[Audit Report on Land Acquisition Activities, U.S. Fish and Wildlife Service]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 99-i-162

Title: Audit Report on Land Acquisition Activities, U.S. Fish and
       Wildlife Service

Date:  December 29, 1998




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U.S. Department of the Interior
Office of Inspector General


AUDIT REPORT


LAND ACQUISITION ACTIVITIES,
U.S. FISH AND WILDLIFE SERVICE
REPORT NO. 99-I-162
DECEMBER 1998




MEMORANDUM

TO:               The Secretary

FROM:             Eljay B. Bowron
                  Inspector General

                  SUBJECT   SUMMARY:  Final Audit Report -
                  "Land Acquisition Activities, U.S. Fish
                  and Wildlife Service" (No. 99-i-162)

Attached for your information is a copy of the subject final
audit  report.   The objective of the audit was to determine
whether the U.S. Fish  and  Wildlife  Service conducted land
acquisition  activities in accordance with  applicable  laws
and regulations  and  whether  it  paid a fair price for the
land acquired.

The   Service   did  not  sufficiently  ensure   that   just
compensation was  properly  established  before  it acquired
land.   Specifically, the Service did not fully comply  with
its appraisal  and  boundary survey requirements, and it did
not require (1) documentation showing that consideration was
given to updating appraisals  over  6  months  old, (2) both
appraisals  to  be  acceptable  when  two  appraisals   were
required,  or  (3)  the purchase price of the property to be
adjusted  based  on boundary  surveys.   As  a  result,  the
Service  did not have  sufficient  assurance  that  it  paid
market  value   for  59  fee  acquisitions  (totaling  $38.2
million)  of  the 205 fee  acquisitions  reviewed.   The  59
acquisitions included 29 cases in which the Service may have
overpaid landowners  about  $748,063  because  the number of
acres in the appraisals was overstated and 3 cases  in which
the  Service  may  have  underpaid landowners about $145,061
because  the  number  of  acres   in   the   appraisals  was
understated.   The  Service  also  did  not  have sufficient
assurance  that  it  paid  market  value  for  462 easements
(costing  $3.5 million)  because just compensation  was  not
based on current data.

The Service also did not ensure  that  payments  to  acquire
easements  and  refuge  land were necessary and appropriate,
resulting  in  inappropriate  payments  of  $207,425  to  22
landowners for future  property taxes and weed control costs
and payments of $66,504  to  3 landowners for prior property
taxes that were not the liability of the Service.  Also, the
Service paid nonprofit organizations  $438,680  for expenses
that  were  unsupported or ineligible for reimbursement  and
$189,322 for expenses that were in excess of the fair market
value of the acquired land.

In addition,  the  Service  acquired two tracts of land that
contained environmental contaminants without having obtained
the required approvals.  As a  result,  the  Service  has  a
potential  liability  of as much as $722,862 to clean up the
property if it is determined  that  a  full-scale cleanup is
required.

Of  14  land  exchanges  reviewed,  we found  that  13  land
exchanges were transacted in accordance with applicable laws
and regulations and that fair value was  received.  However,
one  land  exchange  was  transacted  in which  the  Service
inappropriately obtained funds to acquire  private  land  by
selling  refuge land timber worth $190,000 to a third party.
We considered  this transaction not to be in compliance with
statutory requirements for the use of timber sales revenues.

Based on the Service's  response  to  the  draft  report, we
considered 7 of the report's 11 recommendations resolved but
not  implemented  and  4  recommendations  unresolved.   The
Service  was  requested  to reconsider its response  to  the
unresolved recommendations,  which  pertained  to  complying
with  appraisal  requirements, preparing purchase agreements
with  provisions  for  price  revisions  based  on  boundary
surveys, discontinuing  payments  for  future property taxes
and weed control costs on easements, and  developing  action
plans for cleaning up contaminants on acquired land.

If   you  have any questions concerning this matter,  please
contact  me  at  (202)  208-5745  or Mr. Robert J. Williams,
Assistant Inspector General for Audits, at (202) 208-4252.

Attachment




                                        E-IN-FWS-001-97


Memorandum

     To:  Assistant Secretary for Fish
          and Wildlife and Parks

   From:  Robert J. Williams
          Assistant Inspector General for Audits

Subject:  Audit Report on Land Acquisition
          Activities, U.S. Fish and Wildlife
          Service (No. 99-i-162)

This report presents  the  results of our audit of land
acquisition activities conducted  by  the U.S. Fish and
Wildlife Service.  The objective of the  audit  was  to
determine   whether   the    Service   conducted   land
acquisition  activities  in  accordance with applicable
laws and regulations and whether  it  paid a fair price
for the land acquired.

We  concluded  that  the  Service  did not sufficiently
ensure that just compensation was properly  established
before  it  acquired  land  through purchase or wetland
easements.   Although  the  Service   had   established
procedural requirements  for conducting, reviewing, and
updating appraisals and obtaining  boundary surveys, we
found that the Service did not fully  comply with these
requirements. Service officials said that  they did not
always  comply  with  these  requirements  in order  to
expedite the acquisition process and minimize  the cost
of  land acquisitions. We also found that the Service's
procedures  were  insufficient  in  that  they  did not
require  (1)  documentation  in  the files showing that
consideration was given to updating  appraisals  over 6
months  old,  (2) both appraisals to be acceptable when
two appraisals were required, or (3) the purchase price
of the property  to be adjusted based on the results of
the boundary survey.  As  a result, the Service did not
have sufficient assurance that it paid market value for
59  fee  acquisitions  ($38.2   million)   of  the  205
acquisitions we reviewed.  The 59 acquisitions included
29  cases  in  which  the  Service  may  have  overpaid
landowners $748,063 because the number of acres  in the
appraisal  was  overstated  and  3  cases  in which the
Service may have underpaid landowners $145,061  because
the  number  of acres in the appraisal was understated.
Also, the Service  did  not  have  sufficient assurance
that  it  paid  market value for 462 wetland  easements
that cost $3.5 million  for which just compensation was
not based on current data.

In addition, the Service  did  not ensure that payments
to acquire grassland conservation  easements and refuge
land  were  necessary and appropriate.    Although  the
Service's land  acquisition  guidance  does not provide
for  payments  to landowners for future or  prior  year
property taxes or  for  weed  control expenses, Service
officials  said  that  they paid landowners  for  these
costs  because they believed  that  the  payments  were
necessary  to  fully  compensate the landowners for the
economic impact of the  easements.   Also, although the
Service had established procedures for  conducting land
acquisitions with nonprofit organizations,  it  did not
provide  sufficient  oversight to prevent payments  for
unallowable or unsupported  expenses  or to ensure that
established procedures for acquiring  land  from  these
organizations  were followed.  As a result, the Service
inappropriately  paid  $207,425  to  22  landowners for
costs  related to grassland conservation easements  and
paid  $66,504  to  3  landowners for expenses that were
not the liability of the  Service.   Also,  the Service
paid  expenses  of  $438,680  that were unsupported  or
ineligible for reimbursement to nonprofit organizations
which had letters of intent and  reimbursed expenses of
$189,322 that were in excess of the  fair  market value
of  the acquired land to nonprofit organizations  which
did not have signed letters of intent.

We also  found  that the Service acquired two tracts of
land which contained environmental contaminants without
obtaining the required  approvals because, according to
Service  officials,  the  additional  notification  and
approval   requirements   would    have   delayed   the
acquisitions and because field personnel concluded that
the  contaminants  did not represent a  threat  to  the
environment.  As a result,  the Service may have to pay
as  much  as  $722,862  to clean  up  sites  if  it  is
determined that full-scale cleanup is required.

Concerning land exchanges,  the Service conducted 13 of
the 14 land exchanges we reviewed  in  accordance  with
applicable laws and regulations and received fair value
in these exchanges. However, in the remaining instance,
the  Service  inappropriately obtained funds to acquire
private land by selling timber worth $190,000 on refuge
land  to  a  third   party.    We   believe  that  this
transaction  was not conducted in compliance  with  the
statutory requirements  for  the  use  of revenues from
timber  sales, that it resulted in the Service's  using
timber sales  proceeds  for  unauthorized purposes, and
that it may have denied county governments the revenues
to which they were entitled.

In the September 1, 1998, response  (Appendix 3) to the
draft report from the Director, U.S. Fish  and Wildlife
Service,  the  Service  concurred  with Recommendations
A.1,  A.2,  A.4,  B.2,  B.3,  B.4,  C.2,  and  D.1  and
nonconcurred  with Recommendations A.3, B.1,  and  C.1.
Based on the response, we consider Recommendations A.2,
A.4, B.2, B.3,  B.4,  C.2,  and  D.1  resolved  but not
implemented. Accordingly, these recommendations will be
referred   to   the  Assistant  Secretary  for  Policy,
Management and Budget  for  tracking of implementation.
Also   based   on   the  response,  we   have   revised
Recommendation C.1, and  we  request  that  the Service
respond   to   the   revised   recommendation   and  to
Recommendations  A.1, A.3,  and  B.1,  all of which are
unresolved (see Appendix 4). The Service  also provided
additional   comments   on   the  findings,  which   we
considered   in   preparing   the  final   report   and
incorporated as appropriate.

In  accordance  with the Departmental  Manual  (360  DM
5.3), we are requesting  a  written  response  to  this
report by January 29, 1999. The response should provide
the information requested in Appendix 4.

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 Service  personnel  in
the conduct of our audit.


E-IN-FWS-001-97

                            CONTENTS

                                                     Page

INTRODUCTION                                            1

BACKGROUND                                              1
OBJECTIVE AND SCOPE                                     2
PRIOR AUDIT COVERAGE                                    3

FINDINGS AND RECOMMENDATIONS                            5

A. JUST COMPENSATION                                    5
B. PAYMENTS TO LANDOWNERS                              20
C. CONTAMINANT SURVEYS                                 28
D. LAND EXCHANGES                                      33

APPENDICES

1. CLASSIFICATION OF MONETARY AMOUNTS                  34
2. U.S. FISH AND WILDLIFE SERVICE OFFICES
       VISITED OR CONTACTED                            35
3. U.S. FISH AND WILDLIFE SERVICE RESPONSE             36
4. STATUS OF AUDIT REPORT RECOMMENDATIONS              52


E-IN-FWS-001-97

INTRODUCTION

BACKGROUND

The U.S. Fish and Wildlife Service operates and maintains
509 national wildlife refuges and 193 waterfowl production
areas encompassing over 92 million acres, which provide
habitats for endangered  and threatened  species,  resident
species, and migratory birds. The National Wildlife Refuge
System also provides recreational opportunities, including
wildlife  watching, photography, hiking, environmental
education, and fishing, to over 29 million visitors annually.
The Service received appropriations totaling $117.2 million
in fiscal year 1995 and $88.6 million in fiscal year 1996
to acquire additional land to support these
activities as follows:

Appropriations    (In Millions)
Funding SourceFiscal Year 1995   Fiscal
Year 1996

Land and Water Conservation Fund              $67.3      $36.9
Migratory Bird Conservation Fund               40.9       44.9
North American Wetland Conservation Fund        9.0        6.8
   Total                                     $117.2      $88.6

The  Service  is  subject to certain restrictions in acquiring
land, depending on  the  funding source.  Lands purchased with
Land and Water Conservation  Fund  monies  are  restricted  to
specific  line-item  projects  authorized by the Congress, and
the Service must obtain the written  approval of the House and
Senate Committees on Appropriations for  purchases that exceed
the approved appraised value.  Land acquisitions  using  funds
from  the  Migratory  Bird  Conservation  Fund  and  the North
American  Wetlands  Conservation Fund must be approved by  the
Migratory   Bird   Conservation   Commission,   with   further
Commission approval  required for acquisitions that exceed the
approved appraised value by more than 10 percent.[1]

The Service usually acquires  land through purchase, donation,
transfer  from  other  Federal agencies,  and  exchange.   The
Service, which has a policy  of  acquiring  land  from willing
sellers,  may  acquire  a  full  interest  in  the  land  (fee
acquisition) or a partial interest in the land using licenses,
permits,  leases,  cooperative  agreements,  and  wetland  and
grassland  conservation  easements.[2]   The  Service also may
enter into transactions in which public land is  exchanged for
private land.

When  expedient  action  is  needed  to  prevent  the sale  of
property  to  other  parties  or  to  eliminate the threat  of
adverse  development, the Service may acquire  land  with  the
assistance  of  nonprofit  organizations.  These organizations
either purchase or obtain a purchase option  on  the land with
the  intention  of  selling  the  land  to  the  Service  when
appropriated funds are available.

As  of  September 1996, the Service had 248 employees (located
in  the  Central  Office,  7 regional  offices,  and  17 field
offices) who performed land acquisition activities.

OBJECTIVE AND SCOPE

The objective  of  the audit was to determine whether the U.S.
Fish   and  Wildlife  Service   conducted   land   acquisition
activities  in accordance with applicable laws and regulations
and whether it  paid  a fair price for the land acquired.  The
audit  covered  land purchase  and  exchange  activities  that
occurred during fiscal  years  1995  and  1996.   During  this
period,  the Service acquired 301,577 acres of land for $155.4
million in 1,712 transactions[3] and conducted 29 exchanges in
which 907  acres  of Federal land valued at $1.07 million plus
equalization payments  of  $50,000  were  exchanged  for 1,514
acres of private land valued at $1.12 million.[4]

During   the   survey   phase  of  our  review,  we  found  no
deficiencies  related to the  Service's  overall  process  for
determining the  lands  and  ownership  interests  needed  for
wildlife  refuges  and waterfowl production areas.  Therefore,
we focused our review on acquisitions made through purchase or
exchange  because  we  considered  these  transactions,  which
involve the use of Federal  funds  or  other assets, to be the
areas  that  had  the  greatest  potential for  weaknesses  or
deficiencies.  Our review consisted  of  305 acquisitions  for
$78.8 million that covered 79,820 acres (205 fee acquisitions,
96 easements, and 4 leases) and 14 land exchanges in which 457
acres of Federal land and timber valued at about $738,000 plus
equalization  payments  of  about  $21,000  were exchanged for
1,233 acres of private land valued at about $759,000.

We conducted our review at the Service's headquarters (Central
Office) in Arlington, Virginia, and at the regional offices in
Albuquerque,  New  Mexico; Fort Snelling, Minnesota;  Atlanta,
Georgia;   Hadley,  Massachusetts;   Denver,   Colorado;   and
Anchorage, Alaska.

Our review was  made,  as  applicable,  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  in the
land   acquisition   process   to  the  extent  we  considered
necessary.   We  found  internal  control  weaknesses  in  the
Service's procedures for conducting appraisals and contaminant
and  boundary surveys.  Our recommendations,  if  implemented,
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 year
1995 and the Departmental  Report on Accountability for Fiscal
Years 1996 and 1997  which includes  information  required  by
the  Act,  and  the  Service's  annual assurance statement for
fiscal year 1997 and determined that  no  reported  weaknesses
were within the objective and scope of our audit.

PRIOR AUDIT COVERAGE

During the past 6 years, the General Accounting Office has not
issued  any  audit  reports  on the Service's land acquisition
activities.  However, the Office  of  Inspector General issued
the audit report "Department of the Interior Land Acquisitions
Conducted With the Assistance of Nonprofit Organizations" (No.
92-I-833)  in  May  1992,  which  covered the  U.S.  Fish  and
Wildlife Service, the National Park Service, and the Bureau of
Land   Management.   The  report  concluded   that   nonprofit
organizations  helped  acquire  needed  land  but that certain
transactions  were  not adequately controlled to  ensure  that
nonprofit organizations  did  not  benefit unduly and that the
Government's interests were adequately  protected.   According
to the report, most of these transactions occurred in the Fish
and  Wildlife  Service, which paid the nonprofit organizations
about  $5.2  million  more  than  the  approved  market  value
($44 million) of the land on 64 transactions.  The report also
noted that the  Service  did  not follow established standards
for appraising real property.   Specifically,  appraisals were
adjusted  upward  without  adequate documentary support,  land
purchases were made without  appraisals  or  properly approved
appraisals,  and  the values of purchased land were  based  on
appraisals that averaged  over  1  year  old.   As  a  result,
according  to  the report, the Department had little assurance
that the fair market  value estimates used by the Service were
timely, complete, or accurate.   The  report  contained  seven
recommendations,  all  of  which  were considered resolved and
implemented. However, our current audit found that the Service
was not fully complying with the requirements  for conducting,
reviewing, and updating appraisals.

**FOOTNOTES**

[1]:The Migratory Bird Conservation Commission,  which  consists
of the Secretary  of  the  Interior,  the  Administrator  of  the
Environmental Protection  Agency,  the  Secretary of Agriculture,
two members  of  the Senate, and two members of  the House of
Representatives, is responsible for considering and approving the
acquisition of land for migratory bird habitat  (other  than
waterfowl   production   areas)   that  has  been
recommended by the Secretary of the Interior.

[2]:Easements generally are used to secure land for waterfowl
production areas.  Wetland easements prohibit landowners from
draining,  leveling, burning,  or  filling wetlands.  Grassland
easements can either prohibit or limit landowners from
converting grassland to other uses.

[3]:In its response  to  our  draft  report,  the  Service
stated that, according  to  its  records,  it  acquired 1,723
tracts totaling 534,065 acres at a total cost of $191.3 million
during  fiscal  years  1995 and 1996.   We  were  subsequently
informed by Service officials that these statistics  included
all land acquisitions  (purchases,  donations,  and transfers
from  other  Federal  agencies).   The  scope  of  our review,
however, included only land purchases.

[4]:We  did not include in our review the acquisitions of
land   in  the Kodiak  National  Wildlife  Refuge from
three Alaska Native Corporations that were transacted in
fiscal  years 1995 through 1997 (10 acquisitions in which
151,353 acres were acquired for $84.5 million).  Although
these lands conveyed to the Service, the  acquisitions
were  approved  by the Exxon  Valdez  Oil Spill Trustee
Council and funded by a settlement from the Exxon Valdez
oil  spill.   At  the  time of our review, the General
Accounting Office was reviewing these acquisitions.

E-IN-FWS-001-97

FINDINGS AND RECOMMENDATIONS

A.  JUST COMPENSATION

The U.S. Fish and Wildlife Service did not sufficiently ensure
that  just  compensation  (the  amount  to be offered  to  the
landowner) was properly established before  it  acquired  land
through  purchase  or wetland conservation easements.  Federal
land acquisition laws  (42 U.S.C. 4651[3]) and regulations (49
CFR 24.102) require the Service to establish just compensation
before  negotiating  land   acquisitions   and  to  base  just
compensation  on the appraised market value of  the  property.
Although the Service  had  established procedural requirements
for  conducting,  reviewing,  and   updating   appraisals  and
obtaining boundary surveys, we found that the Service  did not
fully comply with these requirements.  Service officials  said
that they did not always comply with these requirements in  an
effort  to  expedite  the acquisition process and minimize the
cost of land acquisitions.   We  also found that the Service's
procedures were insufficient in that  they did not require (1)
documentation  in  the  files showing that  consideration  was
given to updating appraisals  over  6  months  old,  (2)  both
appraisals to be acceptable when two appraisals were required,
or (3) the purchase price of the property to be adjusted based
on  the  results  of  the  boundary  survey.  As a result, the
Service did not have sufficient assurance  that it paid market
value  for  59 fee acquisitions (22,741 acres  totaling  $38.2
million)  of  the  205  fee  acquisitions  we  reviewed.   The
59 acquisitions include 29 cases in which the Service may have
overpaid landowners about $748,063 because the number of acres
in the appraisals was overstated (by 378 acres) and 3 cases in
which the Service may have underpaid landowners about $145,061
because the number  of acres in the appraisals was understated
(by  22  acres).   In  addition,  the  Service  did  not  have
sufficient assurance that  it  paid  market  value for the 462
wetland   easements   (22,261  acres  totaling   $3.5 million)
acquired  during  the  scope   of   our  review  because  just
compensation was not based on current data.

Appraisals

Service   guidance  on  establishing  just   compensation   is
contained in  the  Service's  Appraisal  and  Appraisal Review
Handbooks  and  its  Manual.   The  Handbooks  state  that  an
appraisal  should  be  obtained for all land acquisitions  and
that the appraisals "must  be  reviewed  and  approved  .  . .
before  the  respective  values  are  used  by the Service" to
establish   just   compensation.   Regarding  the  review   of
appraisals,  the Review  Handbook  requires  the  reviewer  to
"decide whether  a  report  [appraisal]  is acceptable" and to
document the reviewer's conclusions "so that  there  can be no
question  as  to  the reviewer's position" on matters such  as
"over-all acceptability."[5]   According to the Handbooks, two
appraisals  should  be  obtained  for  acquisitions  exceeding
$750,000,  and  consideration  should  be  given  to  updating
appraisals over 6  months  old.   Overall,  we  found that the
Service  did  not fully comply with the Handbook guidance  for
establishing just  compensation  in  21  acquisitions  (16,656
acres  at  a  cost  of  $17.3  million) and did not obtain two
acceptable appraisals in 10 acquisitions  (3,863  acres  at  a
cost  of  $12.3  million)  because  it  had  not established a
requirement   that   both   appraisals   obtained  should   be
acceptable.   As  a  result,  of  the 205 fee acquisitions  we
reviewed, the Service did not have  sufficient  assurance that
market value was paid  for 28 acquisitions (18,421  acres at a
cost of $27.7 million).[6]

Appraisal  Preparation. Overall,  we  found  that  the Service
complied with its appraisal preparation requirements  in about
98  percent  (200  out  of  205)  of  the  fee acquisitions we
reviewed.  However, the Service  did   not  obtain  appraisals
for  four  tracts (26.3 acres) for which it  paid $781,300 and
could  not provide a copy of an appraisal for one  tract  (340
acres) for which it paid $330,000.  For example:

-  On August 14, 1996, an organization offered to sell a 24-acre
  tract to  the  Southeast  Region  for $225,000 and to donate a
  1,200-acre tract to the Region, both  of  which  would  become
  part  of  the  Big  Branch  Marsh  National Wildlife Refuge in
  Louisiana.  On August 27, 1996, the organization increased the
  sales price of the 24-acre tract to  $325,000.   Although  the
  Region  did  not  obtain  an  appraisal  for  either  tract, a
  Regional  staff  appraiser  prepared  a "value opinion," which
  stated that the smaller tract of land had  a value of $120,000
  based  on "very limited" comparable sales in  the  area.   The
  staff appraiser  attributed  the  $205,000  difference  to the
  1,200-acre tract (which was supposed to have been a donation),
  stating  that  the  $171  per  acre  value  for this tract "is
  considerably below traditional market values  of similar types
  of properties" and that "both tracts are worth  not  less than
  $325,000 (overall) or $266 per acre." On September 20, 1996, a
  Deed  of  Gift  was recorded in which the organization donated
  the 1,200-acre tract  to  the  Service,  and  on September 25,
  1996,  the Service paid $325,000 to the organization  for  the
  24-acre  tract.   Because  the Service bought the land without
  obtaining an appraisal, we could  not  determine  whether  the
  Service paid market value for the land.

-   Three  landowners  offered  to sell 1.8 acres of land to the
  Service  for  a total of $456,300.   The  tracts,  which  were
  acquired for the  Archie  Carr  National  Wildlife  Refuge  in
  Florida,   were   not  appraised,  although  a  Service  staff
  appraiser did prepare  an  "Assessment of Value" memorandum in
  February 1995.  The memorandum  stated  that  the  tracts were
  "worth  the  offered  prices" and that "these amounts are  not
  above fair market value  and  are values in the accepted range
  for property values of this type  in  this  market."   Service
  officials  stated that since the landowners offered the tracts
  at a reasonable value, official appraisals were not necessary.
  However, the  officials  could  not  identify  any regulation,
  policy,  or  guidance  that  would  authorize  the Service  to
  acquire land without obtaining a valid appraisal  (except land
  with a value of less than $10,000, according to the  Appraisal
  Handbook).

Two  Appraisals. The  Service  did  not  fully comply with the
requirement   to  obtain  two  appraisals  for  certain   land
acquisitions.   The Service's Appraisal Handbook requires that
a  second  appraisal  be  prepared  by  a  qualified  contract
appraiser or an appraiser from a different region for property
that is "unique," "controversial," or "complex" or that has an
estimated value  exceeding  $750,000  and  that   the  Service
establish just compensation based on the value established  by
one or more of the acceptable appraisals.

We  reviewed  40 acquisitions that exceeded $750,000 and found
that  the  Service  did  not  obtain  two  appraisals  for  11
acquisitions totaling 14,061 acres at a cost of $14.2 million.
For 19 of the  40  acquisitions, the Service obtained a waiver
from the two-appraisal requirement in 2 cases and obtained two
acceptable appraisals  in the remaining 17 cases.  The Service
approved and paid the lower  appraised  value  in 11 of the 17
cases,[7]   which  we  believe  illustrates  the  benefit   of
obtaining two acceptable appraisals.

Although the  Service obtained two appraisals for the 10 other
cases, the review appraisers' reports did not clearly conclude
whether both of  the  appraisals  were  acceptable.   In seven
cases,   the  reviewers  stated  that  only  one  of  the  two
appraisals  was  acceptable, and in three cases, the reviewers
did  not  state whether  either  of  the  two  appraisals  was
acceptable.   According to the Appraisal Review Handbook, "The
reviewer must decide  whether  a report is acceptable and then
decide from among one or more acceptable  reports which report
will  be  used  as  the  Service's `approved appraisal.'"  The
Handbook  further  states,  "It  is  the  reviewer's  ultimate
responsibility to conclude whether the appraisal report itself
arrives at a logical and reasonable  and  therefore acceptable
conclusion based on the facts presented."

Service officials said that even though the reviewers' reports
did   not   specifically   state  that  the  appraisals   were
acceptable,  payment for an appraisal  represented  acceptance
and that even  though they required two appraisals for certain
land acquisitions,  they  did not require that both appraisals
have to be acceptable.  In  our  opinion,  if  the  Service is
going  to  require  two  appraisals,  it  should  require both
appraisals  to  be  acceptable  products  that  meet appraisal
standards  and  provide  a logical and reasonable estimate  of
market value.  In addition,  we  believe  that  when  a review
appraiser  identifies  deficiencies or questionable issues  in
appraisals, the reviewer should send the appraisal back to the
appraiser for correction or clarification.  For example:

-  A  review appraiser reviewed  two  appraisals  for  a  parcel
  containing  1,783  acres.   One appraisal estimated the market
  value of the land at $650 per  acre,  or  $1.16  million.  The
  other appraisal estimated the value at $716 per acre, or $1.28
  million.  The review appraiser did not document his acceptance
  of  either  appraisal,  as  required  by the Appraisal  Review
  Handbook.  Instead, the review appraiser accepted and approved
  the  landowner's original offer of $700  per  acre,  or  $1.25
  million, as the just compensation without obtaining subsequent
  approval from the Service's Chief Appraiser.

-  In late  1991,  the  Service  obtained  two  appraisals for a
  1,506-acre  tract: one that valued the tract at  $3.32 million
  and the other  that  valued  the  tract at $2.26 million.  The
  land was being considered for joint acquisition by the Service
  and the Minnesota Department of Natural Resources.  The review
  appraiser accepted the $2.26 million  appraisal  but  did  not
  accept  the $3.32 million appraisal, which had placed a higher
  value on  the  land  based  on  its  potential for residential
  development  use,  stating  that  the  appraisal   was   "very
  subjective,   almost   conjectural,   and   contain[ed]   both
  procedural  and  arithmetic  error."  The review appraiser did
  not  send  the appraisal report  back  to  the  appraiser  for
  correction and  clarification or additional support.  In March
  1992, having approved  the  single  acceptable  appraisal, the
  Service  offered $2.26 million to the landowner, who  rejected
  the offer.

In 1994, the  Service resumed efforts to acquire the land.  By
this time, property  adjacent  to  the  landowner's  site  was
subdivided  and developed (as envisioned in the appraisal that
had not been accepted), and the zoning of the land had changed
from agricultural  land with residential development potential
to residential subdivision.  The Service obtained an update to
the appraisal that previously had not been accepted and, based
on  this  updated  valuation,   offered  the  landowner  $4.26
million,  which  the  landowner  accepted.   In  our  opinion,
because more than 2 years had elapsed  and  market  conditions
had  changed  since  submission of the initial appraisal,  the
initial $2.26 million  appraisal  was  no  longer  valid  as a
second appraisal.

Appraisal  Review  and  Approval. Overall,  we  found that the
Service complied with the review and approval requirements  in
98  percent  of  the  cases  we  reviewed  (200 out of 205 fee
acquisitions).    The  Service's  Appraisal  Review   Handbook
requires  that appraisals  be  reviewed  and  approved  by  an
appraisal professional  on  behalf of the Service and that, if
the review appraiser rejects  the  appraisal and establishes a
different fair market value, the new  value be approved by the
Service's Chief Appraiser.  However, we found that the Service
did  not perform appraisal reviews for two  tracts  containing
130 acres  which were acquired for a total of $87,000 and that
the Chief Appraiser  had  not  approved the fair market values
established  by  the  review  appraisers,   who  had  rejected
appraisals for three tracts containing 2,100  acres which were
acquired for $1.88 million.  For example, two appraisals  were
prepared for two tracts containing 315.58 acres  that  were to
be  added  to the Stewart B. McKinney National Wildlife Refuge
in Connecticut.   The first appraisal, which was prepared by a
contractor and established  an  average  value  of  $4,623 per
acre,  was rejected by the review appraiser who said that  the
valuation  was not a reasonable estimate of market value.  The
review appraiser also rejected the second appraisal, which was
prepared by  a  Service  appraiser  and established an average
value of about $1,500 per acre, stating that "[i]n general the
report is poorly written and does not  support  its  projected
use  or  value."   Having rejected both appraisals, the review
appraiser  determined  that  the  fair  market  value  of  the
property was $2,000 per acre, which was used to establish just
compensation.  However, there was no documentation in the file
to support the  review  appraiser's fair market value estimate
or to show that the Chief  Appraiser had reviewed and approved
  the valuation.

Appraisal Updates. The Service's Appraisal Handbook states that
the Service should "consider  updating  any  appraisal  over 6
months  old as well as any appraisal that may be outdated  due
to extraordinary  market  conditions."   However,  because the
Handbook does not require that this process be documented,  no
documentation   was   prepared.   Accordingly,  we  could  not
determine  whether  the  Service   considered   updating   the
appraisals  for  101  of the 122 acquisitions we identified in
which  more  than 6 months  had  elapsed  from  the  date  the
appraisal was prepared to the date that the purchase agreement
was signed or  whether  the  Service  had  determined that the
valuations  of  the  properties  were  still valid.   The  101
appraisals    included   36   acquisitions   totaling    about
$19.5 million for  which  the  elapsed  times were from 1 to 3
years and 3 acquisitions totaling about $906,000 for which the
elapsed times were more than 3 years.

Boundary Surveys

Part 343, Chapter 1, of the Service Manual requires surveys to
be  made of tracts that form the boundary  of  Service  lands,
that  require  accurate  area  determination,  or that involve
adverse claims or disputes over boundaries.  However, we found
that the Service did not obtain boundary surveys  in 10 (2,033
acres  acquired  for  $5.48  million)  of  the 52 acquisitions
reviewed which required these surveys.  Therefore, the Service
did  not have sufficient assurance that it paid  market  value
for these  acquisitions.   In  six  cases,  the  acreage to be
appraised or conveyed was disputed or questioned,  and in four
cases, the tracts were on the boundaries of refuges.   In  two
of  the  six  cases  that  had acreage disputes, the reviewing
appraisers said that the acreage  needed  to  be determined or
confirmed  by  the  Service's  Branch of Surveys and  Maps.  A
Service  official  said  that  some  regions  did  not  obtain
boundary surveys because of the high  cost of contract surveys
and the length of time required  to  contract for and complete
the surveys.

We also identified 32 acquisitions (5,794  acres  acquired for
$20.2 million) in which the appraised values were based on the
number  of  acres  stated  in  deed records but for which  the
boundary  surveys  showed that the  property  consisted  of  a
different amount of  acreage.  In these cases, the Service had
prepared and signed purchase agreements based on a fixed price
for the property independent  of  the actual acreage conveyed.
However, the Service did not  require  that the purchase price
be  adjusted  to reflect the actual acreage  determined  by  a
boundary survey.   As  a result, the Service, in 29 cases, may
have overpaid landowners about  $748,063 because the number of
acres in the appraisals was overstated by about 378 acres and,
in  3 cases,  may  have underpaid  landowners  about  $145,061
because the number of  acres in the appraisals was understated
by about 22 acres.

For example, the boundary  survey reports for two tracts being
acquired for the Stewart B.  McKinney National Wildlife Refuge
identified a total of 316.4 acres  for both parcels.  However,
according  to  the  reports,  163.9 of the  316.4  acres  were
covered by water from various creeks  and  inlets  to the mean
high  water  line  and  should  have  been  excluded  from the
acquisition.   The  Service  paid  the  landowner  a  total of
$627,560 for 316 acres.  However, only 152.5 acres conveyed to
the  Service, as the warranty deeds specifically excluded  the
conveyance of "all portions of said tract which are covered by
the waters of various creeks and inlets to the mean high water
line."   Therefore,  the  Service in effect paid the landowner
$326,749 for acreage that did not convey to the Service.

We believe that in cases where  boundary surveys are required,
the  Service should prepare purchase  agreements  which  state
that the  sales  price  of  the  land is subject to adjustment
based on the results of a boundary  survey,  particularly when
the  variance  in  acreage  in the appraisal and the  boundary
survey is significant.  Such  a  practice  would  protect  the
interests of both the landowner and the Service, ensuring that
the  appraised per-acre valuation is reflected in the purchase
price.

Wetland Easements

The  Service  did  not  ensure  that  wetland  easements  were
obtained  at market value because the values were not based on
current data.   During fiscal years 1995 and 1996, the Service
acquired 462 perpetual  easements on 22,261 acres at a cost of
$3.5  million.   The Service  established  values  of  wetland
easements by applying  valuation factors that were established
in  a 1984 study.  This study  estimated  the  effect  of  the
wetland  easements  on the resale value of easement-encumbered
properties in eight geographic  areas  in  North Dakota, South
Dakota,  and Minnesota.  Based on these factors,  the  Service
developed   wetland   easement   indices   that  provided  for
landowners to receive payments ranging from  30  to 90 percent
of the fee value (the value for outright purchase) of the area
covered by the easement.

Even  though the 1984 study showed that the easements  had  no
statistically significant impact on land values in five of the
eight areas,  the  Service  established  easement indices that
provided for payments ranging from 30 to 60 percent of the fee
value for the five areas.  In August 1990, the Service revised
its  easement  indices,  which provided landowners  a  minimum
payment of 50 percent of the  fee  value  of  their  land  for
easements  on  land  in  the  five nonimpacted areas.  Service
officials  said  that  the  wetland  easement  program  was  a
voluntary program and that the  landowners  would not agree to
the easements if they did not receive sufficient compensation.
However, the Service had not conducted any formal  analysis to
determine whether a reduction in the payments would negatively
affect landowner participation in the program.  Based  on  our
review,  we  concluded that the Service spent about $1 million
to purchase 118 wetland easements on 2,903 acres on properties
which were determined  not  to  be financially impacted by the
easements.  Overall, we concluded  that  the  Service  did not
have  sufficient  assurance that it paid market value for  the
462 wetland easements  it  obtained  at  a total cost of about
$3.5  million  because  the  factors  used  to  establish  the
easements' values were not based on current data.

Recommendations

  We  recommend  that  the  Director,  U.S.  Fish  and  Wildlife
  Service, ensure that:

1.   Requirements  for  preparing,  reviewing,  approving,  and
  updating  appraisals  are followed.  Specifically, the Service
  should obtain appraisals  for  all  land  acquisitions, ensure
  that appraisals are properly reviewed and approved, obtain two
  acceptable appraisals for land estimated to  be valued at more
  than  $750,000,  and  update  appraisals  that are  more  than
  6 months old or document the files to support  the  basis  for
  not updating the appraisals.

2.   Boundary  surveys  are  conducted  in  accordance  with the
  Service's requirements.

3.  Purchase agreements are prepared that provide the Service an
  opportunity to revise the sales price of the property based on
  the  actual  acreage  conveyed,  as  determined  by a boundary
  survey.

4.   An  analysis  is  performed  to update the factors used  to
  establish market value for wetland  easements and to determine
  whether  payments to landowners could  be  reduced  without  a
  significant  negative impact on landowner participation in the
  easement program.

  U.S.  Fish  and   Wildlife  Service  Response  and  Office  of
  Inspector General Reply

  In the September 1,  1998,  response (Appendix 3) to the draft
  report from the Director, U.S. Fish  and Wildlife Service, the
  Service concurred with Recommendations  1  and  2  and did not
  concur  with  Recommendations 3 and 4.  Based on the response,
  we  consider  Recommendations   2   and  4  resolved  but  not
  implemented  and  request  that  the Service  reconsider   its
  response to  Recommendations 1 and  3,  which  are  unresolved
  (see Appendix 4.)

  Recommendation 1.  Concurrence.

    Fish  and Wildlife Service Response.   The  Service  stated,
  "Service  requirements  as currently written have been largely
  followed to date, but we  are  not  adverse  to  updating  and
  clarifying   those   requirements,   when   such  updates  and
  clarifications  are practical and do not conflict  with  sound
  realty practices."   The  Service  further  stated  that it is
  proposing to amend the Appraisal Review Handbook  "to  clarify
  the  distinction  between  `rejected' appraisals and `accepted
  but  not approved' appraisals";  to  specify  that  "when  two
  appraisals are required, both should be acceptable for payment
  as provided  by  the Appraisal Review Handbook"; and to revise
  the expiration time for appraisals from 6 months to 1 year (at
  which time the appraisal  would  be  validated or updated) and
  require  that  the  files be documented to  show  the  actions
  taken.

    Office of Inspector  General  Reply.    Although  the report
  recommended   that   existing   requirements   for  preparing,
  reviewing, approving, and updating appraisals be  followed, we
  believe  that the Service's proposal to amend its Handbook  to
  clarify  or   revise   those  requirements  will  improve  the
  integrity of the appraisal  process.  However, the Service did
  not identify specific actions  for  ensuring  compliance  with
  these  requirements,  such as  issuing a memorandum similar to
  the  memorandum  described   in   the  Service's  response  to
  Recommendation 3.  Accordingly, we consider the recommendation
  unresolved.

  Recommendation 3.  Nonconcurrence.

    Fish and Wildlife Service Response.   The  Service disagreed
  with   the  recommendation,  stating,  "We  perceive   serious
  difficulties with this policy."  The Service also stated:

     We   believe   that  our  current  regulations,
     properly   understood    and    applied,     do
     appropriately   address   this  complex  issue:
     [Those regulations state that]  "[t]he purchase
     price may be negotiated on a lump  sum  or  per
     hectare  (acre)  basis.  Factors that influence
     the choice of approach  are  local custom, size
     of  property,  and reliability of  the  acreage
     estimate.  Generally, a lump sum price offer is
     more acceptable  to  a landowner since there is
     no question as to the  amount  of  money  to be
     paid.   However,  in  case  of large properties
     where  there  is  a  real question  as  to  the
     quantity  of  land involved,  the  per  hectare
     (acre) approach may be the most desirable. . ."

The  Service  further   stated  that  it  will  "issue  a
memorandum reemphasizing the importance of complying with
Service  requirements  and   accentuating  the  need  for
consistent application of current policy."

  Office of Inspector General  Reply.    In  11 of the 32
acquisitions in which there was a difference between  the
appraised  acreage based on deed records and the conveyed
acreage based  on  boundary  surveys,  the difference was
significant  (more than 5 percent). For example,  in  one
case, as described  in  the  report, a landowner may have
received excessive compensation of about $327,000 because
the acreage used in the appraisal  was overstated,  while
in three other cases, the landowners  could have received
additional compensation totaling about  $145,000  if  the
appraisals had been based on the correct acreage.

We  acknowledge  that  the  Service's  policy  allows for
negotiating  the  price on either a lump sum or per  acre
basis.  However, in  our  opinion, the Service should use
the per acre method when boundary  surveys  are  required
under   the   Service's  regulations,  and  the  purchase
agreements should allow for an adjustment of the purchase
price if the boundary  survey  identifies  a  significant
variance in recorded and actual acreage.  We believe that
such a practice would  help ensure that the interests  of
both   the  Service  and  the  landowner  are  adequately
protected.

Recommendation 4.  Nonconcurrence.

  Fish and Wildlife Service Response.  The Service agreed
to perform  the  recommended  analysis and stated that it
would award a contract or contracts  for  a  new  wetland
easement study.  However, the Service also stated that it
"cannot agree that it [the study] should be `to determine
whether  payments to landowners could be reduced.'"   The
Service further  stated  that  it  "will  not commit to a
specific method of measuring Just Compensation, except to
say   that   the   formula  should  consider  appropriate
valuation  factors, and  payments  should  entice  actual
owners to enter into actual agreements under actual, real
world, conditions."

  Office of  Inspector  General Reply. The recommendation
was based on two concerns:  (1) the Service may have been
paying excessive amounts for  wetland  easements  because
the  factors  it used to determine compensation were  not
based on current  market data and (2) the Service had not
performed  a  recent  documented  analysis  to  determine
whether  the  rates   of   compensation  were  more  than
necessary to achieve a satisfactory  level  of  landowner
participation in the program.

Although    the    Service    nonconcurred    with    the
recommendation,  we  believe  that the Service's plans to
contract for a new wetland easement  study  will  address
these concerns  if the  contractor is directed to  ensure
that  the  levels  of  compensation  for "enticing actual
owners to enter into actual agreements" are not excessive
for achieving sufficient participation  in the program to
provide  adequate protection of the wetlands  areas.   We
consider the recommendation resolved but not implemented.

Comments on Audit Finding

The Service  also  provided comments on our finding.  The
Service's comments and our replies are as follows:

General Comments

     Fish and Wildlife  Service  Comments.   In  its
     response, the Service stated:

     The  report  states  that  the Service "did not
     fully comply with its requirements"  in  148 of
     305 acquisitions.  This is incorrect.  While  a
     very   small   number   of   deficiencies   are
     acknowledged,  which  will  be  addressed,  the
     Service  has conducted a credible and effective
     real estate  program.   In the preponderance of
     cases,   the  Service  did  manage   its   land
     acquisition  program  in  accordance  with  its
     written     requirements     and    recommended
     procedures.  The Service takes  issue  with the
     audit's  interpretation and application of  its
     requirements.

     For example,  the  148  cases include 101 cases
     where  the audit merely found  that  appraisals
     over  6  months   old   had  been  used.   Such
     appraisals  can be valid if  market  conditions
     have been stable,  as  they generally have been
     in recent non-inflationary  times.   The report
     says  that  there  was "no indication that  the
     Service had considered updating the appraisals"
     (page 7), but in fact  there  is no requirement
     for this.

     In addition, we take exception  to  the  way in
     which  the  Service  and  Service officials are
     portrayed.  In numerous instances,  the  report
     portrays "Service officials," as caring nothing
     for    Service   regulations,   policies,   and
     procedures.   For  example,  the  report states
     that "Services officials said that they did not
     always  comply  with these requirements  in  an
     effort  to expedite  the  acquisition  process,
     minimize  the  cost of land acquisition, and/or
     provide   landowners    with    incentives   to
     participate  in the Service's `willing  seller'
     land  acquisition  program"  (page  4).   These
     alleged  quotes  do  not represent the views of
     the Service, and they  do  a  disservice to our
     dedicated  career  realty  professionals.    We
     object to this inaccurate presentation.

  Office   of  Inspector  General  Reply.  Regarding  our
statement in  the  draft  report that the Service did not
fully comply with its requirements  in  148  of  the  305
acquisitions  we  reviewed,  we  acknowledge that in some
cases,  the Service's guidance did  not  require  certain
actions.   Specifically,  although the Service's Handbook
(1) states that the Service should "consider updating any
appraisal over 6 months old,"  it  does  not require that
this   action  be  documented;  (2)  requires  that   two
appraisals  be  obtained  in  certain  cases, it does not
require  that  both  appraisals  be acceptable;  and  (3)
requires  boundary  surveys to be conducted  for  certain
acquisitions, it does  not  require   that  the  purchase
price  be adjusted if the boundary survey indicates  that
the acreage  used  to  establish  the  purchase price was
significantly   understated   or  overstated.   We   have
clarified  the  report  (page 5)  to   state   that   the
deficiencies    related    to   these   procedures   were
attributable to insufficient  requirements rather than to
noncompliance  with existing requirements.   However,  we
believe that these  procedures should be mandatory rather
than discretionary.

We disagree with the Service's statement that "appraisals
[over 6 months old] can  be  valid  if  market conditions
have been stable, as they generally have  been  in recent
non-inflationary  times" because there are factors  other
than inflation that  could  affect  the  validity  of the
appraisals, such as zoning changes and market conditions.
We  further  disagree  with  the  Service's position that
there is no need  to review appraisals  which are in some
cases  3  years  old  because market conditions  remained
stable.  We  question  how  the  Service  can  determine,
without  reviewing  the appraisal,  that  the  conditions
cited   in   the   appraisal    have   remained   stable.
Furthermore, the files did not contain  any documentation
to show that appraisals more than 6 months  old  had been
reviewed.   Consequently,  we could not determine whether
the appraisals (some of which were more than 3 years old)
had been reviewed to determine  whether  they  were still
valid.

Regarding the Service's  statements pertaining to  quotes
in  our  report  "not  represent[ing]  the  views  of the
Service"  and to the quotes "do[ing] a disservice to  our
dedicated career  realty  professionals," the report does
not  state or imply that the  statements  made  by  these
individuals represented the official views or position of
the Service. These statements are not "alleged " but were
made by these individuals during the audit in response to
our questions  as  to  why  certain  procedures  were not
followed.   The statements are documented in the form  of
memoranda for the record in the audit working papers.

Appraisal Preparation

     Fish  and   Wildlife   Service  Comments.   The
     Service stated:

     Of  the  6 cases cited as  deficient,  one  was
     apparently an instance where the audit team was
     unable to  identify  the  appraisal because the
     name  of the seller had changed.   Others  were
     instances  where  the appraisers had prepared a
     "memorandum  of  value"   or   "value  opinion"
     instead  of an appraisal, and one  was  a  case
     where the appraisal had been made but could not
     be  located.   While  any  deviation  from  the
     Service's  appraisal  policy  is a concern, the
     audit indicates that the Service  complied with
     its   appraisal  preparation  policy  over   98
     percent of the time.

  Office of  Inspector  General  Reply.   Regarding   the
Service's  statement  pertaining  to  our audit not being
able to identify the appraisal "because  the  name of the
seller had changed," we found that  the appraisal was not
in the acquisition files for this transaction during  our
field  visit  to the Southeast Region  in March 1997, and
we asked the Regional  officials to locate the appraisal.
The  officials were not able   to  provide  us  with  the
appraisal  by  the time of our audit survey exit briefing
in April 1997.   However,  the  Service did  provide us a
copy of the appraisal at our May  1998  exit  conference.
Accordingly, we have revised the audit report (page 6) to
indicate   that   only  one  appraisal  rather  than  two
appraisals was not provided to us.

Regarding the  four  acquisitions  for which an appraisal
was not obtained, we acknowledged in  the report (page 6)
that  the Service had prepared either an  "assessment  of
value"  memorandum  or a "value opinion" for establishing
market  value of the property.  However,  preparation  of
these documents  in  lieu of obtaining a formal appraisal
is  not  an  acceptable  practice   under  the  Service's
Handbook.

Two Appraisals

  Fish  and  Wildlife  Service  Comments.    The  Service
disagreed with our finding concerning compliance with its
policy   for   obtaining   two   appraisals  for  certain
acquisitions.   Specifically,  the  Service  stated  that
there is no specific requirement that  both appraisals be
"accepted."   The  response stated, "The purpose  of  the
Service's two appraisal  policy  is to obtain an approved
appraisal in which the Service can  have  confidence.  An
appraisal  that  is not `acceptable' due to one  or  more
flaws can still provide secondary facts and opinions that
increase  the  Service's   confidence   in  the  approved
report."

Regarding the examples in the report, the Service stated:

     We  note  that  in  the  first  case these  two
     appraisals support one another, being less than
     five percent divergent from the mean,  and  the
     final  approved  value  was  bracketed  by  the
     appraisals   and  diverged  by  less  than  2.5
     percent from their  average.   We wish that all
     valuation efforts were this unequivocal.

     In  the second case, the report contends  that:
     "Although  the  Appraisal  Handbook states that
     updating appraisals `is a matter  of  appraisal
     judgment,' it also states that conditions  such
     as  `a  change  in the highest and best use ...
     will require a full reappraisal'" (page 6).  As
     a matter of fact,  the  Appraisal Handbook does
     not say that.  The Appraisal Handbook says: "It
     is possible that long delays  in  negotiations,
     radical changes in the marketplace,  or changes
     in  highest  and best use of the property  will
     require a full  reappraisal.   This is a matter
     of appraisal judgement."

     Regarding  the specific example,  the  reviewer
     first took the conservative course by accepting
     and  approving   the   lower  appraisal.   When
     subsequent  events  pointed   to   the   higher
     appraisal  as  the  better measure, the Service
     ordered  an  update  of  that  appraisal  -  as
     opposed to a certainly  more expensive, but not
     necessarily  more reliable,  full  reappraisal.
     As stated in the Appraisal Handbook, this was a
     matter  of  appraisal   judgment.   Since  that
     updated appraisal was approved, which certainly
     shows acceptance and expurgation of the earlier
     "rejection," the Service  did indeed obtain two
     acceptable  appraisals  in  support   of   this
     acquisition.

  Office of Inspector General Reply.  We acknowledge that
the Service's guidance does not specifically require both
appraisals to be "acceptable" and have revised the report
accordingly  (page  7).   However,  we  believe  that the
Service should require both appraisals  obtained and used
to   establish   just   compensation   during   the  land
acquisition  process  (whether  from  a  contractor or  a
Service appraiser)  to be acceptable products  that  meet
appraisal standards and provide a supportable estimate of
market  value.  The Service cited the expensiveness of  a
reappraisal  as  a  reason  for  some of the instances of
deviating  from  existing  procedures,  but  the  Service
appears  to  be  willing to bear  the  full  cost  of  an
unacceptable appraisal.   Even  though,  in the Service's
opinion,  a  flawed appraisal can increase the  Service's
confidence in  the  approved  appraisal,  we believe that
the  Service,  if  it   is going to incur the expense  of
obtaining an appraisal  from  a  contractor  or a Service
appraiser,  should  make  the most efficient use  of  the
funds and obtain a product  that meets standards and also
provides   as  much useful and  accurate  information  as
possible.

Regarding the Service's  comments  on  the  first example
that the difference between the two appraisals  was small
and that the appraisals support one another, there  was a
difference of  $120,000 (over 10 percent) between the two
appraisals.   In addition, the main point of this example
was not to show the difference between the two appraisals
but  to  show  that   even  though  two  appraisals  were
obtained,  the  just  compensation   established  by  the
Service  was  not  based  on  an  accepted  and  properly
approved appraisal.

Concerning  the  second example, we acknowledge  that  an
update  of the originally  rejected  report  in  lieu  of
replacing  it with a new appraisal was acceptable, and we
have revised   the  report  (page 8) to remove statements
that took exception to the update.   However,  we  do not
agree  that the Service met its two-appraisal requirement
on this  acquisition.   Since  more  than   2  years  had
elapsed and there was a significant change in conditions,
the  other  appraisal  citing  a  value of $2.26 million,
which was obtained in late 1991, was  not  valid in 1994.
In our opinion, the Service should have obtained  another
current appraisal.

Appraisal Review and Approval

  Fish  and  Wildlife  Service  Comments.   Regarding the
finding   pertaining   to   the  Service  not  performing
appraisal  reviews  in  some  cases   and  to  the  Chief
Appraiser not approving the fair market value established
by  the  review  appraisers in other cases,  the  Service
stated:

     In the first  category,  there  were apparently
     some reviews that were overlooked in the audit.
     In the second category, there were reviews that
     were   not   acknowledged  because  they   were
     performed by other  regional reviewers, not the
     Chief Appraiser.  While  these  reviews may not
     have   been   done  at  a  "higher  level"   as
     technically required  by  Service  regulations,
     they   were   performed   by  competent  review
     appraisers and the spirit ,  if not the precise
     letter,  of  the appraisal review  mandate  was
     followed.

  Office of Inspector General Reply. Based on  additional
information provided  by  the  Service  during  the  exit
conference  in May 1998, we have revised our report (page
8) to state that  appraisal reviews were not performed in
two,  rather  than  four,   of  the  cases  we  reviewed.
Concerning the three cases in  which  the Chief Appraiser
did  not  approve  the  values  established   by   review
appraisers,  we  acknowledged  that  for  two  cases, the
review  appraiser's  value  was reviewed and approved  by
another regional review appraiser.   However, because the
designated  higher-level official, the  Chief  Appraiser,
had not approved the appraised value, the reviews did not
receive the level  of scrutiny established by regulation.
Therefore, we do not  agree  with the Service's statement
that the "spirit . . .  of the  appraisal review mandate"
was followed.  In the remaining case  (Tract  #29 at Bald
Knob  National  Wildlife  Refuge), the review appraiser's
established  value  was  not  reviewed  and  approved  by
another review appraiser or by the Chief Appraiser.

Appraisal Updates

  Fish  and  Wildlife  Service Comments.   Regarding  the
Service's   compliance   with    the   requirement   that
consideration  must  be given to updating  any  appraisal
over  6  months  old,  the   Service   stated   that  the
appropriate  considerations  were  given  but  that these
considerations   were  not  documented  because  "Service
regulations . . .  do  not  require  the  creation of any
additional   documentation  when  appraisals  are   still
valid."  The Service  further  stated,  "The  absence  of
supplemental  updates  as  required  by  the  Handbook is
evidence that such changes were unnecessary."

  Office  of  Inspector General Reply.  We have clarified
our report (page  9)  to  acknowledge  that the Service's
guidance does not require documentation  to  be  prepared
to  support  that  appraisals  over  6  months  old  were
considered   for  updating.   However,  we  believe  that
requiring documentation  of  update  consideration  is  a
necessary  internal  control mechanism to ensure that the
procedures are followed.   We disagree with the Service's
statement that "the absence  of  supplemental  updates is
evidence that such changes were unnecessary" because,  in
the  absence of documentation, there is no assurance that
the appraisals  were even reviewed.  However, in response
to our recommendation,  the  Service  said  that it would
include the appropriate documentation in its files.

Boundary Surveys

  Fish  and  Wildlife  Service  Comments.  Regarding  the
Service's  practice of using the  "lump  sum price offer"
approach and purchasing land on the basis of deeded acres
as  opposed  to  acres  defined by boundary surveys,  the
Service stated:

     It is not our policy to uniformly base payments
     on  boundary surveys,  nor  is  it  a  commonly
     accepted    real    estate    practice.    Land
     acquisition payments are not invariably made on
     the basis of the surveyed acres,  and precision
     in the measurement of acquired tracts  does not
     necessarily   increase   the   reliability   of
     valuations.   In  some  markets,  it  is common
     practice  to  buy  and  sell property based  on
     deeded  acres;  in  other markets,  tracts  are
     bought and sold based on lump-sum negotiations;
     and in others, custom dictates a formal survey.
     The Service  Manual states  that  "the purchase
     price  may be negotiated on a lump sum  or  per
     hectare (acre)  basis . . . .  Generally a lump
     sum  price   offer  is  more  acceptable  to  a
     landowner since  there is no question as to the
     amount of money to  be  paid."   The  report is
     interpolating and presuming regulations that do
     not  actually  exist;  it  did  not  apply  the
     Service's  regulations  as  they are written in
     the  Service Manual.  The report's  citation  -
     that the  Service  bought  land on the basis of
     deeded  acres  as opposed to boundary  surveyed
     acres - is not a violation of Service policy or
     of sound realty practices.

  Office of Inspector  General  Reply.   We reported that
the Service did not obtain boundary surveys  in 10 of the
52  acquisitions in which boundary surveys were  required
and that  the  Service  therefore did not have sufficient
assurance that it paid market value for these
acquisitions.  For the 32  acquisitions  in  which  there
were  differences  between the deeded acreage and acreage
identified by boundary  surveys,  we  concluded  that the
Service may not
have  paid  market value in these cases.  We have revised
the report (page  9) to clarify that the Service does not
require  the purchase price to be adjusted to reflect the
actual  acreage  determined   by   the  boundary  survey.
However,  we  concluded that the Service,   in  order  to
better protect  the interests of both the Service and the
landowner, should  establish  a requirement that purchase
agreements  provide for the adjustment  of  the  purchase
price in instances  where  the variance in the acreage in
the appraisal and the boundary survey is significant.

Wetland Easements

  Fish  and  Wildlife Service  Comments.   Regarding  our
  statement that wetland easement payments were not based
  on  current data,  the  Service  said,  "This  is  only
  partially  true."   The  Service further stated, "While
  the base study dates from  1984,  the  payment  formula
  requires the input of current market land values."  The
  Service  further  stated  that the study "was revisited
  and revalidated by a review  committee  in  1992."  The
  Service also stated:

       We are in agreement that it is nearly time to
       revisit  and  update  the  wetlands  easement
       study,  but  we do not agree that the Service
       lacks assurance that it was paying fair value
       for its wetland easements. . . .  About 30 to
       40  percent of  the  landowners  who  inquire
       about  wetland easements subsequently decline
       to enroll  their  land.  .  . .  It is simple
       economics:   if   the  Service  were   indeed
       offering more than  market  value, landowners
       would not be turning the offers down.

  Office of Inspector General Reply.   We were aware that
  the 1984 study was evaluated by a  review  committee in
  1992, which concluded that the process was still valid.
  However,  based  on  the memorandum that resulted  from
  that effort, there was  no  indication  that the review
  committee  had  updated  the regression analysis  using
  current market sales data.   In  addition, officials at
  the  Denver  Region  said that the regression  analysis
  which served as the basis  for the factors developed in
  the  1984 study had never been  updated  using  current
  market sales information.

  Regarding  the  statement  made by the Service  that it
  was  not  offering  more  than market  value  based  on
  "simple   economics"  because   landowners   were   not
  accepting the Service's offers on wetland easements, we
  were not able  to reach this same conclusion because we
  had no information  supporting  why landowners declined
  to enroll their land in the Service's  wetland easement
  program.    There   are   other   factors   that  could
  potentially   affect   a  landowner's  willingness   to
  participate in the program,  such  as   the landowner's
  willingness   to  work  with  the  Federal  Government,
  conservation programs  and  state and local regulations
  concerning  wetlands, and a landowner's  reluctance  to
  place  land under  easements  that  restrict the use of
  those lands.

  **FOOTNOTES**

[5]:The Fish and Wildlife Service Manual  (342  FW  2.5)
states  that a report  is  an  "acceptable  document"  if
it  "adequately  supports  a reasonable and rational estimate
of value."

[6]:We  found  that  3  of the 31 acquisitions (2,099 acres at
a cost of $1.88 million) were deficient  in both areas
(noncompliance with Service guidelines and not having two
acceptable appraisals).

[7]:For the remaining six cases,  the higher value was approved
and paid in four cases, the higher value was approved but the
Service acquired the land at less than the appraised value in
one case, and both appraisals resulted in the same value in the
remaining case.


E-IN-FWS-001-97

B.  PAYMENTS TO LANDOWNERS

The U.S. Fish and Wildlife Service did not  ensure that
payments  to  acquire  grassland conservation easements
and refuge land were necessary  and  appropriate.   The
Service's  land  acquisition  guidance does not provide
for payments to landowners for  future  or  prior  year
property  taxes or for weed control expenses.  However,
Service officials  said  that  they paid landowners for
these  costs because they believed  that  the  payments
were necessary  to  fully compensate the landowners for
the  easements.   Also,   although   the   Service  had
established    procedures    for    transacting    land
acquisitions  with  nonprofit organizations, it did not
provide sufficient oversight  to  prevent  payments for
unallowable  or unsupported expenses or to ensure  that
procedures for  acquiring land from these organizations
were   followed.    As    a    result,    the   Service
inappropriately   paid   22  landowners  $207,425   for
expenses  related to grassland  conservation  easements
and compensated 3 landowners $66,504 for  expenses that
were not the  liability  of  the Service.  In addition,
the  Service  reimbursed  nonprofit  organizations  for
costs   of  $438,680  that  were   unsupported   and/or
ineligible  for  reimbursement  under letters of intent
(16 acquisitions) and for costs of  $189,322  that were
ineligible for reimbursement without letters of  intent
(14 acquisitions).

Grassland Easements

In  acquiring  grassland easements, the Service's North
Central Region inappropriately  compensated  landowners
for  future  property  taxes ($79,943) and future  weed
control  costs ($127,482)  related  to  the  easements.
Regional officials  said  that these payments were made
because, under the grassland  easement  agreements, the
landowner is required to pay property taxes and control
weeds,  even  though the land may have little  economic
value  because  of   the   easements'  restrictions  on
agricultural use.

In fiscal years 1995 and 1996,  20  of the 22 grassland
easements acquired by the North Central Region included
compensation  totaling  $79,943  for  future   property
taxes.[8]   According  to  staff appraisers, provisions
for  tax payments were not included  in  two  grassland
easements because easement restrictions would lower the
property  values,  thus  reducing  taxes.   Because the
Service  had  not  determined what effect the easements
would  have on the property  values  of  the  20  other
landowners,  we  consider  the  compensation for future
taxes to be inappropriate.  Furthermore,  we found that
this practice was inconsistent with that of  the Denver
Region,  which  obtained  grassland  easements  without
paying  the landowners for these expenses.  During  our
review, the  North Central Region's Chief of the Realty
Division said  that the Region was going to discontinue
the  practice of  compensating  landowners  for  future
taxes because it had determined that the land does have
economic value, even if the land is under easement.

In  fiscal  years  1995  and  1996,  the  22  grassland
easements   acquired   by  the  North  Central   Region
provided  payments totaling  $127,461  for  future weed
control  costs.[9]   We  believe  that  these  payments
should  be  discontinued  because  the  landowners  are
required  to  control  weeds under county requirements.
Therefore, these costs are  not incurred solely for the
benefit of the Federal Government.

Rollback Tax Payments

The  Service's  Real  Property  Manual   (Part  342  FW
4.15K(3))   states,    "The   owner   is  entitled   to
reimbursement  of the pro rata portion of  any  prepaid
real property taxes  which  are allocable to the period
after the United States obtains  title  to the property
or effective possession of it, whichever  is  earlier."
However, to facilitate the acquisition of three  tracts
of land for the Wallkill River National Wildlife Refuge
in  New  Jersey  in  October 1994 and January 1995, the
Service's Northeast Region  reimbursed  landowners  for
taxes  that were assessed on the properties in November
1993 for  tax  years  1991,  1992, and 1993 (before the
Service  acquired the property).   The  rollback  taxes
were assessed  by  the County Board of Taxation because
the owners had removed  their  land from the New Jersey
Farmland Assessment Program and   their  land  had been
reclassified  from  general  farming use to residential
subdivision  use  (prior to the  Service's  appraisal).
Since the property  taxes  were assessed for the period
before  the  landowners started  negotiating  with  the
Service and before  the  Service took possession of the
land, we concluded that the landowners were compensated
$66,504  for  expenses that  were  liabilities  of  the
landowners and not the Service.

Nonprofit Organizations

In August 1995,  the  Department of the Interior issued
"Clarifications  to  August  10,  1983  Guidelines  for
Transactions   Between  Nonprofit   Organizations   and
Agencies of the  Department  of  the  Interior,"  which
provided  guidance  on real estate transactions between
Departmental bureaus  and nonprofit organizations.  The
guidance   pertained  to  land   purchases   transacted
pursuant to  letters  of  intent,[10] which establish a
cooperative arrangement between  a Federal agency and a
nonprofit organization that "intend[s]  to acquire land
for subsequent conveyance  to  a  Federal agency."
According  to  the guidance, letters of intent should
disclose the nonprofit organization's estimated purchase
price or other consideration for the land and the
Service's purchase price should be either (1) the fair
market value of the property based on an approved
appraisal or on "such lesser figure at which the
nonprofit organization offers to sell the property" or
(2) the nonprofit organization's cost to acquire the
property at an amount "not to exceed the appraised fair
market value . . . plus related and associated expenses
from a list  approved by the Assistant Secretary for
Policy, Management and Budget." The second option
provided for the payment  of a "predetermined overhead
cost" if such cost was authorized  "in  special  cases
subject to the approval of the Secretary.
"  Furthermore,  the guidance stated  that nonprofit
organizations "must be  able  to document  and
substantiate all expenses claimed in the transaction."

Prior to August  1995,  the Service had issued guidance
on  reimbursing  nonprofit   organizations   for   land
acquisition costs when the organizations operated under
letters  of  intent.   In 1990, 1992, and 1993 guidance
("Policy and Operating Procedure  for  Cooperative Land
Acquisition  Projects Involving Nonprofit  Conservation
Organizations    (NCO),"   "Non-Profits,   Reimbursable
Costs," and "Status  on  Reimbursable  Costs  with Non-
Profits,"   respectively),   the   Service  established
reimbursement  policy comparable to that  contained  in
the August 1995  Departmental  guidance.   In addition,
the Service guidance (1) stated that to be eligible for
reimbursement    of   direct   costs,   the   nonprofit
organization  should   identify  these  costs  "at  the
beginning  of  the  acquisition";   (2)   provided  for
overhead  cost reimbursement of "up to 15 percent"  but
stated that  the nonprofit organizations had to justify
the need to pay  these  costs in disclosure statements;
and (3) required "full disclosure  of  the specifics of
the  nonprofits' purchase [price]" before  the  Service
would  accept  and reimburse the nonprofit organization
for the  land.   Also, the Service's policy stated that
if a nonprofit organization  bought  land  at less than
market value, the organization should be "encouraged to
transfer   the  property  at  the  reduced  price  plus
reasonable direct  expenses.   This enables the savings
to   be   applied   to  other  Service  high   priority
acquisitions."

Letters  of  Intent.   In   our   review   of  51  land
acquisitions  transacted  with nonprofit organizations,
we found that 24 acquisitions  for  $12.2  million were
made  pursuant  to  letters of intent.  In 16 of  these
transactions that had  total  acquisition costs of $4.9
million,  we  found  that the Service  had  compensated
nonprofit organizations  $438,680  for  costs that were
unsupported  or  ineligible  for  reimbursement   under
Departmental  and  Service guidance.  Specifically, the
Service reimbursed the organization for direct costs of
$64,306 that were undocumented  and  for indirect costs
of $356,627 that were not adequately justified  by  the
organizations,  and  it  paid  expenses  of  $17,299 in
addition  to  the  fair  market value of the properties
without  obtaining  the  required  information  on  the
organization's purchase price. Also, the Service paid a
nonprofit  organization  $448   more  than  the  amount
authorized  under  either  of the two  payment  options
described in the Department's guidelines.[11]

No Letters of Intent.  We also reviewed 27 acquisitions
for $16.3 million that were  transacted without letters
of  intent.   Since neither the  Department's  nor  the
Service's guidelines  apply  to  acquisitions  that are
made  without  letters  of  intent, we considered these
acquisitions  not  to  be  subject   to   the   special
regulations  that  pertain  to  nonprofit organizations
operating  under letters of intent.   In  14  of  these
transactions that had  total acquisition costs of $12.1
million, we  found  that the Service had reimbursed the
nonprofit  organizations  for   costs  of  $189,322  in
excess  of  fair  market  value.   These  costs,  which
compensated nonprofit  organizations for their reported
direct and indirect costs to acquire the land, were not
reimbursable  to  landowners   other   than   nonprofit
organizations.   Therefore, we believe that such  costs
should not be reimbursable  to  nonprofit organizations
unless the organizations are operating under letters of
intent. Moreover, in 8 of the 14  cases,  the nonprofit
organizations had not documented the expenses  and thus
may  not  have qualified for reimbursement had a letter
of intent been issued.

Potential  Savings.    Under   the  Uniform  Relocation
Assistance and Real Property Acquisition  Policies  Act
of  1970  (Public  Law  91-646),   Federal agencies are
required  to offer landowners just compensation  (based
on the appraised fair market value).  However, in 10 of
the 27 fee  acquisitions  in  which  the  organizations
disclosed the purchase price, we found no documentation
to  show  that  the  Service  had  attempted to acquire
property at amounts less than fair market value despite
the  Service's  1993  reemphasis of its  1990  guidance
encouraging such efforts.   In these cases, the Service
had an opportunity to reduce  costs  by  negotiating  a
purchase  price  at  an  amount  that  compensated  the
organizations  for  their  acquisition costs (land plus
acquisition-related expenses) rather than at the lands'
fair market value.  For example, in one transaction, an
organization disclosed that  it had bought the property
for $369,750 and reported transaction-related  expenses
of  $884.   However,  the Service paid the organization
$870,000 for the fair market  value of the property and
$884  for  direct  costs,  or $500,250  more  than  the
organization's reported cost  to transact the sale.  We
found no documentation to show  that  the  Service  had
encouraged  the  organization  to sell the land at less
than fair market value.  Although this land acquisition
was proper, we believe that the transaction illustrates
the potential savings that could  be  obtained  if  the
Service   sought   to   acquire   land  from  nonprofit
organizations at cost plus related expenses rather than
at fair market value.

Recommendations

We recommend that the Director, U.S.  Fish and Wildlife
Service, ensure that:

1.  The practice of compensating landowners  for future
property  taxes  and  weed  control costs of properties
that are under grassland easements is discontinued.

2.   The  practice  of paying landowners  for  rollback
property taxes which  are  not  the  liability  of  the
Service is discontinued.

3.   Acquisitions involving nonprofit organizations are
conducted  in  accordance with  Departmental guidelines
regarding letters  of  intent  and  reimbursements  for
direct and indirect costs.

4.    Efforts   are   made   to   encourage   nonprofit
organizations  to  transfer land at a reduced price  if
the nonprofit organizations  bought  the  land  at less
than fair market value and that such efforts to achieve
savings are documented.

U.S.  Fish and Wildlife Service Response and Office  of
Inspector General Reply

In  the    September  1, 1998,   response  (Appendix 3)
to the draft  report  from  the Director, U.S. Fish and
Wildlife   Service,   the   Service    concurred   with
Recommendations  2,  3, and 4 but did not  concur  with
Recommendation 1. Based  on  the  response, we consider
Recommendations    2,  3,  and  4  resolved   but   not
implemented and request that the Service reconsider its
response to Recommendation  1, which is unresolved (see
Appendix 4).

Regarding Recommendation 1, the  Service stated that it
was  not  paying  for future property  taxes  and  weed
control costs, as stated in the report, but that it was
"considering  the  impact   of   legitimate   operating
expenses  when  preparing its appraisals."  The Service
further stated:

     Resales of properties  -  i.e., the emergence
     of  empirical  data  addressing  the  "after"
     values  of  lands  placed   under   grassland
     easements   -   have   made   this  appraisal
     technique  unnecessary.  However,  we  cannot
     agree to always  exclude the consideration of
     these  operating expenses,  to  do  so  would
     result  in   a  departure  from  the  Uniform
     Appraisal Standards,  and would most probably
     be  a  violation  of  the  Just  Compensation
     provision of P.L. 91-646.

Although the Service stated that "resales of properties
. . . have made this appraisal technique  unnecessary,"
the Service did not clearly state whether it  was going
to  discontinue  this  method  of payment for grassland
easements  in  the  North  Central  Region  or  provide
information on the circumstances under  which  it would
be  appropriate  to  fully  compensate  landowners  for
property taxes.

Comments on Audit Finding

The  Service also provided comments on the finding. The
Service's comments and our replies are as follows:

Grassland Easements

Fish  and  Wildlife  Service  Comments.    The  Service
disagreed with the finding that compensating landowners
for future  property  taxes  and weed control costs was
inappropriate.  The Service stated that Region 3 (North
Central Region) had projected  that  grassland easement
enrollees  would   incur  negative cash flows  "due  to
future property taxes and future  weed  control  costs,
which continued to be the responsibility of the seller,
even  though  the  economic utility of the property had
been largely severed  by  the  easement."   The Service
further stated:

     The  value  of  the  property  in its "after"
     condition  was not equal to the preliminarily
     estimated value  derived from analysis of the
     cover  types,  prior   to   considering   the
     economic    effect    of    these    specific
     liabilities.    In  order  to  estimate  Just
     Compensation,  which  by  definition  is  the
     total loss in value suffered by the property,
     these liabilities had to be accounted for.

     The  items  in  question  are  classified  as
     operating expenses, which are routinely taken
     into  account when  valuing  income-producing
     property such as a farm, apartment, or office
     building.   Regarding  operating  expenses, a
     definitive  real  estate appraisal text,  The
     Appraisal   of   Real   Estate,    says:   "a
     comprehensive analysis of the annual expenses
     of property operation is essential. " And the
     Uniform  Standards  of Professional Appraisal
     Practice   (USPAP)   require    that,    when
     applicable,   an   appraiser  must  "collect,
     verify, analyze, and  reconcile  .  .  . such
     comparable  operating  expense  data  as  are
     available  to estimate the operating expenses
     of the property being appraised.

     The elements  in  question  do not constitute
     unsanctioned   payment  to  landowners,   but
     legitimate components  of  Just  Compensation
     that   were   included   in  the  appraisals,
     approved by the appraisal review process, and
     included   in   the   statements    of   Just
     Compensation.   The report does not recognize
     the  common  and  appropriate   practice   of
     considering operating expenses when valuing a
     property.

Additionally,  the  response  stated  that  Region  3's
grassland easements "are substantially more restrictive
than  those taken in Region 6 (Denver Region), and that
comparison of the two programs is not valid."

Office of Inspector General Reply.  As we stated in our
report,  the North Central Region's Chief of the Realty
Division said  that the Region was going to discontinue
the  practice of  compensating  landowners  for  future
taxes because it had determined that the land does have
economic value, even if the land is under easement.  In
addition, the Service, in response to Recommendation 1,
stated  that  this  appraisal  technique is unnecessary
"due to the emergence of empirical  data addressing the
`after'   values  of  lands  placed  under    grassland
easements."  We  believe  that  this  statement further
indicates that the property has economic value.

Though the grassland easements restrict  the use of the
land,  we  noted  that  some  use of the land is  still
allowed under the easements.  However,  the  appraisals
did  not consider any income potential remaining  after
the grassland  easements were implemented.  As such, we
believe  that  it  was  inappropriate  to  relieve  the
landowners of the  entire  tax  burden on the  easement
areas because the areas still had  economic  value.  In
addition,  as  stated  in  our  report  (page  20), the
appraisers  in  two  cases  confirmed that the property
taxes  would be reduced as a result  of  the  grassland
easements.   However, for the other 20 cases, there was
no indication  that the appraisers confirmed whether or
not  the  taxes  would  be  reduced,  even  though  the
appraisers stated, "Because the easement area no longer
produces  any  steady   income,  the  taxes  should  be
reduced, but they probably will not."

The  North  Central  Region's   method  of  calculating
payments  to  landowners for grassland  easements   was
inconsistent   with   the   Denver   Region's   method.
Specifically,  the  North  Central  Region's  grassland
easements were more restrictive by prohibiting grazing,
but the Denver Region  did  not factor in taxes or weed
control payments, even though there were some losses of
value.  We did not consider this additional restriction
on  grazing  to be  sufficient  justification  for  the
North Central  Region's  practice  of  factoring in the
full cost of taxes and weed control. If  there  was  no
decrease in taxes and no income potential, some portion
of  the  taxes  and weed control could be factored into
the North Central Region's grassland easements, but not
the entire amount.

Nonprofit Organizations

Fish and Wildlife Service Comments.  The Service stated
that a number of  land  acquisitions  discussed  in the
report   were   completed   or  started  prior  to  the
Department's August 1995 guidance  and  that  therefore
"the  rules  that the Service was operating under  were
not those of the August 28, 1995, memorandum."

Office of Inspector General Reply.  As we stated in our
report  (page  22),   the   Service,   prior   to   the
Department's  August  1995 guidance,  had guidance that
was comparable and that   included other considerations
not included in the Department's  1995  guidance.   The
acquisitions  were  evaluated  using  the  guidance  in
effect at the time of the transaction.

Fish   and  Wildlife  Service  Comments.   The  Service
disagreed with the finding that it reimbursed nonprofit
organizations for costs of $189,322 that were in excess
of fair market value, stating:

     In   the  cases  of  nonprofit  organizations
     operating   without  letters  of  intent,  we
     believe that  many  of  the  direct costs are
     indeed  reimbursable under P.L.  91-646.   No
     itemization of the costs were provided in the
     report, but many of these reimbursements were
     for legitimate costs such as tax recompenses,
     relocations   expenses,  closing  costs,  and
     other  expenses   legitimately   reimbursable
     under the law.

Office  of  Inspector  General  Reply.   Regarding  the
Service's  disagreement  with  our statement  that  the
Service paid ineligible costs of  $189,322 to nonprofit
organizations which operated without letters of intent,
the  costs in question were costs associated  with  the
nonprofit organizations' original acquisition or option
costs,  not  the  costs  of selling or transferring the
land  to  the  Government.  For  example,  the  Service
reimbursed a nonprofit  organization  for appraisal and
survey  costs,  overhead,  and  other  costs   totaling
$47,409  that were related to  two tracts on which  the
organization  had  obtained a purchase option. However,
the nonprofit organization  transferred  the  option to
the Service, which purchased the land directly from the
landowner.   We   believe   that  these  payments  were
inappropriate   because  the  Service   purchased   the
property directly  from the landowner, and there was no
letter of intent for  this transaction authorizing such
payments. Also, the Uniform  Relocation  Assistance and
Real Property Acquisition Policies Act of  1970 (Public
Law 91-646) allows for reimbursement of relocation  and
replacement housing expenses applicable at the time the
Government is acquiring the real property, not expenses
incurred  by  landowners  when they originally acquired
the real property.

Fish and Wildlife  Service  Comments.
The Service disagreed with the statement that  we found
"no documentation to show that the Service had attempted
to acquire property from nonprofit organizations at less
than  fair  market  value."  The Service cited examples
where   it  had  acquired   property   from   nonprofit
organizations  at  less  than  the  appraised value and
stated:

     There  are  many other cases where  nonprofit
     organizations   have   made  substantial  and
     valuable  donations to the  Service.   During
     the period  of  time  covered  by  the audit,
     nonprofit  organizations  donated  23  tracts
     totaling 16,662.33 acres to the Service to be
     used for the public good.

Office of Inspector General Reply.  We acknowledge that
the  Service  has  been  successful  in acquiring  land
through   donations   from   nonprofit   organizations;
however,  donations  were not within the scope  of  our
review.  We have clarified  the  report  (page  23)  to
state  that  we  found no documentation to support that
the Service had attempted to acquire
property at amounts  less than fair market value for 10
of  the  27  fee acquisitions  reviewed  in  which  the
nonprofit organizations disclosed the purchase price to
the Service.

FOOTNOTES**

[8]:The Service computed the amount of the lump-sum
payment for property taxes by estimating the amount
of the annual tax on the land under the easement
and dividing the annual  tax amount by the 1-year
U.S. Treasury bill interest rate in effect at the
time of appraisal. The Service said that this method
would provide sufficient compensation to the
landowner if the lump-sum payment was invested in a
Treasury bill and the interest earned each year was
used to pay the taxes. Property tax and weed control
(discussed in footnote 9) compensation was included
in the appraisals as part of the just compensation, as
determined by North Central Region personnel.

[9]:The Service computed the amount of the lump-sum
payment for weed control in a manner similar to that used
to calculate the payment for taxes. The annual weed control
cost was estimated by multiplying the total number of acres
under the easement by the estimated annual maintenance cost
per acre.

[10]:According to the Department's guidelines, a letter of
intent should be used whenever (1) a nonprofit organization
seeks prior assurance from a Federal agency that the agency has
an interest in and an intent to take conveyance of land
acquired by a nonprofit organization or (2) a Federal agency
requests the assistance of a nonprofit organization in a
proposed acquisition.

[11]:Although we identified reimbursed costs that were
unsupported or ineligible for payment in 16 acquisitions,
some reimbursements were classified in more than one category
of questioned costs. For example, there were 13 instances in
which costs were not supported or indirect costs were not
approved, 5 instances in which the purchase price was not
disclosed and payments were made in excess of fair market
value, and 3 instances in which the purchase price was not
disclosed but no payments were made in excess of fair market
value. There was one instance in which payment was made for
more than the amount authorized under either of the two
payment options.

E-IN-FWS-001-97

C.  CONTAMINANT SURVEYS

The  U.S.  Fish  and  Wildlife  Service's North Central
Region   acquired   two   tracts  of  land   that   had
environmental  contaminants   without   obtaining   the
required  Departmental   approvals.   The Department of
the  Interior's  Interim Guidance on Implementation  of
Secretarial Order 3127 and the Departmental Manual (602
DM  2)  require  potential   land  acquisitions  to  be
reviewed to determine whether  hazardous substances are
present.  The Guidance requires  the   approval  of the
Assistant Secretary for Fish and Wildlife and Parks and
the  Assistant  Secretary  for  Policy,  Management and
Budget  for  acquisitions of land on which contaminants
have been identified  and which have associated cleanup
costs.  A regional Service  official  stated  that  the
required   approvals  were  not  obtained  because  the
additional notification and approval requirements would
have delayed  the  acquisitions  and  because the field
personnel   concluded  that  the  level  of  identified
contaminants   did   not  represent  a  threat  to  the
environment.  As a result,  the Service may have to pay
as much as $722,862 to clean  up the two sites that had
environmental  contaminants if it  is  determined  that
full-scale cleanup is required.

Meredosia National Wildlife Refuge

As required by the  Department's  Interim Guidance,[12]
the Service completed a Level I Contaminant  Survey  in
May  1992  before  acquiring  a  400-acre tract for the
Meredosia National Wildlife Refuge  in  Illinois.   The
Survey  identified  a  half-mile long ditch within a 4-
acre tract that had been  used  as a dump site and that
contained empty 50-gallon drums,  paint  and  oil cans,
motors  and automobile parts, abandoned motor vehicles,
and tires  and  recommended that a Level II Contaminant
Survey be performed.   A  Level  II Survey conducted in
December 1993 found that hydrocarbons and silver levels
in the dump area were "substantially"  higher  than the
acceptable    levels   identified   in   the   regional
soil/sediment cleanup  guidelines  and  concluded  that
there  was a potential for contaminants, or the effects
of contaminants, to be present on the property.

Based on  the  results  of the Level II Survey, a Level
III  Contaminant Survey was  requested  by  the  Refuge
Manager.   However,  before  completing  the  Level III
Survey, the Service acquired 306 acres of this tract on
July  20,  1994,  but delayed taking possession of  the
western 94 acres of  the property that contained the 4-
acre contaminated ditch.   The  Service  paid the owner
$431,000 for 306 acres, and the remaining  $125,000 was
placed in escrow pending sale of the remaining acres.

The  Level  III  Survey  completed  by the Contaminants
Specialist in August 1994 concluded that  1  of  the 47
sites  tested  on  the 4-acre tract contained chlordane
levels that exceeded  the State of Illinois groundwater
quality   standards  and  that   silver   levels   were
"significantly" higher within the entire test site than
in  nondump   areas.    According  to  the  Specialist,
chlordane is a hydrocarbon  that  has  been shown to be
carcinogenic, to be connected to eggshell  thinning  in
fish-eating migratory birds, to be a cause of mortality
in  birds,  and to be extremely toxic to rainbow trout.
Although  a  Service   contractor  estimated  that  the
cleanup cost of the entire ditch would be $704,800, the
Field  Supervisor at the  office  which  conducted  the
surveys  noted:   "Only one data point was estimated to
exceed State of Illinois'  groundwater  standards.   It
seems  reasonable  that  some simple method of clean-up
(as opposed to the contractor's  estimated  full  scale
remediation)  should be satisfactory particularly since
the main function  of  the  area  will not be for human
use."

We  also  found  that the Service did  not  obtain  the
required Departmental  approvals  before  it  proceeded
with   the   acquisition.    The  Interim  Guidance  on
Contaminant  Surveys requires that  Level  II  and  III
Contaminant Survey  Reports be reviewed and approved by
the Assistant Secretary for Fish and Wildlife and Parks
or a designee and submitted  to the Assistant Secretary
for Policy, Management and Budget  for  approval of the
acquisition.   The  files  contained  no  documentation
showing that survey  reports  had  been submitted to or
approved by either Assistant Secretary.

Furthermore, the file for the acquisition of the 4-acre
tract was incomplete and contained information that was
inconsistent  with the conclusions in  the  Contaminant
Survey Reports.  For example, we did not find the Level
III Contaminant  Survey  Report  in  our  review of the
acquisition  file.   However,  the  file did contain  a
second Level I Contaminant Survey Checklist  and Report
that  had been prepared by the Refuge Manager in  March
1995.   The  Report indicated that there was no surface
material  on the  property,  even  though  the  surface
material identified in May 1992 was still on-site.  The
file  also included  a  certification  by   the  Refuge
Manager  stating,  "To  the  best  of  my  knowledge no
contaminants are present on this real estate  and there
are   no   conclusive   signs   of   any   effects   of
contamination."

The  Service took possession of the contaminated 4-acre
tract  on  May 9, 1995.  According to the Acting Refuge
Manager, the  surface  material  was removed during the
summer of 1996, but the contaminants  on  the  property
had not been cleaned up.

Cypress Creek National Wildlife Refuge

In  May  1993,  a Senior Appraiser completed a Level  I
Contaminant Survey  of  a  6-acre  tract that was to be
acquired for the Cypress Creek National Wildlife Refuge
in  Illinois  at  the appraised value of  $6,100.   The
Survey Report identified  several dump sites and stated
that the current owner operated  a  lawn  mower  repair
business on the property and that there was evidence of
waste  oil dumping and discarded lawn mower oil filters
on the property.

A Level  II  Contaminant  Survey completed in September
1993 found that hydrocarbons,  lead, and cadmium levels
were "significantly" higher on the  site  than  in non-
dump areas and higher than the acceptable levels in the
regional soil cleanup guidelines, which were indicative
of moderate soil contamination.  The Survey Report also
stated that, according to the landowner, a former owner
operated  an automobile service station on the property
several   decades    ago   and   that   moderate   soil
contamination may have  resulted from the operations of
the  service  station.   The   Report  recommended  the
removal of surface soil at the contaminated  sites  and
additional  sampling and analysis of the site after the
soil removal.

A Level III Contaminant  Survey  completed in July 1994
stated  that  lead, cadmium, and barium  concentrations
were  higher  than  those  in  the  State  of  Illinois
Groundwater Quality  Standards.  The State Water Survey
Office told the Service that there were three wells  in
the same section, which  indicated that there was local
potable use of the groundwater  in the general vicinity
of  the  contaminated property.  A  Service  contractor
estimated   the  cost  of   remediating  the  soil  and
potential groundwater contamination to be $18,062.

Even though all  of  the  contaminants  remained on the
property,  the  Refuge Manager certified in  the  files
that, "To the best  of my knowledge no contaminants are
present on this real  estate  and  there are no obvious
signs of any effects of contamination."  According to a
Regional official, the Service took  possession  of the
property  in  March 1995 without obtaining the required
approvals from  the Assistant Secretaries.  The surface
material was removed  by  Refuge staff in 1996, but the
contaminants had not been cleaned up.

Recommendations

We recommend that the Director,  U.S. Fish and Wildlife
Service, ensure that:
1.    Immediate  action  is  taken to develop an action
plan, including costs estimates  and  target  dates, to
clean  up  the areas which contain contaminants at  the
Meredosia and  Cypress Creek National Wildlife Refuges.
If a determination is made that further cleanup work is
unnecessary, a written  justification  fully supporting
that determination should be prepared and  approved  by
the appropriate officials.

2.    Appropriate   approvals  are  obtained  from  the
Assistant Secretary for Fish and Wildlife and Parks and
the  Assistant Secretary  for  Policy,  Management  and
Budget   before  land  that  contains  contaminants  is
acquired.


**FOOTNOTES**

[12]:As stated  in  the  Department's  Guidance,  a
Level I Contaminant Survey  is  required  for all
potential land acquisitions  to  determine whether
contaminants are  present.   If  the  Level  I Survey
identifies indications of contaminants, a Level II
Contaminant Survey  is conducted to  determine  the
presence  or absence of a contaminant.  A Level  III
Contaminant Survey is required  when  a bureau determines
that, based on the  Level I or II Survey, a reasonable
basis  exists  to  assume  that contaminants are present
on the site or that the effects of contamination are
present  at the  site  and  extensive  sampling  and
research are required to obtain an estimate of the
cleanup cost.

E-IN-FWS-001-97

U.S.  Fish  and Wildlife Service Response  and
Office of Inspector General Reply

In the September  1, 1998, response (Appendix 3) to the
draft report from the  Director, U.S. Fish and Wildlife
Service, the Service concurred  with  Recommendation  2
but did not concur with Recommendation 1.  Based on the
response, we consider Recommendation 2 resolved but not
implemented.  Also  based  on  the  response,  we  have
revised  Recommendation  1 and request that the Service
respond to the revised recommendation (see Appendix 4).

Regarding Recommendation 1,  the Service stated, "After
consulting the IEPA [Illinois  Environmental Protection
Agency], the Service determined that-full scale cleanup
for  these  sites  was not appropriate."   The  Service
further stated that  the affected surface areas of both
sites had been cleaned  up  in  1996 and that "[i]n the
opinion of Service professionals,  the  tracts  do  not
pose  a  contaminant  threat  to  the  Service's  trust
resources  or  to  the  public, nor do they represent a
hazard or a liability."

We were not provided any documentation, such as test or
study results, to support the Service's statements that
the  tracts do not pose a  contaminant  threat  to  the
Service's trust resources or to the public or that they
do  not   represent  a  hazard  or  a  liability.   The
Assistant Field  Supervisor  of  the  Rock Island Field
Office   told   us   that  the  Illinois  Environmental
Protection Agency was  not provided a copy of the Level
III Contaminant Survey on the contaminated tract in the
Meredosia National Wildlife  Refuge.   In addition, the
Service  did  not   provide any documentation  obtained
from the Agency which  supports a determination that  a
full-scale   cleanup   of  the   Meredosia   site   was
inappropriate.  Concerning  the  tract  in  the Cypress
Creek  National  Wildlife  Refuge, the Assistant  Field
Supervisor of the Rock Island  Field Office provided us
with documentation which supported  that the Agency was
consulted on the tract, but the information provided to
the Agency was not sufficient for the  Agency to render
an  opinion  concerning  liability  clearance  for  the
contaminated tract and the Assistant  Field  Supervisor
did  not   pursue  liability clearance from the Agency.
Based on the Service's  comment that full-scale cleanup
of  the  sites  is unnecessary,  we  have  revised  the
recommendation  to   require  the  Service  to  prepare
sufficient  documentation   justifying   its  position.
Accordingly, we request that the Service respond to the
revised recommendation.

Comments on Audit Finding

The  Service also provided additional comments  on  our
finding.   The  Service's comments and our reply are as
follows:

            Fish  and  Wildlife  Service Comments.  The
Service  stated that it did not consider  the  $704,800
cost  estimate  for  the  Meredosia  National  Wildlife
Refuge  or  the  $18,062 estimate for the Cypress Creek
National Wildlife Refuge to be "credible or meaningful"
because the estimates  were based on a "worst-case desk
exercise" and the contractor  did not visit the site or
examine the data obtained from  the  Level II and Level
III  Surveys.  The Service also stated,  regarding  the
Meredosia  National  Wildlife Refuge, that "information
obtained form IEPA [Illinois  Environmental  Protection
Agency]  after  the  Level  III  Survey  was  conducted
determined  that  a full-scale cleanup of the site  was
inappropriate.  Good  site management (using management
practices to minimize the risks to trust resources) was
determined  to  be  appropriate   for  this  property."
Regarding the Cypress Creek Refuge, the Service stated,
"Information   obtained   from  the  IEPA   after   the
remediation estimate was made  led to the determination
that a full-scale cleanup was not appropriate."

Office of Inspector General Reply.  The Assistant Field
Supervisor of the Rock Island Field Office told us that
the Level III Contaminant Studies for  both tracts were
conducted properly and that the results  (including the
cost estimates) were valid.  Concerning the estimate of
the cleanup cost for the Meredosia tract, the Assistant
Supervisor said that, in her opinion, the cleanup costs
may   be  closer  to  $200,000  rather  than  $700,000.
However,  the  potential cost to clean up the sites, if
any,  cannot  be  determined   until  the  Service  has
adequately documented the basis  for  its decision that
full-scale cleanup at these sites is unnecessary.

E-IN-FWS-001-97

D.  LAND EXCHANGES

The U.S. Fish and Wildlife Service conducted  13 of the
14  land  exchanges  we  reviewed  in  accordance  with
applicable laws and regulations and received fair value
in   these   exchanges.   However,  for  the  remaining
exchange, the Southeast Region may have inappropriately
obtained  funds  to  acquire private  land  by  selling
timber on refuge lands  to  a  third party.  The United
States Code (16 U.S.C. 715s, "Participation  of  States
in Revenues from National Wildlife Refuge System"),  as
amended  (Public  Law  95-469),  requires  timber  sale
revenues   from  areas  under  the  Service's  National
Wildlife Refuge  System to be deposited into a separate
fund  that  is used  for  revenue-sharing  payments  to
counties in lieu  of  taxes  on refuge lands.  Although
the National Wildlife Refuge System  Administration Act
authorizes  the  Service to exchange timber  on  refuge
land for private land,  it  does  not,  in our opinion,
permit the Service to sell timber to one  party and use
the  proceeds to acquire land from another party.   The
Region entered into a purchase agreement with a private
landowner to acquire 92.4 acres for the appraised value
of $190,000.   In  a  separate transaction, the Service
issued a special use permit  to  a  lumber  company  to
harvest  timber  worth  $190,000 from a refuge, and the
Region directed the lumber company to pay the landowner
$190,000  on  the  Service's   behalf  to  acquire  the
92.4-acre  tract.  Regional officials  said  that  they
entered into  this  arrangement with the lumber company
because the Region did not have funds available for the
acquisition when the  landowner was willing to sell the
property.  At the exit  conference,  Service  officials
said  that  they  believed  that  this  transaction was
appropriate  but  agreed  that  a  Solicitor's  opinion
should  be  obtained  to  resolve  the issue.   In  our
opinion,  the  Region's  method  of using  timber  sale
proceeds  to  acquire land was inappropriate,  and  the
counties may have  been  denied  revenues to which they
were entitled.

Recommendation

We recommend that the Director, U.S.  Fish and Wildlife
Service,   request  an  opinion  from  the  Solicitor's
Office  on  the propriety of the transactions conducted
by the Southeast  Region  and  a  determination  as  to
whether  the  Region  should  be  required  to  deposit
$190,000  from  the  sale  of  timber into the revenue-
sharing fund established by Public  Law 95-469.  If the
Solicitor determines that such action is required,  the
Director  should  ensure  that the Region  deposits the
revenues from the timber sale  into the revenue-sharing
fund.

U.S. Fish and Wildlife Service Response  and  Office of
Inspector General Reply

In the September 1, 1998, response (Appendix 3)  to the
draft  report from the Director, U.S. Fish and Wildlife
Service,  the  Service  agreed with our recommendation.
Based on the response, we  consider  the recommendation
resolved but not implemented (see Appendix 4).

E-IN-FWS-001-97

APPENDIX 1

CLASSIFICATION OF MONETARY AMOUNTS

Funds To Be Put
Finding     Area
To     Better     Use
Unsupported Costs

Boundary Surveys       $603,002[1]

Grassland Easements207,425

Rollback Taxes66,504

Nonprofit  Organizations189,322
$438,680

Total$1,066,253      $438,680

**FOOTNOTES**

[1]:The net amount of $603,002 represents 29 overpayments
totaling
$748,063 and 3 underpayments totaling $145,061.


E-IN-FWS-001-97


APPENDIX 2

U.S. FISH AND WILDLIFE SERVICE
OFFICES VISITED OR CONTACTED


Office Location

Central Office Arlington, Virginia

Pacific Region[1]Portland, Oregon

Southwest  Region Albuquerque, New Mexico

North Central Region Fort Snelling, Minnesota

Litchfield Wetland Acquisition Office
  Litchfield, Minnesota

Southeast Region Atlanta, Georgia

Northeast Region Hadley, Massachusetts

Denver RegionDenver, Colorado

Alaska RegionAnchorage, Alaska

**FOOTNOTES**

[1]:Contacted only.

E-IN-FWS-001-97

APPENDIX 4

STATUS OF AUDIT REPORT RECOMMENDATIONS

   -----------------------------------------------------------
   Finding/Recommendation
                              Status                   Action
   Reference                              Required
                       Resolved; not      No further response
   A.2, A.4, B.2,      implemented        to the Office of
   B.3,                                   Inspector General
   B.4, C.2, and D.1                      is required.  The
                                          recommendations
                                          will be referred to
                                          the Assistant
                                          Secretary for
                                          Policy, Management
                                          and Budget for
                                          tracking of
                                          implementation.
   -----------------------------------------------------------
   A.1, A.3, and B.1   Unresolved         Reconsider the
                                          recommendations,
                                          and provide action
                                          plans that include
                                          target dates and
                                          titles of officials
                                          responsible for
                                          implementation.
   -----------------------------------------------------------
   C.1                 Unresolved         Provide a response
                                          to the revised
                                          recommendation. If
                                          concurrence is
                                          indicated, provide
                                          an action plan that
                                          includes a target
                                          date and the title
                                          of the official
                                          responsible for
                                          implementation. If
                                          nonconcurrence is
                                          indicated, provide
                                          the reasons for the
                                          nonconcurrence.
   -----------------------------------------------------------




ILLEGAL OR WASTEFUL ACTIVITIES SHOULD BE REPORTED

TO THE OFFICE OF INSPECTOR GENERAL BY:

Sending written documents to:



Within the Continental United States

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

Calling:

Our 24 hour
Telephone HOTLINE
1-800-424-5081 or
(202) 208-5300

TDD for hearing impaired
(202) 208-2420 or
1-800-354-0996



Outside the Continental United States


Caribbean Region

U.S. Department of the Interior
Office of Inspector General
Eastern Division- Investigations
1550 Wilson Boulevard
Suite 410
Arlington, Virginia 22209

Calling:
(703) 235-9221


North Pacific Region

U.S. Department of the Interior
Office of Inspector General
North Pacific Region
238 Archbishop F.C. F'lores Street
Suite 807, PDN Building
Agana, Guam 96910


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