[Survey Report on the Rangelands Improvement Program, Bureau of Land Management]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 99-i-677

Title: Survey Report on the Rangelands Improvement Program, Bureau
       of Land Management



Date:  July 28, 1999




                  **********DISCLAIMER**********

This file contains an ASCII representation of an OIG report.
No attempt has been made to display graphic images or
illustrations. Some tables may be included, but may not resemble
those in the printed version.

A printed copy of this report may be obtained by referring to the
PDF file or by calling the Office of Inspector General, Division
of Acquisition and Management Operations at (202) 208-4599.

                  ******************************





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



SURVEY REPORT
RANGELANDS IMPROVEMENT PROGRAM,
BUREAU OF LAND MANAGEMENT



REPORT NO. 99-I-677

JULY 1999



MEMORANDUM

             TO:  The Secretary

           FROM:  Robert J. Williams
                  Acting Inspector General

SUBJECT SUMMARY:  Final Survey Report - "Rangelands 
                  Improvement Program, Bureau of Land
                  Management" (No. 99-i-677)

Attached for your information is a copy of the subject final
survey report.  The objective of the survey was to determine
whether the Bureau of Land Management (1) spent rangelands
improvement funds for their intended purposes, (2) reported the
status of rangelands improvement projects accurately, and (3)
performed scheduled inspections of rangelands improvement
projects to ensure that the projects were maintained properly.

We found, for the three offices we visited in Nevada, that the
Bureau had charged costs that were not adequately justified
and/or were incorrectly charged to the rangelands improvement
program.  In addition, these offices did not maintain a complete
and accurate database of rangelands improvement projects.  The
costs were not adequately justified because the Bureau charged
expenditures based on budgeted amounts rather than on actual
expenditures and did not record program costs by rangelands
improvement project numbers.  Also, the Bureau did not provide
adequate guidance to its personnel on inputting data into the
Rangelands Improvement Program System.  As a result, as much as
$328,700 charged to the rangelands improvement program was not
used for program purposes, and the Bureau was unable to readily
ascertain the operational status of its improvements, which
hindered its ability to manage, maintain, and improve the
condition of the public rangelands.

Based on the Bureau's response to the draft report and the
additional information it provided, we considered all four of the
report's recommendations to improve the program resolved but not
implemented.  

If you have any questions concerning this matter, please contact
me at (202) 208-4252.


Attachment

cc:  Chief of Staff
Assistant Secretary for Land and Minerals Management
Director, Office of Communications




                                             C-IN-BLM-001-98(A)-D

SURVEY REPORT

Memorandum

     To:  Director, Bureau of Land Management

   From:  Robert J. Williams
          Assistant Inspector General for Audits

Subject:  Survey Report on the Rangelands Improvement Program,
          Bureau of Land Management (No. 99-i-677)

INTRODUCTION

This report presents the results of our survey of the Bureau of
Land Management's rangelands improvement program.  The objective
of the survey was to determine whether the Bureau (1) spent
rangelands improvement funds for their intended purposes, (2)
reported the status of rangelands improvement projects
accurately, and (3) performed scheduled inspections of rangelands
improvement projects to ensure that the projects were maintained
properly.  This is the second of two reports we have issued
concerning improvement of rangeland conditions (see Prior Audit
Coverage section).

BACKGROUND

The Bureau is responsible for managing, protecting, and improving
260 million acres of public lands, including about 166 million
acres of rangelands in the western states.  The Bureau's
Rangelands Management Program involves managing  ecosystems to
ensure their health, natural diversity, and long-term
productivity.  Program activities include administering livestock
grazing permits, supporting wildlife habitats, serving wild horse
and burro needs, promoting watershed health, and maintaining and
improving the condition of rangelands to serve a variety of uses
and values.  The Bureau authorizes about 10 million animal unit
months[1] of livestock use annually to about 19,000 operators.
These operators graze about 3.7 million livestock (2 million
cattle and 1.7 million sheep) on Bureau lands.  By contrast,
there are about 42,000 wild horses and burros on Bureau lands.

Three Federal statutes govern the administration of rangelands
improvement.  The Taylor Grazing Act of 1934 (43 U.S.C. 315)
requires the Bureau to provide for the orderly use, improvement,
and development of the range. The Federal Land Policy and
Management Act of 1976 (43 U.S.C. 1751) authorizes annual
appropriations for the purpose of on-the-ground range
rehabilitation, protection, and improvements on public lands and
states that such rehabilitation, protection, and improvements
"shall include all forms of range land betterment."  The Public
Rangelands Improvement Act of 1978 requires the Bureau to manage,
maintain, and improve the condition of the public rangelands so
that they become "as productive as feasible."

The Bureau's rangelands improvement policy, as stated in the
Bureau Manual Handbook H-1740-1, "Renewable Resource Improvement
and Treatment Guidelines and Procedures," encourages private
parties and other beneficiaries to contribute funds toward
improving rangeland conditions and makes project maintenance the
responsibility of benefiting users. 

The Bureau, in its budget justification for fiscal year 1998,
stated that rangelands improvement would be directed toward
improving the productivity of public rangeland ecosystems to
benefit livestock, fish and wildlife habitat, riparian values,
watershed protection, and other resource values.  The Bureau's
budget justification for fiscal year 1998 for the rangelands
improvement program provided for completing approximately 320 new
projects and treating vegetation on approximately 45,000 acres.
The budget for fiscal year 1998 for rangelands improvement was
approximately $12.1 million ($9.1 million of fiscal year 1998
appropriations and $3 million of carryover funds).  Funds were
obtained primarily from range permit revenues as prescribed  in
the Federal Land Policy and Management Act of 1976 and from
carryover funds, which are previous year's funding that has not
been expended.  Annual rangelands improvement appropriations
remain available until expended. 

Bureau field offices are responsible for tracking the types of
rangelands improvement (for example, soil stabilization, such as
seeding and weed control; water management, such as springs,
wells, and pipelines; and facilities, such as cattleguards and
fences) in individual databases maintained on personal computers
at each of the offices.  Because the Rangelands Improvement
Project System is not integrated,[2] the Bureau's field offices
have to send copies of their databases to the Bureau's National
Applied Resource Science Center[3] in Denver, Colorado, in order
for the data to be accumulated and the information to be
published in the "Public Land Statistics."  In addition, the
System is programmed to provide each field office with a list of
scheduled cyclical maintenance inspections required for
rangelands improvement projects in their respective areas.

SCOPE OF SURVEY

The survey was performed during April through September 1998 at
the Bureau's field offices in Battle Mountain, Elko, and
Winnemucca, Nevada, and at the Bureau's National Applied Resource
Science Center in Denver.  To accomplish the stated objective, we
interviewed Bureau field office and Center personnel and the
Bureau's Budget Officer in Washington, D.C.  We also reviewed the
field offices' project files and time and attendance records in
support of rangelands improvement expenditures and the Center's
procedures and controls related to reporting information on
rangelands improvement.  Our survey covered expenditures and
program activities that occurred during fiscal years 1996, 1997,
and 1998 (through May).  Rangelands improvement expenditures were
$9.0 million for fiscal year 1996, $7.8 million for fiscal year
1997, and $3.9 million for fiscal year 1998 (through May).  The
fiscal year 1998 appropriation was $9.1 million.  For the three
offices visited, expenditures for fiscal years 1996 and 1997 and
1998 (through May) were as shown in Table 1.  


---------------------------------------------------
Table 1.  Rangeland Improvement Expenditures for
Fiscal Years 1996, 1997, and 1998 (through May)
---------------------------------------------------
                Fiscal   Fiscal    Fiscal
                Year     Year      Year

Field Office     1996     1997      1998    Totals 
---------------------------------------------------

---------------------------------------------------
Elko          |$257,495|$374,245|$164,450|$796,190|
---------------------------------------------------
Winnemucca    |274,702 |206,094 |72,785  |553,581 |
---------------------------------------------------
Battle        |105,924 |289,886 |55,775  |451,585 |
Mountain      |        |        |        |        |
---------------------------------------------------
Totals  $638,121   $870,225   $293,010   $1,801,356
---------------------------------------------------


Our survey was conducted in accordance with the "Government
Auditing Standards," issued by the Comptroller General of the
United States.  Accordingly, we included such tests of records
and other auditing procedures that were considered necessary
under the circumstances.  As part of our review, we assessed the
Bureau's systems of internal controls applicable to the
rangelands improvement program and found weaknesses related to
the lack of identification of rangelands improvement project
numbers on time and attendance and cost records.  These
weaknesses are addressed in the Results of Survey section of this
report.  Our recommendations, if implemented, should improve the
internal controls in these areas.

We also reviewed the Departmental Reports on Accountability for
fiscal years 1996 and 1997, which include information required by
the Federal Managers' Financial Integrity Act of 1982, and the
Bureau's annual assurance statement on management controls for
fiscal year 1997 to determine whether any reported weaknesses
were within the objective and scope of our review.  We found that
a material weakness was reported by the Bureau relating to
inadequate rangeland monitoring data.  To resolve this weakness,
the Bureau issued  Instruction  Memorandum No. 96-172,
"Implementing Standards of Rangeland Health and Guidelines for
Grazing Management," dated August 30, 1996, and conducted a
workshop on December 9-11, 1997, regarding the implementation of
the new standards and guidelines.

PRIOR AUDIT COVERAGE

The General Accounting Office has not issued any audit reports
during the past 5 years on the Bureau's rangelands improvement
program.  However, in April 1993, the General Accounting Office
issued the report "BLM's [Bureau of Land Management's] Range
Improvement Project Data Base is Incomplete and Inaccurate" (No.
GAO/RCED-93-92).  The report stated that the Bureau's Rangelands
Improvement Project System was incomplete and inaccurate.
Specifically, the System did not contain (1) a comprehensive
project inventory, (2) a complete and accurate accounting of
project costs, or (3) a full description of project benefits.
Furthermore, the Bureau did not develop guidance to ensure that
all of the System data were consistently collected, and few
individuals in the Bureau were accountable for the data in the
System.  The General Accounting Office recommended that the
Secretary of the Interior instruct the Bureau Director to assess
the need for the information that the System database is designed
to provide.  For information that the Bureau determines useful,
the General Accounting Office recommended that the Director (1)
issue Bureauwide guidance to ensure that the data are
consistently collected and entered and (2) assign accountability
for the accuracy and completeness of the data.  Conversely, for
information determined to be not useful, the General Accounting
Office recommended that the Director ensure that these data are
not entered into the System.  During our current review, we found
that the data in the System were still inaccurate and incomplete,
as discussed in the Results of Survey section of this report.  

The Office of Inspector General has issued one report during the
past 5 years relating to the  improvement of rangeland
conditions.  The report, "Resource Advisory Councils, Rangeland
Management Program, Bureau of Land Management" (No. 98-I-646),
issued in September 1998, stated that the Resource Advisory
Councils worked effectively with the Bureau.  Specifically, the
Councils assisted in developing standards and guidelines for
rangeland health, represented and reached consensus among diverse
public interest groups, and advised the Bureau concerning land
use decisions.  The report on the Councils contained no
recommendations.

RESULTS OF SURVEY

The Bureau of Land Management's Battle Mountain, Elko, and
Winnemucca Field Offices charged costs that were not adequately
justified and/or were incorrectly charged to the rangelands
improvement program and did not maintain a complete and accurate
database of its rangelands improvement projects.  The Federal
Land Policy and Management Act and the Bureau Manual restrict the
expenditure of rangelands improvement program funds to the direct
costs of construction or implementation, inspection, and
maintenance of rangelands improvement projects.  Additionally,
Bureau procedures require that improvements and treatments on
public rangelands be reported and documented through the
Rangelands Improvement Project System to maintain an accurate
inventory of rangelands improvement projects.  The costs were not
adequately justified because the Bureau charged expenditures
based on budgeted amounts rather than on actual expenditures and
did not record program costs by rangelands improvement project
numbers.  Also, the Bureau did not provide adequate guidance to
its personnel on inputting data into the System and did not
integrate the System.  As a result, as much as $328,700 charged
to the rangelands improvement program was not used for program
purposes.  Also, the Bureau was unable to readily ascertain the
operational status of its improvements, which therefore hindered
its ability to manage, maintain, and improve the condition of the
public rangelands.

Rangelands Improvement Expenditures

The Battle Mountain, Elko, and Winnemucca Field Offices charged
expenditures for personnel that were not adequately justified as
program costs.  In addition, vehicle usage and other costs were
incorrectly charged to the rangelands improvement program.
Specifically, at the three Nevada field offices visited, we found
that, of the rangelands improvement program funds of about
$1,801,400 expended during fiscal years 1996, 1997, and 1998
(through May), rangelands improvement expenditures of about
$328,700 either were not adequately justified ($194,500 for
personnel) or were charged incorrectly ($103,300 for vehicle and
$30,900 for other costs) as follows:  

- Personnel costs of $194,500, consisting of $130,200 for
employees working on other activities and $64,300 for
administrative employees, were not adequately justified to
support that the employees' work was applicable to the rangelands
improvement program.  Regarding the $130,200 charged for
program-related employees, the Battle Mountain and Elko Field
Offices expended rangelands improvement funds of about $98,900
and $31,300, respectively, for payroll costs for range aids,
biologists, and equipment operators, even though activities such
as facilities maintenance, fire rehabilitation, and land
resources benefited from their services.  For example, the Battle
Mountain rangelands improvement program supervisor told us that
of the 42 employees who charged personnel costs of about $164,200
to rangelands improvement during fiscal years 1996 through 1998,
only 6 employees should have charged about $65,300 to the
program; therefore, 36 personnel inappropriately charged about
$98,900 to the program.  In addition, administrative personnel
expenditures of about $64,300 incurred during the audit period
were charged to the rangelands improvement program without
adequate justification as to how the program benefited.  For
example, at the Elko Field Office, administrative labor costs of
$11,000 for an assistant district manager for support services
and $15,300 for a warehouse worker were charged to the program.
At the Winnemucca Field Office, administrative labor costs of
$9,700 for an operations chief were charged to the program.
These three offices could not support that these charges
benefited the rangelands improvement program.

- Costs of about $103,300 for General Services Administration and
Bureau automobiles and pickup trucks assigned to other programs
were inappropriately charged to the rangelands improvement
program.  We determined that costs of about $59,100 at the Elko
Office, $30,400 at the Battle Mountain Office, and $13,800 at the
Winnemucca Office should have been charged to other programs. 

- The remaining costs of $30,900 consisted of the following:
$15,000 for a forklift for use in a warehouse, of which a portion
may have been chargeable to the Program; $12,100 for the repair
and maintenance of vehicles,  which should have been charged to
the Bureau's Working Capital Fund; and $500 for training and
$3,300 for repairs and maintenance, which are not allowable costs
of the rangelands improvement program according to the Bureau
Handbook.  

Regarding range betterment funds, the Federal Land Policy and
Management Act of 1976 (43 U.S.C. 1751 (b)(1)) states: 

Moneys . . . authorized to be appropriated and made available for
use in the district, region, or national forest from which such
moneys were derived, as the respective Secretary may direct after
consultation with district, regional, or national forest user
representatives, for the purpose of on-the-ground range
rehabilitation, protection, and improvements on such lands, and
the remaining one-half shall be used for on-the-ground range
rehabilitation, protection, and improvements as the Secretary
concerned directs.

The fund established by the Federal Land Policy and Management
Act is called the "Range Betterment Fund," and the Bureau
Handbook H-4120, "Grazing Management," describes the purpose of
these funds as follows:

Range betterment funds may be used for all forms of rangeland
rehabilitation, protection, and improvement, including, but not
limited to, seeding,  reseeding, fence construction, weed
control, water development, and fish and wildlife habitat
enhancement.  Range betterment funds may be used for installing,
modifying, and removing improvements.  This includes design,
survey, materials, equipment, labor, and supervision of such
projects.  Use of range betterment funds for other actions or
projects is not specifically precluded, but such use must be
justified to arrest rangeland deterioration and/or improve forage
conditions for wildlife, watershed protection, or livestock
production.  Range betterment funds must not be used for
maintenance of improvements after year 1984.

Further, the Bureau Handbook H-1740-1 states:

Bureau employees are responsible for assuring that funds are used
consistent with existing legislative and appropriation
requirements.  The Bureau's financial management system (FMS) is
based on the benefiting activity concept, which requires that
program costs be charged directly to the benefiting subactivity.
. . .  Because of this concept, constraints on allowable uses of
certain funds exist, as prescribed by the relevant legislation,
policy, or other guidance.

According to Handbook H-1740-1, rangelands improvement funds
cannot be used for land use planning, project planning, water
right filings, easement and right-of-way acquisitions, contract
preparation, maintenance, clerical personnel for general filing
and typing, training, workshops, and general administrative
expenses.

Except for expenses related to fire fighting and reimbursable
programs, which were charged based on project numbers, we found
that the Bureau charged costs to program funds based on budget
estimates rather than on actual costs.  The Bureau's procedures
also did not require that rangelands improvement expenditures be
identified to specific rangelands improvement projects.
Specifically, the three field offices visited did not require
rangelands improvement project numbers to be on time and
attendance records or on financial records such as purchase
orders.  For example, the Bureau developed its personnel budget
by assigning work months to individuals by activity.  Then, in
order to meet the Bureau's budget, individuals charged their time
as allotted in the budget, even though the work they performed
did not benefit the activities charged.  Rangelands improvement
project numbers were not indicated on time and attendance records
or financial documents because, according to Bureau field
personnel, the automated systems were not implemented to require
and accept project numbers, although the systems were able to
accommodate these data.

The Bureau's methodology of using budgeted work months by
activity for funding personnel and other costs resulted in funds
being used for other than intended purposes when the actual and
planned work loads differed and appropriations that should have
been charged were not available to fund the differences.
Additionally, the Bureau's procedure to exclude project numbers
from time and attendance records and cost coding data prevented
the tracking of costs by rangelands improvement projects.
Therefore, although the Bureau's records indicated that the
Bureau had rangelands improvement expenditures of $9.0 million
for fiscal year 1996, $7.8 million for fiscal year 1997, and $3.9
million for fiscal year 1998 (through May), the Bureau did not
provide us data to substantiate that rangelands improvement
projects benefited from these expenditures.  

Rangelands Improvement Project System

The Rangelands Improvement Project System was designed to produce
inventory data on rangelands improvement projects and on project
maintenance schedules  However, we found that the three Bureau
offices reviewed had not maintained a complete and accurate
database of their rangelands improvement projects.  This
condition was also reported by the General Accounting Office in
its April 1993 report (see Prior Audit Coverage).  For example,
at the three offices visited, we found the following:

- The Winnemucca Field Office had completed 32 rangelands
improvement projects during fiscal years 1996, 1997, and 1998
(through June 30), at a cost of $692,100, and the Field Office
had input the data into the System; however, the database at the
National Applied Resource Science Center, which is used to
compile data for the "Public Land Statistics," showed only 4
projects, totaling $113,200.

- We found the same number of rangelands improvement projects
(18) in the System at the Elko Field Office for fiscal years
1996, 1997, and 1998 (through June 30) and at the  Science
Center; however, there were 5 projects on each database (total of
10 projects) that did not match.  The Field Office reported total
rangelands improvement costs of $209,500 in the System, while the
Science Center reported such costs at $176,200, or $33,300 less
than the costs at the Field Office.  Additionally, during the
same time period that the Field Office reported $209,500 for
rangelands improvements in the System, the Bureau's accounting
system reported $796,190 in rangelands improvement expenditures
for the Field Office.

- At the  Battle Mountain Field Office, we found that neither the
database at the Science Center nor the Field Office listed any
projects completed during fiscal years 1996, 1997, and 1998
(through June 30); however, the Field Office had completed 3
rangelands improvement projects, totaling $151,300, during fiscal
years 1996 and 1997.  

We also found that expenditures detailed in the Bureau's official
accounting system under rangelands improvement funds could be
identified but could not be traced to projects in the System's
databases.  This condition was also reported as a deficiency by
the General Accounting Office in its April 1993 report.  

The Bureau needs accurate cost and inventory information for
rangelands improvement projects for reporting purposes and for
making effective decisions related to managing the rangelands.
The Bureau is required to manage, maintain, and improve the
condition of the public rangelands in accordance with management
objectives and the land use planning process pursuant to Section
202 of the Federal Land Policy and Management Act.  Also, the
Federal Land Policy and Management Act, the Public Rangelands
Improvement Act of 1978, and the Bureau Manual limit rangelands
improvement expenditures to specified purposes.  Further,
Statement of Federal Financial Accounting Concepts No. 1 states:

Federal financial reporting should provide information that helps
users to determine:

- Costs of specific programs and activities and the composition
of, and changes in, these costs;

- Efforts and accomplishments associated with Federal programs
and their changes over time and in relation to costs; and

- Efficiency and effectiveness of the Government's management of
its assets and liabilities.  

We found that the rangelands improvement program databases at the
field offices visited were not complete and accurate because
field office personnel had not received adequate direction and
guidance on inputting the data into the System.  For example, as
a result of deficiencies in the System reported by the General
Accounting Office, the Bureau issued Instructional Memorandum
95-136 on July 1, 1995, regarding project inventories and
accountability for use of the funds.  The memorandum stated that
the Bureau was eliminating its prior requirement to include
project cost data in all System project records.  According to a
Bureau official, the Bureau attempted to reconstruct its records
but could not complete this task because of the incompleteness
and unreliability of information in the Bureau's financial
records.  Additionally, when rangelands improvement projects were
completed, the required data were usually transcribed to a form
for input to the System; however, the data either were not
entered into the field office database timely or were not entered
because project completions and work in process were not required
to be reported until the end of that fiscal year.  Also, the
System was not integrated, which therefore required that the same
data be input at both the field offices and at the National
Applied Resource Science Center.  The Bureau has acknowledged
that the System needs to be redesigned as an integrated system
which can be accessed by all the field offices and the National
Applied Resource Science Center, but at the time of our audit,
the redesign was only in the early planning stage.  

As a result of using incomplete and inaccurate databases on its
rangelands improvement projects, the Bureau's "Public Land
Statistics" has not been completely reliable.  Therefore, we
believe that the Bureau's ability to manage, maintain, and
improve the condition of the public rangelands has been adversely
impacted.  

Recommendations

We recommend that the Director, Bureau of Land Management:

1.  Ensure that field offices use rangelands improvement program
funds only for the purpose of authorized on-the-ground range
rehabilitation, protection, and improvement.

2.  Ensure that the Bureau identifies rangelands improvement
costs by project and justifies charges to rangelands improvement
program funds.  To accomplish this, the Bureau could record
rangelands improvement project numbers on time and attendance
records and other cost code data.  

3.  Issue formal procedures and guidance to all field offices on
the proper and timely recording of rangelands improvement project
information into the Rangelands Improvement Project System and
ensure that all appropriate field personnel are adequately
trained in this area.  

4.  Redesign and implement the Rangelands Improvement Project
System so that  project data can be input at field locations but
accessed by other field offices and by the National Applied
Resource Science Center.

Bureau of Land Management Response and Office of Inspector
General Reply

In the April 26, 1999, response (Appendix 2) to the draft report
from the Acting Director, Bureau of Land Management, through the
Acting Assistant Secretary for Land and Minerals Management, the
Bureau indicated concurrence with Recommendations 2, 3, and 4 but
did not indicate full concurrence with Recommendation 1.
Subsequent to the response, Bureau officials provided us
additional information on May 14 and 25, 1999, on the
recommendations.  Based on the response and the additional
information, we consider all four recommendations resolved but
not implemented.  Accordingly, the recommendations will be
forwarded to the Assistant Secretary for Policy, Management and
Budget for tracking of implementation (see Appendix 3).

Regarding Recommendation 1, Bureau officials clarified the
Bureau's response in the subsequent information provided, stating
that the instruction memorandum it planned to issue to clarify
allowable uses for the rangelands improvement funds will also
provide "specific guidance" requiring project numbers to be used
to more accurately charge expenditures to the appropriate program
and that this guidance would cause a "significant decrease" in
the number of expenditures charged based on budgeted amounts.
Bureau officials further stated that the instruction memorandum
will clarify the use of range improvement and other funds and
direct that all land treatments or projects and associated costs
be entered into the Rangelands Improvement Program System.
Bureau officials stated that the instruction memorandum will be
implemented by October 1, 1999, and that the Assistant Director
for Renewable Resources and Planning is responsible for
implementation.

Regarding Recommendation 2, Bureau officials said that it planned
to implement the recommendation by September 30, 1999, and that
the Assistant Director for Business and Fiscal Resources is
responsible for implementation.

Bureau officials also provided additional information after the
initial response for Recommendations 3 and 4, stating that the
Assistant Director for Renewable Resources and Planning is
responsible for these recommendations and that the intensive
training program (Recommendation 3) would be completed by April
30, 2000.  In its response, the Bureau stated that the training
program would be completed after the redesign of the Rangelands
Improvement Program System, which is expected to be completed by
January 1, 2000.

Additional Comments on Report

In its response, the Bureau also provided additional comments on
the report.  The Bureau's comments and our replies are in the
paragraphs that follow.

Findings and Results of Survey

Bureau Comments.  The Bureau said that its "first concern" was
that the draft report omitted the quote from the Code of Federal
Regulations (43 CFR 4120.3-8(b)) which was included in the
preliminary draft as follows:

". . . funds may be used for activities associated with
on-the-ground improvements, including planning, designing, laying
out, contracting, modifying, maintaining when the Bureau is
responsible, and monitoring and evaluating the effectiveness of
specific rangelands improvement projects."

The Bureau stated, "This section of the regulation is the most
current guidance on the appropriate uses of these funds during
the 3-year period under review for this report."  The Bureau
further stated that omitting this sentence from the report
"significantly changes the tone of the subsequent findings."
Additionally, the Bureau stated that the "review should have been
comparing how closely actual use of these funds complied with
this regulation" instead of attempting to "compare actual
expenditures with guidance provided in a Handbook (H-1740-1)."

The Bureau also disagreed with the report's conclusion that the
allowable uses of rangelands improvement funds under the Federal
Land Policy and Management Act and the Bureau Manual (H-1740-1)
were restricted to "`direct costs of construction.'"  The Bureau
stated that the Federal Land Policy and Management Act states
that rangelands improvement funds may be used " `. . . for the
purpose of on-the-ground range rehabilitation, protection, and
improvements. . ..' "  The Bureau further stated that "FLPMA
[Federal Land Policy and Management Act] does not restrict the
use of these funds to `direct cost of construction.'  If it did,
43 CFR 4120.3-8(b) would not be in compliance with the law."
Further, the Bureau stated that although the December 7, 1987,
Handbook states that "`[i]t is Bureau policy that RI [rangelands
improvement] funds not normally be used for project planning,
resource clearances, etc.,'" the Secretary of the Interior
"changed this Bureau policy by issuing new regulations under 43
CFR 4120.3-8(b) on February 22, 1995."

The Bureau further stated that the "change in policy increased
the number of employees who could legitimately charge" to the
rangelands improvement program and that this policy was "in place
during the 3-year period under review."

Office of Inspector General Reply. We omitted the reference to
the Code (43 CFR 4120.3-8(b)) because the questioned costs were
attributable to a lack of documentation and justification that
the charges benefited the rangelands improvement program rather
than to the types of costs charged.  We concur with the Bureau
that costs for on-the-ground improvements such as specific
project planning, designing, laying out, contracting, modifying,
monitoring, and evaluating were proper charges to the rangelands
improvement program.  However, the costs must be adequately
documented and justified as to the specific projects benefited.
Therefore, the citation from the Code was not applicable as to
why the costs were questioned.

The statement that the Federal Land Policy and Management Act
does not restrict the use of these funds to "direct costs of
construction" is correct, and our report does not question the
use of funds for construction. Therefore, we included the entire
quotation, which includes implementation, inspection, and
maintenance of rangelands improvement projects.  In addition, in
our report (page 6), we included a quote from the Bureau's
Grazing Handbook that more accurately describes the uses of range
betterment funds as established and defined by the Federal Land
Policy and Management Act.  Again, our report did not question
which employees could charge the rangelands improvements program
but that the employees' charges to the program which we reviewed
were not justified as to the benefiting range improvement
projects. 

Personnel Costs

Bureau Comments.  The Bureau stated that "the Battle Mountain
situation appears to be accurately described in the report" and
that the Battle Mountain Field Office "has initiated new
procedures, guidance and training to ensure that in the future
all charges to RI (8100) [rangelands improvement] are directly
related to specific projects."  However, the Bureau further
stated that the Elko and Winnemucca Field Offices "are a
different situation," in that the officials involved "were
directly responsible for the supervision of the engineering
staffs and Force Account crews" that are directly involved in
carrying out the rangelands improvement program on a daily basis.

Office of Inspector General Reply.  As discussed at the exit
conference, we revised our report to state that the personnel
costs were "not adequately justified to support" that the
employees' work benefited the rangelands improvement program.
Again, we emphasize that the costs were not adequately justified
because the Bureau charged expenditures based on budgeted amounts
rather than actual work performed and did not record program
costs by rangelands improvement project numbers.  Specifically,
at the Elko Field Office, the Assistant District Manager for
Support Services, who is responsible for management analysis,
financial management, information resources management,
procurement and contracting functions, personnel management,
fleet management, warehouse management, range improvement
construction and maintenance operations, and facilities
construction and maintenance, stated that the charges to the
rangelands improvement funds were based on a planned annual
allocation at the direction of senior-level management. For the
Winnemucca Chief of Operations, whose responsibilities included
ensuring that all assigned work for staff functions and
line-management roles related to lands and realty, minerals,
cultural resources, and wilderness is completed, and the Elko
warehouse worker who is responsible for all district warehousing,
including fire supplies, property accountability, maintenance of
the building and grounds, vehicle coordination, and project
materials and stores accountability, we could not obtain
documentation to justify that the costs for these two positions
were appropriately charged to the rangelands improvement program,
and the cost data could not be reconciled to specific rangelands
improvement projects.

Vehicles

Bureau Comments.  The Bureau stated that it would be "interested
in knowing how the auditors determined that the vehicle costs
were `inappropriately charged to the rangelands improvement
program.'"  The Bureau further stated:

If the auditors reached a conclusion based on the fact that a
particular vehicle was not assigned to an equipment operator,
then the assumptions are not accurate . . ..  Rangeland
management specialists, biologists, archeologists, as well as
other pertinent specialists, etc., can and should charge their
time and other expenses to RI (8100) [rangelands improvement]
when they are working on the project planning process.

Office of Inspector General Reply.  We agree that all costs,
except those prohibited in Bureau Handbook H-4170-1, associated
with a range improvement project should be charged to the
rangelands improvement program funds when work is performed on a
project, including specific project planning costs.  In reviewing
vehicle costs charged to the program, we identified the vehicles
charged to the rangelands improvement funds and the employees to
whom the vehicles were assigned. If the employees had charged
time to the program or were responsible for range improvement
activities, we did not take exception to the vehicle charges.  If
the employees did not charge time to the program and were not
assigned responsibility for the program, we concluded that the
vehicle charges were inappropriately charged to the program.

Remaining Costs

Bureau Comments.  The Bureau stated that our report "makes
reference to, `$15,000 for forklift use in a warehouse.'"  The
Bureau further stated:

The forklift is being used in support of the RI (8100)
[rangelands improvement] program for loading and unloading
supplies and equipment at the Elko Field Office.  Fifty percent
of the hourly rate and fixed ownership rate (FOR) are charged to
RI (8100).  This would seem to be a totally legitimate charge to
RI (8100).  The forklift was purchased ($42,432) entirely with
real property appraisals (9310) money [The account code for the
Working Capital Fund].

Office of Inspector General Reply.  The Bureau's supporting
documentation that we obtained from Bureau field offices shows
that the $15,000 was charged to rangelands improvement funds for
the purchase of the forklift, not for the hourly rate usage
charge or for the fixed ownership rate.  Additionally, the
documentation also shows that the amount charged in total for the
forklift was $39,322.  We have sent this documentation to the
Bureau's headquarters.  Other programs benefit from the warehouse
operations use of the forklift, such as fire and building
maintenance; however, those programs were not charged a portion
of the purchase price of the forklift.  The total cost of the
forklift should have been charged to the Working Capital Fund;
however, with proper justification, we believe that the Bureau
could charge an equitable portion of any cost exceeding available
funding in the Working Capital Fund to all benefiting programs,
not just the rangelands improvement program.  Considering the
relatively low number of rangelands improvement project
accomplishments of the field office during the period of our
review, we believe that most of the $15,000 should have been
charged to other programs.

Bureau Comments.  Regarding the $12,100 for vehicle repairs and
maintenance, the Bureau stated that "this amounts to an average
of $1,500/FO/year" [$1,500 per field office per year] and that
"[r]epairs and maintenance outside of regular maintenance are
charged to the benefitting activity."  The Bureau further stated:

If a vehicle or equipment breaks down while working an RI (8100)
[rangelands improvement] project, RI (8100) would be the
legitimate code in which to charge the repairs.  Considering the
stress put on equipment during project construction, $1,500/year
seems to be very conservative.

Office of Inspector General Reply.  According to the Bureau
Manual for the Working Capital Fund,  range improvement funds
should not be used for vehicle maintenance, presumably because
vehicle maintenance costs are recovered through the monthly use
rate charged by the Working Capital Fund.  The Bureau's statement
that $1,500 per field office per year for vehicle repair is
"conservative" does not justify charging rangelands improvement
funds because the Bureau did not identify a specific project
number.  Also, we do not know how the Bureau determined that the
$7,300 charged by the Elko Office and the $4,800 charged by the
Winnemucca Office (total of $12,100) equate to $1,500 per field
office per year or that the $1,500 is "conservative."  We did
determine that the Battle Mountain Office did not directly charge
the rangelands improvement program for vehicle repairs and
maintenance. 

Bureau Comments.  The Bureau stated, "The other $3,300 for
`repairs and maintenance' is not clearly described, therefore, we
are unable to provide a response.  The same holds true for the
$500 for training expenditure."

Office of Inspector General Reply.  The captions of "repairs and
maintenance" and "training" were the only documentation for these
amounts in the Bureau records provided to us. As previously
stated, Bureau Handbook H-4170-1 does not permit the use of range
improvement funds for maintenance or training.  Under current
regulations, the Bureau may use rangelands improvement funds for
maintenance of specific projects; however, during our review,
none of these expenditures were identified to specific projects.

Other Matters

Personnel at the Bureau's three offices we visited were not
performing all scheduled inspections for maintenance on
rangelands improvement projects, as required by Bureau Handbook
H-1740-1.  Bureau management and staff said that staffing was
inadequate to conduct all scheduled rangelands improvement
inspections.  Although we did not review the adequacy of the
staffing for performing inspections, we did find that scheduled
inspection intervals for similar type projects varied
significantly.  As a result of not conducting scheduled
inspections, the Bureau had little assurance that projects for
these three field offices were operational.  

At the time of our audit, the Winnemucca Field Office had
approximately 1,947 rangelands improvements, the Elko Field
Office had 6,062 rangelands improvements, and the Battle Mountain
Field Office had 1,358 rangelands improvements.  In accordance
with instructions for the Rangelands Improvements Project System,
these projects are to be inspected on a cyclical basis ranging
from 1 to 10 years.  Our review of rangelands improvement files
disclosed that scheduled inspections were rarely performed.  At
the Winnemucca Office, we reviewed five rangelands improvement
files for projects that were completed during 1969 through 1996
and found that only 3 of 44 scheduled inspections for the four
projects were performed and documented (with the most recent
inspection completed in 1991).  At the Elko Office, we reviewed
six rangelands improvement files for projects that were completed
during 1951 through 1986 and found that only 2 of 162 scheduled
inspections had been performed and documented (with the most
recent inspection completed in 1993).  At the time of our visit,
Battle Mountain Office personnel stated that inspections of
rangelands improvement projects had not been performed.
Subsequent to our site visit, Battle Mountain Office personnel
stated that their office had performed 12 inspections and found
that all of the projects were either not operational or were only
partially functioning.  

We noted that all project files we reviewed at the Elko Office
scheduled projects for annual inspections.  At the Winnemucca
Office, we noted that while one fence was scheduled for annual
inspections, another fence was scheduled for inspections every 5
years.  We could not determine from the files the reasons for the
differences in inspection periods; however, Bureau field
personnel said that inspection intervals were determined by the
field office civil engineer when each project was designed.
However, we believe that some inspections may be required too
frequently, such as annually.  We suggest that the Bureau
instruct field offices to develop inspection schedules for
monitoring range improvement projects that are frequent enough to
detect needed repairs and maintenance in a timely manner and that
existing staff can accomplish.  

Bureau of Land Management Response and Office of Inspector
General Reply

In its response (Appendix 2), the Bureau stated that it
"recognizes a lack of maintenance inspection, however, when given
all the work that the BLM [Bureau of Land Management] must do
within present personnel constraints, this workload is relatively
low in priority."  The Bureau also stated that our report noted
the inconsistency of project inspection schedules.  The response
further stated that "[w]hile some inconsistency among like
projects between States could be expected," the Bureau will
address the differences in project schedules within a field
office when it revises the Renewable Resource Improvement and
Treatment Handbook.

When revising its Handbook, we encourage the Bureau to consider
performing the inspections to ensure that the projects are
operational, since a project that is not operational cannot
provide the benefits for which it was intended.

Since all of the report's recommendations are considered
resolved, no further response to the Office of Inspector General
is required (see Appendix 3).

The legislation, as amended, creating the Office of Inspector
General requires semiannual reporting to the Congress on all
audit reports issued, the monetary impact of audit findings
(Appendix 1), 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 Bureau of Land Management
personnel in the conduct of our survey.

**FOOTNOTES**

[1]:An animal unit month is the amount of forage needed to feed
one cow, one horse, or five sheep for 1 month.

[2]:"Integrated" is defined as "a collection of distinct elements
or components that have been built into one unit."   (Computer
Desktop Encyclopedia, Version 9.4, 4th Quarter, 1996)

[3]:The National Applied Resource Science Center, under the
Bureau's Assistant Director of Renewable Resources and Planning,
is responsible for ecosystem science and technology transfer,
information exchange, and consulting services.


APPENDIX 1

CLASSIFICATION OF MONETARY AMOUNTS

Finding Area Costs That Were Inadequately Justified or
Inappropriately Charged to Rangelands Improvement Funds

Funds To Be Put To Better Use $328,700


APPENDIX 2
Page  1  of  6

APPENDIX 2
Page  1  of  6

APPENDIX 2
Page  1  of  6

APPENDIX 2
Page  1  of  6

APPENDIX 2
Page  1  of  6

APPENDIX 2
Page  1  of  6

APPENDIX 2
Page  1  of  6


APPENDIX 3

STATUS OF SURVEY REPORT RECOMMENDATIONS

Finding/Recommendation
Reference 

Status

Action Required
1, 2, 3, and 4 

Resolved; not implemented.

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



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