[Audit Report on Recreation Management, Bureau of Land Management
]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 97-I-1299

Title: Audit Report on Recreation Management, Bureau of Land Management

Date:September 30, 1997

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C-IN-BLM-002-96

United States Department of the Interior

OFFICE OF INSPECTOR GENERAL
Washington, D.C. 20240

Subject:  Audit Report on Recreation Management, Bureau of Land Management
(No. 97-I-1299)

This report presents the results of our review of the Bureau of Land Management's
Recreation Management Program. The objective of the audit was to determine whether the
Bureau was administering the Recreation Management Program in an economical and
effective manner. Specifically, we determined whether user fees were collected and were
used properly.

We concluded that the Bureau did not make effective use of its authority to designate special
areas and collect special recreation permit fees at those areas. In addition, the Bureau did not

collect recreation use permit fees at all sites eligible for fee collection or establish adequate
controls over fee collections. This occurred because the Bureau did not ensure that Bureau
state offkes complied with Program requirements. As a result, we estimated that additional
revenues of approximately $15 million for fiscal year 1996 could have been collected, which
could have been used for resource protection.

In its September 26, 1997, response (Appendix 4) the Bureau concurred with all four of the
report's recommendations. The Bureau also provided additional comments, which we
incorporated into the report as appropriate. Based on the response, we consider all of the
recommendations resolved but not implemented. Accordingly, the recommendations will be
referred to the Assistant Secretary for Policy Management and Budget for tracking of
implementation, and no fkther response to the Office of Inspector General is required (see
Appendix 5).

 
The legislation as amended, creating the Office of Inspector General requires semiannual
reporting to the Congress on all audit reports issued, actions taken to implement audit
recommendations, and identification of each significant recommendation on which corrective
action has not been taken.

We appreciate the assistance of the Bureau of Land Management personnel in the conduct
of our audit.

 
CONTENTS

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

BACKGROUND   ....................................  1
OBJECTIVE AND SCOPE  ..............................  2
PRIOR AUDIT COVERAGE   ............................  3

FINDING AND RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 5

RECREATION FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

OTHERMATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14

APPENDICES

1. CLASSIFICATION OF MONETARY AMOUNTS   ...........  16
2. OFFICES AND SITES VISITED AND/OR CONTACTED  ......  17
3.  POTENTIAL SPECIAL RECREATION AREAS  ................. 19
4.  BUREAU OF LAND MANAGEMENT RESPONSE  .............. 21
5.  STATUS OF AUDIT REPORT RECOMMENDATIONS  ........... 25

 
INTRODUCTION

BACKGROUND

The Bureau of Land Management is responsible for managing, protecting, and improving
the 270 million acres of public lands in a manner that serves the needs of the American
people. The Bureau's Recreation Management Program activity consists of three
subactivities: Recreation Resources, Recreation Operations, and Wilderness Management.
The Bureau's fiscal year 1996 budget for the Program was $44.1 million: $26.1 million
for Recreation Resources, $4 million for Recreation Operations, and $14 million for
Wilderness Management.  The Program has two objectives. The first objective is to
provide quality recreational opportunities for users that sustain healthy land and water
resources; minimize damage to natural resources; protect wilderness values; provide for
the health and safety of users; and enhance local economies and job opportunities through
cooperative relationships with national, state, and local tourism entities. The second
objective is to provide revenues to the Federal Government for the use of facilities and for
any commercial ventures that profit from public land resources.

The Land and Water Conservation Fund Act of 1965 authorizes the Bureau to assess
recreation fees through recreation use permits and special recreation permits. Recreation
use permits involve the collection of daily use fees for campgrounds or other developed
facilities that meet the requirements of the Land and Water Conservation Fund Act, as
amended. Special recreation permits are required for commercial use, competitive use, off-
road vehicle events involving more than 50 vehicles, and individuals who use designated
special areas in which the Bureau determines that, because of the nature of the recreation
activity and the impact of the activity on an area's resources, a permit is required.

The Omnibus Budget Reconciliation Act of 1993 amended the Land and Water
Conservation Fund Act to give the Bureau more latitude in charging recreation use permit
fees. Specifically, the Act permitted the Bureau to: (1) charge fees for entrance to
National Conservation Areas; (2) charge fees at campgrounds that provide a majority of
site amenities, such as tent spaces, drinking water, access roads, refuse containers, toilet
facilities, personal collection of fees, reasonable visitor protection, and simple campfire
devices (the Land and Water Conservation Fund Act originally required that all of these
amenities be provided at a campground in order for a fee to be charged); and (3) retain up
to 15 percent of recreation receipts, without further appropriation, in the year collected.

In fiscal year 1996, the Congress authorized the Recreation Fee Demonstration Program,
which gave the Bureau authority to establish a demonstration program to test the collection,

 
fees would be collected at up to 50 sites. In that regard, a 1996 Senate Committee Report
stated:

The Committee agrees that the fee demonstration period should be extended for
1 year due to the late signing of the appropriations act. In addition, the
Committee recommends that the number of sites be increased from 50 per agency
to 100. This will provide the agencies with an even greater ability to accomplish
a needed resource influx to more recreational areas. Taking advantage of this
program demonstrates the agencies are taking serious their need for more funding
resources, understanding the seriousness of the budget situation, and
demonstrating their desire to help the situation through increased fees. Congress
is not able to fund all of the recreation activities requirements. Future overall
budget funding levels are expected to decrease. Collection of these modest fees
is one method to assist in meetinaz
for these programs. [Emphasis added.]

The Demonstration Program provides an incentive for the Bureau to collect fees, since 80
percent of the fees collected at a site over fiscal year 1995 levels can be used at the specific
site collected without further appropriation and 20 percent of the fees collected can be used
for Bureau expenditures. The Bureau selected 17 recreation sites for the Program, which,
according to Bureau officials, will be implemented at these sites by May 1998.

The Bureau's Facilities Maintenance subactivity is responsible for maintaining Bureau
buildings, administrative sites, recreation facilities, trails, and transportation systems, as well
as for providing engineering support services for maintenance and construction. In fiscal
year 1996, the Maintenance subactivity maintained 1,150 recreation sites (785 developed and
3 65 semideveloped) and 14,100 miles of designated trails. The Maintenance budget was
$33.3 million, $32.9 million, and $33.3 million for fiscal years 1994, 1995, and 1996,
respectively. For fiscal year 1996, the Bureau reported a maintenance backlog of
approximately $275 million, of which $55 million was for recreation sites. The
$275 million maintenance backlog also included cost estimates for recreation-related
maintenance of buildings, roads, trails, and bridges. Bureau engineers estimated that
approximately 70 percent ($192.4 million) of the maintenance backlog is for recreation
maintenance needs.

' The Recreation Fee Demonstration Program required four agencies, including the Bureau, to select
no fewer
than 10 and no more than 50 sites. Participating sites are authorized to: (1) collect fees for admission
and for
use of outdoor recreation sites, facilities, visitor centers, equipment, and services; (2) establish fees
at fair
market value; (3) contract with public or private entities to provide visitor services; (4) encourage
private
investment and partnership; and (5) assess fines of not more than $100 for any violation of the
authority to
collect fees.

2

 
OBJECTIVE AND SCOPE

The audit objective was to determine whether the Bureau of Land Management was
administering the Recreation Management Program in an economical and effective manner.
Specifically, we determined whether user fees were collected and were used properly.

The audit scope included the Recreation Resources, Recreation Operations, and Facilities
Maintenance subactivities but did not include the Bureau's Wilderness Management
subactivity because of the relatively low fee potential. To accomplish our objective, we
reviewed records pertaining to the Bureau's recreation planning, management, fee
collection, and maintenance activities that occurred during fiscal years 1990 through 1996.
We contacted and/or visited officials at the Bureau's headquarters office in Washington,
DC., and at the state offices, district offices, and field offices listed in Appendix 2. At
the Bureau district and field off&s visited, we observed selected recreation sites, including
campgrounds, day-use areas, boating access facilities, visitor centers, and trails.

Our audit was conducted in accordance with the "Government Auditing Standards," issued
by the Comptroller General of the United States. Accordingly, we included such tests of
records and other auditing procedures that were considered necessary under the
circumstances.  As part of our audit, we evaluated the system of internal controls to the
extent we considered necessary. The internal control weaknesses identified are discussed
in the Finding and Recommendations section of this report.  If implemented, the
recommendations should improve the internal controls in these areas.

In addition, we reviewed the Secretary's Annual Statement and Report to the President and
the Congress, which is required by the Federal Managers' Financial Integrity Act, for
fiscal years 1993 through 1995 to determine whether any reported weaknesses were within
the objective and scope of our audit. We determined that none of the reported weaknesses
were directly related to the objective and scope of our audit.

PRIOR AUDIT COVERAGE

The Office of Inspector General and the General Accounting Office have not issued any
reports on the Bureau's Recreation Management Program during the past 5 years. However,
in August 1994, the OEce of Inspector General issued the audit report "Maintenance
Activities, Bureau of Land Management" (No. 94-I-l 067), which stated that the Bureau's
maintenance program was negatively impacted because funds appropriated for program
activities were used for nonmaintenance purposes. The report also stated that the Bureau did
not have adequate procedures to ensure that needed maintenance work was identified and
prioritized. The report made three recommendations to correct the deficiencies noted. The
Bureau reported, in September 1995, that all three recommendations had been implemented.
However, our current audit showed that facilities maintenance data were unreliable (see Other

 
Matters). Therefore, the Bureau cannot effectively prioritize and fbnd its resource protection
needs.

4

 
FINDING AND RECOMMENDATIONS

RECREATION FEES

The Bureau of Land Management did not make effective use of its authority to designate
special areas and collect special recreation permit fees at those areas. In addition, the Bureau
did not collect recreation use permit fees at all sites eligible for fee collection or establish
adequate controls over fee collection activities.  The Bureau is authorized to collect
recreation fees by the Land and Water Conservation Act of 1965, as amended by the
Omnibus Budget Reconciliation Act of 1993; the Code of Federal Regulations; and
Departmental regulations. However, the Bureau did not suffkiently emphasize the benefits
of using special area designations or ensure that its state offices charged recreation fees
where appropriate. As a result, we estimated, based on fiscal year 1995 visitation data, the
methodology developed by the Colorado State Office for special recreation permit fees, and
historical Bureau revenue averages for recreation use permit fees, that additional revenues of
about $15 million for fiscal year 1996 could have been collected and used for resource
protection (see Appendix 1).

The Act and regulations direct the Bureau to assess recreation fees that recover costs
incurred by the Recreation Management Program commensurate with the benefits
provided.  The Bureau's policy regarding fee collection, as stated in Instruction
Memorandum No. 94-102, is that "field offices shall aggressively implement the recreation
fee policy at all qualified sites in order to generate operating revenues and provide cost
recovery of the management of such sites."

Special Recreation Areas and Permits

The Bureau did not effectively use its authority to designate "special areas" and require
special recreation permits for use of these areas, as provided in the Code of Federal
Regulations (43 CFR 8372). Specifically, Part 8372.05(g) of the Code states:

A special area is an area established as a component of the National Trails System,
the National Wild and Scenic Rivers System and the National Wdderness System,
an area covered by joint agreement between the Bureau of Land Management
and a state government as provided for in title II of the Sikes Act, or anv other
area the authorized officer determines that the resources require special
management and control measures for their protection. [Emphasis added.]

Although the Bureau has designated 17 recreation fee demonstration sites, we believe that
there are other areas in which: (1) the resources require special management and control
measures for their protection and (2) the Bureau could significantly increase fee collections

5

 
through the use of the "special area" designation. Specifically, we identified an additional
39 sites that could be designated as "special areas" because of the nature of the recreational
use and estimated that the Bureau could have collected an additional $14.6 million for fiscal
year 1996 at those areas (see Appendix 3). The estimate is based on 1995 visitation statistics

could be designated as "special areas" is illustrated as follows:

- The 1996 Colorado State Office's report "Outdoor Experiences Workload Needs
Analysis and Strategic and Tactical Action Recommendations" identified 14 potential

special area fee sites in Colorado that
a $2 per visit fee, the report estimated
from these potential special area fee
only $143,000 in commercial specia

lad 1.7 million visits in fiscal year 1995. Based on
that $3.4 million could have been generated in 1996
sites. In comparison, however, Colorado collected
recreation permit fees in fiscal year 1996.

- In California, we identified eight eligible sites that reported 2.7 million visits in
fiscal 1995 and at which fees were not collected. The primary reason given by Bureau
officials for not collecting fees was "local opposition." We estimated, based on the
number of visits reported in fiscal year 1995, that the Bureau could have collected
$5.4 million based on a $2 per visit fee in fiscal year 1996 at these eight sites. For
example, the Arcata Resource Area Office in California was not collecting recreation fees
at the Samoa Dunes Recreation Area. In our opinion, Samoa Dunes qualifies as a special
area fee site because of the nature of the recreational use (off-road vehicle use) and
because fees could easily be collected by establishing a fee station at the site's only
entrance/exit road. In addition, the site is attended 24 hours a day by a volunteer host
couple who live on-site in a Bureau-provided mobile home. In fiscal year 1995, the
Resource Area Office reported 208,000 visits to Samoa Dunes (the Samoa Dunes
Recreation Area is discussed further on page 8).

- The Las Vegas District Office in Nevada identified, in the Bureau's Recreation
Management Information System, Red Rocks Canyon National Conservation Area as an
eligible fee site in 1994. The District Office reported that Red Rocks Canyon had
1.9 million visits in fiscal year 1995 and estimated potential 1995 fee revenues of
$1 million. The District Offxe estimated that it spends $1.1 million for annual operations
and maintenance costs at Red Rocks Canyon. However, as of fiscal year 1996, fee
collections had not begun at the site. We estimated lost revenue for fiscal year 1996 at
$3.8 million (1.9 million visitors times the $2 fee).

  The Utah State Of&e's "Draft 1996 Recreation Task Force Report" identified 24
"prior&~ areas" of concern in the State of Utah regarding resource degradation, visitor health,

* The Colorado State Office estimated that $2 is the average special recreation permit fee for
individuals who use
special recreation areas.

. 6

 
safety, and sanitation. However, the Utah State Office had designated only four special areas.
For example, the Moab District Office in Utah did not charge individual boaters for use of a
section of the Colorado River outside of Moab known as the "Daily," although commercial
boating outfitters using this area are required to obtain special recreation permits and pay a
fee equal to 3 percent of their gross receipts. The Moab District estimated that 7 1,500
private boaters used the "Daily" in fiscal year 1995. At a nominal amount of $2 per boater,
the District could have collected $143,000 for recreation facilities management and resource
protection for fiscal year 1996.

  - In Idaho, we identified seven areas that could be designated as "special areas" and
at which individual fees could be, but were not, charged- For example, the St. Anthony
Dunes, which had 40,100 reported visits in fiscal year 1995, is a designated wilderness
study area. Recreation activities at St. Anthony Dunes include off-road vehicle use,
camping, horseback riding, and hiking.  Because the District Office did not track
operations and maintenance costs by site, we could not determine actual costs needed to
manage the St. Anthony Dunes site However, scheduled and corrective maintenance costs
were budgeted at $102,000 for the site for fiscal year 1995. District Office officials said
that they do not plan to implement recreation fees until at least 1999. As such, the
Resource Area Office is not recovering costs of at least $80,200 (40,100 visits times the
$2 fee) to manage and protect the natural resources of this wilderness study area.

  - We believe that the Yakima Canyon in the Wenatchee Resource Area in Washington
is another candidate for designation as a special area requiring special recreation permits and
charging fees for individual users. The Resource Area Office spent approximately $345,000
in fiscal years 1994 and 1995 for construction of developed recreation sites in the Canyon and
to correct resource damage caused by overuse, including stream bank degradation, siltation,
and erosion. Yakima Canyon had about 500,000 recreation visits in fiscal year 1995.
Resource Area Office officials said that they expect maintenance and facilities improvement
costs to increase with the steadily increasing visitor use.  The Wenatchee Resource Area
Office could assess a $2 special recreation permit fee for individuals, which would recover
$1 million annually to offset the costs associated with resource protection, facilities
maintenance, and visitor services. The Bureau, in its response to our draft report, stated that
it had started charging fees at Yakima Canyon in May 1997.

In our opinion, the Bureau has not placed sufficient emphasis on identifying special areas and
has left decisions on implementing recreation fees to the field offices. For example, the
State Director, in an August 26, 1996, memorandum to all California offices regarding
recreation fees, stated:

One area that we have not taken advantage of is under the authority of 43 CFR
83 72.1-1 and 8372.1-2, Special Areas. . . . Areas that could fit this category
include Fort Ord, Carrizo Plain Imperial Sand Dunes, Santa Rosa National Scenic

 
Area, Samoa Dunes, Clear Creek, wilderness areas with significant visitor use or
resource concerns, and Cache Creek. [Emphasis added.]

The Arcata Resource Area Office in California had identified Samoa Dunes in the Bureau's
Recreation Management Information System as an eligible fee site in 1995. However, the
Area office did not implement fee collections because of its concerns regarding local
opposition. Instead, the Resource Area Office changed the designation and, at the end of
fiscal year 1996, reported Samoa Dunes as a site not eligible for fee collection.

We believe that the Bureau should require the state offices to inventory their recreation areas
and identify those additional sites which can be designated as "special areas." Once the areas
have been identified, the Bureau should direct the state offices to implement special recreation
permit fees as a means to obtain needed revenues for resource protection. In that regard, we
believe that the Bureau needs to be more aggressive in designating special areas despite its
limited resources and local opposition to the collection of fees. The Bureau, in its response
to our draft report, stated that this is "an ongoing process through the BLM [Bureau of Land
Management] planning system. " The response further stated that special recreation
management areas are designated in land use plans or as an update to a land use plan.

Recreation Use Permit Fees

The Bureau did not correctly identify recreation use fee sites or collect recreation use permit
fees at sites that it had identified and reported as eligible for fee collection. As a result, we
estimated that the Bureau did not collect about $410,000 in fees to offset the costs of
resource protection.3

  Identified Eligible Recreation Fee Sites. Based on our review, we determined that
the Bureau had not charged recreation use permit fees at 113 (36 percent) of the 3 15
recreation use sites, with visitation of about 800,000 in 1995, that it had classified as eligible
for fee collection. These sites met the requirements of the Land and Water Conservation Act
for recreation use permit fee collection, but fees were not collected at these sites. We
estimated that lost revenue associated with these sites was at least $344,000 (800,000 visits
times $.43). Specifically:

  - In Idaho, we found that for 27 eligible recreation sites, recreation use permit fees were
not collected at 14 sites, which reported 125,000 visits in fiscal year 1995. For example, the
I&ho State Office identified the Cove Recreation Area for fee collection in April 1994, but
as of the end of fiscal year 1996, fees were not collected. Bureau officials said that fees were
not collected at this site because the Bureau believed that fee collection would not be

%he estimate was based on historical data reported by the Bureau in "Public Land Statistics," which
showed that
the Bureau averaged about $.43 of recreation use permit fees per visitor.

8

 
"locally/politically acceptable. " We estimated lost revenues for fiscal year 1996 at about
$54,000 (125,000 visits times $.43).

  - The Kremmling Resource Area in Colorado did not charge recreation use permit fees
at the Pumphouse or Radium sites despite the fact that these sites met the criteria for fee
collection. A March 9, 1994, Kremmling Resource Area Office memorandum to the Bureau's
Colorado State Office stated that the Resource Area would begin collecting fees at the
Pumphouse and Radium recreation areas during the summer of 1994. However, at the time
of our review, more than 2 years later, recreation fees were not collected at these sites. The
outdoor recreation planner stated that he purchased the fee collection tubes in 1994 but did
not have time to post signs to notify the public that fees were required. Resource Area
offkials said that they began collecting fees at the Pumphouse site during the summer of
1996; however, we observed a fee tube in the ground at the Pumphouse without any sign
indicating that a fee was required for use of the site. The Resource Area did not begin
collecting fees at the Radium site in 1996. The outdoor recreation planner stated that he had
"other priorities" and that fee collection at this site was "not a high priority" for him. Radium
andPumphouse reported 4,500 and 8,500 visits, respectively, for 1995. We estimated lost
revenue at these two sites in 1996 at $5,600 (13,000 visits times $.43).

  Unidentified Eligible Fee Sites.  The Bureau did not classify sites that, in our
opinion, were eligible for fee collection under criteria of the Land and Water Conservation
Fund Act. In fiscal year 1995, the Bureau identified about 2,000 sites, which reported
46.8 million visits, as not eligible for fee collection. However, based on the Act's criteria,
we determined that many of these sites were eligible for fee collection. Specifically, 14
of 35 sites classified as ineligible for fee collection that we visited during our audit met,
in our opinion, the fee collection criteria of the Act, with reported visitation at these sites
in 1995 of 154,000. We estimated lost revenue at the 14 sites for fiscal year 1996 at
$66,000 (154,000 visits times $.43). For example:

  - The Grand Junction Resource Area Office in Colorado reported Miracle Rock and
Big Dominguez campgrounds as not eligible for fee collection. The facilities at these sites
met the requirements of the Land and Water Conservation Fund Act, but Resource Area
officials said that fee collection would not be cost effective because of the remote locations
of the sites and resultant minimal usage. However, in fiscal year 1994, the Bureau spent
$29,000 and $42,000 for reconstruction of the Miracle Rock and Big Dominguez
campgrounds, respectively, to meet sanitation, health, and recreation needs and handicap
requirements. The Bureau reported visits to the campgrounds in 1995 as 2,000, with lost
revenues estimated at $860 (2,000 visits times $.43).

  - The Cascade Resource Area Office in Idaho reported Steck campground as an
ineligible fee site. However, during our site visit, we observed that the campground
provided the facilities required for fee collection at its 23 campsites, including tent pads,
picnic tables, campfire devices, drinking water, restrooms, an access road, garbage

9

 
collection, and a campground host. The campground facilities also included a boat ramp,
a boat dock, and a fish cleaning station.  According to the "Steck Recreation Site
Development Study, " dated July 1993, campground usage "usually exceeds designed
capacity on summer weekends and holidays, [and] has resulted in serious deterioration of
the existing facilities. "  The Study recommended expanding the campground by
approximately 33 campsites and renovating the existing sites at an estimated cost of
$2.8 million. The Cascade Resource Area reported 25,600 visits in fiscal year 1995 at the
campground. Resource Area officials said that they did not identify Steck as aneligible
fee site because they considered the condition of the site to be "unsatisfactory" and had not
received adequate funding to renovate the facilities.  However, the officials stated that
funds for improvements were now budgeted and that they planned to implement fee
collection in fiscal year 1997, after reconstruction and expansion of the site were
completed.

Bureau field managers and outdoor recreation planners said that the primary reason they did
not collect fees was the lack of funding for site development and of personnel who could
collect fees or enforce fee collections. Also, recreation planners said that, although the
recreation facilities met the criteria of the Land and Water Conservation Act, fees were not
collected because, in their opinion, the facilities were inadequate or insufficient. However,
we concluded, as in the case of special area designations, that field office officials did not
implement fee collections because state office management did not place sufficient emphasis
on the recreation fee policy. We believe, in those instances in which the Bureau believes
it cannot collect fees at a particular location, that it should prepare and document
justification for not collecting these fees and take actions necessary to remove the
impediments for collecting the fees.

Program Improvements

We found that the Bureau had, in several instances, made effective use of its limited
resources through cooperative agreements with either state or local entities to improve the
recreational opportunities at its various sites. We also found that the Bureau had increased
the collection of recreation revenues from $1.6 million in fiscal 1993 to $2.6 million in
fiscal year 1995. For example:

  - The Bureau and the State of Colorado entered into a cooperative agreement to have
the State primarily manage the Arkansas Headwaters. The State is collecting the recreation
fees and using those fees, along with some of its funding, to maintain State and Bureau
sites along the river.

  - The Bureau and Grand County, Utah, entered into an agreement to manage the
Sand Flats Recreation Area, which, according to the Bureau, is one of the most "popular"
off-road bicycling sites in the United States. The agreement has generated significant

10

 
revenues for both the County and the Bureau and has provided for increased resource
protection through on-site management and controlled access to the resource by the
County.

Although the Bureau increased the collection of revenues in 1995, we believe, overall, that
the Bureau has not taken full advantage of the Program to have beneficiaries help offset
the costs of resource protition, visitor services, and facilities maintenance. For example,
despite having identified 315 sites as eligible for fee collection and having the opportunity
to nominate up to 50 sites to participate in the Recreation Fee Demonstration Program, the
Bureau collected fees at only 202 of the 3 15 eligible recreation use sites and nominated
only 17 sites for participation in the Demonstration Program. The Bureau, in its response
to our draft report, stated that it now collects fees at 210 recreation use sites. Based on
the 113 eligible fee sites identified by the Bureau at which the Bureau was not collecting
recreation fees and the 39 sites we identified as being classified incorrectly, we believe that
the Bureau has the potential to significantly increase recreation revenues and enhance
resource protection.

Fee Collection Controls

The Bureau had not established adequate controls to ensure effective fee collections from
recreation use permits or special recreation permits. Specifically, the Bureau did not have
adequate controls for collecting cash receipts from recreation use permit fee tubes or for
verifjring reported commercial special recreation permit use.

Recreation Use Permit Fees

Internal control procedures for cash receipts should include controls such as prenumbered
receipts, tickets, cash register receipts, and other devices to ensure full accountability.  In that
regard, we found that once the cash receipts were brought to the field offices, the field offices
performed proper Bureau fee collection procedures, such as double counts, preparation of
required deposit documentation, and separation of duties. However, the Bureau did not have
controls to ensure that all cash receipts collected at recreation sites were returned to the field
offices for deposit. Typically, a field employee collected fee envelopes from each campsite
and returned the collections to the field office for deposit. At unattended sites, the
prenumbered envelopes that were used did not provide the needed controls because
distribution of the envelopes was not controlled and the envelopes could be used for other
purposes or could be lost. Consequently, the field offices could not determine if the number
of envelopes returned was the same number collected at the site. Accordingly, the Bureau
needs to implement stronger controls over collections at the site, such as double safes and

11

 
periodic audits using marked envelopes, to provide greater assurance that the fees collected
at recreation sites are brought to the field offices for deposit.4

Commercial Special Recreation Permit Fees

We also reviewed the special recreation permit programs at five field offices and found that
four field offices did not have adequate controls.  The five field offices accounted for about
$599,000 of the total $1,626,000 of commercial special recreation permit fees collected in
fiscal year 19%. The field offices reviewed did require trip logs, which was in accordance
with the Bureau's Special Recreation Permit Handbook. However, the Bureau had not
established uniform procedures for verifying outfitter usage and for reconciling reported
usage to actual usage as determined by the Bureau. For example, we reviewed a judgmental
sample of 4 of the 36 permits issued by the Kremmling Resource Area for the fiscal year
1995 season. We reconciled the permittees' use reports to the Resource Area's use logs and
determined that three of the permits had underreported a total of 282 visits. Although it
would not be feasible or cost effective to verify 100 percent of the usage, we believe that the
Bureau should implement a system of random counts of permittee usage and reconcile the
Bureau counts to year-end usage reports submitted by the permittees. Random counts,
reconciliations of usage reports, and billings (including applicable administrative fees and
fines) would serve as means to verify permittee reporting, correct errors, and increase

revenues.

Other controls would also be effective in ensuring that petittees report and pay the proper
amounts. For example, the National Park Service requires commercial permittees that have
gross receipts of over $1 million to have their financial statements audited by an independent
certified public accountant or by a licensed public accountant and certified in accordance with
audit standards and procedures issued by the American Institute of Certified Accountants.
If gross receipts are between $250,000 and $1 million, the financial statements should be
reviewed by an independent certified public accountant or by a licensed public accountant in
accordance with the audit standards and procedures issued by the Institute. For commercial
permittees that have gross receipts of less than $250,000, the financial statements may be
prepared without a review by an independent certified or licensed public accountant.

We found that the Bureau had not performed audits or reviews, with the exception of the
Colorado and the Wyoming State Offices, of special recreation permits to ensure proper
payment of special recreation permit fees. The Wyoming and the Colorado State Offices
contracted with an independent certified public accounting firm for audits of their permits.

4 Double safes are locked boxes in which the visitor place their payment. When the box is retrieved
for collection,
it contains another locked box inside that can be retrieved by the collector, but the box cannot be
opened by another
employee until it is retumed to the offic~. During periodic audits using marked envelopes, auditors
place specially
marked envelopes in the collection boxes. AfIer the boxes have been collected, the auditors check
the boxes to
ensure that the envelopes have been properly handled during the collection process.

12

 
The firm, which audited 26 permits in Wyoming and 24 permits in Colorado, reported that
in Wyoming, revenues tested of $8,624 were underreported by $21,044 (244 percent) and
that in Colorado, revenues tested of $29,663 were underreported by $8,343 (28 percent).
The firm further concluded, "Inconsistent enforcement lbv the Bureau] has resulted in an
attitude demonstrated by permitees examined that compliance with policies is not necessary."
(Emphasis added.)

Recommendations

We recommend that the Director, Bureau of Land Management:

   1. Direct Bureau state and field offices to review recreation areas and identify those
areas that can be designated as special areas and to initiate special recreation permit fees
at those areas.

  2. Direct Bureau headquarters and state offices to ensure that, where economically
feasible, field offices collect recreation use permit fees for all eligible sites.

   3. Revise Bureau cash collection control procedures to ensure full accountability for
cash collected from recreation fees by strengthening the control environment over cash
collections at recreation sites.

   4. Revise control procedures over the commercial special recreation permits to ensure
that:

  - Field offices conduct random counts of outfitter usage and reconcile the Bureau
counts to counts reported by permittees.

- Permittees have required audits or reviews of their financial records performed.

Bureau of Land Management Response and Office of Inspector General

Reply

In the September 26, 1997, response (Appendix 4) to the draft report from the Director,
Bureau of Land Management, through the Assistant Secretary for Land and Minerals
Management, the Bureau concurred with all four recommendations. In its response, the
Bureau stated that it "has made consistent progress in the fee program and will continue to
emphasize the BLM [Bureau of Land Management] fee policy to our field offices." In
addition, the Bureau stated that it will issue an instruction memorandum and new guidebook
for recreational programs that will: (1) emphasize the designation of special recreation
management areas and the collection of fees at these areas; (2) emphasize the collection of
fees at all campsites and facilities where economically feasible; and (3) include requirements

13

 
for strengthening controls over cash collections at recreation sites. Based on the response,
we consider all of the recommendations resolved but not implemented (see Appendix 5).

14

 
OTHER MATTERS

Bureau managers could not effectively monitor the use of project funding for development
and maintenance of recreation sites because the Bureau did not have accurate data on:
(1) recreation visitation from the Bureau's Recreation Management Information System or
(2) maintenance requirements from the Facilities Inventory Maintenance Management
System. We found that the various field offices were inconsistent in their methodologies and
definitions regarding identifying, collecting, and reporting visitation and maintenance data.
As a result, we identified instances in which tinds were used to develop sites for which the
available management information did not appear to warrant the expenditures. For example,
we identified several recreation sites that had low visitation but for which the Bureau either
spent or planned to spend large amounts of both scheduled and corrective maintenance dollars
as follows:

- The Craig District Office in Colorado spent $125,000 for maintenance improvements

at the Irish Canyon and Rocky Reservoir campgrounds. In fiscal year 1995, the

campground and the Rocky Reservoir campground reported 550 and 450 visits,

Irish Canyon
respectively,

which resulted in an expenditure-to-visitor ratio of $125 per visitor. A Bureau engineer said
that there was no evidence of overuse of the resources at these sites before the improvements
were made. In addition, the District Office was not charging fees at these sites, although
these sites are eligible for fee collection.

  - The Montrose District Office in Colorado had scheduled the Kelly Recreation Site for
$9 1,000 of corrective maintenance. However, in fiscal year 1995, this site reported only 200
visits, which resulted in an expenditure-to-visitor ratio of $450 per visitor.

In contrast, we identified sites that had high visitation which had not received mnding to
protect the resources and to provide basic facilities for the health and safety of users. For
example, the Richfield District Office in Utah closed Yuba Lake, which had an estimated
annual visitation of 115,000, prior to Memorial Day 1996 because of public safety concerns,
including crowd control, resource protection, and basic sanitation. According to Bureau
officials, Yuba Lake has not received the development &nds needed to adequately manage
the site.

We believe that for sites where fee collections are determined not to be economically
feasible because of low visitation, Bureau headquarters and state offices should require
field offices to prepare a cost-benefit analysis and justification for continued operation of
the sites before operation and maintenance funds are expended at these sites.

Visitation Statistics

Although the Bureau has improved its systems for collecting visitation statistics through the
1994 redevelopment of its Recreation Management Information System, the statistics used

15

 
by the Bureau were inconsistent and conflicting. For example, the Bureau's Acting Director
testified before the House Committee on Appropriations in April 1996 that public lands
provide recreational opportunities for an estimated 66 million visitors per year. The Bureau's
fiscal year 1996 budget justification projected visitation of approximately 85 million
based on a 10 percent increase over fiscal year 1995. However, the Recreation Management
Information System reported total fiscal year 1995 visitation of 56.7 million. Bureau
personnel indicated that site visitation statistics in the Recreation Management Information
System are often estimates and as such are unreliable. For example, in fiscal year 1995, the
Bureau reported, based on its own estimates, 163,000 visits to the North Fork Kaweah River
site. However, in 1996, aRer a review of the data by our office, the Bureau reported
visitation at Kaweah at only 50,000, or a reduction of 113,000 (69 percent) from 1995.

Maintenance Information

The Facilities Inventory Maintenance Management System did not accurately reflect current
recreation site inventories and maintenance funding needs. Specifically, maintenance costs
were often significantly overstated, unsupported, or inaccurate. For example:

  - The Arcata Resource Area double counted $150,000 for accessibility needs, both
corrective and replacement, for the Mouth of the Mattole campground.

  - The Folsom Resource Area in California overstated costs for "accessibility" to Squaw
Leap by $300,000.

  - The Redding Resource Area in California overstated "accessibility" costs for the
Douglas City Campground by $100,000 and the Reading Island Site by $300,000.

The California State Office Engineer stated that the maintenance cost estimates were not
accurate and were not supported. The Engineer further stated that some estimates included
"accessibility" costs as both corrective and replacement cost components and that
maintenance cost estimates were never intended to be accurate.

In our opinion, without improvements being made to the systems for obtaining, maintaining,
and reporting visitation and maintenance data, neither the Bureau's Recreation Management
Information System nor the Facilities Information Maintenance Management System will be
able to provide the Bureau with reliable information that can be used in making management
decisions regarding the collection of recreation fees and the prioritization of maintenance
needs. We suggest that the Bureau standardize its data collection methodologies for both
systems to provide objective data that can be used to support recreation site management
decisions.

16

 
                         APPENDIX 1
   CLASSIFICATION OF MONETARY AMOUNTS

  Findine                     Lost Revenues

Special Recreation Areas and Permits             $14,550,844

Recreation Use Permits                    410,000

Total                        $14,960,844

17

 
APPENDIX 2
Page 1 of 2

OFFICES AND SITES VISITED AND/OR CONTACTED

OFFICES AND SITES

Department of the Interior
Bureau of Land Management
Washington Office*
Alaska State Office*
Arizona State Office*
   Lower Gila Resource Area Office*
   Tucson Resource Area Of&
   Yuma Resource Area Office*
California State Office
   Caliente Resource Area Office
  Eagle Lake Resource Area Office*
   Folsom Resource Area Of&e
   Arcata Resource Area Office
   Clear Lake Resource Area Of&e
  Redding Resource Area Office
Colorado State Office
  Colorado Engineering Field Office
  Glenwood Springs Resource Office
Grand Junction Resource Area Office
  Kremmling Resource Area Ofice
   Little Snake Resource Area Office
Idaho State Office
   Bruneau Resource Area Office
   Cascade Resource Area office
   Cottonwood Resource Area Office
  Emerald Empire Resource Area Office
  Medicine Lodge Resource Area Of&-e
Montana State Office*
   Headwaters Resource Area Office*
Nevada State Office*
  Carson City District Office*
New Mexico State Office*
   Roswell Resource Area Office*
   Taos Resource Area Office*

LOCATION

Washington, DC.
Anchorage, Alaska
Phoenix, Arizona
Phoenix, Arizona
Tucson, Arizona
Yuma, Arizona
Sacramento, California
Bakersfield, California
Susanville, California
Folsom, California
Arcata, California
Ukiah, California
Redding, California
Lakewood, Colorado
Grand Junction, Colorado
Glenwoud Springs, Colorado
Grand Junction, Colorado
Kremmling, Colorado
Craig, Colorado
Boise, Idaho
Boise, Idaho
Boise, Idaho
Cottonwood, Idaho
Coeur d'Alene, Idaho
Idaho Falls, Idaho
Billings, Montana
Butte, Montana
Reno, Nevada
Carson City, Nevada
Santa Fe, New Mexico
Roswell, New Mexico
Taos, New Mexico

* Contacted only.

18

 
APPENDIX 2
Page 2 of 2

  OFFICES AND SITES (Continued)
Oregon State Office
Mt. Scott Resource Area Office*
Umpqua Resource Area Office*
Wenatchee Resource Area Office
Utah State Office

House Range/Warm Springs Resource Area Office
Moab District Office
San Juan Resource Area Offke
Wyoming State Office*
Pinedale Resource Area Offke*
National Park Service
Intermountain Field Area Of&*
Denver Service Center

   LOCATION
Portland, Oregon*
Roseburg, Oregon
North Bend, Oregon
Wenatchee, Washington
Salt Lake City, Utah
Fillmore, Utah
Moab, Utah
Monticello, Utah
Cheyenne, Wyoming
Pinedale, Wyoming

Lakewood, Colorado
Lakewood, Colorado

Department of Agriculture
U.S. Forest Service
  Rocky Mountain Regional Offke

Lakewood, Colorado

19

 
APPENDIX 3
Page 1 of 2

POTENTIAL SPECIAL RECREATION AREAS

STATE             RECREATION SITES          1995 VISITS

California

North Fork Kaweah River Picnic Area
Kern River- Keysville Intensive Area
Carrizo Plain
Clear Creek
Samoa Dunes Intensive Use Area
Cache Creek
Santa Rosa National Scenic Area
Imperial Sand Dunes

49,610
121,750
39,220
111,947
208,400
98,000
1,639,725
416,025

Colorado

Total:                        2,684,677

Penitente Canyon                   25,504
The Banks Climbing Area                12,200
Sand Gulch Rock Climbing Area             9,500
Loma Boat Launch                    8,754
Kokopelli's                       3,720
Rabbit Valley Staging Area               3 1,000
Alpine Loop                     443,460
Gold Belt RMA                   1,029,Oll
North Sand Hills                     7,500
Upper Colorado River                 61,150
Little Yampa Canyon                  3,000
San Miguel River                    7,100
Delores River RMA                  49,391
Eagle River RMA                      12.750

Total:

1,704,040

Idaho

St. Anthony Dunes- Egin Lakes             40,100
Upper Snake River- Conant Boat            3 6,267
Upper Snake River- Byington Boat           43,852
Lower Salmon-Skookumchuck             60,000
Lower Salmon-Hammer Creek             15,750
Lower Salmon-Lucille Bar               27,000
Lower Salmon-Slate Creek                 56,430

279,399

Total:

20

 
APPENDIX 3
Page 2 of 2

STATE (Continued)       RECREATION SITES

Nevada

Red Rock NCA-Springs Picnic Area           93,800
Red Rock NCA-Scenic Loop             1,142,962
Red Rock NCA-Visitor Center             342,889
Red Rock NCA-Calico I Vista             274,3 11
Red Rock NCA-Calico II Vista               68.578

Total:

Oregon

Yakima River- Umptanum Creek            157,500
Yakirna River- Squaw Camp/Water           78,750
Yakima River-Roza Camp/Water             262,500

Total:

Utah

Yuba Lake
Colorado River-Daily Section

Total All Areas:                               7,275,422

VISITS MULTIPLIED BY $2 FEE                   $14,550,844

1995 VISITS

1,922,540

498,750

114,516
71,500
186,016

21

 
APPENDIX4

TO . .
Throu

From:

Subje

United States Department of the Interior Page ' Of4

BUREAU OF LAND MANAGEMENT
   Washington, D.C. 20240

As

sistant I

lb Armstro w
sistant S ecre

rector, B lurea u of Land Ma

'sponse to Dra ft Audit Rep

nspe ctor General

4- t?Y /
I  an a

Septmber 25, 1997

In Reply Refer To:
1245 (WO-250)

MEMORANDUM

fqr Audits

ort on "l$?ecreation '

Management, Bureau of Land Management", August 1997
(Assignment No. C-IN-BLM-002-96)

Thank you for the opportunity to respond to the subject draft
audit report.  The Bureau of Land Management (BLM)-generally
agrees with the findings of the report.

We believe we are making a good faith effort in meeting the
intent of the Land and Water Conservation Fund Act, Office of
Management and Budget Circular A-25, 43 CFR 8372, and our
internal policy direction.  The BLM has made consistent progress
in the fee program and will continue-to emphasize the BLM fee
policy to our field offices.  As of Fiscal Year (FY) 1996, the
BLM has more than doubled its number of fee sites (101 to 210)
and revenue (1.4 million to 2.9 million) since 1990.  The BLM has
added 17 fee demonstration sites, additional non-pilot fee sites,
and has increased recreation fees at many existing sites during
     We understand the value of fees, as a tool, to maintain
and improve our recreation sites and as a way to stretch
appropriated dollars.  The BLM will continue to use cooperative
agreements and partners to improve recreational opportunities
throughout BLM public lands.

The- BLM is committed to carrying out the intent of the  -
Appropriations Committee "Recreation Fee Demonstration Program"
and of Congress' concern that those who use the BLM public lands
share in the operations and maintenance costs assdciated with
                         - -
their use.                       -.
   e- _ _ _ _        __

 
APPENDIX 4
Page 2 of 4

2

Attachment 1 addresses BLM's specific comments on the report and
the OIG's recommendations.  If you have any questions, please
contact Rodger Schmitt, Group Manager, Recreation, at
202-452-7738 or Gwen Midgette, BLM Audit Liaison Officer at
202-452-7739.

Attachment

23

 
APPENDIX4
Page 3 of 4

    RECREATION MANAGEMENT
  BUREAU OF LAND MANAGEMENT
        AUGUST 1997
(Assignment No.  C-IN-BLM-002-96)

P - 5, last paragraph;...
recreation areas, . . . .   the Bureau has designated 17 special

Actually,  the BLM has over 500  "special recreation management
areas (SRMA)".   We have 17  "recreation fee demonstration sites?

P  - 7, 3rd paragraph;.. .believe that the Yakima Canyon in the
Wenatchee Resource Area in Washington is another candidate . . .
requiring special recreation permits and charging fees for
individual users.

The BLM started charging fees at this location in May of 1997.

P.  - 8, 2nd paragraph;.. .Bureau should require the state offices
to inventory their recreation areas...

This is an on-going process through the BLM planning system.
"Special Recreation Management Areas" are designated in BLM land
use plans or as an update to a land use plan.
                                                       _. .-

P  - 11, 1st paragraph;... the Bureau collected fees at only 202
of the 315 eligible recreation use sites...

The BLM collects fees at 2lO%ecreation use sites.

The BLM offers the following in response to the OIG report
recommendations:

Recommendation 1:  Direct Bureau state and field offices to
review recreation areas and identify those areas that can be
designated as special areas and tb initiate special recreation
permit fees at those areas.

Concur: The BLM will issue an Instruction Memorandum (IM) that
restates the BLM's recreation fee policy emphasizing the
designation of SRMAs and collecting fees at these areas.
                                             .

Responsible Official - AD Renewable Resources and Planning.
Target date is November 30, 1997.

24

 
APPENDIX 4
Page 4 of 4

2

Recommendation 2:  Direct Bureau headquarters and state offices
to ensure that, where economically feasible, field offices
collect recreation use permit fees for all eligible sites.

Concur: As part of the IM in Recommendation 1, the BLM will issue
the IM emphasizing the collection of fees at all campsites and
facilities where economically feasible.

Responsible Official - AD Renewable Resources and Planning.
Target date is November 30, 1997.

Recommendation 3:  Revise Bureau cash collection control
procedures to ensure full accountability for cash collected from
recreation fees by strengthening the control environment over
cash collections at recreation sites.

Concur: This will be included in the above IM and will be a
requirement in the new guide book for recreation permits that
will support the revised recreation permit regulations.

Responsible Official - AD Renewable Resources and Planning.
Target date is January 1, 1999.

Recommendation 4:  Revise control procedures over the commercial
special recreation permits to ensure that:  1) field offices
conduct random counts of outfitter usage and reconcile the Bureau
counts to counts reported by permittees, and 2) permittees.have
required audits or reviews of their financial records performed.

Concur:  This will also be included in the previously mentioned
IM and in addition will be addressed in the guide book for
administering the recreation permit program as mentioned in
Recommendation 3 and in support of the revised recreation permit
regulations.

Responsible Official - AD Renewable Resources and Planning.
Target date is January 1, 1999.

25

 
APPENDIX 5

STATUS OF AUDIT REPORT RECOMMENDATIONS

Finding/Recommendation
   Reference

Status            Action Required

l- 4

Resolved; not
implemented.

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

26

 
 

ILLEGAL OR WASTEFUL ACTIVITIES
   SHOULD BE REPORTED TO
THE OFFICE OF INSPECTOR GENERAL BY:

Sending written documents to:            Calling:

Within the Continenttil'United States

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

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

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

Outside the Continental United States

Caribbean Region

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Office of Inspector General
Eastern Division - Investigations
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Arlington, Virginia 22209

North Pacific Retion

(703) 235-9221

U.S. Department of the Interior
Office of Inspector General
North Pacific Region
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Suite 807, PDN Building
Agana, Guam 96910

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