects.  The U.S. Army Corps of Engineers (Corps) is responsible for designing and constructing the Project, but funding is provided through Department of the Interior appropriations.  There are numerous stakeholders affected by the outcome of the Project. Stakeholders for the Project include the State of Florida, Native American tribes, local governments, residential and agricultural landowners, environmental groups, and recreational users.  

The 1989 Act established the Departmentï¿½s role in the Project as one of consultation.  Annual appropriations statutes specified that the Department was to fund the Project.  However, for fiscal year 2006, Congress provided appropriations to both the Department and the Corps.  Although the Department participates with the Corps in general Project planning and design, the Corps is the direct project manager and makes the final decisions.  Because funding is transferred between federal agencies, the Departmentï¿½s responsibilities are generally limited to ensuring that the Corps uses the funds for the Project. Currently, no legislation exists that defines the extent of the Departmentï¿½s consultation to the Corps or that authorizes the Department to enforce cost limits on funding transferred to the Corps for the Project.  Further, the Department has not defined its consultation role to the Corps for the Project nor has it implemented procedures to ensure adequate monitoring and accountability for the Project.  
The following page illustrates the general federal, state, and other stakeholder roles in the Project (Figure 1):


PUTTING IT ALL TOGETHER: THE DEPARTMENTï¿½S CONSULTATION IS A
CRITICAL COMPONENT TO ENSURE PROJECT  SUCCESS (Figure 1, portrays pieces of a puzzle)                                                                                                                                                                                                




The Corps issued a General Design Memorandum (GDM) for the Project in 1992.  The GDM provided the initial design for the Project and serves as the authorizing document for modifications needed to improve water flows into the Park.  The Department supported the Corpsï¿½ initial design as set forth in the GDM.  The GDM identified work that is currently being carried out as three major components.  These components are:

> Eight and One-Half Square Mile Area:  Flood mitigation for a residential area near the Park.  The acquisition of lands required to construct this component has been completed and a contract has been awarded for the construction of flood mitigation features.

> Tamiami Trail:  Raising a small section of U.S. Highway 41, known as the Tamiami Trail.  Re-design for this component was completed in January 2006.

> Conveyance and Seepage:  The construction of features to pass and control water flows into the Park.  Construction of these features was about 58 percent complete as of April 2005.


The Project was originally estimated to be completed in 1997 at a total cost of about $81 million.  As of June 2005, about $183 million had been transferred from the Department to the Corps for the Project.


The Project has been subject to considerable public controversy and many factors have led to Project delays and cost increases.  Many of these factors are outside the Departmentï¿½s direct responsibility and control, such as delays resulting from litigation concerning the Eight and One-Half Square Mile Area.  In addition, Federal and State of Florida planning agencies disagree about how to best achieve restoration.  This has contributed to the need for redesign of Project features and escalating costs. Further, conflict within the Department over the restoration approach has also contributed to Project delays.  Consequently, the Project is currently eight years behind schedule and its projected price tag is approaching $400 million, nearly five times the original estimate.

In 1996, Congress authorized the Corps to develop a comprehensive plan for restoring, preserving, and protecting the Everglades.  This comprehensive plan is known as the Comprehensive Everglades Restoration Plan (CERP) and is a separate restoration effort from the Project.  Congress also established a special advisory task force that is charged with coordinating and facilitating CERP and other Everglades restoration projects.  A Special Assistant to the Secretary of the Interior leads this task force.  The Project has been recognized as a foundation project for CERP and its completion is a legislated prerequisite for other CERP projects.  Therefore, the success of CERP is dependent on the completion of the Project.   As a result, the Projectï¿½s schedule is of particular interest to the Congress and the Department. 

Our report will give the Department insight into some of the key issues that are currently hindering successful Project completion and present strategies geared towards resolving these issues.  Appendices 1 and 2 contain information on the objective, scope, and methodology of our audit and prior audit coverage.


RESULTS OF AUDIT

The Department has not effectively participated in the Project because it has not clearly defined its consultation role and it has not developed and communicated a comprehensive and unified restoration strategy for the Project.  This has contributed to Project delays and cost increases.  Effective participation can best be achieved by the Department utilizing a project management approach to guide its participation, including:

> A clearly defined Department-level consultation plan. 

> A unified Departmental approach to restoration. 

> A single line of communication with the Corps. 

> Improved coordination and communication with Project stakeholders.

> Improved Departmental monitoring and reporting of the Project.  


DEVELOP A PLAN TO GUIDE THE DEPARTMENTï¿½S PARTICIPATION

The Department lacks a plan to effectively guide its participation in the Project.  Although the Corps makes final Project decisions, the Department participates in Project planning and design and provides consultation to the Corps.  Numerous planning documents exist, but none represent a comprehensive plan that adequately defines the process by which the Department will provide its consultation and its desired goals in meeting the overall statutory objectives for the Project.  Given the unique nature of the Departmentï¿½s role in the Project, we believe that such a plan is needed to ensure the goals of the Department are clearly conveyed to the Corps and considered in the Corpsï¿½ design.  Specifically, the plan should define:

> A process for a unified Departmental approach to restoration, including clear decision-making and desired goals for the Project.

> A strategy for coordinating and communicating with the Corps and other stakeholders.

> A process to improve monitoring and accurately report on Project status and funding.  


Since the initial design of the Project in 1992, the Department has changed its desired restoration goals for the Project resulting in the need to redesign Project components and contributing to delays and cost increases.  The Department also has not communicated to the Corps a unified and consistent restoration approach that is based on the Parkï¿½s needs and overall Department goals.   For example: 

> Eight and One-Half Square Mile Area:  The 1992 initial Project design included a pump station, a flood mitigation canal, and a levee around a residential area next to the Park.  In 1998, the Department and the State of Florida determined that the Corpsï¿½ initial design would no longer meet the desired restoration needs for the Park and the greater Everglades system.  Specifically, the Department voiced concerns that pressure from residents within the area could cause this component to be operated for flood protection rather than restoration.  The Department supported the State of Florida in its request that the Corps re-evaluate the initial design.  This required a re-design of the Project component.

> Tamiami Trail:  The 1992 initial Project design included raising a small section of U.S. Highway 41, known as the Tamiami Trail.  Due to changing restoration goals, more water is now expected to be conveyed under the roadway.  As a result, the Department and the State of Florida determined that the Corpsï¿½ initial design was not workable.  The Corps re-designed this component of the Project in 2003.  Subsequently, the Department determined that the Corpsï¿½ 2003 design was not workable and would not meet its desired restoration needs for the Park.  As a result, the Corps had to re-design this Project component for a second time.


Both Corps officials and NPS officials have acknowledged that a significant risk exists regarding the adequacy of the design for the Tamiami Trail.  Specifically, agreement on the final design for the Conveyance and Seepage component has not been reached.  Consequently, questions regarding the ultimate capacity, placement, and operation of Conveyance and Seepage Component features remain unanswered.  This information is needed to address the timing, location, and amount of water flowing under the roadway.  NPS officials have stated that they do not believe they can direct the Corps on how to plan and design the Project and that such direction would have to come from the Secretary or Assistant Secretary level.

The Department has acknowledged the high priority of the Project and its importance to achieving restoration of the Park.  Despite its importance, the Department has no performance goals for the Project.   The needs of the Park are generally articulated in the Parkï¿½s strategic plan for 2001 to 2005, which identifies two goals related to the Project:  (1) hydrologic restoration and (2) water quality.  The strategic plan identified a target date of September 30, 2005, for completing the Projectï¿½s design.  The plan was deficient because it did not identify clear and concrete restoration objectives for the Park.  In addition, the plan did not include critical tasks and milestones for monitoring the consultation process to ensure the design target date was reached.  

In September 2003, the NPS had developed a planning document that defined objectives and assumptions for operating the Project upon its completion.  This document was not approved by the Department nor was it agreed to by the Corps.  Additionally, this document did not address the Departmentï¿½s participation in the Project.  For example, it did not describe a process for ensuring that the Departmentï¿½s consultation to the Corps was provided in a unified manner or that conflicts within the Department were adequately resolved prior to providing Project design consultation to the Corps.   

None of the plans described above represent a coordinated and comprehensive strategy for the Departmentï¿½s participation in the Project.  A 1999 Government Accountability Office (GAO) report on the South Florida Ecosystem Restoration indicated that the lack of 1) a strategic plan, 2) clearly defined restoration objectives, and 3) a dispute resolution process were significant factors impeding the successful restoration of the Everglades. The GAO report identified the Project as one that had incurred delays and cost increases as a result of these factors.

The Department has the responsibility to communicate the Parkï¿½s restoration needs to the Corps.   However, without a restoration strategy and consultation plan, we question the Department's ability to participate successfully in the Project and to provide effective consultation to the Corps.


DEVELOP A UNIFIED APPROACH TO RESTORATION 

The Department has not developed a clear unified position on its preferred restoration approaches.  The Fish and Wildlife Service (FWS) and NPS have had different positions regarding fundamental planning and design issues.  Specifically, they differ on methods for water control and the preferred options to ensure that water depths achieve restoration objectives.  Such differing positions have contributed to the need for multiple Project feature re-designs.  For example:

> Water Control Methods: To best achieve restoration, NPS believes water should move freely into the Park.  However, FWS is concerned that if water flows are not adequately controlled, poor water quality could compromise species habitat and Park restoration.  Conflicts surrounding this issue have contributed to the need for multiple re-designs of Project features that determine how water will flow into the Park.  As of June 2005, a final design of these features had yet to be determined.

> Water Depths:  FWS and NPS have been unable to agree on the optimal water depths for Project operations.  NPS has decided that higher water depths than were originally designed are now necessary to achieve its restoration objectives.  However, FWS believes that the higher water depths proposed by NPS may cause damage to the tree islands.  NPS insists the tree islands can survive with higher water depths.  This argument has persisted for many years without resolution.  


The Department does not have an adequate method to ensure the timely resolution of such disputes.  Specifically, the Department lacks a formal process for elevating and resolving planning and design related disputes between the agencies to arrive at a unified Departmental position.  In fact, when a Departmental official was asked if there were any unresolved issues for the Project, the official was unaware of any ongoing contentious issues.  Further, the Corpsï¿½ Project Manager noted disconnect within the Department regarding restoration approaches and believes NPSï¿½ approach to restoration is a moving target.  Because the Department has not formulated a unified approach to restoration, it has contributed to the Corpsï¿½ need to re-design project features.



ESTABLISH A SINGLE LINE OF COMMUNICATION WITH THE CORPS


The Department does not have a single line of communication to clearly convey a unified position on Project issues to the Corps. The Departmentï¿½s communication with the Corps is fragmented, as it is carried out through the following offices and individuals: 

> Department of the Interior
     o Special Assistant to the Secretary 
     o Everglades Restoration Initiatives Office

> National Park Service
     o Everglades National Park Superintendent
     o South Florida Natural Resources Center Technical Staff

> Fish and Wildlife Service
     o South Florida Field Office

The Corps has received conflicting and inconsistent information from these various Departmental sources regarding Project planning and design issues.   Corps planning officials stated that they were not sure which of these Departmental sources had the authority to resolve conflicting or inconsistent positions.  


IMPROVE COORDINATION AND COMMUNICATION WITH PROJECT STAKEHOLDERS

The Department needs to improve its coordination and communication with stakeholders to provide effective consultation for the Project and to build consensus with stakeholders to reach workable Project solutions.

Numerous stakeholders are affected by the outcome of Project alternatives.  Stakeholders for the Project include the State of Florida, Native American tribes, local governments, residential and agricultural landowners, environmental groups, and recreational users.  

Since the Projectï¿½s inception, public controversies have resulted from the competing interests of diverse stakeholder groups.  Some controversies have resulted in litigation and have significantly delayed the Project.  For example, debates over how to best achieve flood mitigation for the Eight and One-Half Square Mile Area resulted in a litigious dispute that was not resolved until 2003, delaying the Project by at least four years.   Similarly, stakeholder controversies regarding the length and placement of bridging modifications for the Tamiami Trail component delayed the Project since at least 2003.  


To carry out its consultation role for the Project, the Department:

> Negotiates with the Miccosukee Tribe and the airboat operators within the Projectï¿½s boundaries.

> Participates on a stakeholderï¿½s advisory team that provides a forum for building consensus.

> Serves as the Chair for the South Florida Ecosystem Restoration Task Force which coordinates the efforts of the federal, state, and local agencies involved in the larger Everglades restoration project.   


The Department has not effectively coordinated and communicated with stakeholders to build consensus.  Consequently, its image and credibility have suffered.  For example:

> Miccosukee Tribe members have expressed mistrust toward the NPS.  Previous attempts by NPS staff to negotiate a workable solution with the Tribeï¿½s Osceola Village residents have been unsuccessful.  The village must be raised due to the Projectï¿½s higher water levels before the Project can operate.  In an attempt to find a workable solution, the current Park Superintendent has taken over the responsibility for the negotiations.

> The Department participates on a stakeholderï¿½s advisory team that represents multiple stakeholder interests and provides a forum for consensus building.  However, team members have asserted that the advisory process lacks transparency and that communication is not effective.  Further, team members have stated their issues are not well addressed by the Department and pertinent information is not provided for effective input and consideration.

> Project operations require a flowage easement across lands used for airboat recreation.  A flowage easement is a legal right to allow water flow across property.  The landowners and the Corps could not reach agreement on the easementï¿½s purchase price.  Consequently, the landowners initiated negotiations with the Department.  However, the Department failed to inform the Corps of these ongoing negotiations.  Unaware of the current status of these negotiations, the Corps subsequently condemned the property.  As a result, trust-building efforts between the Department and the landowners were undone. 


NPS has attempted to improve coordination and communication with stakeholders.  For example, the current Park Superintendent has made progress in moving negotiations forward with Osceola Village residents.  Also, the Park staff developed Ground Rules in August 2003 for the stakeholderï¿½s advisory team.  If adopted, these rules would aid in improving communications and transparency for the advisory process.  However, as of June 2005 the Ground Rules had not been adopted.  

Negative public perception in the past has hindered the effectiveness of cooperation efforts.  In fact, a Departmental official noted that mistrust created by NPS in the past has limited current efforts to build consensus.  Therefore, we believe a Departmental liaison is needed to ensure a coordinated and well communicated approach to improving consensus-building among stakeholders.


IMPROVE MONITORING AND REPORTING 

Historically, the Department has taken little action to monitor costs or to obtain status information from the Corps.  Because Project funds are transferred from the Department to another federal agency, the Departmentï¿½s responsibility is generally limited to ensuring the funds are used for general Project purposes.  As the primary beneficiary and funding agency for the Project, we believe the Department should take a greater role in monitoring the costs and schedule of this Project than it has in the past.  

Departmental officials have expressed concern with the Corpsï¿½ ability to manage the Project within budget and schedule.    However, the Department did not require the Corps to formally report Project status and costs until late 2004, twelve years after the Projectï¿½s authorized start date.  

NPS, on its own initiative, has taken steps to improve oversight and accountability for the Project.  For example, in April 2005, NPS instituted monthly Project management meetings that are attended by FWS and the Corps.   Also, NPS has developed a management agreement with the Corps.  Although the agreement was designed jointly with the Corps, it contained provisions intended to improve the Departmentï¿½s ability to monitor and track Project status and funding.  We reviewed the agreement and noted that it was too general to ensure adequate oversight and accountability for the Project.  For example, the agreement provides that disputes shall be resolved at the lowest organizational level, but it does not specify a process or a timeframe for doing so.  


Although the agreement was signed by the Special Assistant to the Secretary and the Corps in May 2005, the Department has not enforced the provisions in the agreement.  For example, the quarterly meetings intended to brief Departmental policy officials have not occurred.  Instead, the Department has opted to replace these meetings with the Corpsï¿½ existing Quarterly Review Board meetings.  Departmental policy officials do not attend these Quarterly Review Board meetings and the issues addressed in these meetings deal with the larger comprehensive Everglades restoration effort and are not specific to the Project.  A Departmental official noted that although the management agreement specifies that quarterly briefings are to occur, these meetings are not occurring because policy officials do not have time.  The official also acknowledged that there should be more oversight and input into the Project at higher levels within the Department.  The quarterly meetings called for in the agreement were intended to:

> Determine if agencies were on track to achieve policy and management objectives.

> Provide an opportunity for policy officials to set and clarify joint goals.

> Review policy issues and provide direction to field managers.

> Resolve any disputed issues.

> Facilitate reporting to the Office of Management and Budget (OMB).


NPS is required to prepare an annual capital asset plan (CAP) that provides information on Project accomplishments, status, expenditures, and the proposed budget to the Department and OMB.  NPS also uses this information in developing its five-year construction plan.  NPS does not always include all known information regarding Project costs, risks, and uncertainties in its CAP.  For example, the April 2005 CAP did not disclose all known costs and risks such as:

> There is a risk that the Tamiami Trail may need to be expanded onto the Parkï¿½s property.  This may require additional authorization from Congress and about $1 million for further environmental analysis. 

> The Department has been unable to reach agreement with the Corps and the State of Florida on the operations for one pump station.  As a result, the State of Florida will not accept transfer of the pumping station and the Department is paying about $450,000 for annual maintenance of this pumping station.  In addition, there is a risk that either the capacity of this pump will need to be increased or a seepage barrier will need to be constructed.  The cost of this additional work was not included in the CAP. 

> The risk that the scope of the Tamiami Trail design may exceed current legislative authority and could be subject to cost share requirements with the State of Florida, as expressed by the Corpsï¿½ authorizing committee. 


The NPS, recognizing the need for improved Project monitoring and reporting, has recently instituted more stringent reporting requirements from the Corps.  However, the Department still needs to take steps to ensure that the Department is adequately and readily updated regarding Project status, cost, and risks.  Given the importance of the Project to the Department, the Department should establish a process to improve monitoring and reporting to ensure that the Project stays within its authorized budget and scope.


RECOMMENDATIONS

To address the deficiencies identified in this report, we made six recommendations to the Deputy Secretary.  The Deputy Secretaryï¿½s March 8, 2006 response (Appendix 4) identified proposed actions by the Department to address our recommendations. Additionally, the Deputy Secretaryï¿½s original February 6, 2006 response also included suggested changes to the report and additional information that we considered and included as appropriate.  We also restated recommendation 2 in order to clarify the intent of the recommendation.  Based on the Departmentï¿½s responses, we classified Recommendation 4 as resolved and implemented.  The remaining five recommendations were classified as resolvedï¿½not implemented.

The Department should effectively participate in the Project by providing consultation to the Corps that is integrated, consistent, and unified.  Effective participation may best be achieved by using a project management approach to guide the Department's consultation.  We recommend that the Deputy Secretary establish and implement a project management approach to consultation for the Project by: 

		  1. Appointing a proven project manager with access to the highest levels of the Department to take charge of this project and serve as the final arbitrator of intra Bureau conflicts and to speak with one Department voice to external stakeholders.

DOI RESPONSE	The Department hired a new Assistant Deputy Secretary who will serve as the Departmentï¿½s lead official on South Florida ecosystem restoration projects.  She will report to the Deputy Secretary and will act as the final arbitrator of intra-bureau conflicts and represent the Department to external organizations.  Additionally, NPS will recruit a project manager to be co-located with the Corps.  This person will report to the Everglades National Park Superintendent, who will report to the Departmentï¿½s Director of Everglades Restoration Initiatives, who will in turn report to the Assistant Deputy Secretary of the Interior.  The target completion date is May, 2006.

OIG CONCLUSION	This recommendation is resolved ï¿½ not implemented.
		  2. Developing a Department-level plan to guide the Departmentï¿½s participation in the Project.  The plan should clearly define the process by which the Department will provide its consultation and its desired goals in meeting the overall statutory objectives for the Project. 

DOI RESPONSE	A Department-level plan is currently being developed to improve the Departmentï¿½s participation in the implementation of the projects to ensure restoration objectives.  The target date of completion is March 31, 2006. 

OIG CONCLUSION	The recommendation is resolved ï¿½ not implemented.
		  3. Developing a Department-level approach to restoration including establishing a process for elevating critical Project issues, to arrive at a unified Department position.

DOI RESPONSE	The Director of Everglades Restoration Initiatives will facilitate coordination, communication and consensus building.  If resolution of issues is not achieved, the Director will elevate the issue to the Assistant Deputy Secretary for final arbitration and decision.  The Assistant Deputy Secretary will issue a memorandum clarifying the role of the Director.  Target completion date is March 15, 2006.

OIG CONCLUSION	Managementï¿½s target date for completion of the action for this recommendation was March 15, 2006; however, we have not received confirmation that the action was timely completed. Therefore, we consider this recommendation resolved ï¿½ not implemented. 
		  4. Establishing a single line of communication with the Corps to clearly convey the Departmentï¿½s position on critical Project issues.

DOI RESPONSE	The Director of Everglades Restoration will serve as the South Florida direct contact and will be responsible for communicating the Departmentï¿½s day-to-day restoration efforts.  The Assistant Deputy Secretary will serve as the ultimate single point of contact to convey the Departmentï¿½s position on critical Project issues. 

OIG CONCLUSION	The recommendation is resolved and implemented.
		  5. Designating a Departmental liaison to improve coordination, communication, and consensus building.

DOI RESPONSE	Implemented through the response to Recommendation 2. Target date March 31, 2006.

OIG CONCLUSION	Recommendation resolved ï¿½ not implemented. 
		  6. Improving monitoring and reporting by enforcing the provisions of the management agreement to ensure that the Project stays within authorized budget and scope.

DOI RESPONSE	Implemented through the response to Recommendation 1.

OIG CONCLUSION	Recommendation resolved ï¿½ not implemented.


Appendix 1 - OBJECTIVE, SCOPE, AND METHODOLOGY

The authorizing legislation for the Project established the Departmentï¿½s role as one of consultation.  Further, because funding is transferred between Federal agencies, the Departmentï¿½s responsibility is limited to ensuring that the Corps uses funds for general Project purposes.  The Department participates with the Corps in project planning and design, but the Corps makes the final decisions.  Therefore, our audit objective was to evaluate the effectiveness of the Departmentï¿½s participation in the Project.  We did not audit the Corpsï¿½ management of the Project, the State of Floridaï¿½s involvement in the Project, or the Departmentï¿½s participation in the overall Comprehensive Everglades Restoration Project.

To accomplish our objective, we:

> Reviewed and evaluated the Project costs, land acquisition data, management plans, design plans, and other related agreements and reports.  

> Reviewed laws, regulations, policies, and guidance relating to the Project and Everglades restoration. 

> Obtained information on the processes and controls in place for monitoring Project activities.  

> Examined prior audit reports, Departmental Performance and Accountability Reports, Congressional testimony, and various reports issued by advisory groups providing suggested improvements on Evergladesï¿½ restoration.

> Reviewed and considered federal and private industry project management standards and practices, such as those set forth by the Project Management Institute. 

During the audit, we also interviewed personnel and obtained Project-related documentation, as necessary, at the following locations:

Department of the Interior

Everglades Restoration Initiatives Office				Miami, FL
Special Assistant to the Secretary of the Interior			Washington, DC
Office of the Solicitor							Washington, DC

National Park Service 

Everglades National Park						Homestead, FL
South Florida Natural Resources Center					Homestead, FL
Land Acquisition Office							Naples, FL
NPS Directorï¿½s Office							Washington, DC
Budget Office								Washington, DC
Southeast Regional Office						Atlanta, GA
Denver Service Center							Denver, CO

Fish and Wildlife Service

South Florida Field Office						Vero Beach, FL

U.S. Geological Survey

Eastern Region Directorate						Ft. Lauderdale, FL
Central Region Directorate						Denver, CO

Bureau of Reclamation

Phoenix Area Office							Phoenix, AZ
Technical Service Center						Denver, CO

U. S. Army Corps of Engineers

Jacksonville District Office						Jacksonville, FL
South Florida Office							West Palm Beach, FL

State of Florida

South Florida Water Management District					West Palm Beach, FL

Interested Stakeholders
		
Miccosukee Tribe							Miami, FL
South Florida Ecosystem Restoration Task Force				Miami, FL

Other officials representing various stakeholder interests, such as residential, agricultural, environmental, and recreational	South Florida 

We performed our audit from February 2005 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 that we considered necessary under the circumstances.  As part of our audit, we evaluated the system of internal controls to the extent that we considered necessary to accomplish our objective.  We identified internal control weaknesses in the area of budget preparation.    The internal control weaknesses identified are discussed in the Results of Audit section of this report.   If implemented, the recommendations should improve the internal controls. 

We reviewed the Secretaryï¿½s Annual Report on Performance and Accountability (Secretaryï¿½s Report) to the President and the Congress for fiscal year 2005.   This report is required by the Federal Managersï¿½ Financial Integrity Act of 1982.   The Secretaryï¿½s Report contained no reported weaknesses within the objective and scope of our audit.   


Appendix 2 - PRIOR AUDITS

During the past five years the Office of Inspector General has not issued any audit reports regarding the Project.  The Government Accountability Office (GAO) issued six reports in the past five years related to Evergladesï¿½ restoration.  Five of the six reports generally addressed the overall Everglades restoration efforts, but the reports also included narrative specific to the Project, as well as other authorized Everglades restoration projects.  One report addressed major management challenges for the Department of the Interior, including the Project. 

> ï¿½South Florida Ecosystem Restoration: An Overall Strategic Plan and a Decision-Making Process are Needed to Keep the Effort on Track,ï¿½ GAO Report No. 99-121, April 1999.

Agencies involved in Evergladesï¿½ restoration, including the Modified Water Deliveries Project have differing and conflicting missions.  This has contributed to the inability to resolve disagreements in a timely manner and has kept Everglades National Park from achieving anticipated environmental benefits.  Without some entity or group with overall management responsibility and authority to resolve differences, problems could continue to hinder the Project as well as other Everglades restoration projects.  GAO recommended the development of a comprehensive strategic plan for Evergladesï¿½ restoration and a decision-making process to resolve conflicts.

>  ï¿½South Florida Ecosystem Restoration:  Substantial Progress Made in Developing a Strategic Plan, but Actions Still Needed,ï¿½ GAO Report No. 01-361, March 2001.

The South Florida Ecosystem Restoration Task Force has made progress in developing a strategic plan for ecosystem restoration.  However, GAO noted that the plan was not sufficient in that it does not outline how restoration will occur.  Specifically, the plan did not:  (1) describe approaches or strategies to achieve the strategic goal of fostering compatibility of the built and natural systems, (2) describe the relationship of desired end results and strategic restoration goals, and (3) include quantifiable measures for assessing progress.  


> ï¿½Major Management Challenges and Program Risks:  Department of the Interior,ï¿½ GAO Report No. 01-249, January 2001.

GAO identified ecosystem restoration as a major management challenge for the Department.  GAO noted that the Department needed to:  (1) work with outside entities to develop plans and strategies that will achieve restoration and management goals  and (2) improve its coordination with the multiple entities involved in the restoration efforts by ensuring coordination procedures are in place and that a means to resolve conflicts exists.

> ï¿½Comprehensive Everglades Restoration Plan,ï¿½ GAO Report No. 00-235, September 2000.

The Comprehensive Everglades Restoration Plan (Plan) provides a conceptual framework for improving the quality, quantity, timing, and distribution of water in the South Florida ecosystem.  GAO concluded that there were too many `uncertainties to estimate the number and costs of the Corps projects that would ultimately be needed to address water quality.  GAO stated that it was likely that modifications and additions to the Plan would be necessary and that these changes could increase the total cost of the Plan over the estimated $7.8 billion.  GAO recommended that the Secretary of the Army provide Congress with updates that (1) reflect the cumulative project and cost changes to the overall Plan and (2) indicate the progress being made toward implementing the Plan.

> ï¿½South Florida Ecosystem Restoration:  A Land Acquisition Plan Would Help Identify Lands That Need to be Acquired,ï¿½ GAO Report No. 00-84, April 2000.

The South Florida Ecosystem Restoration Task Force (Task Force) has established ecosystem restoration goals and identified land acquisition as critical to achieving them.  However, the Task Force has not yet developed a land acquisition plan that identifies all of the lands needed to accomplish the goals of the restoration initiative; each federal and state agency has made independent acquisition decisions.  Without an acquisition plan, the Task Force cannot (1) identify all the lands needed, (2) reasonably estimate the cost of land acquisition, (3) measure progress in acquiring lands, or (4) increase the chances that the lands being acquired are needed.  GAO recommended the Task Force develop a land acquisition plan that includes an assessment of the lands needed to accomplish the initiativeï¿½s goals.


> ï¿½South Florida Ecosystem Restoration:  Task Force Needs to Improve Science Coordination to Increase Likelihood of Success,ï¿½ GAO Report No. 03-345, March 2003.

The Science Coordination Team (Team) ï¿½ the group created to coordinate scientific information for the restoration ï¿½ is limited by a number of factors.  First, the Team is limited by the lack of clear direction on what it is to accomplish.  Second, it has no processes to ensure (1) that the South Florida Ecosystem Restoration Task Force identified key management issues that need to be addressed in science planning and (2) that the Team, the Working Group, and the Task Force prioritize critical science issues requiring synthesis in order to provide input into restoration decisions.  Third, the Team lacks resources to adequately carry out its responsibilities.  Until the factors limiting the Team are addressed, coordination of scientific activities cannot be improved.  Without effective coordination of scientific activities, the Task Force lacks assurance that the scientific information needed to make key decisions will be available; decreasing the likelihood that restoration of the South Florida ecosystem will be successful.  GAO recommended that as Chair of the Task Force, the Secretary of the Interior:

1. Specify the plans and documents ï¿½ including a science plan focused on key information gaps, a comprehensive monitoring plan, and progress reports for each plan ï¿½ that the Team needs to complete and the time frames for completing them.
 
2. Establish a process that ensures the Task Force identifies key management issues that need to be addressed by science planning.

3. Establish a process, such as review by an advisory group, to ensure that the Team, Working Group, and Task Force prioritize issues that require synthesis and are critical to restoration decisions.

4. Evaluate staffing needs of the Team and allocate sufficient resources to carry out its duties.


Appendix 3 - MANAGEMENTï¿½S  COMMENTS ON DRAFT REPORT

(Management's comments on Draft report - pages 27-44 - see pdf version)

Appendix 4 - STATUS OF AUDIT RECOMMENDATIONS

Recommendations
1,2,3,5,6

Status
Resolved - not implemented

Action Required
No further response to the Office of Inspector General is required.  The recommendations will be referred to the Departmentï¿½s Focus Leader for Management Control and Audit Follow Up for tracking implementation.
4
Resolved and implemented
No further response to the Office of Inspector General is required.

Recommendations
4

Status
Resovled and implemented.

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