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FOREST SERVICE FISCAL YEAR 2000 BUDGET
THURSDAY, MARCH 11, 1999
House of Representatives,
Subcommittee on Department Operations,
Oversight, Nutrition and Forestry,
Committee on Agriculture,
Washington, DC.
The subcommittee met, pursuant to call, at 11:40 a.m., in room 1300, Longworth House Office Building, Hon. Bob Goodlatte (chairman of the subcommittee) presiding.
Present: Representatives Canady, Walden, Clayton, Goode, Phelps, and Hill.
Staff present: Kevin Kramp, subcommittee staff director; David Tenny, professional staff; Wanda Worsham, clerk; Callista Bisek, assistant clerk, and Danelle Farmer, minority consultant.
OPENING STATEMENT OF HON. BOB GOODLATTE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA
Mr. GOODLATTE. Good morning. This hearing of the Subcommittee on Department Operations, Oversight, Nutrition and Forestry to review the Forest Service's fiscal year 2000 budget will come to order. I have an opening statement.
I want to welcome everyone here today to this, the second hearing of the subcommittee. I am pleased to note the presence today of my colleagues Congressman Wally Herger, a senior member of the Budget Committee, and Congressman John Peterson, a newly appointed member of the Interior Appropriations Subcommittee, who have taken the time from their busy schedules to address the subcommittee today.
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I also note the testimony is submitted to the subcommittee by my colleague Jim Oberstar from Minnesota, who was kept from joining us this morning by Transportation Committee markup.
I believe the comments of these distinguished Members, representing views that are not only bipartisan, but also diverse in terms of geography and committee assignment, underscore the importance of the things the subcommittee will discuss today.
I also welcome Chief Dombeck to our hearing this morning.
Chief, as I told your staff at our first hearing—has he come back in the room yet? He will hear this in absentia then. You can rest assured that this committee will not neglect you during the 106th Congress. We are glad you are here and look forward to working closely with you in the months ahead. In fact, I have instructed staff to set up a cot for you in the back to make things as easy on you as possible.
You will recall that at our last hearing I laid out the three highest priorities of this subcommittee during the 106th Congress. These are, one, to restore and sustain the long-term health and productivity of our forests; two, to restore financial and performance accountability of the Forest Service; and three, to strengthen State and private forestry and define the appropriate role of Forest Service relative to private forest landowners.
The purpose of this hearing is to discuss the first two of these priorities within the context of the Forest Service's fiscal year 2000 budget. In doing so, I would like to focus the subcommittee's attention on two very simple yet critical threshold questions. First, based on the agency's performance, should Congress give the Forest Service more money as requested in the agency's budget? Second, what should the agency's priorities be assuming current funding levels?
Let me address the first question by providing a little history. In 1996, the USDA Office of Inspector General issued the first in a series of adverse opinions on the financial statements of the Forest Service. What has followed since has been a steady stream of reports by Congress, by the IG and the General Accounting Office with titles like ''Lack of Financial and Performance Accountability Has Resulted in Inefficiency and Waste,'' ''Unauthorized Use of the National Forest Fund,'' ''Better Procedures and Oversight Needed to Address Indirect Expenditures,'' ''Weak Contracting Practices Increase Vulnerability to Waste, Fraud and Abuse,'' and ''Barriers to Financial Accountability Remain.''
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Then in January of this year, the General Accounting Office issued a report identifying the Forest Service as an agency at high risk because of its vulnerability to waste, fraud, and abuse and mismanagement. Let me quote briefly from that GAO report.
Inefficiency in waste throughout USDA's Forest Service operations and organizations have cost taxpayers hundreds of millions of dollars. While the Forest Service has made progress in recent years, it is still far from achieving financial accountability and possibly a decade or more away from being fully accountable for its performance.
So now the question, should the Congress increase funding for an agency that has cost the taxpayer hundreds of millions of dollars through inefficiency and waste, continues to lack basic financial and performance accountability, and may be a decade or more away from fixing its problems?
Congressman Oberstar and I think the answer, at least at this point, is obvious; that as fiduciaries of the American taxpayer, our answer must be an emphatic no. To give the Forest Service more money when it cannot account for how it will be spent would be an egregious breach of the public's trust.
If the Forest Service's fiscal year 2000 budget, when you take away the smoking mirrors of budget scoring, asks Congress for $173 million increase in discretionary spending over last year's enacted level and a $253 million increase over the level enacted in fiscal year 1995, when the agency received its first adverse opinion from the Inspector General, Chief, from the perspective of a former litigator, you have a difficult case to make.
Now I would like to turn the subcommittee's attention to the second question: What should be the agency's priorities given current funding levels? I think this question is best answered by first reviewing a few Forest Service statistics.
Forty million acres of National Forest are presently at an unacceptable risk of catastrophic wildfire. Twenty-six million acres, including a great deal in my State of Virginia, of National Forests are at high risk of insect and disease infestation. Deferred road maintenance and reconstruction totals an estimated $8.4 billion. Deferred maintenance on recreational facilities exceeds $1 billion. Together, these figures constitute a forest restoration backlog of massive proportions, a backlog that will increasingly jeopardize the ecological integrity of the forest and its ability to provide a full range of benefits to the public unless we act immediately and decisively.
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Both Congressman Oberstar and I hold the firm opinion that this forest restoration backlog should be the Forest Service's No. 1 priority in this and future budget cycles until it has been fully addressed. Unfortunately, however, we are not persuaded that the restoration backlog is a priority in the agency's budget. Funding for natural fuels treatment is static, and total acres treated are down. Road construction and reconstruction dollars have been reduced, and the agency plans to maintain only 22 percent of its road infrastructure to standard.
Insect and disease control programs continue to be reactive rather than proactive, and the agency appears to be on track to treat only 2 percent of the lands identified to be at high risk. Funds identified for annual maintenance of recreational facilities total only a tenth of the stated backlog.
Finally, the budget all but ignores the recently enacted law contained in the research title of the farm bill requiring the Forest Service to vastly improve the Forest Inventory and Analysis Program, a critical analytical tool for addressing the restoration backlog.
Let me repeat, Congressman Oberstar and I see no serious indication from this budget that addressing the restoration backlog is a Forest Service priority. What I do see as a top priority, however, is what the administration is calling its Lands Legacy Initiative. This initiative, which is the centerpiece of the budget, appears to move away from rather than toward addressing the restoration backlog. Its basic premise, an aggressive effort to spend over $100 million to acquire more Federal land, is an idea that is fundamentally flawed in view of the current condition of our forest infrastructure. In our view, the Lands Legacy Initiative is a misplaced priority that reflects political aspirations more than it does an understanding of the fundamental needs of our forests. The agency simply should not expend scarce resources on land acquisition when it cannot afford to manage the land it already has.
In closing, I want to restate my commitment to addressing the priorities that I have outlined for this committee. We need a Forest Service that is fully accountable for the way it uses taxpayer dollars. We need an agency that is fully committed to effectively addressing the forest restoration backlog. The budget is where it all starts.
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Chief Dombeck, I am extending you my hand. Let's get to work to fix the agency and the resources it manages once and for all.
At this time I would like to recognize the distinguished ranking member of the subcommittee, the gentle woman from North Carolina, Mrs. Clayton.
OPENING STATEMENT OF HON. EVA M. CLAYTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH CAROLINA
Mrs. CLAYTON. Thank you, Mr. Chairman. Mr. Chairman, I thank the Members for appearing. Let me say parenthetically that I look forward to working with you in establishing priorities for this committee. I think you know that it is a bipartisan committee, and we look forward to having that consultation, as I gather the Speaker has admonished all of the chairmen and the ranking members. So I want to extend my hand to you in establishing those priorities that we will have for this committee as a joint effort.
I appreciate you holding this hearing, because indeed today, this is the second of the hearings. I gather I will learn a lot about forestry with the five or six we will hold.
Mr. GOODLATTE. At least.
Mrs. CLAYTON. At least. So I am on a learning curve. I am moving up. So I want to tell you how much I appreciate this. I do appreciate you holding this hearing today on the Forest Service fiscal year 2000 budget request.
I would like to welcome all the witnesses and to thank you for being here today. I look forward to all of your testimony today, particularly our colleagues' testimony. I appreciate the opportunity this hearing provides for us to review the 2000 fiscal year budget for the U.S. Forest Service. The decision we make now and the funds allocated will impact the forest for years to come.
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In recent years, the USDA Inspector General has found serious accounting and financial reporting weaknesses in the financial statements of the Forest Service, that which our chairman has noted. It is my understanding that some progress has been made in correcting the Forest Service's fundamental management deficiency. Today's hearing gives us the opportunity to determine how much progress has been made to identify the challenges remaining and what this committee can do to ensure that the Forest Service has the resources necessary to meet these challenges. This includes completing the agency-wide accounting system implementation.
The U.S. Forest Service manages 191 million acres of America's forests and grasslands for this and future generations. This is an extraordinary responsibility to be stewards of this great resource and therefore requires fiscal and ecological responsibility. Good public policy mandates that our accounting procedure adequately records the cost of programs so that we have accurate financial statistics to review when future funding is being considered. Without an accurate accounting of the Forest Service assets and costs, the Congress cannot be certain the requests for additional funding and employees are warranted.
As you know, the Forest Service is requesting an additional $172 million in discretionary funds and an addition of 360 full-time employees. While we deal with tight discretionary spending caps in many agencies within the USDA, the FSA, NRCS are struggling to deliver services with very limited resources. I am very interested in learning more about the significant increase the Forest Service is requesting and how you justify that.
I am also interested in the President's proposed new initiatives, and how they would improve our natural resources, and how they are related to the existing priority of this agency.
In addition, the subcommittee held a hearing just a couple weeks ago on forest health maps to identify at-risk acres, many of those in North Carolina. I am pleased that the Forest Service is so actively pursuing this matter and would like to hear from Chief Dombeck what priority this budget assigns to dealing with the millions of acres at risk due to catastrophic fire, insect and disease infestation that were identified by these maps.
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While I look forward to hearing from all of the witnesses today, I am especially interested in hearing from Chief Dombeck priorities he has identified in the Forest Service and how we propose to find funding for it.
Thank you, Mr. Chairman.
Mr. GOODLATTE. The gentleman from Oregon, Mr. Walden.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON
Mr. WALDEN. Thank you, Mr. Chairman. I want to thank you for holding this hearing on the Forest Service budget.
I am beginning to believe that forest health is going to be closely tied to the financial accountability of the Forest Service. As we heard in last month's hearing, the General Accounting Office recently found that the Forest Service is at risk because of its vulnerability to waste, fraud, abuse and mismanagement.
As I understand it, Mr. Chairman, at least 40 million acres of our National Forests are also at high risk because of their vulnerability to wildlife, insects, and disease. High risk means people's homes and lives are at risk from catastrophic wildfires. You can see that possibility up and down Highway 97 along Bend and LaPine in Oregon, Hood River County, and throughout much of my district. High risk means that wildlife habitat will be destroyed and animals killed in searing firestorms, not to mention the lives of young people put at risk trying to fight these fires.
I am sorry to say I do not think we can begin to earnestly attack the forest health crisis on our National Forests until we can properly account for the Forest Service's past and present expenditures, including properly focusing expenditures on projects that will immediately increase the health, safety and recreational opportunities of the people who enjoy our National Forests.
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I think we can all agree there is a tremendous amount of work that needs to be done to increase the health of our Nation's forest. All we need to do is look at the figure of 40 million acres as an unacceptably high risk to see that.
Within the President's budget is $218 million in funding for Federal land acquisition, urban sprawl, and other similar initiatives. With this money, the Forest Service could properly treat and thin over 2 million acres of the 26 billion acre backlog of overstocked and insect-infested National Forests. The bottom line is we should be putting the money in the resource towards fixing the forests we have rather than acquiring more lands.
We have all heard stories about run-down, cockroach-infested, uninhabitable buildings. We would not tolerate as a committee, as taxpayers, when millions of our acres of National Forest have become similarly run down, beetle-infested, choked with trees, overstocked. It is a fire waiting to happen. Now, when you compare them, they are akin to a run-down tenement building. We must not allow it to become a slum, nor the Forest Service to become a slumlord.
Chief Dombeck, you cannot allow our National Forests to degrade to this point. Until you can demonstrate that you can take care of the National Forests that have already been entrusted to you, I think I am one Member who is not interested in having us purchase any more lands. I am earnest when I tell you, though, I want to work to get the Forest Service's affairs in order so that we can concentrate on forest health and begin bringing our forests back to a state where they are no longer at high risk, where our citizens and wildlife are not threatened by catastrophic fires. We can achieve that state, but we have to concentrate on the end goal of addressing the problem that is before us.
So Chief, I say let's go to work, concentrate on getting rid of the title ''slumlord'' that could be put on our agency. I suggest we start with the beetle-infested timber on the Malheur National Forest, and I got a lot of other places we can go from there.
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Thank you, Mr. Chairman.
Mr. GOODLATTE. We would now like to recognize our witnesses, who are already at the table, the Honorable Wally Herger of California and the Honorable John Peterson of Pennsylvania.
And, Congressman Herger, we are delighted to have you with us, and your statement will be made a part of the record, and we would like to recognize you for your comments.
STATEMENT OF HON. WALLY HERGER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA
Mr. HERGER. Thank you very much, Mr. Chairman and Members. I appreciate this opportunity to discuss the future of the Forest Service and its need to increase fiscal accountability.
Mr. Chairman, as I have pointed out before, I have two strong concerns about the agency's management practices. First, I am concerned about what I feel is a major misdirection of policy from Washington that I believe is literally destroying the environment in our National Forests. Second, I am concerned about what has been pointed out as a failure by the Forest Service to properly manage its annually appropriated dollars. These issues are critically important to me and my constituents. My district in northern California is made up of extensive forest lands that include all or parts of 11 National Forests. Forest Service policy, therefore, has a direct impact on the well-being of the communities in my district.
The Forest Service estimates more than 40 million acres of our National Forests are threatened by destruction by catastrophic wildfire. The danger of this threat is particularly strong in forests in the western United States. Historically, western forests were filled with stands of large trees. Forest floors were less dense and were naturally and regularly thinned by lightning and Native American-caused fires that cleaned out dense underbrush leaving the big trees to grow bigger. However, because of decades of well-meaning and aggressive fire suppression practices, these forests have grown out of hand, creating an almost overwhelming threat of catastrophic fire. Now when a fire strikes, it is not like the positive fires of the past. Instead, modern fires leave an almost sterile environment in their wake with almost no vegetation, wildlife or habitat left behind. These dangerous conditions are not irreversible. Regrettably, however, because of the Washington-based mandates and directives from the current administration, the Forest Service suffers from a virtual paralysis.
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On another note, I am also deeply concerned about the lack of accountability for the Forest Service's financial resources. In a December 29, 1996, letter, the General Accounting Office noted that the Forest Service could not account for $215 million of spending in this 1995 budget. In addition, at a March 26, 1998, hearing, Mr. Barry Hill, Associate Director of the GAO, testified that although the Forest Service had been notified of areas where it needed improvement, ''The agency has not acted on some recommendations, has studied and restudied others without implementing them, and has left the implementation of others to the discretion of its independent and autonomous regional offices and forests with mixed results.''
Also, for the first time in the history of this agency, the GAO included the Forest Service in its list of major management challenges and program risks within the Department of Agriculture.
In spite of this, the Forest Service requested a $172 million increase for fiscal year 2000. I seriously question whether we can allot additional funds to this agency when for the past 4 years it has not been able to accurately account for its current financial resources.
I am also concerned that the Forest Service's priorities are not properly set to fulfill its role as a land management agency. Without proper guidance, this agency may neglect some of its more important programs, such as fire suppression and forest health restoration, and may, as has happened in the past, spend taxpayer dollars on programs like painting rocks to make them look older or, in another actual instance, where the agency spent more than a half million dollars on an employee retreat that explored such concepts as ''everyone's truth is truth,'' and ''alternative realities are OK.''
Mr. Chairman, I would like to say in closing that I hope that we can work together to assist the Forest Service here in Washington in turning itself around so that we can ensure a brighter, more healthy future for America's forests and forest communities.
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Thank you.
[The prepared statement of Mr. Herger appears at the conclusion of the hearing.]
Mr. GOODLATTE. Thank you, Congressman Herger. And I very much welcome your remarks and agree with your concerns and your objectives. Thank you.
Congressman Peterson.
STATEMENT OF HON. JOHN E. PETERSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA
Mr. PETERSON. Thank you, and good morning. Chairman Goodlatte, Ranking Member Clayton, and other members of the committee, I want to share with you my perspective regarding the fiscal year 2000 budget for the U.S. Forest Service.
So far this year, the U.S. Forest Service and Chief Dombeck have testified, and Secretary Glickman for the Department of Agriculture, before the Interior Appropriations Subcommittee and also the Resources Forest and Forest Health Subcommittee.
Today I would like to point out some specific areas I feel are shortchanged by the Forest Service budget. I am not here to tell you that the Forest Service should get reduced, level, or increased funding appropriations, but rather to highlight what I believe are questionable priorities that will result in flawed outcomes.
First, the U.S. Forest Service has a tremendous backlog in deferred maintenance. There is currently a need for billions of dollars to make a dent in the maintenance of 380,000 miles of road, bridges, campgrounds and other facilities. The administration's attention to maintenance is inadequate. It is my understanding that the road maintenance alone needs $431 million annually and will have requested only $122 million. That is 29 percent of their annual need. Facility maintenance needs $255 million annually, and their request of $55 million is only 21 percent of their annual need.
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Also, there is a huge need in the forest health area. Insects and disease have devastated some 40 million acres of forest, while the potential for wildfire exists on 50 million. Yet the request is level funding in both areas.
I represent the most rural of America in the East. My volunteer fire departments provide critical first-line fire and rescue service to the Forest Service in Pennsylvania. However, the funding for partnerships between the Forest Service and local departments is only $2 million. They make no mention of emergency services, which I think are even more vital than fire services. Other agencies in the Federal Government do have direct contracts with fire departments, and I would urge the Forest Service to take up that kind of project, because our fire departments and emergency service people will only be there if they have adequate resources to remain in business.
The administration continues to talk about the need for recreation on the Forest Service land; however, the budget request includes level funding for recreation management activity and also cuts construction of trails by 50 percent. Yet with all of these vital needs, the Forest Service requests $118 million for outright land purchases as proposed by a new administration initiative. If we are unable to take care of the land we have, should it be a high priority to continue to buy more?
I have heard the argument that much of the money for the so-called Lands Legacy $60 million initiative is pass-through money to the States with a 50/50 cost share. It would seem to me that when you add the two new initiatives, which is $178 million, it would be a wiser investment if this is utilized on roads, bridges, and the facilities we now have that so much need maintenance.
I would say the Forest Service has implemented many programs that are successful. The Recreation Fee Demo Program is a good example, but I would encourage them to continue to expand that opportunity and help with their own maintenance backlog with appropriate fees. But I do not support the call for service fees for timber sales. I do not understand how you make money when you take the cost of putting up a timber sale and put it on the purchaser. You are automatically going to lower the price of that amount. So it is more paperwork. It makes no real public policy sense.
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Now, what I would say, if the Forest Service would like a piece of the resource money that is coming to them to go into their coffers for backlog of maintenance, I would take a look at that, but let's be straight up about it, and if that is what they would like, let's talk about that.
Also, stabilizing the 25 percent fee to our local communities. Now, I am a person who says I look at history to see whether we should do that in the future. I only need to look at PILT, Payment in Lieu of Taxes, a rural program that is only 40 percent funded the amount it is authorized, and the authorization never goes up. There is no inflation. It has been on the back burner in this country for many years. The State I come from, we pay $1.20 an acre for every public acre to help the local governments provide the services that are necessary there. We pay pennies to our holdings at the Federal level, and we only get 40 percent, because it is rural, of what is authorized, and the authorization is seldom if ever increased.
I would like to comment finally here on some comments of Secretary of Agriculture Dan Glickman, a former colleague of ours, in front of the Appropriations Subcommittee this week. His priorities were:
Watershed health. I do not think anybody has a quarrel with that.
Roads and roads maintenance. If it is his priority, I say where is the beef? Where are the bucks? We need to put money in our road system and in our bridges if our forests are going to be accessible by all of those who choose to use them, especially our recreational people.
Land Legacy. This is an interesting concept for a rural agency like Department of Agriculture and the Forest Service. It is a program to fight urban sprawl. It never ceases to amaze me how rural dollars get funneled off into urban areas. Urban sprawl may be a serious problem, but should it be on the priority list of the one agency at the Federal Government whose role it is to keep a strong, healthy rural America? I think not.
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Urban sprawl is really caused by our most affluent Americans who keep moving out of the cities into the rural areas around them and using up land that people would like to have preserved. But that is an urban issue, and I don't think should be at the top of the priority list.
Research and financial accountability are the other two issues he mentioned.I asked, what about forest health? What about sustainable timber production and other resource production? What about the multiple use concept? What about recreation? It makes me wonder that if those on high, and I mean really on high, in this administration have their way, will we end up with a U.S. Park Service under a different name. I hope that we do not let that happen.
As far as financial accountability, I share many of the concerns that Mr. Regula, the chairman of the Interior Appropriations Subcommittee, and of you, Mr. Goodlatte. I want to thank you for the chance to be with you here today and share these few thoughts on the Forest Service budget and would be pleased to answer any questions you might have.
[The prepared statement of Mr. Peterson appears at the conclusion of the hearing.]
Mr. GOODLATTE. Thank you, Mr. Peterson, for those very well thought out remarks.
We generally do not have questions for our congressional witnesses, but we do thank you both for your contribution and look forward to working with you in the key positions you both hold to try to straighten this out, and we will work with the Forest Service, too. Thank you very much.
I would now like to invite our second panel to come up to the table. We are pleased to have Mr. Michael Dombeck, the Chief of the U.S. Forest Service, on behalf of the U.S. Department of Agriculture; Ms. Linda Calbom, who is the Director for Accounting and Management Division of the General Accounting Office. Ms. Calbom is accompanied today by Mr. McCoy Williams, who is an assistant director of financial management issues at the General Accounting Office. We are also pleased to be joined by Mr. Roger Viadero, who is the Inspector General at the U.S. Department of Agriculture. Mr. Viadero is accompanied by Mr. Robert Young, who is the Deputy Assistant Inspector General at the USDA.
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Chief Dombeck, welcome. We will make your full testimony a part of the record, and we welcome your remarks.
STATEMENT OF MICHAEL DOMBECK, CHIEF, U.S. FOREST SERVICE, U.S. DEPARTMENT OF AGRICULTURE
Mr. DOMBECK. Thank you, Mr. Chairman. I would like to start out by saying I really appreciate the hospitality. I have never been offered a cot before at a hearing, but I appreciate that. And I would invite you and Mrs. Clayton and also Mr. Walden to the Chief's office as well to continue the dialog that we have and try to move forward.
I have been in this job about 2 years now. It has been fascinating and challenging to be part of the evolution of the natural resource policy, dealing with the controversies of the Forest Service. And one of the things that I look back on, as Mr. Peterson mentioned, is the history of natural resource issues. And to go all the way back to Gifford Pinchot, we see the challenges, the debate around natural resources issues that we are in the midst of here in 1999 were also present at the turn of the century. And the values that the first Chief of the Forest Service had are really the values about the long-term interest of the land, the health of the land, and we move forward along those lines.
However, over the last few decades, there has been a significant change in how society views conservation values. Many people have ceased viewing publicly-owned resources as a warehouse of outputs to be brought to market and instead have begun assigning greater values, positive values, to the outcomes of forest management, their recreation values and water values, the scenic beauty and all of these values. And the result of such a change is that we often find ourselves caught in the middle of these competing interests.
Some look to you, the Congress, to fix the legislation that they perceive has negatively affected these interests. Others push to limit appeals so the agency can get on with producing timber or stop producing timber, as the case may be. Still others seek to ask the courts to resolve land use issues through litigation.
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I welcome the opportunity to work together with you in an open dialog and move forward on many of these issues; however, I think the central premise of our approach is that restoring and maintaining a healthy landscape, both on the public land base as well as the private land base, is important. It is important that we ensure these values for our children and their children. And hence the natural resources agenda that sets out our priorities, the priorities of watershed restoration, of recreation, of sustainable forest management, of dealing with our road system, and the importance of accountability and financial management within the Forest Service.
Mr. Chairman, I want you to know, concerning the problems of accountability, I, as the new Chief in this agency, was greeted with many of these challenges. I was the subject of many hearings in the last Congress. I want to say we have got the message. I also want to thank my colleagues at the table, the Inspector General's Office, the General Accounting Office, because it is with their efforts and their guidance that the agency has gotten the message. And I have made it a priority—in fact, I made it clear through organizational changes, through personal statements—that the business and financial management functions of this agency are of equal importance to managing natural resources.
In fact, I have Vincette Goerl with me at my right, who is the Chief Financial Officer of the Forest Service, with tremendous credentials. She was part of getting a clean financial audit for their Customs Service. I was Acting Director of the Bureau of Land Management when we received our first clean financial audit at that agency back in 1995. And we know what it takes. We need your support, encouragement, and guidance to move forward. We want to work with you in this effort.
We would like to talk about budget structure. The Forest Service has one of the most complex budget structures in Government, and there are many issues like this that I hope we can talk about. But over the long haul, I hope that our resource policy debate does not detract from the need to streamline and modernize the Forest Service's accountability and business operations. I believe all of us, regardless of our resource philosophies, need a smoothly running, efficient resource management organization. That is important to all of the people of the country.
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I want to point out that the Forest Service manages some 192 million acres of public lands, 383,000 miles of roads, $30 billion worth of structure. We process 74,000 land uses, 23,000 developed recreation sites—campgrounds, access sites, and other things like that—tens of thousands of dispersed recreation sites, and 35 million acres of wilderness.
The National Forests are many things to many people, in addition to a world class research program that has contributed tremendously to society in solving problems like western white pine blister rust, making progress in dealing with the gypsy moth issue in the Northeast. And I could list a long litany of successes along these lines that are of value not only to National Forest System lands, but also of value to private forest landowners as well.
In addition to that, we have a State and Private Forestry Program that provides technical assistance to the States, to private landowners, in cooperation with State Foresters that are so important. Because the National Forests are only a percentage of the forest lands in the United States—and if our goals are forest health and clean water and protecting the values that I believe most of us agree on—we need to make sure that the technical assistance, the best science, is available to all forest landowners in this country.
I would also like to mention that among the many employees of the Forest Service, we have among the best wildland firefighters, the best researchers, the silviculturalists, the biologists, and the landscape architects in the world. And I think it is very important that our National Forests be models of what good forest management should be. And I look forward to working with you. I appreciate the offer that you have made, and I would be happy to answer any questions you have after we finish with the panel.
And I want to thank the panel again for their support, and understand that I do not view what we heard earlier as personal criticism by any means. What I do is I accept the challenge to move forward, and I hope we can expend as much energy as possible moving forward and fixing the problems one step at a time.
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I am reminded of the fact that it took Jack Welsh about 10 years to get GE where GE needed to be. And the fact is some of the complexities within the Forest Service are even more so because of the constraints that we have in large Government agencies.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Dombeck appears at the conclusion of the hearing.]
Mr. GOODLATTE. Thank you, Chief.
Ms. Calbom, welcome.
STATEMENT OF LINDA M. CALBOM, DIRECTOR, RESOURCES, COMMUNITY, AND ECONOMIC DEVELOPMENT, ACCOUNTING AND FINANCIAL MANAGEMENT ISSUES, ACCOUNTING AND INFORMATION MANAGEMENT DIVISION, GENERAL ACCOUNTING OFFICE
Ms. CALBOM. Thank you. Mr. Chairman and members of the subcommittee, I am pleased to be here today to discuss our ongoing monitoring of the Forest Service's efforts to improve its financial accountability. Mr. McCoy Williams is with me today. He is the assistant director who is responsible for financial management work at Forest Service.
As you know, and as we heard today, Forest Service has a long history of financial management inadequacies. Since the first audit of the Forest Service's financial statements, which covered fiscal year 1991, the Inspector General has consistently found serious accounting and financial reporting weaknesses. As you will hear in a few minutes from Mr. Viadero, these problems continue today.
Additionally, the Forest Service has experienced major setbacks in implementing its new accounting system, which is really key to correcting many of the financial management deficiencies.
I wanted to spend just a few minutes discussing the basic problems that the Forest Service must resolve in order to achieve financial accountability, and then I will talk a little bit about GAO's designation of Forest Service financial management as a high-risk area. Finally, I want to touch on some of the recent steps that Forest Service has taken towards correcting its problems.
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There are really three fundamental problems that Forest Service must resolve in order to achieve financial accountability. First, they have got to correct the basic accounting and reporting deficiencies which have plagued the agency for years. The IG's most recent audit report, which you will hear more about in a few minutes, shows that the agency continues to be unable to reliably keep track of billions of dollars of major assets, cannot accurately allocate revenues and costs to its programs, and made significant errors in preparing its financial statements. These fundamental problems must be corrected before Forest Service can even begin to be accountable to taxpayers for the billions of dollars invested in its programs and activities.
Second, the Forest Service must resolve the significant problems that have undermined its attempts to implement its new accounting system. The system was partially implemented during October 1997 in three of its operating units. These represent about a third of the agency's activities. These units experienced major problems in processing and reporting transactions and were not able to produce critical budgetary and accounting reports. The problems stemmed in large part from errors of transferring data into the new system and Forest Service's onerous cost classification and allocation processes, which essentially overwhelmed the system. Additionally, the projects suffered from a lack of proper oversight and insufficient testing prior to implementation. These problems need to be fully addressed before moving forward with implementation of the system agency-wide.
And finally, Forest Service must address its field structure as it relates to financial management. The autonomous nature of the Forest Service's organization makes it very difficult for headquarters financial managers to gain full cooperation from the field in trying to correct the many deep-seated accounting and reporting deficiencies. The problem was well summed up in an independent consultant's report that characterized the organizational structure as, and I quote, a chaotic financial environment. The report went on to say that this environment creates inconsistent practices and credibility problems. The consultant recommended, among other things, a chief financial officer be established within each region which would be in charge of all accounting, budgeting, financial planning and analysis, and strategic planning.
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As several others have mentioned today, because of the severity of the weaknesses in Forest Service accounting and finance reporting, in January of this year we designated forest risk financial management as a high-risk area. We used specific criteria in making that designation. Just to very briefly summarize, we first looked at significant agencies in the Federal Government that had been unable to produce auditable financial statements. In other words, the Inspector General, in doing their audit, was not able to form any kind of conclusion on the statement because the records are in such disarray. USDA as a whole fits into that category. We then looked within the agency for the most severe problems. And in the case of USDA, while they do have other problems, Forest Service is really their Achilles' heel.
Now, in order to be removed from the list, the Forest Service will need to correct the problems I just outlined and will have to demonstrate that it can sustain financial accountability as measured by the results of the financial audit for at least two consecutive years. Thus, assuming the Forest Service meets its goal of correcting its financial management deficiencies by fiscal year 2000, which I believe is an optimistic goal, the earliest it could be removed from the high-risk list is 2003.
While major barriers remain, the Forest Service has taken several actions that if successfully carried through represent important steps towards achieving financial accountability. For example, the Forest Service has put in place individuals in headquarters, including Ms. Goerl here, with the type of financial management experience necessary to turn the agency around, including those who have experienced implementing the new accounting system that Forest Service is attempting to implement.
In addition, steps have been taken to simplify the process Forest Service uses to classify and allocate costs which will help pave the way for successful implementation of the new system. However, even if the new system is successfully implemented, the Forest Service's problems will not be resolved until the entire agency understands the need to be accountable to the tax-paying public. Until this occurs, Forest Service will be unable to reduce the risk of waste, fraud and abuse caused by its current lack of financial accountability.
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That concludes my statement, Mr. Chairman.
[The prepared statement of Ms. Calbom appears at the conclusion of the hearing.]
Mr. GOODLATTE. Thank you very much.
Mr. Viadero, welcome.
STATEMENT OF ROGER C. VIADERO, INSPECTOR GENERAL, U.S. DEPARTMENT OF AGRICULTURE
Mr. VIADERO. Thank you, Mr. Chairman.
Mr. Chairman and members of the subcommittee, thank you for the opportunity to be here to testify on financial accountability in the Forest Service. With me today is Mr. Robert Young, Deputy Assistant Inspector General for Audit.
Last month I issued the audit report on the Forest Service's fiscal year 1998 financial statement. My opinion was a disclaimer, meaning the agency's books and records were in such poor condition I could not do enough work to draw a conclusion. This has been the pattern since the annual audit of the financial statements became law in 1990.
Although many problems remain, the Forest Service has made significant strides toward improving its financial management; however, much remains to be done. Because weaknesses have been so pervasive and long-standing, corrections have been difficult to achieve within the agency. It was not until fiscal year 1995 that the Forest Service began to grasp the seriousness of these problems. That year I issued an adverse opinion on the Forest Service's financial statements. At that time I met with the then Chief to impress upon him the magnitude of the weaknesses, the inadequate systems, the shoddy recordkeeping, and the disinterested attitudes. He agreed, and the Financial Health Task Force was created.
Even though Forest Service management has been committed to implement this initiative, difficulties and sometimes failed efforts have occurred. The Office of Inspector General has stayed current on Forest Service actions to address its financial and management weaknesses through our annual financial audits. In each of these audits, we recheck and readdress material weaknesses in the Forest Service's financial systems and internal controls.
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In addition, through a consulting agreement with the Forest Service, OIG has assisted the agency in monitoring the implementation of actions pursued under the Financial Health Task Force. Results from these efforts continue to show a need for improvement. I will separately address these problems having the greatest impact on the Forest Service.
The Forest Service estimates that all of the issues will be overcome by fiscal year 2000. Although the goal is admirable, I cannot assure you that it is obtainable. The main problems confronting the Forest Service are real property, receivables and payables, and systems deficiencies.
First of all, real property. Accounting for real property is by far the most significant accountability problem the Forest Service has. Unfortunately, though the Forest Service may be able to see the forest for the trees, it is uncertain as to what is in the forest, where it is, or how much it is worth. In fiscal year 1997, we could not verify the $8.2 billion in real property reported by the Forest Service because the agency had not inventoried enough of its assets nor put a value on them. To attempt to rectify this situation, Forest Service has been working for years to build a new automated database to account for all its real property.
As fundamental as these efforts seem, finding out what you own and writing it down, it proved to be a major problem for the Service. It turned out that many of the inventories were incomplete and the valuations erroneous. More importantly, Forest Service roads, with an estimated value of over $3 billion, were not considered at all.
Next, accounts receivable and accounts payable. The second major problem area is accounts receivable and accounts payable; in other words, how much you are owed by others and how much you owe others. Forest Service has continuously had problems filing accurate accounts receivable and accounts payable balances. Put simply, they are uncertain what is owed them and what they owe others.
Input errors at the field level have resulted in a substantial amount of invalid receivables. In total, Forest Service's financial statements for fiscal year 1998 had to be adjusted by over $44 million to correct these errors. While the receivables, money owed to the Forest Service, are wrong, so are the payables, money owed others. Since 1993, the Forest Service has historically computed its accounts payable balance statistically by identifying the extent of errors likely to have occurred and projecting them over the universe of transactions, then adjusting the total. In other words, the Forest Service knows they have incorrect entries, but does not know for sure how many or how much. Rather than correcting the errors, the Forest Service tries to estimate them.
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The Forest Service has got to fix these problems before the accounting can get any better. They are trying by first converting to a new general ledger system which will facilitate an integrated accounts receivable system and accounts payable system, thus improving controls. After you correct your accounts receivable and payable and real property, you have to have a good computer system to put the information in. Right now the Forest Service does not have this. Until they do, the problems will remain.
The Forest Service is in the process of converting the National Finance Center, NFC, new general ledger system, called the Foundation Financial Information System, FFIS. Conversion to FFIS is intended to correct the long-standing weaknesses in the Central Accounting System, CAS, at NFC. The CAS general ledger is not fully integrated with the subsystems. Processes within CAS impede the ability to trace individual transactions back to source documentation, and CAS does not conform with Government-wide standard general ledger requirements.
Conversion to FFIS began during fiscal year 1997, with two out of the nine Forest Service regions coming on line. The remaining regions are scheduled for conversion in October 1999.
Conversion to FFIS has not been easy. The Forest Service has experienced problems with the production of timely and accurate FFIS budget and accounting reports. I mentioned that all of the remaining Forest Service regions are scheduled to go on line on the new system in October of this year. Realistically, to get this done and make it work is a major task. From our perspective, the jury is still out as to whether it can be done effectively.
In conclusion, what does all this mean? Well, first the Forest Service cannot assure the Congress, the Secretary of Agriculture, or the American people that it is fulfilling its obligations as stewards over billions of dollars of assets. Second, without correcting the weakness in accountability, Forest Service managers' ability to effectively operate the agency will continue to be hampered. Forest Service's financial management and accountability have been materially deficient for many years, and correction remains a long-term venture needing continued emphasis and discipline to stay on its course. It is critical that an improved general ledger system, such as FFIS, be successfully implemented.
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Further, the real property problems must be rectified. All assets must be located and properly valued. If the efforts are achieved, I believe at that time the Forest Service will no longer be an agency at high risk.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Viadero appears at the conclusion of the hearing.]
Mr. GOODLATTE. Thank you, Mr. Viadero.
Ms. Calbom, could you recount for the subcommittee why the GAO included the Forest Service on its written list of high-risk agencies? What does the agency need to do to get off that list, and how long do you anticipate it will take the agency to get off the list?
Ms. CALBOM. The reason that we put Forest Service on the list, as I was mentioning in my opening statement, it really started with looking at the overall agency USDA itself, because the USDA got a disclaimer of opinion. But then we looked further into USDA and said, well, what really is the big problem there that does not look like it could be corrected anytime soon? And within USDA, Forest Service is the big problem that, as we have been talking today, has existed for many years. And even though the goal is to have things corrected by fiscal year 2000, I think realistically it is going to take more time than that.
What they have to do to get off the list. One, they need to be able to get a clean audit opinion, and they need to do that for at least 2 years in a row. But it really goes beyond a clean audit opinion. You can get a clean audit opinion if you can go out and count all your assets and write them down, and give a statement as of a certain date, the end of the year, and say, well, here is what I have. But the problem is you have to be able to know the next day what you have got, and you do not have that until you have got a good system in place to keep track of if I have assets that wear out and they are no longer useful that I need to write off. When I acquire new assets, I need to have those on my books, and I need to know where they are and how many I have at all times.
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It is these kinds of issues that are really internal control issues, how do I manage my agency, how do I keep track of things on an ongoing basis. Those have to be corrected as well.
Mr. GOODLATTE. Thank you.
I understand that the Forest Service has taken some initial steps to overcome its financial accountability problems. Yet you still put them on the high-risk list. Can you tell us why?
Ms. CALBOM. Well, they have taken some initial steps, and I think some very good steps, but there have not been any results to show for that yet. And until you can prove that the actions you are taking are, in fact, correcting the problems, GAO would not take them off the high-risk list. And again, even when they do correct the problems, we want to see that they can sustain that over at least a period of 2 years.
Mr. GOODLATTE. In your testimony, you indicate that the Forest Service's lack of financial accountability makes it vulnerable to waste, fraud and abuse. I wonder if you could elaborate on the risks related to the Forest Service's financial management problems.
Ms. CALBOM. Sure. There are a number of risks. As Mr. Viadero was saying, one of the big problems the Forest Service has is that they do not know what they have, and they do not know where it is. And this could put you in a situation, for instance, where if someone at Forest Service needed some kind of very expensive, specialized equipment, because they do not have a system that could tell them whether this piece of equipment actually exists in a warehouse somewhere not too far away, again this is hypothetical, but they could, in fact, end up purchasing some equipment that they already have. This could go for anything. This could go for pesticides. This could go for chainsaws. It could go for anything. And because you do not have a good handle on keeping track of these assets, not only are you going to purchase things that you may not need, you end up having to store this equipment. So there is a lot of wasteful types of situations that occur.
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Another type of situation that could occur and actually does occur is where certain assets are purchased, and the account that typically they would come out of has already been used up. So instead of recording it in that account, situations occur where Forest Service would actually record the cost in another account. That is a problem with not knowing what they spent the money on. They do not know how much they spent and what did they really spend it on. Those are the types of situations that can occur in Forest Service's vulnerable-type situations.
Mr. GOODLATTE. Mr. Viadero, would you like to comment on that same question?
Mr. VIADERO. Yes, sir. I will pick up on what Ms. Calbom said. What we found during an inventory, and we will again give you a hypothetical on this one, let's say we have a John Deere, a very specialized piece of equipment, that the Forest Service needs, and let's say we are going to transfer from region 1 to region 6. They never dropped it when they transferred the equipment from the region 1 inventory, but added it up to seven times on the region 6 inventory. So now we have an overstatement of some 800 percent on one piece of equipment.
Another example on the inventory, while Forest Service did go out and do an inventory of the roads, they failed to realize that they did not include 10,000 miles worth of roadway in there. That is an awful lot of roadway.
What we did do to correct it, though, in 1995 we issued the adverse opinion. There are not too many adverse opinions around. That was the bell ringer the attention getter. And what we did do then is enter into a consultative agreement with the Forest Service. In other words, it is very easy for me, just from an Inspector General's point of view, just to go in and criticize somebody for their operation and leave, but there really is no fun to that. The fun is working with the client, if you will, to fix the problem.
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So we are working with the Forest Service to fix the problem. To that end, for instance, for the most recent financial statements that we just rendered last month, we did no substantive work in the Forest Service in the financial statements so far as doing what we call in the profession the jerk work, if you will. The problem is if we had done that, the problems would have continued and only been exacerbated. So we went in to fix the major problems on the plant, property, and equipment; and to that end, we consulted both with GAO and the Office of Management and Budget, OMB, so that we would obviate certain normal auditing standards and procedures so we could work on the problem of fixing it rather than just coming back with another disclaimer that would be totally meaningless.
To that end, we have approximately 25 members of OIG working with the Forest Service and its financial staff, and we honestly feel that we have come in the last 3 years, light-years from where we were. However, that is not dealing with the computer system. That is dealing with the grunt work of checking out how many roads we have, how many pieces of equipment we have, basically the fundamental and rudimentary financial management issues.
Mr. GOODLATTE. Thank you.
Mrs. Clayton.
Mrs. CLAYTON. Thank you. I do not know where to begin, there are so many irregularities in such a big agency which has such a vast responsibility.
Let me just ask Ms. Calbom first. I appreciate your testimony. I am just getting your testimony today, and I guess I am getting a little sensitive about the committee when I do not get all of the information at the appropriate time. Are you just sending it up? I am not being critical of you.
Ms. CALBOM. No. We sent it up on Tuesday.
Mrs. CLAYTON. I am just getting it today. I do not know how that happens, but at any rate, that is a possibility. It is very good, and I appreciate it. I did not read it all because I have just been handed it as I walked in here.
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Are there any other agencies at high risk that we have in the U.S. Government?
Ms. CALBOM. Yes, there are a number of agencies on the high-risk list. And Forest Service is on the high-risk list for financial management issues. In fact, another agency we added this year was FAA. Also, the IRS continues to be on the list for financial management high risk, as does the Department of Defense.
Mrs. CLAYTON. And the purpose of that is to bring to the attention of those agencies and the American people these are agencies that are so out of compliance that they really do threaten their ability to carry out their constitutional mandate; as well as fraud, waste, because fraud, waste, and abuse, they are bad and criminal and all that. They are found in all agencies at some given time. So trying to distinguish what our public policy issues for designating them as high risk, meaning that we will concentrate our concerted effort to make sure that they will come into compliance, is there a reason that we do it other than just to red flag it? And is there a greater commitment you feel that we should have now that we know these agencies are in danger: Defense, IRS, I guess Federal Aviation Administration, as well as the Forest Service of the USDA? What would you say should be the Government's attitude now towards these agencies? Should we be looking at Defense to see how much money we give? I notice in the budget, I am on the Budget Committee, we are increasing that substantially. Should we be looking at IRS dismantling? What do you see as a public policy reason that we would have GAO designated as a high risk?
Ms. CALBOM. The reason we do single out Forest Service and FAA and DOD and some of the others is not to say that other agencies do not have significant problems in trying to be accountable. They certainly do. I audit 10 other agencies in the Federal Government, and the majority of those have problems as well. But none of them have just this basic lack of accountability that I see in Forest Service as well as some of the others on the high-risk list.
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And if you really look at it, there are several facets to accountability and ways to measure that accountability. We have got our budget, which really tells us here is what you are supposed to spend your money on, and here is how much you get. You have got the financial statements, which is what my group focuses attention on; and that says, all right, this is the public report to the American taxpayer on what this agency spends money on. And then you have got performance reporting, which says, all right, Mr. And Mrs. American Taxpayer, this is what you got for your money. And you really need that whole package, you need all three, for an agency to really, truly be accountable to the American public.
Now, particularly in the performance reporting area, that is a relatively new area, all agencies are struggling in that. But the financial reporting, you have got to get that squared away before you can even begin to think about doing realistic performance reporting that really gives you this idea, what did I get for my money.
So to answer your question, that is what we are after is the accountability. These agencies have a serious lack of accountability, and they are not going to be able to move forward in doing the performance measures and whatnot until they can correct just the very basic problems.
Mrs. CLAYTON. Well, I want to tell you I agree with that. I think they have two responsibilities, the financial responsibility and the ecological responsibility, and that is performance, performance according to what they are mandated by the statute that created them. And if they are not accounting for how they spend those resources to achieve those statutory objectives, obviously they are failing both of them.
So I want to be on record as saying that I cannot sustain an operation or be supportive of an operation that does not understand the fundamental necessity of being financially accountable in order to do what they are established to do. So the financial records ought to be there.
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I guess I am having difficulty, and I understand this is a large organization, but I am having difficulty understanding why you cannot manage an inventory, as vast as it is, why you cannot manage that, why you cannot do the inventory of land. Is it because of lack of staff, lack of structure, or lack of systems, lack of someone being responsible for it? What do you see it is a lack of?
Ms. CALBOM. I think part of the problem is nobody really ever thought they had to be accountable for that before, and it was not until some attention was drawn to these problems that the Forest Service got real serious about deciding they needed to go out and find out how many thousands of miles of roads they had.
There was earlier discussion about the deferred maintenance on the roads. Well, how in the world can you estimate how much you have in deferred maintenance if you do not even know how many roads you have out there? And as to why they have not gone out and completed their inventories, they are working on it, certainly.
Mr. Viadero could probably comment more on that. He has been directly involved in that issue, I know, for a number of years.
Mrs. CLAYTON. Mr. Viadero, your comment was on the report card it is an F, but you see your added responsibilities is to work with the agencies. What are some of the things that you see that are still barriers of overcoming this?
In your testimony, you have stated they have put a number of initiatives, kind of the grunt work, as you said, to put in place, I guess, counting the trees and counting the agencies and counting the roads, but they have not yet put the more technological tools in place. But what do you see is impeding this? Is it lack of attitude or leadership? Is it lack of resources to do it? Is it lack of understanding the technological tools that are needed? What do you see, since you are working with them? Do you find that there is a spirit of awareness and we have a fierce problem here, and do they take this seriously, or do you see a lack of appreciation of the problem, or what do you see is the problem?
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Mr. VIADERO. Mrs. Clayton, we do not see a problem with the leadership, particularly since Chief Dombeck came on board. There is no doubt the Forest Service has a leader. We also see a very positive step that the Forest Service took by appointing a chief financial officer. Prior to that they did not have one.
The issue where they got really bogged down with was the FFIS, that computer system down at the National Finance Center. And if I can, I do not want to be overly optimistic here, but it is like a child going to its first rodeo, and they look in the corral, and that is all they see is what is on the floor, and they say, there must be a pony in here someplace.
What happened is they signed off on, if you will, what the vendor promised them would be right out of the box, computer program, put on the machine and it would work marvelously. Myself and Mr. Young sat at a meeting at the Deputy Secretary's office with the then chief of staff for the Forest Service and the then Acting Chief Financial Officer at the Department, and we wanted those systems tested.
With 31 years in Government at various stages, this is my fourth or fifth major computer system, and it has been the same problem regardless of the agency that I have been at. The problem is nobody wants to take the time to test the software. All we asked to do was test the software and run the software parallel, which means the old software and the new software, and compare them. And then I got this nonsensical response that, well, the reports will not be the same. Well, in accounting, Luther Vitroli in 1494 discovered double-entry bookkeeping. This is not mind-boggling. So regardless of the reports you have, the system should still be processing the same number of debits and the same number of credits.
I could not get anybody to understand my point of view. So they said it will go on line, and they put it on line, and it not only failed, but it failed abysmally. That is not the fault of the individual Forest Service employee who is dedicated and is out there doing the job. The problem happens to be those are the techies involved.
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I bought a new version of Windows 98, and I should have taken the hint and waited for 98.01 to come out because 98 had problems in it. This is just another example, a more homeboy example if you will, of what is going on. You just cannot take these systems out of the box. They took an alpha system, which by definition is not yet ready for prime time, put it on the machine, turned the switch, and it started to cough a little bit. And it has taken us 3 years to catch up to the coughing, but they are moving in the right direction.
Mrs. CLAYTON. Mr. Dombeck, now that you have heard of this, what do you say to this committee as to how you have a handle on this problem? You acknowledged early on that you did not deny there was a problem, but do you have the same assessment as you are managing the problem?
Mr. DOMBECK. Yes. In fact, as I had mentioned in my opening statement, I know these are tough pills to swallow, but the fact is the agency and I acknowledge the problem. And I appreciate the partnership of the Inspector General and the committee in moving forward and solving the problem, because that is where the energies need to go.
So we do acknowledge the problem. And I have placed as equal priority on business management as I have on natural resource management. I would like to just tell you a little bit of the history of the development of this and sort of where we go from here.
By its culture, the Forest Service is a very large, decentralized organization of resource managers if we go way back, say, several decades. And resource management should be made on the decentralized basis, because watersheds are different in North Carolina than they are in eastern Oregon and than they are in my home State of Wisconsin, so we want this centralized decisionmaking. And what evolved then over time as more requirements were placed on the business side of this system is also a decentralized business system. And the fact is, as Mr. Viadero said, a credit and a debit is the same; it does not matter if are you in North Carolina or eastern Oregon or in my home State of Wisconsin. And that evolved over time.
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I was amazed when you look at the magnitude of the Forest Service. We do 75 million transactions a month. A couple years ago, we had 800 data entry points and 40 systems, all of which did not communicate with one another. So as pointed out, we have a major systems problem that we are getting on top of. If you have got to add up data from many, many different units, the data has to be uniform, it has to be entered with particular protocols, and it has to be entered accurately to add up on a national basis.
So we have got a cultural situation that we are dealing with, in a sense a behavioral situation, if will you will. We are aggressively moving forward with business training courses for our employees, with bringing on the staffs with the expertise, like Vincette and others have, to move forward with this effort.
We recognize the problem, and I consider it a major challenge, but just think of what an accomplishment it will be when we get this fixed. The fact is we need to bring resource management decisions using the best up-to-date business management practices combined. And I think it will achieve tremendous efficiencies for us. We just need to keep on moving forward with this.
Mr. WALDEN [presiding]. Chief and members of the subcommittee, we have been called for a vote on the rule on the Kosovo debate. We are going to recess the committee and return with this panel after the vote. So if you could stretch your legs, and we will be back in just a moment.
The subcommittee is in recess.
[Recess.]
Mr. GOODLATTE. While we are waiting for the subcommittee members to return, I have got a few extra questions, so I will take the liberty of asking those.
Ms. Calbom, could you expand on your comment that some of the financial management problems you have identified could result in unnecessary budget requests.
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Ms. CALBOM. Yes, again the situation that we were talking about before where you don't know what you have or where it is. In that situation, you could be asking to purchase supplies, purchase equipment, not understanding that, in fact, that those supplies and equipment already exist in the agency.
This is a kind of a system where you go to any kind of a retail store, and you might ask, well, do you have this certain merchandise in stock.
I went to Bed, Bath & Beyond the other day. I wanted a particular bedspread. They were able to pull up on their computer and tell me they didn't have it but their store over in the next city had it, so they were able to order it, that kind of thing.
The Forest Service needs a good system where they know what they have, where it is, so they can efficiently use their inventory and equipment and supplies.
Mr. GOODLATTE. Ms. Calbom, your testimony talks about a disclaimer of opinion on the agency's financial statement. How bad is a disclaimer.
Ms. CALBOM. In my view, a disclaimer is probably the worst kind of audit opinion. It is really not an opinion. It is an audit report because in essence you are saying you can't give an opinion. The records are so bad that you cannot give an opinion.
And I guess, again, if I could, just an example of what this is like, this would be like if you gave your teenage son—I don't know if you have a teenage son or not, but you gave your teenage son your checkbook and you said, okay, take this for 6 months and have at it.
And so he does. And he doesn't write any of the checks he writes. He doesn't write down when he uses a cash machine. He doesn't write down probably few and far between but when he makes deposits.
He gives you the checkbook back in 6 months and the question is, well, how much money is in the checkbook? Well, you don't know because there is no information, or the information has been written down so sporadically you just don't know. And you can't say for sure how far off it is because you can't even add up the columns to see.
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You may be able to call a bank later to get a balance, but you are certainly never going to able to retract and see what that money was actually spent on.
So a disclaimer of opinion is that kind of situation that you just can't tell.
Mr. GOODLATTE. Chief Dombeck, you have heard the GAO and OIG folks testify that they found your agency to be at high risk waste, fraud, and abuse and mismanagement, and they believe that you are still years away from overcoming this high-risk status.
Can you tell the committee in good faith that your agency is able to accurately account for how it spends taxpayer dollars?
Mr. DOMBECK. The IG and GAO's testimony have articulated quite well that we have got significant problems within these areas, and we acknowledge these problems.
I would like to make a point, though, that I made a little bit earlier because I think it is important, and that is: the reasons that we are where we are with the Forest Service and the importance of getting on with this.
The culture of the organization is a very decentralized culture, and that is the way resource management decisions should be made. I mean, you want resource management decisions on the George Washington to be made by the professional staff on the George Washington National Forest.
And this culture over the decades, this decentralized culture, when it comes to business management, a credit and a debit is the same, but what we had evolve various systems in various parts of the country.
So we have an organization with 75 million transactions a month, 800 data entry points and 40 systems that don't necessarily talk to one another. So we are dealing with, in addition to the system's problems and having to have the general ledger in place and items that were talked about earlier, but we are also talking about behavioral changes that need to occur within the organization.
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The centralization that is needed is counter to the culture of making resource management decisions at the local level.
And we have instituted a variety of programs. For example, we have launched business principles courses and are requiring employees to take that.
We've got a variety of things that I could talk about, but, I mean, it is important to understand that this is the kind of thing that evolved over a long time and it is not something that we are going to fix overnight. it is going to be something that we have to have a very methodical approach.
Mr. GOODLATTE. It would take years to fix, you think?
Mr. DOMBECK. Well, the staff tells me that the real property inventories are moving along fairly well and things like that, but this isn't something that we are going to fix in a year or two.
Mr. GOODLATTE. Under those circumstances, how do you justify a $172 million increase in discretionary spending and $100 million worth of new land acquisition to be managed by an agency that needs to get ahold of its management problems before it takes on any new responsibilities?
Mr. DOMBECK. Well, there is always a tremendous challenge just like you have here with the caps and so on. There is always a lot more work to do in most program areas than there are dollars to move around.
And, for example, to gather the information for the inventory, we have added 130 positions to deal with, you know, the accounting side, the business side of the program, and that is basically going to take positions and energy away from people that perhaps would be dealing with urban wild land interface issues, with fire risk, with forest health, and all of these kinds of things.
So I think the most appropriate dialog for us to have is we need to have some sort of a balanced approach or that we pull everybody out of the resource management business to fix say the inventory issue and so on.
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So those are the challenges that we face, and I am, you know, very willing to enter into a dialog to talk about that balance.
Mr. GOODLATTE. Thank you.
I think when we left off before the vote, Mr. Walden was the next in line to be recognized. And I will afford you more opportunity for more questions, but we'll recognize the gentleman from Oregon at this point.
Mr. WALDEN. Thank you, Mr. Chairman.
I took down some notes when you were first speaking, Mr. Dombeck, about General Electric taking 10 years to be turned around, and it sounds like from the testimony from the IG and the GAO this has been at least 8 years since the alarm bells went off so I guess we've got two left, and maybe the new administration will change things around.
But that being what it may, but I in my real life have served on a bank board for about 5 years. And I have got to tell you, when the FDIC comes in and says you've got a problem in your accounting, heads roll or things change or systems are dealt with.
And if they come back 6 months or a year later and find you haven't addressed these issues, other changes occur. And it is taken very seriously because of the fiduciary responsibility the board members have.
And I'm curious at the outset, the last 8 years of these alarm calls and horrible audit reports, have there been people held responsible and accountable in your agency that have been removed or reprimanded at all?
Mr. DOMBECK. What I have is I have a whole new team of deputy chiefs, and I might point out that when I made those changes, I was roundly criticized for making those changes.
It was considered something that was a first for the Forest Service. And we have brought in people like Vincette, and I want to point out that this is not something necessarily that I view that there was a willful in any way. This is part of the culture of the organization and the need to bring about behavioral changes and so on, just as, you know, there is a lot of criticism for putting 130 people into the accounting side of the organization.
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We have just got to put our shoulder to the wheel and make the changes that we believe are necessary to move forward.
Mr. WALDEN. OK, but has one person ever lost their job over all of this?
Mr. DOMBECK. Not that I'm aware.
Mr. WALDEN. In 8 years?
Mr. DOMBECK. Not that I'm aware of, no.
Mr. WALDEN. Has one person been demoted in 8 years?
Mr. DOMBECK. Not that I'm aware of.
Mr. WALDEN. I mean, assume for a minute that we are not talking about the Forest Service, but rather some other Federal agency, I mean, if that agency had turned in a decade of substandard or completely meaningless financial statements with no solid assurance for improved performance in the near term, you were saying maybe a couple of years to go, would you feel it unreasonable for Congress to temporarily deny any additional funding to that agency?
Mr. DOMBECK. Again, I think, you know, to have the dialog about the balance and what is needed is, you know, certainly the most important thing.
What we heard in some of the dialog here of the importance of getting on top of the resource issues, we have got, you know, the importance of getting on top of the accountability, financial management issues.
And, you know, what I hope we could agree upon is a balance, a reasonable balance to move forward because we do—I am pleased that we all here in the room have the common goal of wanting to get this fixed and manage the resources as well.
Mr. WALDEN. And I must tell you I am pleased to hear some of the comments about how you have made changes. I guess I just, as a taxpayer that has a lot of Federal land in his district, that I have some deep concerns about it as you're well aware both from myself now and my predecessor who still looms largely over this very hearing room. I just am troubled when I hear it is still going to take a couple of years to resolve.
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Let me move on to some other questions. You've mentioned frequently the 40 million acres of national forest currently at an acceptable risk of catastrophic fire. At our last hearing, we learned that 26 million acres of national forest land were currently at high risk of insect and disease infestation.
I assume you are aware this level of problem exists, and do you support the risk mapping initiative that provides this kind of information. Is it a priority?
Mr. DOMBECK. Yes, very strongly. In fact, it was my ninth day on the job in what is now your district, the hearing at Sun River, talking about the forest health issues with Governor Kitzhaber and at that time Chairman Smith and other members of this committee.
And we sort of asked ourselves this question: How could this be? You know, how is it that we are dealing with some of these forest health issues?
And it is a variety of things and people applying the science of the day; for example, total fire suppression, which has allowed, you know, the fuel buildup to occur.
The focus on harvest of the sixties, seventies and eighties. And the focus was not on the fire risk at that time, so, you know, we have new sets of issues that were really focused on that are problematic today.
And so we are aware of it. I strongly support the mapping effort, and I strongly support aggressive action to deal with the problems.
Mr. WALDEN. Thank you, Mr. Chairman.
Mr. GOODLATTE. Thank you. Mrs. Clayton.
Mrs. CLAYTON. I do have other questions, maybe three. Again, following up on the risk management that is talked about in the mapping, would you say that your budget adequately responds to what you think is the risk that is been identified through the mapping system either or fly or insects or disease?
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Mr. DOMBECK. What I would like to do is I would like to give you a breakdown of the priorities, and then I'd like to ask Janice McDougle, who is head of our State and Private Forestry organization, to give you a little bit more details about that.
But if you look at the priorities of increases requested for watershed health and restoration, we've got, I think, a $22 million increase for roads restoration, and we've also got significant increases for—and I'm looking for the data here—right now in those areas.
So there are increases. In fact, we've got $48 million for our watershed health and restoration; $113 million total for sustainable forest management; and $22 million for the national forest road system.
Let me ask Janice to elaborate on the rest of the initiative.
Ms. MCDOUGLE. Thank you.
One of the things I'd like to emphasize is that for fiscal year 1999 we are addressing some of those risks with such programs as thinning, with such efforts as salvage.
Let me give you some background in terms of where we are, what is the status of those maps. We have three maps that we are working on. One is the insect and disease. One is catastrophic fire. And one is urban wild land interface.
The insect and disease map is the only one—it got started about 2 1/2 years ago, and it is the only one that in it is fourth iteration. We are in the process of field-validating the others.
So I say that to say it is too soon to say the full implementation what it is going to cost. Also what we hope will happen is that our field units will drive that process based on how they use them, but we believe for fiscal year 2000 we are okay.
Mrs. CLAYTON. Well, let me just follow out. Where would I find that? I'm looking at someone else's analysis of this, but in what, I guess, was sent in by the committee and I gather it is correct, suppression and treatment of the forest lands in 1998 total 518 acres; however, the agency identified 26 million acres of high-risk insects and disease.
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Now, where would I find the money—where is what they say. There is no mention in the budget how the agency intends to address this, so maybe they just didn't have it in the right category.
Let me understand why that statement is not correct and what you have just said is correct, that you have identified, I guess what you said, the insect and disease; the others you haven't because you haven't had enough field testing. Where would I find that in your budget?
Ms. MCDOUGLE. That would be under our Forest Health Management budget line item under suppression.
Mrs. CLAYTON. Do you know what page in your budget it is?
Ms. MCDOUGLE. It is part of the Federal lands EBLI as well as well as the co-op lands EBLI.
Mrs. CLAYTON. And your budget?
Ms. MCDOUGLE. To the tune of $27 million.
Mrs. CLAYTON. OK. I will accept that. I am just reading where it says here that there is no mention, and I gather this was just an oversight on their part.
Ms. MCDOUGLE. It is not broken down in the table that you're looking at.
Mrs. CLAYTON. We are looking at.
Ms. MCDOUGLE. Because it is not the only thing that contributes to that. We have our gypsy moth program to the tune of $8 million. That is in there.
And I would like to say that for fiscal year 2000 that is the first time that program has been fully funded. We found it very, very successful in getting out ahead of severe infestations, and it has slowed the movement of the gypsy moth to and through the South by 60 percent.
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Mrs. CLAYTON. OK. Thank you. Another question, Mr. Dombeck. What does the budget proposal for the State and private forests include for cost-share programs on your——
Mr. DOMBECK. In fact, I will ask Janice to address that since that is her program area of responsibility.
Ms. MCDOUGLE. We have $5 million included in the Stewardship Incentive Program to provide cost-share support for a number of practices, timber supply, watershed conditions, wildlife habitat, recreation, and the like.
And an additional $10 million is provided as passed through to the Rural Business and Cooperative Services. This is something new for us. We are looking at ways to establish loans to landowners to do work that they would repay and replenish this pot.
So this is a new one for us. We have several examples that we could follow, and we haven't quite fleshed that out, but we are looking at two or three ways of doing that.
Mrs. CLAYTON. There is been a lot of conversation and interest in the President's new initiative of legacy. Again, the question is appropriately asked as we go for a new activity, Are we indeed keeping our current priorities? And I think that is a fair policy question.
Now, here again in the overviews I have here, it says that this new initiative is approximately $218 million funded for Federal acquisition of new lands in there; however, in other information I have that it may be $50 million. Obviously that is a big discrepancy in the amount, but I think the question is still appropriate to ask if it is $50 or $218 million.
Can you say, as we move in this new initiative, that we are able to keep our commitment and fulfill our obligations in our current priorities of the Forest Service.
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Mr. DOMBECK. Well, to answer your first question, the $218 million breakdown is like this: $118 million for land acquisition; $40 million for Urban and Community Forest; $10 million for Smart Growth and our Stewardship incentive programs; and $50 million for the Forest Legacy Program.
And the Forest Legacy Program—I see it as both an urban and a rural program. And as having been one who grew up in a rural area, you know, maintaining tract size, the ability of families to maintain ownership of their lands for whatever reasons is important.
And one of the things that the forest legacy program does is on a willing, private landowner basis only, it is completely voluntary, that rights-of-way and that type of thing are acquired.
And I just want to point out, of the States that have expressed interest in that program, Tennessee has almost completed an assessment. North Carolina will have completed an assessment in fiscal year 2000 . There is interest in Virginia, Texas, Pennsylvania, Wisconsin and South Carolina as well. So this is a program to assist private landowners but only on a voluntary basis. This is the forest legacy.
Mrs. CLAYTON. What is the $118 million for land acquisition? Is that for your existing program or is this your new initiative?
Mr. DOMBECK. The $118 million is the traditional Land and Water Conservation Fund——
Mrs. CLAYTON. For the watersheds?
Mr. DOMBECK [continuing]. That is appropriated each year for acquisition of high-priority tracts, yes.
Mrs. CLAYTON. But that is not a new function, though?
Mr. DOMBECK. No, it is not.
Mrs. CLAYTON. Those are all the questions I have, Mr. Chairman.
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Mr. GOODLATTE. Thank you, Mrs. Clayton.
I would like to follow up on those questions. Chief, I would like to know if you place reducing the backlog of fire risks and insect and disease risks and road repair and recreational facilities maintenance on a higher or lower priority than land acquisition?
Mr. DOMBECK. Well, again, the thing that we have to strive for that we all struggle with is a balance. And, you know, as I mentioned earlier, the priorities that were, I believe, articulated by Mr. Peterson that the Secretary had laid out on watershed health and restoration, sustainable forest management and the national forest system add up to—well, I have got $48 million, $113 million and about $22 million respectively as investments in those programs, so there increases in those programs as well.
Mr. GOODLATTE. You haven't answered my question. Are you maintaining what you have got and protecting what you have got a higher priority or a lower priority than getting more?
Mr. DOMBECK. My view is maintaining what we have is a higher priority, keeping in mind that as you have opportunities to acquire lands that there is agreement that should be acquired for whatever purposes, those opportunities come and go.
Mr. GOODLATTE. Of the huge backlog you have on maintaining the roads you've got, on fighting the risk of fire and insect and disease infestation and the poor quality of so many of the recreational facilities that I have been to and seen in my forests, many of which are closed because they don't have adequate funds to maintain them, how can you justify going out and acquiring more land when hundreds of millions of dollars would be an awful lot to restore some of those facilities?
Mr. DOMBECK. Well, as I said again, I think it is a matter of balance. And, you know, I appreciate the dialog, and, you know, I think we need to continue to work on this.
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Mr. GOODLATTE. I would hope we could work towards a little less land acquisition, in fact, a lot less and use that money—I'd like to see the money used for those purposes.
I think it is needed. The backlogs are going to take, in some cases, decades. You'll never—because new needs are going to arise during that point in time. You'll never whittle away at that backlog unless you dedicate yourself to saying I have got a great asset here in our national forests, and I am going to put every penny I can put my hands on to taking care of that and maintaining that. The land is going to be around forever, and it is best to take care of what we've got than to take on more than we can manage.
Mr. DOMBECK. Yeah. What I'd like to do in response to that is just give you a little bit of history of the trends in, for example, dealing with something like a hazardous fuel reduction.
Just a few years ago we were doing about 750,000 acres a year for treatment for that. In the year 2000 that total treatment that we will be doing is treatment on about 2 million acres of that, and our goal is to have that backlog down to zero by 2015.
Mr. GOODLATTE. Well, let's talk about the roads backlog; aren't the number of roads that are in need of repair rising rather than falling? Shouldn't you at least turn the corner on that and be headed in the direction of having a smaller percentage of your roads substandard before you acquire new lands?
Mr. DOMBECK. Yes. And as a matter of fact again, in that area the 2000 budget proposes to get us up from what is now 18 percent of our road system maintained to standard up to somewhere in the neighborhood of 22, 23, 24 percent.
Mr. GOODLATTE. By when?
Mr. DOMBECK. By the end of the year 2000. That would be the investments we would be making with these budget proposals.
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Mr. GOODLATTE. Your budget describes the forest inventory and analysis program as the only centralized systematic source of forest health information in the United States. Would you agree with this statement?
Mr. DOMBECK. I guess I'm not sure it is the only one, but I want to tell you that of all of the things I deal with in this job, one of the places where there is almost unanimous agreement is of forest inventory and analysis, forest health monitoring needs.
And, you know, the risk maps and the science and technologies that research and development is doing associated with that is important. In fact, we are moving forward with the State foresters and others aggressively with the criterion indicators that were agreed upon.
And what we really need is we need a common language. Some of the accountability issues that we discussed earlier was the fact that there doesn't always exist a common language, so we are comparing apples and apples rather than apples and oranges across the country.
And the value in the forest inventory and analysis is this applied across all forests, and the technologies are made available to not only the national forests but to all forest landowners.
Mr. GOODLATTE. Well, I think it is a good program, but why does your budget fund it at a status quo level rather than improving the program to meet the requirements that this committee put into the research title of the farm bill?
Mr. DOMBECK. Again, it is a matter of priorities. And let me ask——
Mr. GOODLATTE. What other research priorities are greater than FIA?
Mr. DOMBECK. I'd be happy to give you an answer, a written response, but I'm not prepared to, you know, go down the whole laundry list of research priorities because we deal with everything from the fire research that occurs in Montana, out West, in other parts of the country; dealing with the exotics, the gypsy moth, the aged longhorn beetle, a variety of things.
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Mr. GOODLATTE. But how do you treat all of those fire and insects and disease risk backlogs without more current and reliable FIA data?
Mr. DOMBECK. The bottom line is you—I guess you don't stop, you know, treated the gypsy moth problem to do forest inventory and analysis. You need to have a balance of both, and that is what I think we are attempting to do.
Mr. GOODLATTE. Last year Chairman Smith introduced a bill, H.R. 4149 to phase out the use of your trust funds for overhead. You strongly opposed the bill because you said it would prevent critical on-the-ground work.
Now your budget proposal is prohibiting the use of overhead, precisely as Mr. Smith's bill directed. What prompted your sudden change of heart?
Mr. DOMBECK. Well, the trust fund issue and the overhead issue has been a problem for us for many years, and it is an area I think that we've got to take a look at.
And the whole breadth of the trust fund issues are something that we need to take a look at and want to have a dialog with you.
Mr. GOODLATTE. Are you conceding that Chairman Smith was right about that?
Mr. DOMBECK. I'm not exactly sure how to respond to that, but the fact is our proposal this year does call for elimination of overhead.
Mr. GOODLATTE. One last question. Along those lines, it is very possible that this committee will move budget reconciliation legislation. Do you think it would be a good idea to include your trust fund overhead proposal in that legislation?
Mr. DOMBECK. I believe so.
Mr. GOODLATTE. Good. We are glad to hear it. Mrs. Clayton, do you have any more questions?
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Mrs. CLAYTON. The conclusion one comes from here from discussion is that, because you haven't managed your resources and been accountable for your assets and costs, as we look at the new budget, that we ought to be a little less generous or perhaps freeze it at the level.
Would you just comment, not on whether that is a good statement or not, on how much of your budget is really to enable to address some of these issues that have been raised by GAO? I heard 132 accountants, but I'm aware that 600 and—I have forgotten the number, but 600 and—what—630 employees, so I know of that, that is part of your new budget, but tell me and others I'm sure for the ecological reason as we talk about insects and disease address that part of the budget.
Mr. DOMBECK. Let me ask Vincette to talk about the administrative side of that.
Ms. GOERL. A lot of what we have proposed in the 2000 budget is supporting the efforts that we are putting in place to correct our financial accountability issues.
One of those that was the decision of the Chief Dombeck last year was to dedicate 130 work years towards fiscal accountability, and that included not just financial management, but other accountability areas of information technology and human resources as well.
We had reserved those particular resources within our resources we currently have to dedicate to that area for the future.
And so we are looking at all of our resources that what we are living with today to dedicate toward that effort, and we've been analyzing the effect of that and reallocating resources to support that.
Mrs. CLAYTON. Ms. Calbom, is there any consequences of being put on the high-risk list by the GAO, any consequence do you perceive to the defense to the GAO, I mean, other than for us in our oversight, is there any? If you use my colleagues, and they were in banking, and I have a relationship there, too, if you do that long enough in the banking, you're out of business.
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Now, I don't want to put the forestry out of business because obviously they're doing—what they're here for is great. I don't want to put defense out of business, and they are at high risk. Can't put IRS out of business.
But is there any consequences of you doing this other than having it——
Ms. CALBOM. I guess the consequence is up to the Congress. The reason that we designate agencies as high risk and every other year publish our report on that is to, as someone else said earlier, raise the red flag to the Congress so that they can see that, yes, in fact, this particular agency does have a higher risk, be it in the case of Forest Service financial management we consider to be a high-risk area. There are other areas, of course, we designated.
And we have no ability to, you know, cause any consequences to occur from that designation, again, other than just to make the Congress aware and have the ability to more closely monitor the situation.
Mrs. CLAYTON. Well, I think that is a worthwhile service because there is no way, unless we know from your analysis, how bad things are.
But when we have audits, they usually are for reconciling and management letters and reconciling procedures and behavior in judgment of that. And I gather that is what GAO internally said. You're not called IGA; what are you called? Are you called the internal——
Ms. CALBOM. The IG is probably what you're thinking of, but GAO is——
Mrs. CLAYTON. Independent.
Ms. GOERL. Is more external. The IG's independent as well, but GAO is more external to the agency, yes.
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Mrs. CLAYTON. Well, I think this ought to be for something other than just for a couple of hearings, and, you know, and for us to kind of rap knuckles and publicly berate.
It ought to be for an analysis that has some substantive change as a result of your investigation, your analysis. And the only way—there are one or two ways we can do it. We can do it by authorizing agent to tinker with the structure. Those of us who are in budget can begin to look at some budget things in the resolution or those pursuing appropriation and not appropriate a change.
Those are the options that we have. As I say this—and I gather I can ask my own question. I gather it is really up to the internal management of the U.S. Forest Service to take this serious as well as for us to have oversight.
We can have these hearings till, you know, the cows come home, but that won't change anything substantively unless we do something as a result of it.
So rather than just postulate or put ourselves in a position of being fiscally responsible, you want to see some behavior change as a result of all this, so I would welcome comments from you.
Ms. GOERL. Well, and I think that is very true. And Chief Dombeck has said a couple of times that there are some real cultural issues that have to be addressed at the Forest Service.
And I believe that is a very critical thing that does have to be addressed, that those out in the field have to understand the fact that every dollar they spend is taxpayer money.
And one thing that I know has been suggested by various consultants and that we agree with is that there need to be chief financial officers out in the regions that are qualified in accounting and understanding points of accountability and have some kind of a direct line to headquarters as far reporting responsibilities.
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Mrs. CLAYTON. I appreciate your comment, and I also appreciate your testimony.
Thank you, Mr. Chairman.
Mr. GOODLATTE. Thank you. Mr. Walden.
Mr. WALDEN. Thank you, Mr. Chairman. I would like to go to Mr. Viadero and ask the same similar sort of question that our ranking member asked. What should we do? Is there a way?
I'm pleased in some respects by the fact you say this chief is implementing some good things. I'm troubled by the fact it is going on 8 years. I'm also troubled by the fact we are hearing it could be a couple more years before this thing really gets results.
Is there some mechanism to move this along faster we should look at?
Mr. VIADERO. Well, first, sir, I'd like to say that these problems seem to be somewhat generational because the chief wasn't there when the problems started.
I wasn't there. I am a career from the FBI.
And taking up on your banking lead, if this was a business, we would shut the door, put a padlock on it and walk away, and then let the competition come in and take it over.
In our case, thought, these people are the custodians of one of the most precious trusts that we have, our national lands, so that leaves us in a quandary; however, but not only for the Forest Service, but for other agencies that are at risk.
We would like to see, as would be a common accounting practice in the public sector, quarterly financial statements, interim financial statements; however, the system that we are working with and other Government agencies are working with just don't allow that because that is not the way they were designed.
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But that is really the fix to it. Have a quarterly accounting. Bring it in and let's see what you're doing quarter by quarter.
And I think it would help the client, if you will, the Forest Service are better managed, because I'm sure in the company you were with before you became a member the CEO, even the CEO of GE, he probably wasn't even getting statements, he was probably getting weekly statements as to what is going on. And I think that is what we have to do.
Again, I don't the key is auditing. I don't think that the key is accounting. I think the key here is accountability. That is what we are looking for.
And I think once we get accountability, the rest of it, to coin my performance statement, is jerk work; the statements will flow.
Mr. WALDEN. Do you think we should—I mean, I go back to my old legislative days. We used to hold money, and we met every 2 years and did budgets on 2-year cycles, and we would hold money at the emergency board level until we saw results and have the agency come back and report and then we would release it if they had done what they said they would do.
Is that a technique we should try to figure out to use here, do you think? Would that help?
Mr. VIADERO. It very well may help. It couldn't harm. It couldn't do much more harm than we have already.
The only thing is these folks probably need that, and I'm speaking for Mike now, but these folks probably need that to maintain what they have.
Again, it is somewhat of a quandary when you deal with one of the larger and older organizations in Government and the trust, the fiduciary position that they fill.
If this was a commercial enterprise, I would say most definitely.
Mr. WALDEN. Well, again, I had listened, Mr. Dombeck, to your comments about the number of transactions you have to do on a daily, weekly, monthly basis and the thought came to mind about the mergers in the banking world that have occurred and the number of data entry points and transactions that must occur on a daily basis that would, I would think, dwarf what possibly occurred at the Forest Service. And so there is got to be a system out there that we can work toward.
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Let me change to a different topic, again getting back to some of the forest health and fire issues. Sometime ago, Chief, you apparently told this committee you intended to ramp up fire prevention treatments to five million acres per years.
Over the last 2 years, those treatments have been reduced by 170,000 per year. Have you changed your mind about the urgency of this problem?
Mr. DOMBECK. No, I haven't. In fact, what we have for fuel reduction activities, because these activities are funded through different programs, is we'll be doing—we are proposing doing a 2.2 million acres in 2000.
And if I could, I just would like to make a comment about the sort of the business dialog here, and that is another thing that occurs in the private sector are mergers and hostile takeovers and spinoffs of low profit-making entities in an organization to keep that going.
That is one of the luxuries we don't have in Government because we operate carrying out the mandates that have been given to us over time based upon the legislation and that we have here.
So one of the frustrations that I think all, or many Federal employees have is the fact that, as we have new mandates, we don't stop doing the other things that one could easily do in the private sector. And I think that is another important point.
Mr. WALDEN. Yes, and I don't dispute that, although I know that even as you spin off unprofitable portions of a business, you still have to have a balance sheet that you can show to a prospective buyer to show there is something worth spinning off there.
And if you have mandates that you'd like to see us take a look at repealing and maybe you're offering those up here, but I, for one, would be interested in hearing it.
But to make it easier for you to manage this agency, let me refer—because the numbers I'm hearing you say—I'm trying to figure out. I must be missing something.
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Page 190 of your fiscal year budget justification list acreage to be dealt with hazardous fuel reduction and for the year 2000 lists 1,320,000, and I believe you just said 2 million.
Mr. DOMBECK. Let me ask the staff to make sure that I'm correct on this. And that is the monies—the work that would be done from that account, from prescribed burning.
As we work toward integrated programs we would, you know, achieve about a half a million acres as a result of timber sales including salvage, another 114,000 acres as a result of brush disposal, another 233,000 acres as a result of timber stand improvement activities for a total of 2.2 million acres.
Mr. WALDEN. Could you, and you don't need to do it now, but provide me with the citations where that are in the budget in addition to the one that is listed on page 190?
Mr. DOMBECK. Yes, we can provide that for you; yes.
[The Department responded:]
The Chief's citations of ''half a million acres as a result of timber sales including salvage'' and ''another 233,000 acres as a result of timber stand improvement activities'' are found in the Forest Service Fiscal Year 2000 Budget Justification under the heading ''Forestland Management'' on page 143, column 2, paragraph 1. The Chief's citation of ''another 114,000 [acres] as a result of brush disposal'' is found in the FY 2000 Budget Justification under the heading of Permanent Appropriations—Working Funds, Brush Disposal'' in the table of Performance Indicators on page 251.
Mr. WALDEN. Mr. Chairman, if I could ask just one final question in this round. In your budget you mentioned a backlog of deferred reconstruction as growing; yet, as I read it, your reconstruction funding is being reduced by a million and a half.
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How do you reduce the reconstruction backlog if the funding is going down?
Mr. DOMBECK. I believe, and again let me ask staff to get the appropriate pages or comment, but I believe, for example, in the roads program we are asking for a $22 million increase to deal with roads, for road maintenance, for example.
And then I can provide that breakdown also.
Mr. WALDEN. That would be helpful.
Mr. DOMBECK. That is one example I will lay out. We have got, you know, proposals to do about 476 miles in our road program to a total of road work of about 2,700 miles for improvements and reconstruction.
Mr. WALDEN. Are you also pursuing TEA–21 or ISTEA funds to do that?
Mr. DOMBECK. We've been in a dialog on that, yes. In fact, we discussed that some at the appropriations hearing that we had yesterday with Mr. Regula's subcommittee.
Mr. WALDEN. Is that a new approach for funding for roads for the Forest Service?
Mr. DOMBECK. Yes. In fact, this year, fiscal year 1999 is the first year that we have received any funding from the Federal Highway Administration, and we've received about $750,000 for inventory work.
Mr. GOODLATTE. Well, thank you very much. And I want to thank all the members of this panel.
Have you had an opportunity to ask questions?
Mr. HILL. Thank you.
Mr. GOODLATTE. Thank you. We want to thank you for your participation. Chief Dombeck, I don't envy you the situation you are in, but, like us members of Congress, you weren't drafted, so we will look forward to working with you to try to solve these problems.
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And we are all very much in favor of the Forest Service succeeding and having a great agency of the Department. So thank you.
Mr. DOMBECK. Thank you.
Mr. GOODLATTE. I thank the folks from the GAO and the Inspector General's office for your participation today.
Mr. BROWN. Mr. Chairman, I had one other question, if I could submit it in writing and have them respond.
Mr. GOODLATTE. In fact, you mentioned responding to one of my questions in writing as well. If you could get those to us in a week, we would appreciate it very much, and we will make those a part of the record.
Mr. BROWN. Thank you.
Mr. GOODLATTE. I would now like to invite our third and final panel to the table. Mr. Michael Virga is here on behalf of the Society of American Foresters. Mr. Jeffery D. Arnold is deputy legislative director for the National Association of Counties. Mr. Michael A. Francis is director of the National Forest Program at the Wilderness Society. Mr. John Heissenbuttel is the vice-president for the Forestry and Wood Division at American Forest and Paper Association. Mr. Bill Imbergamo is the executive director for the National Association of State Foresters; and Mr. David Brown is on the Board of Directors for the American Recreation Coalition.
Mr. Virga, we are delighted to have you with us, and I will make your full statement part of the record and would like to recognize you for your comments now.
STATEMENT OF MICHAEL VIRGA, PROCUREMENT, FOREST LYONS FALLS PULP AND PAPER
Mr. VIRGA. Thank you very much, Mr. Chairman. It is a pleasure to be here, and indeed it is an honor for me coming from upstate New York.
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Again, I have spent the last 15 years working for the private sector, and I can deeply appreciate Mr. Walden's comments of earlier regarding accountability. I have a great familiarity with that.
Today I am representing the Society of American Foresters. We have three main areas of focus we would like to discuss with you today.
We believe the priority funding areas for the Forest Service fiscal year budget of the ecological infrastructure backlog on the national forest system, Federal programs that support a managed forest landscape, an increased spending on the forest inventory and analysis program.
Much has been said about the backlog issues associated with the national forests. Whether it is forest health, deteriorating forest roads, endangered species, salmon habitat, recreation facilities, hazardous fuels or any number of other issues, it is clear that the national forests desperately need attention. The Forest Service must address its ecological infrastructure backlog.
Funding these improvements is an investment in the future sustainability of our forests. The agency is attempting to deal with all these infrastructure needs. They have mapped areas of forest health risk across the Nation. They are addressing a very serious problem with the national forest system road network. They are addressing wild land, urban interface issues; however, the most frustrating thing about all these efforts, as you well know, is the cost associated with addressing them.
I submit addressing the roads and hazardous fuels backlogs alone are many billions of dollars. While these figures are astronomical and beyond what Congress can realistically fund, the Forest Service will receive some funding to address these problems.
It is important that we recognize that one problem should not be favored over any other by the Congress or the administration.
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The key is that we give the Forest Service managers the tools and the resources they need to put the infrastructure back in place.
The Forest Service needs a reliable, multi-year source of funding to address these issues and the ability to set the priorities at the local level.
The Forest Service must address the fiscal accountability challenges it faces. The subcommittee is well aware of these challenges as is the Forest Service.
The SAF believes Congress, the Forest Service and the administration have tried to address these issues openly and with a commitment to solve the problem. There was frustration from everyone including the SAF that progress has not been faster.
We hope that Congress, the Forest Service and the administration can find the mechanisms that increase accountability and increase the health of the land. Many Federal statutes, including the Endangered Species Act, the Clean Water and Clean Air Acts and others have a regulatory impact on the management of forest lands.
Other statutes, the Cooperative Forest Assistance Act of 1978 and the 1990 farm bill forestry title take a cooperative, incentive-based approach to non-Federal forests.
These acts recognize the need for State, Federal and local cooperation to achieve resource benefits across the landscape, and they use a non-regulatory, incentive-based approach to achieve them.
This cooperative approach on issues that cross ownership boundaries such as watersheds, forest insects and disease, and wildfire.
The Forest Service has a unique partnership with the State forestry organizations, a partnership which has the opportunity to improve the health of our Nation's forests.
The potential of State and Private Forestry programs has been unrealized due to limited funding in the past. As a result, we have yet to fully capitalize on the opportunities inherent in the management of our non-industrial private lands.
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Consider that only 10 percent of landowners have written management plans and that most harvesting takes place without the benefit of a professional resource manager.
All the shortfalls pose a serious threat to the long-term sustainability of our Nation's private forest lands.
The current forest inventory and analysis program provides accurate, comparable data across all forest lands in the United States. Understanding the condition of the Nation's forests is critical for appropriate planning and sustainable management.
We believe the subcommittee has recognized the importance of this program in the past as evidenced by the development and passage of the Agricultural Research Extension and Education Reform Act of 1998.
The new draft strategic plan, created in response to section 253(c) of that act and recommendations of the second blue ribbon panel exemplifies the program's commitment to adapt to the changing needs of the forestry profession and the larger public interest in the forests of this Nation.
Although SAF has not seen the final dollar amount requested by the FIA program to implement the goals of this draft strategic, we realize that moving toward the annualized inventories and increasing the range of data collected will create new expenses for this important program.
In order to support these endeavors, we encourage the subcommittee to continue to support increased funding for this program.
In addition to funding for the overall program, we would like to see a separate line item in the national forest system budget to enable the collection of FIA data on the national forest system.
While Congress has given the national forest system funds to implement the FIA program on its lands before, the Forest Service has not always been able to collect this data.
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The Forest Service has many priority issues to deal with. We have discussed their need to address backlog after backlog and the accountability issues from which the agency suffers are no stranger.
The FIA is a priority, and the data from the national forest system must be collected. We hope that by establishing a separate line item, Congress will give the agency the opportunity to adequately fund its share of the FIA program and address the priority ecological issues it must to ensure the sustainability of these forests for the next generation.
That concludes my statement. Thank you.
[The prepared statement of Mr. Virga follows appears at the conclusion of the hearing]
Mr. GOODLATTE. Thank you, Mr. Virga.
Mr. Arnold, welcome. We welcome your statement at this time.
STATEMENT OF JEFFREY D. ARNOLD, DEPUTY LEGISLATIVE DIRECTOR, NATIONAL ASSOCIATION OF COUNTIES
Mr. ARNOLD. Thank you, Mr. Chairman, and the National Association of Counties, NACo, appreciates the opportunity to be here today.
The testimony discusses three important concerns: Timber receipts, forest health and State and private forestry.
Mr. Chairman, there is a crisis brewing in the national forest counties across the country. As you know, 25 percent of the gross receipts from timber sales are returned to the States on behalf of the counties from which the receipts were obtained.
The receipts are then distributed to schools and county road program based on a ratio determined by the State legislatures. In the past few years, timber sale receipts have dropped precipitously from a high of $474.3 million to $240.3 million in 1998.
But this tells only part of the story, because the stumpage risen and this volume has decreased and there has been a substantial shift in the regional distribution of sales.
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Sales volume has declined at a substantially greater rate than receipts and the negative economic effect on counties, those relying on timber activity for jobs and economic vitality has been substantial.
We have to take into account the human factor as well, and that is the longstanding tie between the people of forest counties and the resource. This heritage is extremely important to county officials and the people they represent.
The administration fiscal year 2000 budget proposes to decouple payments to counties from actual receipts and to provide a stable payment to timber counties based on a capped formula.
The proposal assumes a permanent appropriation to cover the estimated the $275.3 million costs of the program. This is approximately $46 million above the current baseline for fiscal year 2000 with the numbers increasing substantially in the out years.
County officials have expressed considerable concerns about the decoupling proposal, particularly since there is not a provision for counties to benefit from any of the increased 25 percent fund sales receipts that might exceed their stable payment in any particular year.
NACo set forth an alternative proposal which would put in place the safety of the forest counties for a finite period, setting in motion a process for resolving this problem once and for all.
We support six basic tenentes: One, that all forest counties be included, not just those that are under the safety net in the Pacific Northwest and northern California.
Require that payments be guaranteed based on 100 percent of the highest 3-year period from 1986 to 1995; require either/or language which provides for the above payment or the actually 25 percent fund receipt, whichever is greater; provide indexing for payments to the CPI; and make no changes beyond existing law, specifically no decoupling of payments from actual timber receipts.
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And then certainly to provide for a process to develop a long-term solution to ensure that long-term forest management and a return to actual forest receipts for everyone.
NACo understands that there are a variety of different concepts as to how to approach this problem, and they want to work with the entire range of groups to reach and equitable and balanced solution for the near and long terms.
This is one that certainly extends to the committees here on Capitol Hill, the administration, interested outside groups and, of course, the Schools Coalition that is been working hard on this issue for some time.
We do not believe this proposal should be considered an entitlement as some have suggested since we would propose sunsetting the safety net within a sufficiently reasonable period to work out long-term solution that meets the needs of counties and expectations of all parties. We are looking for a helping hand, not a handout.
Now, Mr. Chairman, I will briefly mention our interest in the forest health and State and Private Forestry. NACo has a longstanding policy of supporting measures that will improve forest health throughout our forests, both under the national forest systems and those that interface with the national forest resource.
NACo supports aggressive forest health initiatives and believes there is a clear and imminent danger to our public forest resources. We believe certain management practices have led to generally unhealthy forests, which are much more susceptible to insect infestations and diseases we have heard about here today.
We believe that the Forest Service should do more and budget resources should be made available to do that.
Finally, Mr. Chairman, the State and Private Forestry arm of the Forest Service is a lesser-known component that connects people to resources, ideas and to one another so they can care for the Nation's private forest lands and sustain their communities.
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There are nearly 500 million acres of non-Federal forest land in the United States comprising about 20 percent of the Nation's land mass and two-thirds of the Nation's forests.
Over 50 percent of the Nation's forests are privately owned. The cooperative forestry programs within the Forest Service provide technical and financial assistance to help rural, suburban and urban citizens including private landowners and certainly counties to care for forests and sustain their communities where they work and where they live.
All these programs are small. NACo believes the return to counties and their communities is quite large. There is quite a ripple effect.
Thank you, Mr. Chairman. That concludes my remarks. And, again, NACo appreciates the opportunity to be here today.
[The prepared statement of Mr. Arnold appears at the conclusion of the hearing.]
Mr. GOODLATTE. Thank you, Mr. Arnold.
Mr. Francis.
STATEMENT OF MICHAEL A. FRANCIS, DIRECTOR, NATIONAL FORESTS PROGRAM, THE WILDERNESS SOCIETY
Mr. FRANCIS. Thank you, Mr. Chairman, for the opportunity to testify on behalf of the 200,000 members of The Wilderness Society on the USDA Forest Service's budget to manage the National Forest System in fiscal year 2000.
A month ago today, February 11, The Wilderness Society unveiled the results of 2 years of work by The Society's staff and an advisory panel of distinguished scientists and forest policy experts. The Society's goal was to capture the thinking of some of the most innovative minds in forestry today and to develop a positive vision designed to insure the future of America's National Forest System into the 21st century.
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Under The Wilderness Society's vision, the primary objective of the national forest management is to maintain and resort the ecological integrity of the forest ecosystem. The production of commodity resources will no longer be the prime objective. Rather, such uses are limited to those that respect the limits of the land, adhere to principles of stewardship, supported by sound science and economics and lead to the recovery of damaged lands, fish and wildlife populations and watersheds.
In short, The Society seeks to ensure that management of the National Forest System honors the philosophy underlying the American land ethic, an ethic that recognizes that we cannot meet the needs of the people without first securing the health, diversity and productivity of our lands and waters.
In keeping with our vision, The Wilderness Society offers the following recommendations to the Congress for consideration:
The Wilderness Society recommends a reduction in timber sales preparation funding level for fiscal year 2000. Sale preparation does not exceed 1.1 billion feet for ''green tree'' sales and 0.5 billion for salvage, and I mean ''dead trees only'' salvage sales.
Our recommendation would reduce the appropriation to $150 million. The $159 million savings should be used to increase funding for wildlife and fisheries, habitat, watershed restoration, hazardous fuels reduction nationwide, recreation and wilderness management, and to increase the agency's research program.
In fiscal year 2000 The Wilderness Society strongly recommends that Congress prohibit logging in all ancient forest groves, prohibit logging in all roadless areas in the National Forest System, and prohibit all new logging road construction.
The Wilderness Society recommends that Congress eliminate the current subsidy for the timber industry in the form of below-cost timber sales.
We request that Congress require that beginning in fiscal year 2000 agency spending on any commodity timer sale should be contingent upon the implementation of a 3-year plan to systematically phase out these money-losing timber sales nationwide.
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Also the Society recommends that Congress enact the administration's proposal to permanently sever county payments from logging levels and provide county governments with a predictable level of funding towards schools and roads.
In fiscal year 2000, funding for engineering support for timer road construction should be reduced by $19 million. The $19 million savings should be combined with $27 million in timber management savings and that total should be added to the road maintenance program to increase funding to $168 million for roads maintenance.
The Society recommends a funding level of $50 million for the Forest Legacy Program. The increased funding would allow progress in preserving important national lands in all of the participating States.
The Society recommends that national forest research appropriation of $250 million for fiscal year 2000, and the Society recommends an appropriation of $214 million for wildlife and fisheries management program. This is a $90 million increase over the administration's recommendations.
The Wilderness Society also recommends $245 million for recreation programs with an earmark of $50 million for wilderness management.
Finally the Society supports the $190 million in land acquisition to the Forest Service.
Mr. Chairman, I'd like to comment before our closing on three proposals related to the timber sales program and the Forest Service's budget, none of which advance the Chief's goal of improving accountability.
The first issues entitled ''Sealed versus Open Bids'' seeks to avoid the responsibility for doing what the Forest Service already can do.
The authority to use sealed bids has existed since the 1987 Organic Act. Until the early 1950's, sealed bids was used exclusively. It was only at the insistence of the timber industry that oral bidding was introduced. The Forest Service already has the discretion to use sealed bids; therefore, legislation is not necessary.
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Second, ''Timber User Fee Pilot'' would authorize the Forest Service to collect timber sales preparation and harvest administration fees from commodity timber sales.
This is nothing more than an attempt by the administration to hide the costs, the true costs of logging on the national forests.
A pilot is not good public policy for two reasons: First, the timber industry would have more influence over the preparation and monitoring of timber sales in the national forests; and, second, the retention of the fees will add to the Forest Service's ability to freely use trust fund monies without Congressional oversight.
The third issue is the administration's proposal to use deposits from the timber sales the Knutson-Vandenberg, Brush Disposal and Cooperative Work funds without regard to the State from which the deposits were derived to reduce hazardous fuels build-ups.
While this goal is laudable and supported by many in the conservation community, the conversion of these trust fund monies to so-called honest health work is far beyond the legislative mandate of the funds. Such activities are already specifically funded in Wildland Fire Management, and Congress can address needed funds in that category.
This proposal would divert already limited available for resource restoration in logged-over areas. The Congress should reject these three proposals.
Thank you, Mr. Chairman, for this opportunity to testify.
[The prepared statement of Mr. Francis appears at the conclusion of the hearing.]
Mr. GOODLATTE. Thank you, Mr. Francis.
Mr. Heissenbuttel.
STATEMENT OF JOHN HEISSENBUTTEL, VICE-PRESIDENT, FORESTRY AND WOOD DIVISION, AMERICAN FOREST AND PAPER ASSOCIATION
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Mr. HEISSENBUTTEL. I appreciate the opportunity to be here today and represent the views of the American Forest and Paper Association before this subcommittee.
Our priority for Forest Service natural resource management in the fiscal year 2000 appropriations is pretty simple, and that is address the forest health crisis.
By their own analysis and testimony, the Forest Service has identified $66 million acres of national forests at risk of wildfire or at high risks of dying from insects and disease.
We see three important and inter-related strategies for addressing this crisis: First, active forest management; second, cooperative fire and insect and disease protection; and, third, timely forest inventory and analysis information.
The current forest management activities to address the forest health crises on national forests do not fit my definition of active forest management. Even at the 2 million acre per year treated rate that the Chief described just a few minutes ago, that is 30 years.
We are not suggesting that the Forest Service needs to move at light speed, but 30 years to address a crisis that we have documented today in our view is not acceptable.
Now, I understand that there is raging debate over what is a healthy forest, but I try to view it from the context of what future generations would expect that we pass on to them, green trees or fire-blackened forests, live trees or dead trees, abundant wildlife or lack of wildlife.
It is pretty simple to me what the starting point is and what the expectations of future generations would be.
Simply from the standpoint of being a responsible neighbor, the Forest Service should be actively managing to reduce the risks to adjacent landowners and homeowners. The potential for catastrophe in the rural urban interface is very real and can be avoided if the agency chooses to act.
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Helping to avoid catastrophe on adjacent lands is another important role from our view of the agency, and we can accomplish this through cooperative fire and insect and disease protection. With the forest health crisis on national forests, it is more important than ever that we support these cooperative programs.
I do have some serious questions about other line items in the State and private budget. From the budget notes, it seems that the Forest Service is very interested in doing more private land management, and I think we need to discuss what the appropriate roles are for the private sector for State agencies and for the Federal agencies before we get too serious about that.
There is also an important role for the Forest Service on private and public land related to research. And what I am talking about here is the forest inventory and analysis program. Again, we can get ahead of the current forest health crisis now, and in the future if we have good data.
Interesting to note is the Forest Service has not updated its forest inventory on its own land since 1991, so we are dealing with dated information in making important strategic decisions for our national forest based on outdated information. That might be a good subject of a hearing in the future.
Mr. Chairman, in summary, I would like to express our support for some of the concepts the agency promotes, and we heard from Mike Dombeck today, including watershed health and restoration, sustainable forest management, paying attention to roads and recreation. These are good words, solid concept, but the key is turning these words into action. If our current generation is going to be credited for being responsible stewards of our Nation's forests by future generations, we must act to address the current forest health crisis. It is time for the Forest Service to start demonstrating by its actions rather than its words that this is an agency committed to leaving a forest legacy for our children that we can all be proud of.
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Thank you for your attention. I look forward to any questions.
[The prepared statement of Mr. Heissenbuttel appears at the conclusion of the hearing.]
Mr. GOODLATTE. Thank you.
Mr. Imbergamo, welcome.
STATEMENT OF BILL IMBERGAMO, NATIONAL ASSOCIATION OF STATE FORESTERS
Mr. IMBREGAMO. Thank you, Mr. Chairman, I appreciate the opportunity to be here on behalf of the State Foresters to give our views on the fiscal year 2000 budget for the Forest Service. My testimony will highlight the three areas that we see as most important within the agency budget, the cooperative fire programs, the forest inventory and monitoring programs and the forest health protection programs.
Cooperative fire protection is the number one priority of the national association of State Foresters in this budget.
This program is designed to support cooperation between the Forest Service, State Foresters and local, usually volunteer, fire departments. NASF is proposing that funding be increased for the State fire systems program to $31.5 million and for the volunteer fire assistance program to $10 million.
State and local fire departments are often the first ones on the scene of wildfires, especially in the southeastern United States including fires on Federal lands.
In other regions of the country, local fire departments are still struggling to adjust to the 1996 new Federal fire policy which may include structural fire protection in the wild land urban interface is not the responsibility of the Federal firefighting agencies.
Rural volunteer fire departments provide, at a very low cost to the taxpayer, a service that will cost over $36 billion annually to replace, so the increases we are proposing are really not out of proportion to the need.
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The $10 million increase we are proposing for the State fire assistance program should be targeted through a competitive grant process to reducing wildfire hazards in the wild land urban interface.
State fire managers are working with the Forest Service to focus this program on improving risk assessments, fuels treatments, improving the fire suppression capabilities of local fire departments and providing public information and education.
Second, and John just mentioned it, the forest inventory and monitoring programs are absolutely critical to ensuring that we are moving towards the goal of sustainable forest management. We will never know exactly how we are doing on that goal unless the national system for forest inventory can do a better job of reporting the status in terms of our forests.
The administration's proposed budget moves in this direction but it does not go far enough. NASF fully supports the recommendations of the second blue-ribbon panel on FIA, and we have drafted a budget proposal that would, we believe, move us in the direction of meeting the mandate of the 1998 farm bill research title.
In order to reduce inventory cycles, the increases proposed by the administration for the Forest Service Research and Development Branch must be implemented in tandem with a firm commitment from the national forest system to actively participate in the FIM program, and with the creation of a new line item in the State and private budget to help match the investments, including Virginia, are making to help shorten cycles.
Our proposal will enable the agency to begin shortening inventory cycles towards the 5-year standard set in the farm bill. In cooperation with State forestry agencies, the cycle will be reduced to 5 years where it is necessary due to rapid forest growth and intensive forest management while not requiring that areas with less intensive management meet the same standard.
We strongly support a budget for FIM that truly reflects the importance of this program, including the need for all three branches of the agency to actively participate.
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This is one of the very few areas where there is a strong consensus among stakeholders for the Forest Service to take the lead on an issue. We must take advantage of this broad-based support so the Forest Service provides credible, timely inventory data that can serve as the basis for sound policy-making.
Lastly, the Forest Health Protection Program of the State and Private Forestry branch wants your consideration. The budget proposed by the administration moved in the right direction, but it must go further if key past issues are to be dealt with effectively.
We are most concerned that the agency have full funding available to implement strategy to control the gypsy moth, and that they have adequate funding to implement the forest health monitoring program nationwide as part of an integrated forest inventory and monitoring program.
Forest health monitoring is a national interagency program that uses aerial services on-site plots and other methods to monitor, assess and report on the health of forest ecosystems. States value the forest health monitoring program because it enables us to conduct survey work within an established national framework and to compare that data at the regional and national levels.
The increase proposed for the pest suppression program is critical to ensure that the agency has adequate resources to deal with anticipated pest outbreaks, including gypsy moth and pine beetle in the Commonwealth of Virginia, gypsy moth throughout the Midwest and Lake States, mountain pine beetle in Idaho, the spruce beetle in Alaska, oak wilt in Texas and Minnesota and the Asian long-horned beetle in the urban forests of New York and Chicago.
In closing, these programs exemplify the approach to State and Private Forestry that the State Foresters is advocating. The programs are developed, designed and implemented through cooperative relationships between the State Foresters, the Forest Service and other units of State and local government and our cooperators in the private sector.
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They're geared toward protecting forests from insects, fires and disease while ensuring that landowners and others have information they need to make good decisions for their forests. We think that programs such as these non-regulatory, incentive-based approaches should be supported.
[The prepared statement of Mr. Imbergamo appears at the conclusion of the hearing.]
Mr. GOODLATTE. Mr. Brown, we are glad to have you with us, too.
STATEMENT OF DAVID BROWN, BOARD OF DIRECTORS, AMERICAN RECREATION COALITION
Mr. BROWN. Thank you, Mr. Chairman. We applaud the committee's initiative in looking at the fiscal year 2000 budget request for the Forest Service, and I want to summarize our concerns in five areas related to the Forest Service budget with regard to recreation.
Our greatest concern regarding the Forest Service budget is that funds appropriated for recreation are not getting to the field. Recently recreation management funding has grown slightly after a couple of years of declines, although, in terms of real dollars with inflation factored in, the recreation budget has not gown; yet, reports in the field suggest an even more ominous decline than the national numbers would suggest.
In one key recreation district after another, we have totaled the recreation program cutbacks of 25 percent or more, and, disturbingly, the most serious cutbacks appear to be occurring where recreation fee demonstration projects are underway.
What we are told is that recreation funds are prime candidates for diversion to fund national initiatives such as telecommunications upgrades. Recreation is now bearing a low and disproportionate share of the agency's general overhead charges, nearly 20 percent, yet recreation comprises just over ten percent of the total agency budget.
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The impacts of this diversion on the agency's ability to manage recreation is dramatic. I was personally told my a Forest Service employee in Colorado who was involved in budget issues that only the 20 percent of the budget his forest receives for recreation actually reaches the district level.
Furthermore, according to this same employee, there is an inequitable allocation of overhead to recreation accounts. An example, this employee said there was an inequitable allocation of construction overhead to the administration in outfitter and guide permits.
We urgently seek this committee's assistance in assessing the appropriateness of the use of Congressionally provided recreation funding and your help in establishing guidelines to prohibit the inappropriate diversion of funds from national initiatives and overhead.
The second issue I would like to address regards the use of innovative tools. The recreation community is proud of its leadership in the fees area including our role in development of the national recreation fee demonstration program.
But we are concerned about use of the fee demonstration tool in ways we consider to be hostile to the other vital goals and practices of the agency.
Recently we learned that the Forest Service has provided its managers with a mechanism under the fee demo program authority for ''taking back'' campgrounds from private sector concessions and converting them to forest-operated campgrounds.
We will be communication shortly to the Congress and the agency we strongly oppose this use of a project slot. To prevent misuse of fee demo authority and other innovative tools, we urge Congress to continue to authorize these initiatives for periods of 3 to 4 years. Close oversight is needed during this period.
We ask your help in opposing as a premature, legislative initiative from the President to convert the fee demo program into a permanent fee authorization in the 106th Congress.
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The third point I would like to make is that the Forest Service needs to improve its ability to project inter-needs instead of simply tabulating current use.
After acquiring better information about the agency's future needs, the agency must convert that information to a strict strategic plan and particularly a strategic plan at the operating unit level.
Current planning is overly focused on natural resources decision, undercutting the contributions that recreation can play in aiding the Nation's physical and mental well-being as well as sustaining the communities associated with the forests.
And I'd like to equate this somewhat to a business plan, a multi-year business plan that the agencies could use and that both looks at their funding sources, their needs and their funding sources, and that is the way we run our association and most businesses run their operations.
The fifth point is that the agency needs to invest in training to advance its partnership doctrine. We believe that the partnership doctrine underlying Forest Service recreation programs is sound and essential for success in the 21st century.
We urge the Congress to support this doctrine. One impediment to partnerships is the overly restrictive implementation of the Federal Advisory Committee Act. We also find that many Forest Service employees are largely insensitive to their tradition of partnerships in the agency's recreation program. They also lack insights into other important principles of the Forest Service.
To remedy this, the agency need to revise and augment its early and mid-career education efforts with a series of programs designed to define and explain the agency's corporate culture as well as its legislative mandates.
My final point is concerned about recreation's needs for roads and trails. Today's forest road system is largely a product of the agency's past timber production, but now recreationists are some of the prime users of these roads.
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There has been plenty of discussion about the backlog and need for maintenance of Forest Service arterial and collector roads, some 85,000 miles of a system totaling 400,000, and a backlog that is reported at $10.5 billion.
The agency is also responsible for 7,000 bridges. Of these, 940 are deficient and need immediate attention; yet, at current level of funding, only 40 bridges are being replaced annually, so we obviously have a real concern for the restoration of roads, and I think, of course, this not only has an impact on recreation, but also some environmental concerns.
We think there is great logic for earmarking a portion of the receipts for the highway trust fund to forest roads. We are aware that the administration also envisions an aggressive decommissioning of roads in the forest, based upon environmental and physical costs. The recreation community is not necessarily opposed to some road closures provided that access to recreation sites on the forest as well as general travel through the forest is not significantly impaired.
In comments to the agency, we have urged the Forest Service to revise its focus regarding local roads, emphasizing ambitious roads to trails initiative funded in part through recreation fees and cooperative agreements.
Thank you.
[The prepared statement of Mr. Brown appears at the conclusion of the hearing.]
Mr. GOODLATTE. Thank you, Mr. Brown.
Let me start by asking all of you if you think the Forest Service should aggressively seek to increase its landholdings through large-scale land acquisition or, in the alternative, how would you spend $118 million plus proposed in the budget for Federal land acquisition?
Who wants to take the first at that? Mr. Virga.
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Mr. VIRGA. I will address the first part. I don't think large-scale acquisitions would be appropriate at all. I think there are certain special cases involving lands of a highly sensitive nature or very highly ecologically significant areas that should be considered, but, beyond that, no, I think we are much better off at this point by using working forests as a model.
It has been my experience especially in New York where you have an outstanding open space protection plan that involves working forests that you could maintain the integrity of the ecosystem in a working forest context.
Mr. GOODLATTE. OK. Anyone else?
Mr. ARNOLD. Mr. Chairman, the National Association of Counties has some strong policy on land acquisition. We really do believe that maintenance and the backlog of needs need to be taken care of.
We also are concerned that a lot of the commitments made by Congress and others for the payment of low taxes program and certainly timber receipts program have not been fulfilled, and so certainly those dollars could be used in those ways rather than for additional land acquisition.
Mr. GOODLATTE. it is kind of a double-whammy, isn't it? You can't get the tax base any longer, and you may not get anything——
Mr. ARNOLD. Exactly. Every piece of land——
Mr. GOODLATTE [CONTINUING.] And the economic benefit from the land once it is acquired. Plus, we will have to triple, I guess, because your taxpayers have to pay for that land acquisition just like everybody else.
Anyone else want to say something?
Mr. FRANCIS. I will be the lone person here, yes. The Wilderness Society believes they should have that kind of money for acquisition. As you know, Mr. Chairman, and you, Mr. Walden, nice green lines on a map that show the boundaries of a national forest, but usually a lot of the land inside those boundary areas is not owned by the Federal Government, and the Forest Service should be able to have the resources available to buy from willing sellers those lands inside those purchase boundaries to consolidate their holdings or even to land exchange in consolidating holdings to do that.
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Mr. GOODLATTE. Conversely, there is a lot of land owned by the Federal Government that is not all that particularly suitable for being in forest. It is a lot harder for the citizens who are concerned about that land not being properly used in a forest to divest themselves of the land. I went through that process last year. I introduced a bill and it passed through the Congress, but it requires legislation that goes all the way to the President's desk to sell any significant piece of land.
On the other hand, for them to acquire it, they just get a big chunk of money in the budget and start buying land.
Mr. FRANCIS. But it is willing seller, Mr. Chairman. I mean, we are not the enforcer. We are not out there forcing people to sell the land. And the lands are in public trust and so the disposal of those lands should be a little bit harder than the acquisition because they are in public trust and you as a Member of Congress have an ultimate responsibility in having a say in that.
Mr. GOODLATTE. To take that position, you have to take the position that Federal or public ownership of land is a higher priority than private ownership of land.
Mr. FRANCIS. No, it is not.
Mr. GOODLATTE. Sure, it is. You're placing a higher standard in the Congress than under the Federal laws for the divestiture of lands that are perhaps not as suitable as others for ownership by the public than you are for acquisition of lands that might be highly desirable for ownership by our national forest. Why are you making that distinction?
Mr. FRANCIS. I misunderstood your question, Mr. Chairman. No, I agree, that there is a higher standard for public lands if you're going to divest them because they are owned by 260 million Americans and the responsibilities of the stewards or the managers of those lands are to be very careful in their judgments in what they do with that land including indisposable land.
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Mr. GOODLATTE. I think there is an inherent inconsistency in that position.
Anybody else want to comment?
Mr. HEISSENBUTTEL. Mr. Chairman, for the Forest Service budget, we believe very strongly that the priority is clear: Funds must be dedicated to addressing the forest health crisis; however, let me say as a Nation a real priority we should have is finding innovative ways to protect working forests as working forests. We are fast becoming a Nation that imports forest products. That is not a good situation.
Strip away all the rhetoric, and the forest practices in the United States are second to no other nation. We should be producing what we need inside of our borders, not exporting our demands to be supplied by countries that may not have the same forest practices that we do. That would be environmentally irresponsible.
Mr. GOODLATTE. Let me ask you all, what priority should the Forest Service place on addressing the restoration backlog we've been discussing in this hearing, and you have just answered that. Anybody else want to chime in on that?
Mr. IMBREGAMO. We think that the agency ought to be more aggressively pursuing fuels treatments. In our larger testimony that we submitted for the record, we are proposing an increase from about $65 million to about $100 million for the fuels treatment line item alone.
I can say that if there was a little more clarity in the budget proposal as to what other line items fund restoration treatments, we would be supportive of those as well. We have also supported the use of stewardship contracting and other methods that try to get communities near national forests some kind of economic benefit from these activities, but we feel they should be more aggressive in that arena.
Mr. GOODLATTE. All right, thank you. Mr. Francis, I was interested in your organization's announcement that you did not support the no-cut policy, but I'm concerned that that may be a distinction without a difference.
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From your testimony, it appears that you loathe stewardship timber sales because they don't make money, and I'm not aware of any strictly commodity timber sales being offered by the Forest Service anymore, so aren't you simply advocating a zero cut using slightly different rhetoric than the Sierra Club?
Mr. FRANCIS. Well, you'd have to show me where I said that I loathe stewardship sales, because when The Wilderness Society talks about below-cost timber sales and subsidies, we are talking about what is called the commodity program which the Forest Service says is the way they harvest trees only for wood fiber.
We have not gone and said we oppose the subsidies in stewardship sales, and those have other benefits which the forests—for forest health reasons, for wildlife reasons. We are not opposed to that kind of a subsidy. We think that is a subsidy the American people will accept, but subsidizing just a commercial program whose only resource is to put food fiber out there, the costs should be covered that Forest Service needs to make those sales.
Mr. GOODLATTE. Mr. Walden is chomping at the bit——
Mr. FRANCIS. Yes, I can imagine he has something——
Mr. GOODLATTE [continuing.] And I am going to take you up on that point, but before he gets a shot, I will take one more, and that is this: Conversely, I don't know of any timber sales, whether they were stewardship sales or commodity timber sales, that don't have a multitude of other benefits for the public in our national forests.
And so to calculate so-called below-cost timber sales on the basis of the fact that a sale, if they existed anymore were strictly for the purpose of producing commodity, I think is a very misleading statement to begin with, but——
Mr. FRANCIS. Mr. Chairman, if I could respond?
Mr. GOODLATTE. Go ahead.
Mr. FRANCIS. The Forest Service publishes their timber sales report information, and they list a category called commodity sales. That is the ones that they say are just for commodity purposes only, and those are the ones in which we do the analyzing and take issue with, not the stewardship, not the personal use sales.
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Mr. GOODLATTE. Well, I know, but what I am saying to you is, though, first of all, to rely upon the accounting practices of this organization to justify any position you take——
Mr. FRANCIS. They do pretty good in the timber, though, Mr. Chairman.
Mr. GOODLATTE. Well, no, I don't think that is at all correct. I think that there are a whole host of benefits for virtually any timber sale that are getting piled onto the cost of the timber production that are not at all appropriate.
And when you consider all of the bureaucratic morass that one goes through for a timber sale on the national forest compared to that which takes place on private lands, all of which—all of those measures I suspect The Wilderness Society supports.
All of the appeal process that adds an average of $7,000 to $10,000 per sale to the cost of the sale, all of the environmental process that are gone through that you would say are necessary because it is a public land and it is a public trust, all of those things are of benefit to the public at large, not to the timber sale.
The timber sale itself takes place under very comparable market conditions to a private timber sales on private land, and yet you take a whole host of measures that benefit the public as a whole and count those against the sale and then call it a below-cost sale.
And I think that that is very, very misleading and it is a huge part of the problem we have with forest health in this country, because of the fact that a responsibly-managed national forest has got to include a reasonable amount of timber harvesting, particularly in a day and age when we are not going to allow forest fires to go unchecked and we are not going to allow disease and insect infestations to go unchecked. We are going to address those because of the impact they have on land surrounding our national forests, and yet none of that gets counted in what you call a so-called below-cost timber sale.
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Mr. GOODLATTE. The gentleman from Oregon.
Mr. WALDEN. Thank you, Mr. Chairman. I would just like to followup on your comments, Mr. Chairman, because let me put in a sort of fruit industry perspective, and I come from a fruit-growing region as well. If government came in and said I can only harvest the culls among the pears, I probably couldn't make a profit at it. If I had to leave the fancies and the number ones, the high-quality pears behind, it would be pretty tough to have anything but below-cost harvest going on.
And I guess that is an analogy I would use in this case is that in some of our forests we now have to leave behind the bigger trees, the more profitable trees, because they may sometime grow into an old-growth state, and, in fact, now I think it is down to, the Forest Service has ramped it down to somewhere in the order of anything over 15 inches in the east side at least you have to leave.
And so if you have to leave the big trees where the profit is and go through all these things the chairman has talked about, and basically all you are going to harvest is the small stuff that is hard to get to or whatever, and half of that is going to go into a chip process, you can pretty quickly design a system for commodity sales that could never be profitable.
I mean, you could do it. And in a sense I think that is——
Mr. GOODLATTE. I think they have done it.
Mr. WALDEN. Well, I think I was headed there, but that is why you're chairman. [Laughter.]
It is. And so I would concur with the Chairman in terms of the way we describe these sales. And I can appreciate the public trust. Now, let me move on to a slightly different topic because we have talked about exchanges and their relative importance or not.
I can give you two examples in my district alone, a town called Sisters in the central part of Oregon, that is trying to work with the Forest Service to get 28 acres exchanged out or traded or sold or whatever to them because the town's been built up with a septic system that now is no longer able to drain, shall we say, to the point that they have outhouses, plastic outhouses on the street for the public to use because they can't drain sewage. They need to go build a sewage system out here. They're surrounded by the Forest Service. Surrounded.
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You have a public health issue here, and yet we can't seem to get an agreement from the Forest Service to come up with 28 acres somehow around there they could put their treatment plant on. I know it is a public trust, but in this case we have competing public interests.
The second one is a trade-out in the Columbia Gorge National Scenic Area. County-owned land, 1,000 acres, that the local U.S. Forest Service supervisor or ranger or whatever the level has said, yes, because of its location, you're probably never going to be able to harvest it in your county harvest plan like you would otherwise because it has some scenic value. Prime candidate to be traded out.
Well, you know what happened? The next level up said, oh, we don't necessarily—let's have another set of eyes look at this. So they've gone through an appeal process to look at that, and, lo and behold, they've re-read the Columbia Gorge Scenic Area Act to say, oh, that doesn't include public lands for trade-out purposes.
Beyond that, the people up above in the Forest Service said we have no lands available to trade out to you. So the taxpayers are supposed to donate this land to the Federal Government to the tune of about $6.5 million or $7 million, a county of 17,000 people.
So there are those things going on out there that are of great concern to me and the people I represent that involve competing public trusts, let alone the debate we might all have about how to better manage the public trust lands we have in the Federal forests that are ready to catch on fire, burn, have burned, should be dealt with.
I would like to ask a question of Mr. Brown on the recreation fees, because this is an issue that is coming up and is of interest to me, and just get your feedback since you were involved in helping, I understood from your testimony, to create the pilot programs that are in place.
And this is my concern. Do you feel that we have a risk of eventually having an agency that would gain permanent authority to levy and increase its fees and thereby price out the average working family who may want to take the kids on a hike sometime because they've got to make reservations 6 months in advance in Oregon, and I would challenge you to pick which day in Oregon will be sunny in advance, and then have to pay a fee to go do it.
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Mr. BROWN. I think that is a legitimate concern. You know, I think that is why we recommend that it should be a demonstration program, but, there are some places where obviously the public deserves to pay a fee for use of a developed site perhaps, and certainly the whole concept of this fee demo program was that it would go to the backlog to help with the backlog of recreation facilities, and our concerns is that it is being converted to administrative expenses, and because it is being used to offset some of the declines in the budget.
And that is why we're recommending that it stay a demonstration program, to make sure that the kinds of things that you're describing don't happen.
Mr. WALDEN. The other issues, I guess, is along the same trail system in the Mount Hood. They are not talking about racheting down the number of people that can go on this one trail from 220 a day to 20, and it just seems to me that we are—and I know we've got to manage access and all, but it just seems to me that we're racheting down to where nobody, let alone we won't do any harvest, but nobody is going to even be able to hike in there.
Mr. BROWN. Well, we have some of those concerns, too, and we've got outfitters and guides that are across the Nation that are seeing the same kind of things happening, and obviously where recreation is having some really adverse impact, something has to be done, but we're seeing cases where the impacts are not resulting in any environmental consequences, but it is more social agenda.
And use levels are not that high in some areas where this is occurring, and that is going to have an impact on these rural economies that depend on access to the national forests.
Mr. WALDEN. OK. And I would point out I am not totally against the fee concept. We do that with snow park permits. It pays for the State to come plow out the parking areas for those who ski, for example, but it is so tightly controlled, it is a nominal fee and it pays—I am troubled, though, with the sort of Federal public lands and just exactly what you are concerned about, I think, that this thing may get out of hand, and the funds may get used some other way. And, heavens knows, we have heard enough from the IG and the GAO about how the funds are difficult to track at best today.
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Mr. Chairman, I have no other questions at this time.
Mr. GOODLATTE. Mr. Virga, how important is the FIA program to helping foresters like yourself make more informed management decisions?
Mr. VIRGA. I think inventory is critical. I don't see how, with the current system that we have right now on national forest system lands, that we are capable of making the best decisions possible whether that be on the ground in terms of policy-making.
I think it is extremely important that we continue to aggressively fund that program. Again, without the right information in a timely fashion, we just can't make the best decisions that we need to make.
Mr. GOODLATTE. I noticed in your testimony you encouraged the Forest Service to give greater emphasis to its risk mapping initiative. Why is this a priority for your organization?
Mr. VIRGA. Risk mapping is another tool. It is similar to inventory. It just provides us with outstanding information. There are also some accountability issues that can be addressed with the risk mapping in terms of as we address these issues, you take the red zones off the map to measure our progress over time.
These are the types of tools that are handy, not just for the Forest Service, but for the public, and in terms of addressing the public concerns. I would also say that the maps themselves give resource managers a chance to understand the total scope of the problem.
Mr. GOODLATTE. Mr. Brown, in your testimony, you are critical of the way the Forest Service uses its available funds. What should the agency do to be more efficient in its use of funds?
Mr. BROWN. Well, one thing I think would be helpful is to have a 2-year budget or at least more than a 1-year budget. It would seem to be very hard, I think, to operate, given the complexity of the Forest Service with having to reinvent the wheel every year.
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There also seems to be an inordinate focus on process in government and not enough focus on product, and I think the agency spends a lot of money making decisions, frankly, that—and I know they are working to some extent to streamline some of their decisionmaking process, but I would certainly encourage that.
And that doesn't mean that we reduce public input, but certainly reduce some of the paperwork and try to streamline the decision-making process as much as possible.
Mr. GOODLATTE. Mr. Imbregamo, how important is the forest inventory and analysis program to State and Private Forestry. Is the funding level in the Forest Service budget adequate to implement this program consistent with the will of Congress, and how much funding in your opinion might the program need to make it work like it should.
Mr. IMBREGAMO. It is absolutely critical as I said in my testimony, and the agency to this point has gotten quite far behind in the inventory cycles. Maine, for instances, an area with pretty forest management, had its first inventory in 18 years. The cycle is supposed to be every 5 years.
The administration—or the agency, excuse me—in responding to the mandate in the farm bill said that it would take $82 million to implement a 5-year cycle. That seems a bit high to us, and it doesn't take advantage of opportunities to cooperate with agencies like the ones I work for.
As I said, there is probably an alternative that would cost about $56 million as opposed to, I believe, the around $34 million that is being spent currently within research that would start to bring inventory cycles down to where they need to be, and State agencies, including notably Virginia, Maine, Tennessee and the Lake States, are contributing pretty handily towards that, and that would include a $4 million line item in the State and private budget as well.
Mr. GOODLATTE. Mr. Arnold, I am sympathetic to the needs of rural counties that have been hard hit by the drive toward zero cut. I am also aware of your efforts to improve the mechanism for sharing revenues for Federal timber sales with counties.
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One of the difficult questions surrounding that proposal is how to fund it, and you mentioned a couple of ideas in your testimony. I wonder if you could elaborate on those.
Mr. ARNOLD. Certainly. One certainly we have talked about already is land acquisition. We think that clearly is an area that can help go to offset some of the additional costs associated with the safety net proposal.
Aas you will recall, the GAO had a report in April 1997 that basically said the Forest Service was wasting, to their own report, said they were wasting almost $100 million a year in planning costs.
And certainly there are some planning costs that are necessary because of this Federal statute and others, but the National Association of Counties is interested in actually seeing results, and, quite frankly, we have not seen the results that we think $100 million per year going down into some dark hole. We feel that that is an area that needs to be addressed and looked at very carefully, and the Forest Service has identified it as an area they need to look at, but if, indeed, they are wasting $100 million a year, that ought to go to more productive uses like trying to take care of the citizens of the timber counties.
Mr. GOODLATTE. Thank you.
I want to thank this panel for your participation. It has been very helpful, and we look forward to continuing to work with you and to receive your input about this proposed budget which I have some considerable concerns about, and as we do so, we will stay in touch with you.
The Chair would seek unanimous consent to allow the record of today's hearing to remain open for 10 days to receive additional material and supplementary written responses from witnesses to any question posed by a member of the panel. Without objection it is so ordered.
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This hearing of the Subcommittee on Department Operations, Oversight, Nutrition, and Forestry is adjourned.
[Whereupon at 3:11 p.m. the subcommittee was adjourned, subject to the call of the Chair.]
[Material submitted for inclusion in the record follows:]
Statement of Hon. James L. Oberstar, a Representative in Congress From the State of Minnesota
Mr. Chairman, members of the committee, I am pleased to have the opportunity to submit my remarks for the record.
This year's Forest Service budget request is perplexing, and I am deeply concerned that it does not reflect sound management practices. The Forest Service faces a massive forest restoration backlog; yet, the administration has requested funding for further land acquisitions that will only add to this backlog. This doesn't make sense.
The Forest Service's backlog presents a daunting challenge to the agency and requires its immediate and dedicated attention. The agency has provided some alarming statistics: 40 million acres of the national forest are at an unacceptable risk of catastrophic wildfire; 26 million acres of national forest are at ''high risk'' of insect and disease infestation; the agency needs $8.5 billion for deferred reconstruction and maintenance of its road system. Given this appalling backlog, I do not believe that Congress should mandate additional land acquisitions for this already overburdened agency.
Unfortunately, the problems of the Forest Service do not end with threats of wildfire and disease.
The dire troubles of our national forests are exacerbated by the very agency charged with addressing them. In January, GAO identified the Forest Service as an agency at ''high risk'' of waste, fraud, abuse and mismanagement due to its inability to produce a credible financial statement. According to GAO, the agency is currently incapable of demonstrating fiduciary responsibility. Concerns of mismanagement could not have come at a worse ti, me for the Forest Service considering the serious threats facing our national forests. Given these existing administrative problems that require immediate attention, I do not believe that Congress should add additional responsibilities to this beleaguered agency, nor risk an unwise investment in an organization that clearly lacks fiscal accountability.
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Mr. Chairman, the mission of the Forest Service is to ensure our national forests are healthy and well-managed. How can we, in good conscience, endorse additional obligations on this agency when it has failed to meet the needs of its current land holdings? If we are committed to increased funding for our National Forests, then we should dedicate those dollars to the agency's current backlog and not saddle this overburdened and troubled agency with additional responsibilities. Thank you.
Testimony of Hon. Wally Herger, a Representative in Congress From the State of California
Mr. Chairman, I appreciate the opportunity to discuss the future of the Forest Service and its need to increase fiscal accountability. As I have said on a number of occasions, I have two strong concerns about this agency's management practices. First, I am concerned about what I feel is a major misdirection of policy from Washington that I believe is literally destroying the environment in our national forests. Second I am concerned about what has been pointed out as a failure by the Forest Service to properly manage its annually appropriated dollars.
These issues are critically important to me and my constituents. My district in northern California is made up of extensive forest lands that include all or parts of eleven national forests. Forest Service policy, therefore, has a direct impact on the well-being of the communities in my district.
The Forest Service estimates more than 40 million acres of our national forests are threatened by destruction by catastrophic wildfire.
The danger of this threat is particularly strong in forests in the Western United States. Historically, Western forests were filled with stands of large trees. Forest floors were less dense and were naturally and regularly thinned by lightning and native American caused fires that cleaned out dense underbrush leaving the big trees to grow bigger. However, because of decades of well-meaning, but aggressive fire suppression practices, these forests have grown out of hand, creating an almost overwhelming threat of catastrophic fire. Now, when a fire strikes, it is not like the positive fires of the past. Instead, modern fires leave an almost sterile environment in their wake with almost no vegetation, wildlife, or habitat left behind.
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These dangerous conditions are not irreversible. Regrettably, however, because of Washington-based mandates, and directives from the Clinton/Gore administration, the Forest Service suffers from a virtual paralysis.
On another note, I am also deeply concerned about the lack of accountability for the Forest Service's financial resources. In a December 29, 1996 letter, the General Accounting Office noted that the Forest Service could not account for $215 million of spending in its 1995 budget. In addition, at a March 26, 1998 hearing, Mr. Barry Hill, Associate Director of the GAO testified that, although the Forest Service had been notified of areas where it needed improvement, ''the agency has not acted on some [recommendations], has studied and restudied others without implementing them, and has left the implementation of others to the discretion of its independent and autonomous regional offices and forests with mixed results.'' Also, for the first time in the history of this agency the GAO included the Forest Service in its list of Major Management Challenges and Program Risks within the Department of Agriculture.
In spite of this, the Forest Service requested a $172 million increase for fiscal year 2000. I seriously question whether we can allot additional funds to this agency when, for the past 4 years, it has not been able to accurately account for its financial resources. I am also concerned that the Forest Service's priorities are not properly set to fulfill its role as a land management agency. If we don't provide guidance, this agency may neglect some of its more important programs, such as fire suppression and forest health restoration, and may, as has happened in the past, spend taxpayers dollars on programs like painting rocks to make them look older, or, as in another instance, where the agency spent more than a half a million dollars on an employee retreat that explored such morality questions as ''everyone's truth'' is truth, and ''alternative realities are OK.''
Mr. Chairman, I would like to say in closing, that I hope we can work together to help this agency turn itself around so that we can ensure a brighter and more healthy future for America's forests and forest communities.
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Statement of Mike Dombeck
Chairman Goodlatte, Representative Clayton, and members of the committee, thank you for the opportunity to appear before you today to discuss the Forest Service's proposed budget for fiscal year 2000.
Last month, I addressed our employees in Missoula, MT about the state of the Forest Service. I would like to review some of those remarks as I discuss the proposed budget for the Forest Service.
I am honored to have served as Chief of the Forest Service for over 2 years. During this time, I have had the pleasure to be a part of the continuing evolution in the direction of the Forest Service. I have come to appreciate that many of the conflicts we face today over management of natural resources are very similar to the conflicts faced by the agency's first Chief, Gifford Pinchot. What made the Forest Service unique under his leadership was a set of conservation values that were not always popular, but which reflected the long term interest of land health. Mr. Chairman, as in the days of Gifford Pinchot, the values put forth in the President's fiscal year 2000 budget emphasize long term health of the land.
In my testimony today I want to concentrate on the values of healthy land by elaborating on some key areas: (1) the major changes reflected in the President's budget that set a new leadership direction for the Forest Service; (2) how the Forest Service Natural Resource Agenda reflects these values; and (3) how we are addressing important accountability issues. Let me first address some overall perspectives about where the Forest Service has been and where the Secretary and I want to take it in the future.
Over the last decade there has been a significant change in how society views conservation values. Many people have ceased viewing publicly owned resources as a warehouse of outputs to be brought to market and instead have begun assigning greater value to the positive outcomes of forest management.
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The result of such change is that we often find ourselves caught in the middle between competing interests. Some look to you, the Congress to ''fix'' the legislation that they perceive has negatively affected their interests. Others push to limit the number of appeals, so the agency can get on with producing timber or stopping timber production, as the case may be. Still others ask courts to resolve land use policies through litigation.
Too often we find ourselves waiting for someone else to resolve our issues for us. I think that must end. The budget we are going to talk about today sets the framework for the Congress, the administration, the States, local governments, and private parties to begin working together in a new way to collaboratively resolve conservation conflicts. The central premise of our approach is that by restoring and maintaining a healthy land base on public and private lands alike, we can ensure that our children, and their children's children enjoy the benefits of land and water.
Mr. Chairman, with healthy watersheds as a foundation, there is room for a reasonable flow of outputs; timber and livestock specifically, but many other products also. There is and will be the ability to produce cleaner water. There is a land base which will allow us to set aside additional places untrammeled by human beings, and there is an ability and a necessity to preserve now and for generations to come, additional open spaces before such spaces are fragmented or degraded due to private land development, urban sprawl, and other such issues.
For those who advocate a return to timber outputs of 10 years ago, or those who advocate a ''zero cut'' philosophy, I say it is time to inject realism into the debate. The President's budget provides funding for outputs which are consistent with land health. I can not visualize a circumstance when such outputs will ever be at the level of 10 years ago, but I say to the other side of the spectrum, timber harvest will, and should continue. The President's budget contains innovations that recognize the ability of people to restore ecosystems from those already degraded, using modern science and technology, where people have either contributed to poor land health by over using the land, built roads in unstable or overly steep terrain, or prevented natural processes such as fire. We can improve the health of these areas, and do so by not only allowing the removal of forest products but by demonstrating in some cases such activities can contribute to forest health. The more timber harvest contributes to ecological sustainability, the more predictable timber outputs will be. This budget presents a solid balance that if enacted will help accomplish these goals.
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The Forest Service serves many people. With our 192 million acres, 383,000 miles of roads, $30 billion infrastructure, 74,000 authorized land uses, 23,000 developed recreation sites, tens of thousands of dispersed recreation sites, and 35 million acres of wilderness, the national forests are many things to many people. The Forest Service has the premier Forest and Rangeland Research organization in the world which is involved in research to improve land health and to improve the experiences enjoyed on the land by Americans.
SPECIFICS OF THE PRESIDENT'S BUDGET
The President's budget creates a new focus on State and Private Forestry programs. Over time, our leadership capacity to assist those who manage the more than 500 million acres of forests outside of the national forest system has diminished. One of our greatest contributions to society will be our ability to bring people together to provide technical assistance and scientific information to States, private landowners, and other nations of the world. The fiscal year 2000 proposed budget contains an increase of $80 million in State and Private Forestry, and $37 million in Forest and Rangeland Research to increase our involvement in this critical collaborative role. Consider that we have been spending about $2 billion annually to manage the 192 million acres of national forest land, yet spend less than $200 million in support of the 500 million acres of State managed and privately owned lands.
With this budget, support to State and locally managed lands and non-industrial private lands dramatically increases. The budget proposes $218 million for the Lands Legacy Initiative, which will make new tools available to work with States, tribes, local governments, and private partners to protect great places, to conserve open space for recreation, and wildlife habitat; and to preserve forest, farmlands, and coastal areas. This $218 million is part of the President's bold government wide initiative to provide $1 billion for the Lands Legacy Initiative.
The President's budget also continues support for key programs initiated with the fiscal year 1999 budget by targeting an increase of $89.4 million for the Clean Water Action Plan to maintain priority attention to the health of watersheds on Federal, State, and private lands. The budget also proposes $6 million to support the Climate Change Technology Initiative and an increase of $6 million for the Global Change Initiative, both of which are aimed at improving the long term health of the climate that supports life on this planet.
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Forest and Rangeland Research programs are an important aspect of emphasis in the President's budget. In addition to funds to support global climate issues, an additional $14 million is proposed for the Integrated Science for Ecosystem Challenges project which addresses science and technology needs related to ecological systems.
The President is also proposing as part of this budget several new legislative initiatives. Most notably, a proposal similar to one put forward last year, to stabilize payments to States and counties by separating payments to counties from a reliance on receipts generated by commodity production. At the beginning of my testimony, I noted the need to manage outputs from the national forests in a manner consistent with land health. In doing so, emphasis for producing those outputs has changed. For example, today a significant number of timber sales are sold for stewardship purposes rather than pure commodity objectives. There is an increase in the sale of dead or dying timber. In these cases receipts are less than were experienced several years ago. I expect this trend to continue particularly in the west. What we are asking is, why should the richest country in the Nation finance the education of rural schoolchildren on the back of a controversial Federal timber program? The Forest Service has a stewardship responsibility to collaborate with citizens to promote land health. Collaborative stewardship implies an obligation to help provide communities with economic diversity and resiliency so they are not dependent on the results of litigation, the whims of nature or unrelated social values to educate their children and pave their roads. We need to work together so States and counties can anticipate predictable payments on which to base education and road management decisions.
Several other legislative proposals are also soon to be submitted including proposals to transfer timber sale preparation costs to timber purchasers through user fees, a proposal to reform concession management, increased emphasis on obtaining fair market value for land uses and timber, and establishing a fund to manage the sale of special forest products.
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NATURAL RESOURCE AGENDA
The President's budget contains many important initiatives. It also contains a broad program of funding for management of national forest lands. Just one year ago I announced the Natural Resource Agenda, which is a comprehensive science based agenda that will lead management of the agency into the 21st century. As an integral partner with the Government Performance and Results Act, this agenda focus on four areas; (1) watershed health and restoration, (2) sustainable forest and grassland ecosystem management, (3) the national forest road system, and (4) recreation.
I want to highlight briefly our emphasis in each of these areas. A retired Forest Service employee offered me some advice a while back. He said, ''if you just take care of soil and water, everything else will be OK.'' Multiple use does not mean we should do everything on every acre simply because we can. We must protect the last best places and restore the rest. Forest Service lands are truly the headwaters of America, supplying river systems and recharging aquifers. They contain riparian, wetland, and coastal areas that are essential for the Nation's water supply and prosperity. The President's budget provides an increase of $48.6 million included in programs such as wildlife habitat management, watershed improvements, fisheries habitat management, rangeland vegetation management, threatened and endangered species habitat management, and State and private forest health programs. These increases will allow the Forest Service to make important watershed restoration and protection efforts.
Restoration and maintenance of watershed health is contingent on quality land management planning. As you know, the Committee of Scientists will issue their final recommendations on forest planning soon. I expect they will suggest that we focus planning efforts on long-term sustainability, more effectively link forest planning to budget and funding priorities, practice collaborative stewardship through use of diverse and balanced advisory groups, and allow for adaptive management through monitoring. I look forward to issuance of the Committee of Scientists Report from which revised forest planning regulations will be developed in late Spring. I believe new planning regulations will be invaluable in breaking the forest planning gridlock that is hampering national forest management in so many areas.
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A second area of the Natural Resource Agenda is sustainable forest and grassland management. The President is proposing a billion dollar initiative to protect open space, benefit urban forests, and improve the quality of life for the 80 percent of Americans living in urban and suburban areas. Through sustainable forest and grassland management, the Forest Service will play an essential role in accomplishment of this initiative. The President's budget provides an increase of $113 million in State and Private and Research programs which are integral to protecting and restoring the lands and waters that sustain us. We will collaborate with State fish and wildlife agencies, State Foresters, tribes, and others to develop conservation and stewardship plans for an additional 740,000 acres of non-industrial private forestland. We will help States protect an estimated 135,000 additional acres of forestland through acquisitions and conservation easements. We will acquire environmentally sensitive lands through the Land and Water Conservation Fund, and we will include nearly 800 more communities in efforts to conserve urban and community forests. In addition, 300,000 more hours of conservation training will be provided to local communities.
Mr. Chairman, I am truly excited about budgetary emphasis in sustainable forest and grassland management through cooperation and collaboration. This emphasis will carry into many programs including fire management where we will employ fire as a tool to meet integrated resource and societal objectives across landscapes. We will give priority to high-risk wildland/urban interface areas where people, homes and personal property are at risk. We will employ fire as a tool to aid threatened and endangered species conservation and recovery, to reduce accumulated fuels within and adjacent to wilderness and reduce fuels to help lower long term costs of suppressing wildfires.
Now I would like to turn to one of the more challenging aspects of the Natural Resource Agenda. That involves management of the National Forest Road System. As you know, on February 11, I announced an interim suspension of road construction in most roadless areas of the national forest system. We offer this time-out to reduce the controversy of roadless area entries in order to reduce damage to a road system which is already in disrepair.
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A personal source of frustration is that few people or interest groups are focused on the issue of our existing road system as opposed to the roadless area issue. Yet if we care about restoring the ecological fabric of the landscape and the health of our watersheds, we must concentrate on areas that are roaded in addition to those that are not.
The President's budget proposes a $22.6 million increase in the road budget, primarily for maintenance. The agency has an estimated road maintenance backlog of over $8 billion. Meanwhile we are only maintaining 18 percent of our roads to the safety and environmental standards to which they were built. With the proposed funding level in the fiscal year 2000 budget, we will increase by 50 percent from 1998, the miles of road to be decommissioned or stabilized. We will increase the percentage of forest roads maintained to standard from 18 percent to 24 percent.
With roads that could encircle the globe many times, our road system is largely complete. Our challenge is to shrink the system to a size we can afford to maintain while still providing for efficient and safe public access in a manner that protects land health.
Over the next 18 months, we will develop a long term road policy with three primary objectives: (1) develop new analytical tools to help managers determine where, when or if to build new roads, (2) decommission old, unneeded, unauthorized, and other roads that degrade the environment, and (3) selectively upgrade certain roads to help meet changing use patterns on forests and grasslands.
Management of roads is very important to local communities that rely heavily on these roads for livelihoods and rural transportation. I expect decisions about local roads to be made by local managers working with local people and others who use or care about our road system. We will obviously continue to provide access to and through forests. However, it is clear that we simply cannot afford our existing road system.
The fourth element of the Natural Resource Agenda involves recreation. The President's budget provides strong support to the recreation program. With appropriated funds totalling $288 million, and additional funds provided from the recreation fee demonstration project receipts and the ten percent road and trail fund, this program will continue to provide strong support to the 800 million annual visitors which we expect to increase to 1.2 billion over the next 50 years.
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The Forest Service recreation strategy focuses on providing customer service and opportunities for all people. The successful recreation fee demonstration program has served many people at the sites operated under the program through improved visitor experiences and repair and upgrade facilities which were badly in need of attention. I strongly support continuation of this program. I do want to pass on one caution lest this program is viewed as an answer for reducing future recreation discretionary funds. The recreation fee demonstration program serves many people in a limited number of recreation sites. The Forest Service recreation program is highly dispersed. It is the place for a family drive or hike on a Sunday afternoon, a weekend camping trip, or a week long grueling hike in the rugged backcountry. Many of these experiences do not lend themselves to a recreation fee demonstration type program. In fact, less than 10 percent of forest recreation visits occur at fee demonstration sites. As the backyard playground for many Americans, it is essential we maintain a recreation program that allows enjoyment of the national forests without charge in addition to fee programs in limited areas.
A key part of enhancing this dispersed recreation is through our wilderness management program. The President's budget includes an increase of $7 million for protection and restoration of natural conditions in wilderness and to mitigate the impacts of high use areas adjacent to large population centers. The wilderness legacy is a crown jewel. I am committed to increasing the Forest Service commitment to the Wilderness Act and intend to give more emphasis through increased land management planning and re-establishment of a national wilderness field advisory group.
Each of the four emphasis areas of the Natural Resource Agenda links directly to one or more of the goals of the Results Act Strategic Plan. I am pleased that the President's budget supports this plan for moving forward.
FOREST SERVICE ACCOUNTABILITY
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Successful implementation of the President's initiatives and the Natural Resource Agenda is dependent on having the trust of Congress and the American people. To be trusted, we have to be accountable for our performance. We have to be able to identify where our funds are being spent, and what America is receiving in return. We have to do this as efficiently as possible in order to assure that a maximum amount of funds are spent on the ground for intended purposes without being diverted for unnecessary overhead.
Mr. Chairman, as you know, the Forest Service has had problems with accountability in the past. We have been the subject of more than 20 oversight reports and internal studies. We have been resoundingly criticized for having poor decision making, either bloated or inaccurate overhead costs, and non-responsive accounting systems. While some of this may be exaggerated, I fully acknowledge that some is true. We've got the message. We will improve dramatically. Let me highlight several initiatives that are now underway.
First and most importantly, I have made it clear through organization changes and personal statements that the business and financial management functions of this agency are equally as important as attention to managing the resources. I have placed business management professionals in operations and financial management positions. We have established a Chief Operating Officer at the Associate Chief level which reports directly to me, thus placing our business management functions on an operating level equal to that of our natural resource functions. We have brought in a new Chief Financial Officer at the Deputy Chief level to implement the Foundation Financial Information System. This is her top priority, with a goal of achieving a clean financial opinion from the General Accounting Office as soon as possible.
It is also time to reform our budget structure. I want to work with the Congress and the administration to design a budget structure that reflects the work we do and the Results Act Strategic Plan on which the Natural Resource Agenda is based. The current budget structure does not support the integrated work necessary to restore and maintain land health while promoting ecological sustainability. In order to ensure accountability while implementing a new budget structure, we will employ land health performance measures to demonstrate that we can have a simplified budget and improve water quality, protect and restore more habitat, and improve forest ecosystem health.
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In fiscal year 2000 we will begin to implement reforms to our trust funds. We will examine alternatives for trust fund management in the future to avoid unintended incentives to pursue forest management activities that are not consistent with land health objectives.
For the first time, at the direction of Congress, we have developed and implemented standard definitions for indirect costs which are in full compliance with the Federal Accounting Standards Advisory Board. These definitions have been reviewed by several oversight groups. Based on these definitions, for the first time we have accurately determined indirect expenses for the agency, which during fiscal year 2000 we project to be 18.9 percent.
As you know, the issue of indirect costs, often referred to as overhead, received extensive attention during the 105th Congress, as did the poor quality of our financial system and records. I want to make a specific request as your committee examines our budget in the coming year. I ask for your patience and support in rectifying much of our accountability problems. The Forest Service's financial management and reporting of overhead took a decade or more to fall into disrepair. It will take more than a year to fix the problem. Let me emphasize that we are devoting extensive resources to implementing new financial systems, improving our audit processes, and improving decision making. The resources we devote to make these fixes involves expenditures of an overhead type nature. As we concentrate on cleaning up our problems, we need to have flexibility without legislated limitations which could prevent us from being successful.
In my testimony today, I have reviewed the President's initiatives, discussed the Natural Resource Agenda, and described our intent to improve agency accountability. In conclusion, I want to say that a Forest Service that meets the needs of the American people and restores and preserves the health of the Nations forests and rangelands, is a goal we all strive for. I'll leave you with some thoughts based on Aldo Leopold's Sand County Almanac; the same words I left with our employees in Missoula during my state of the Forest Service speech.
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Let us recommit ourselves to an invigorated nation and land ethic. An ethic that recognized that we cannot meet the needs of people without first securing the health, diversity, and productivity of our lands and waters. An ethic that understands the need to reconnect our communities -both urban and rural- to the lands and waters that sustain them. An ethic that respects that the choices we make today influence the legacy that we bequeath to our children and their children's children.
That concludes my remarks. I would be pleased to answer any questions you may have.
March 12, 1999
HONORABLE BOB W. GOODLATTE
Chairman, Subcommittee on Department Operations, Oversight, Nutrition, and Foreign Agriculture
Committee on Agriculture
U.S. House of Representatives
Washington, DC 20515–4606
DEAR CONGRESSMAN GOODLATTE:
I want to clarify for the record a response I provided at yesterday's hearing regarding management of Forest Service trust funds.
During the hearing you asked me about the administration's position regarding the charging of indirect expense to trust funds. In a sequence of questions I was asked if I would support legislation, possibly to be developed by your committee, which would prohibit the charging of indirect expenses to trust funds.
As you know, I committed to a thorough evaluation of the agency's use and management of trust funds. It is imperative that the Forest Service is fully accountable for all aspects of trust fund expenditures including both direct and indirect costs. Over the course of the next year, we will thoroughly review and evaluate our trust funds to ensure vigorous management oversight and accountability. Any reforms we implement will comply with existing laws. If they do not, we will work with Congress to amend the relevant laws as appropriate.
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Charging indirect expenses against trust funds is extremely controversial as indicated by the dialogue which occurred in last year's Congressional session. The principle reason the administration has proposed to prohibit charging indirect expenses against trust funds is to remove the issue from debate for one year while we improve trust fund management oversight and accountability,
The President's budget does not limit indirect cost expenditures represented by the trust fund program of work It shifts these costs to other areas of the Forest Service budget—indirect costs are a function of operating any business or organization and should continue to be funded.
In summary, I do not want my remarks to be construed to mean I favor any limitations that may be premature to a broader reform of total trust fund management. As with any legislation, we need to make a thorough review prior to taking a position. Thank you for the opportunity to clarify this issue.
Sincerely,
MIKE DOMBECK
Chief, U.S. Forest Service
Statement of John Heissenbuttel
Good morning Mr. Chairman. My name is John Heissenbuttel. I am vice-president of the Forestry & Wood Products Division at the American Forest and Paper Association (AF&PA) in Washington, DC.
I am presenting my testimony today on behalf of the Association's member companies, associations, and allied groups. AF&PA members include forest landowners, manufacturers of solid wood products, and producers of pulp and paper products. The U.S. forest products industry has sales of over $195 billion annually and employs 1.6 million people, 1.2 percent of the entire U.S. work force. Let me first thank the chairman and the members of this subcommittee for asking me to testify today on the priorities of the forest products industry with regard to Forest Service natural resources management and their fiscal year 2000 appropriations proposal. AF&PA welcomes the opportunity to work with the subcommittee to increase the value and efficiency of Federal forestry programs to ensure the sustainability of our Nation's forests. Mr. Chairman and members of the Subcommittee, I must admit from the outset that I am disappointed by the President's Forest Service budget proposal for fiscal year 2000.
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AF&PA generally supports the U.S. Forest Service's Natural Resource Agenda which identifies four basic concepts: watershed health and restoration, sustainable forest management, roads, and recreation. However, we are disappointed that the administration's proposed budget does not reflect a commitment to this agenda. I would like to express our members' deep concern that the Forest Service has proposed a budget increase for only three of the four previously identified priorities. We are baffled by the fact that the agenda item focused on sustainable forest management is not receiving the same budget emphasis as the other three. In fact, the administration's proposal seeks a $30 million decrease from the fiscal year 1999 enacted budget for this area. We are confused by this and urge the subcommittee to challenge the Forest Service to ''walk the talk.'' Our top priority is forest health. Healthy forests are important to us all. The health of our Federal forests is critical to private landowners who live on or own land adjacent to national forests. National forests at risk of fire or with unnatural levels of insects and disease, pose a significant risk to neighboring land. Moreover, recreation, watershed, wildlife and fisheries, and aesthetic values all depend on healthy, sustainable forests. Unfortunately, our national forests are not all healthy; in fact, our forests are in crisis. Last year, Forest Service Chief Mike Dombeck testified that approximately 40 million acres of our national forests are at high risk of catastrophic forest fires. Two weeks ago, before this subcommittee, the Forest Service referred to risk maps identifying an additional 58 million acres of public and private forest lands at risk of dying from insect and disease—26 million of those acres are in national forests. I think we can all agree that these conditions are frightening and unacceptable. Restoration of our national forests is essential. The Forest Service has said so, this subcommittee has agreed, and its time the Forest Service comes forward with an aggressive program to start dealing with this crisis. In 1997, the Forest Service's timber sale program treated only 130,000 acres for forest health goals. The Forest Service recognizes that at least 40 million acres are at high risk of catastrophic wildfire and an additional 26 million are at high risk of dying from insect and disease. Therefore, the Forest Service should be requesting funds to increase treatment twenty-fold in order to achieve our collective goal of forest restoration. Active management can restore and restock forest land for fish and wildlife, recreation, and future generations, and produce the wood and paper products Americans want and need. However, forest managers can't adequately respond to the crisis in our forests if their hands are tied by bad policy and shrinking budgets. We urge the subcommittee to support programs that address the forest health crisis, untie the land managers hands, and help them take care of our forests. Consistent with our first priority is maintaining State and Private Forestry programs that address the forest health crisis. Such programs as the Forest Health Management and Cooperative Fire Protection accounts are vitally important to keeping our forest resource healthy. Cooperating with the States on fire protection as well as insect and disease treatments is necessary in order to protect homes and private lands from suffering the consequences of inadequately managed, unhealthy conditions on Federal lands. However, we do have concerns over some of the language in the fiscal year 2000 budget notes. These notes seem to suggest that the Agency will be turning its attention away from managing National Forests and placing more emphasis on private lands. We believe that the agency must meet their responsibilities for managing National Forests before considering such large increases in the State & Private programs. In addition, we believe there needs to be more discussion and definition of the appropriate roles and responsibilities of the private sector and State and Federal agencies. Our third priority is Forest Inventory and Analysis (FIA). The importance of obtaining comprehensive and current forest resource data is more significant than ever. The FIA program is designed to modernize, expedite and use consistent data collection techniques to obtain forest resource data across all regions of the country and all ownerships. We firmly believe that the existing forest inventory and analysis budget is woefully inadequate to provide this critical information. We are also concerned that the present average 12- to 15-year cycle of forest inventory and analysis is too long to provide forest managers with the current data that is necessary to make timely and effective management decisions, particularly decisions responsive to changing forest conditions. We recommend 5-year inventory cycles across the country as directed in the Research Title of the 1998 farm bill. Let me also add that AF&PA believes the National Forest System must begin to pay their fair share of collecting FIA data on the lands they manage. Finally, I would like to reiterate AF&PA's appreciation of the dedication of this subcommittee and its Chairman to address these and other issues that are important to all forest users. We should all expect the Forest Service to commit itself to restoring our forests, and to use and support all of the available tools to get there. The Forest Service has detailed resource management plans for all national forests. If fully implemented, many of today's forest health problems would not be as severe. We believe it is important for the Forest Service to focus its efforts and not ignore the crisis facing our forests. It's time for the agency to stop talking about the forest health crisis and begin to take significant action. Adjacent land and home owners deserve some sort of action on national forests to reduce the threats posed to their investments. The American people deserve healthy national forests which will support abundant wildlife and clean water. In sum, our message today is simple; the Forest Service needs to act as a responsible steward of our Nations forest resources.
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Statement of Hon. John E. Peterson, a Representative in Congress From the State of Pennsylvania
Mr. Chairman and members of the subcommittee. Today I want to share with you my perspective regarding the fiscal year 2000 Budget for the U.S. Forest Service. So far this year the U.S. Forest Service and Chief Dombeck have testified before me in both the Interior Appropriations Subcommittee and the Resources Forests and Forest Health Subcommittee.
Today I would like to point out some specific areas I feel are short changed by the Forest Service Budget. I am not here to tell you that the Forest Service should get reduced, level, or increased funding from appropriators, but rather to highlight what I believe are poor priorities that will result in flawed outcomes.
First, the USFS has a tremendous backlog in deferred maintenance. There is currently a need for billions of dollars to make a dent in maintenance of 400,000 miles of road, or repair of bridges, campgrounds, and other facilities. The administration's attention to this maintenance is non-existent. It is my understanding that road maintenance alone needs $431 million for fiscal year 2000, yet the request is for a mere $122 million.
Also, there is a huge need in the forest health area. Insects and disease are devastating some 40 million acres of forests, while the potential for wildfire exists on 50 million acres. Yet the USFS request is for level funding in both areas.
I represent rural America. My volunteer fire departments provide critical first line fire and rescue services. However the funding for partnerships between the forest service and these local departments is only $1 million dollars.
The administration continues to talk about the need for recreation on USFS land. However, the budget request includes level funding for recreation management activity within the national forest system account and cuts trail construction by 50 percent.
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Yet, with all of these glaring needs the Forest Service requests $118 million for outright land purchases as proposed by a new administration initiative. If we are not able to take care of the land we have, why would we be able to take care of more land.
I have heard the argument that much of the money for the so called ''Lands Legacy'' initiative is pass through money to the States with a 50/50 cost share. I ask myself the questions, ''Are we causing States to use their surpluses for land purchases when these same financial resources might be better used in some of their own programs like health, law enforcement, and education? Are we causing States to modify their own priorities at the whim of the Federal Government?''
I will say that the Forest Service has implemented many programs that are successful. The recreation fee demo program is just one such example. Most of the fees collected are being used for projects at the point of collection.
However, while the new forest service calls for new innovation, I do not believe that innovation is demonstrated in the proposed fees for timber sales. What the forest service needs is a more entrepreneurial spirit and mind set. Our State and private forests are producing more and better timber at sustainable levels because these entrepreneurial practices affect their bottom line in a positive way. We need that same entrepreneurial drive at the Federal level.
Finally, I would like to comment on something the Secretary of Agriculture, Dan Glickman, said in front of the Interior Appropriations Subcommittee when talking about the priorities of the U.S. Forest Service. His five priorities were:
1. Watershed Health
2. Roads and Road Maintenance
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3. Lands Legacy
4. Research
5. Financial Accountability
I ask myself: What about forest health? What about sustainable timber production? What about recreation? It makes me wonder if we will not soon end up with another U.S. Park Service under a different name.
As far as financial accountability I share many of the concerns of Mr. Regula, my chairman of the Interior Appropriations Subcommittee, and of you Mr. Goodlatte.
Thank you Mr. Chairman for the opportunity to come before you today. I hope that my perspective on this issue adds to this debate in a positive way. I'd be happy to answer any questions you may have.
Statement of Roger Viadero
Mr. Chairman and members of the subcommittee:
Thank you for the opportunity to be here to testify on financial accountability in the Forest Service. With me today is Robert Young, Deputy Assistant Inspector General for Audit.
Last month I issued the audit report on the Forest Service's fiscal year 1998 financial statements. My opinion was a disclaimer—meaning the agency's books and records were in such poor shape I couldn't do enough work to draw a conclusion. This has been the pattern since the annual audit of financial statements became law in 1990.
The Forest Service has made significant strides towards improving its financial management systems and accountability since the advent of the Chief Financial Officer Act in 1990. However, much remains to be done. Because weaknesses have been so pervasive and long-standing, corrections have been difficult to achieve within the agency.
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Because of our adverse opinion on Forest Service's fiscal year 1995 financial statements, a coordinated effort was initiated involving the Forest Service, the Office of the Chief Financial Officer, and OIG towards improving the agency's financial management and accountability. A Financial Health Task Force was created, and during December 1996, issued a report detailing actions needed within the Forest Service to become accountable at all levels. Even though Forest Service management was committed to implement the plan, difficulties and sometimes failed efforts have occurred. OIG has stayed current on the Forest Service actions to address its financial and management weaknesses through our annual financial audits. In each of these audits, we recheck and readdress material weaknesses in the Forest Service's financial systems and internal controls to assess progress and make recommendations. In addition, through a consulting agreement with the Forest Service, OIG has assisted the agency in monitoring the implementation of actions pursued under the Financial Health Task Force plan. Results from these efforts continue to show a need for improvement.
I will separately address the problems having the greatest impact on financial management and accountability within the Forest Service. The Forest Service estimates that all of the issues will be overcome by fiscal year 2000. Although the goal is admirable, it is also ambitious, and thus we cannot assure you that it is attainable.
Real Property. By far the most significant accountability problem the Forest Service has is its management of real property. The Forest Service is one of the Government's largest owners of land, buildings, and equipment. Unfortunately, though the Forest Service may be able to see the forest for the trees, it's uncertain as to what's in the forests, where it is, or how much it's worth. In fiscal year 1997, we could not verify the $8.2 billion in real property reported by the Forest Service on its financial statements. This condition existed because all physical inventories and valuations of these assets had not been completed. To correct the weakness, Forest Service has been working for several years to build a new automated real property database (called Infrastructure) to account for all real property. In fiscal year 1998, agency personnel conducted real property inventories for the first time in many years in an effort to populate Infrastructure. At about yearend, most Forest Service units reported their real property inventory totals and certified them to be correct. Subsequently, however, the values increased by more than $500 million indicating that the inventories and valuations were, in fact, continuing despite the certifications. More importantly, pooled assets (primarily roads) of over $3 billion were not inventoried at all. Also, Infrastructure does not currently have a mechanism for automatically calculating depreciation for real property. This results in manual, labor intensive calculations that have been subject to error. For example, we identified a $213.5 million misstatement in the depreciation expense for the fiscal year 1998.
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We also found, in response to a Congressional request last year, that the Forest Service has no system or systematic way to compile maintenance backlog information. The Forest Service estimated that for fiscal year 1998 its deferred maintenance needs were between
$7.3 and $8.3 billion. Our review disclosed that the methodologies used to compile and estimate maintenance costs were generally not documented, and the definition of what constituted deferred maintenance for real property varied. In response to our recommendations, the Forest Service has developed a standard definition of what constitutes deferred maintenance. The process of gathering the information, via what is referred to as a condition assessment survey, will be several years in duration. As a result, a reasonable estimate of the maintenance backlog will not be known for some time.
The Forest Service goal is to have accurate real property information by the end of fiscal year 1999. This continues to be no small task in that it will require populating Infrastructure with a complete physical inventory that has been properly valuated, to include roads, adding a depreciation module, and implementing controls to review and verify accuracy at the data entry level.
Accounts Receivable and Accounts Payable. Forest Service does not have an integrated accounts receivable system or accounts payable system as part of its general ledger. The lack of an integrated system means that each month the Forest Service reporting units must go through a cumbersome manual input process to transmit accounts receivable and payable data to the general ledger. This process has been conducive to numerous errors.
Entry errors at the field level have resulted in a substantial amount of invalid receivables. For example, reported receivables have included intra-agency transactions; more specifically, transactions that occur between segments of the Forest Service that should be eliminated when preparing the financial statements. Without eliminating these transactions, assets shown by the statements include amounts the Forest Service expects to receive from itself. In total, Forest Service's financial statements for fiscal year 1998 had to be adjusted by over $44 million for intra-agency transactions.
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Since 1993, the Forest Service has historically computed its accounts payable balance statistically by identifying the extent of errors likely to have occurred and projecting them over the universe of transactions, then adjusting the total. Rather than correcting the errors, the Forest Service tries to estimate how many were made.
The Forest Service is converting to a new general ledger system which will facilitate an integrated accounts receivable system and accounts payable system; thus improving controls. To be successful, however, the Forest Service will need to ensure a successful conversion to the new system so that feeder systems provide accurate and timely accounts receivable and payable data. In addition, improved supervisory controls at reporting units will be needed to minimize field level entry errors.
Fund Balances with Treasury. For the account ''Fund Balances with Treasury'', unexplained variances exist between deposits and disbursements shown in Treasury records when compared to the amounts reflected in the accounting system used by Forest Service.
The Central Accounting System, or (CAS), used by Forest Service, is maintained by the National Finance Center, or NFC. For fiscal year 1998, NFC manually adjusted the Department's agencywide fund balance accounts by $535 million to agree with Treasury records. This adjustment was made without fully researching and reconciling the differences. As a result, the portion of the adjustment applicable to Forest Service could not be determined. This situation compares to adjusting your checkbook to reflect the bank's balance shown by your monthly statement without balancing your checkbook to determine why the difference exists, thus automatically accepting the bank's reported balance.
To correct accounting weaknesses in the account ''Fund Balances with Treasury'', Forest Service must document the basis for any adjustments made by the agency, and NFC must do the same for adjustments it makes. Adjustments by NFC must provide sufficient detail to allow allocation of the adjustment to applicable agencies within the Department. We have continually reported material weaknesses in the general controls environment at NFC that have hampered the ability of user agencies to analyze and reconcile accounting data. It is difficult to estimate when these weaknesses might be resolved. However, it should be noted that even though part of the problem exists at NFC, Forest Service has the ultimate responsibility for producing and reporting reliable data.
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Conversion to a New General Ledger System. As previously mentioned, Forest Service is in the process of converting to a new general ledger system, the Foundation Financial Information System (FFIS). Conversion to FFIS is intended to correct weaknesses in CAS. The CAS general ledger is not fully integrated with its subsystems, processes within CAS impede the ability to trace individual transactions back to source documentation, and CAS does not conform with governmentwide standard general ledger requirements.
FFIS will be maintained by NFC. Conversion to FFIS began during fiscal year 1997, with two out of the nine Forest Service Regions being converted. The remaining Regions are scheduled for conversion in October 1999.
Conversion to FFIS has not been easy. The Forest Service has experienced problems with the production of timely and accurate FFIS budget and account reports, system accounting errors, integrating subsystems data into FFIS, and conversion of the Forest Service management codes process to FFIS. Historically the Forest Service has used about 100,000 management codes that contain up to 99 lines of accounting data to allocate fund usage among expanded budget line items. The use of these management codes pose great risk that fund usage will be improperly reported and we have recommended their elimination. The Forest Service has proposed reducing the number of management codes in CAS by more than 50 percent and standardizing the codes throughout the agency. These codes are to be eliminated when FFIS is fully implemented.
Without correcting the weaknesses in accountability, Forest Service managers' ability to effectively manage operations, monitor revenue and spending levels, and make informed decisions about future funding needs will continue to be hampered. Forest Service's financial management and accountability has been materially deficient for many years, and correction remains a long-term venture needing continued emphasis and discipline to stay on course. It is critical that an improved general ledger system such as FFIS be successfully implemented in conjunction with controls to ensure that reporting units input accurate data through integrated feeder systems and retain supporting documentation. Further, the real property problems must be rectified—all assets must be located, and properly valued. If these efforts are achieved, I believe that Forest Service will no longer be an agency at ''high risk''.
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Statement of Michael Virga
Mr. Chairman, I am Michael Virga, a leader in the Society of American Foresters (SAF). The more than 18,000 members of the Society constitute the scientific and educational association representing the profession of forestry in the United States. SAF's primary objective is to advance the science, technology, education, and practice of professional forestry for the benefit of society. We are ethically bound to advocate and practice land management consistent with ecologically sound principles. I am especially pleased to be here today to comment on the fiscal year 2000 budget for the Department of Interior and Related Agencies. I wish to thank the subcommittee for its continued support of professional forestry, and its continued support of our priorities. I thank the Chair for the opportunity to testify on these important issues.
The public policy activities of SAF are grounded in scientific knowledge and professional judgment. From this perspective we review proposed budgets for forestry and related natural resource programs to determine their adequacy to meet stated objectives and public needs.
Mr. Chairman, in addition to other programs that we continue to support, we have three main areas of focus we would like to discuss with you today. We believe the priority funding areas for the Forest Service fiscal year 2000 budget are the ecological infrastructure backlog on the National Forest System, Federal programs that support a managed forest landscape, and increased spending on the Forest Inventory and Analysis program.
ADDRESSING THE ECOLOGICAL INFRASTRUCTURE BACKLOG
Much has been said about the backlog issues associated with the national forests. Whether it is forest health, deteriorating forest roads, endangered species, salmon habitat, recreation facilities, hazardous fuels, or any number of other issues, it is clear that the national forests desperately need attention. The Forest Service must address its ecological infrastructure backlog. Ecological infrastructures are those mechanisms that allow forest and other natural systems to function properly. Any one component of a system that is not functioning properly has the potential to impact other parts of the system. This is not always the case, but clearly there are examples in the national forests. Humans manipulate these processes sometimes acting as an equalizer, sometimes doing more damage. The key is allowing professional natural resource managers to put the infrastructure back in place.
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The Agency is attempting to deal with all these ecological infrastructure needs. They have mapped areas of forest health risk across the nation. They are addressing a very serious problem with the National Forest System road network. They are addressing wildland/urban interface issues. The most frustrating thing about all of these efforts is the estimated costs associated with addressing them. The Forest Service believes it will cost $8.6 billion to address the road backlog it faces. The Congressional Research Service believes it will cost $3.9 billion to completely address the hazardous fuels buildup on the National Forest System. These figures do not include other ecological infrastructure issues that plague the National Forest System, such as the costs associated with restoring salmon habitat, enhancement of endangered species habitat, or a host of other problems. While these figures are astronomical and beyond what Congress can realistically fund, the Forest Service will receive money to address some of these problems and one problem should not be favored over the other by the Congress or the administration. Forest Service managers know where the most critical problems are, they know how to address them, and they have the wherewithal to get the job done. The Forest Service should continue to develop plans and tools like the forest health risk maps, which Congress can study and consider. We believe this helps Congress, in their oversight role, fund backlogged work with confidence that the work will be completed. The Forest Service needs a reliable multi-year source of funding to address these issues, and the ability to set the priorities at the local level. The Agency also needs adequate and appropriate staff to carry out these activities.
With that said, we feel the need to address the fiscal accountability challenges the Forest Service faces. This subcommittee is well aware of these challenges, as is the Forest Service. The SAF believes Congress, the Forest Service, and the administration have tried to address these issues openly and with a commitment to solve the problem. There is frustration from everyone, including the SAF, that progress has not been faster. Many believe that the Forest Service should not be rewarded with increased appropriations when their perceived performance on this matter is less than satisfactory. While we understand that philosophy, our primary concern is for the health of the land. We hope that Congress, the Forest Service, and the administration can find mechanisms that increase accountability and increase the health of the land.
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KEEPING A MANAGED FOREST LANDSCAPE
It is important that the Forest Service and the Federal Government not waiver on their commitment to state and local forestry agencies and the 10 million private nonindustrial forestland owners of this nation. The Forest Service has a unique partnership with the state forestry organizations, a partnership which has the opportunity to improve the health of our Nation's forests through technical assistance, inventory and monitoring, and protection from fires, insects, and disease on the 490 million acres of non-Federal forests. Due to limited funding, the State and Private Forestry programs have yet to fully meet their potential.
We are concerned about the status of private forestland in this nation. State, county, private, and industrial lands are increasingly producing forest-related goods and services. The most dramatic change on these lands is the shift in production of timber. Approximately 94 percent of all timber produced in the US is produced on non-Federal lands. The volume of timber from national forests has decreased dramatically, from 12.7 billion board feet (bbf) to 3.4 bbf, over the past 12 years. Such reductions shift the burden of producing wood fiber to state and private lands in order to meet the Nation's increasing demand for forest products. The Federal Government has some responsibility to protect and enhance the sustainable flow of forest products from state and private lands precisely because of the substantial decrease in production on Forest Service lands.
We are seeing examples of increasing urban sprawl, forest fragmentation, and large managed private forests sold as smaller parcels to individual owners. As a nation we have decided that forests, both public and private, are important for economic, environmental, human health, and spiritual reasons. We express the importance and value of our forest resources through a variety of mechanisms, including legislation. Many Federal statutes, including the Endangered Species Act, the Clean Water Act, the Clean Air Act and others, have a regulatory impact on the management of private lands. Other statutes, the Cooperative Forestry Assistance Act of 1978, and the 1990 Farm Bill Forestry Title, for example, take a cooperative, incentive based approach to nonFederal forests. These acts recognize the need for state, Federal, and local cooperation to achieve resource benefits across the landscape, and they use a nonregulatory, incentivebased approach to achieve them. This cooperative approach is vital on issues that cross ownership boundaries, such as watersheds, forest insects and disease, and wildfire.
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Adequate funding is essential if the program is to reach nonindustrial private landowners, only about 10 percent of whom have written management plans for their land. Even worse, the majority of timber sales on private lands go forward without the benefit of professional forestry advice. While this may seem like merely a problem of poor business practices, we in the forestry profession view it as a serious threat to the long-term sustainability of the Nation's forest resources. Private land has public value. That is why we actively support programs that increase the amount of forestry advice available to nonindustrial private forest landowners. In addition to private sector consulting and industry efforts, extension programs, and other mechanisms, we believe the State and Private forestry programs can help both public and private sector foresters meet these challenges.
FOREST INVENTORY AND ANALYSIS
The current Forest Inventory and Analysis program provides accurate, comparable data across all forestlands in the United States. Local governments, journalists, environmental groups and private citizens, in addition to forestry professionals in every employer category, need and use this information. Understanding the condition of the Nation's forests is critical for appropriate planning and sustainable management. We believe the subcommittee has recognized the importance of this program in the past, as evidenced by the development and passage of the Agricultural Research, Extension, and Education Reform Act of 1998. The new draft strategic plan, created in response to Section 253(c) of that act and recommendations of the Second Blue Ribbon Panel, exemplifies the program's commitment to adapt for the changing needs of the forestry profession and the larger public interested in the forests of this nation. The draft plan we viewed integrates the Forest Inventory and Analysis program with the Forest Health Monitoring program. It reduces the current inventory cycle and explores ways to make the program more efficient. We look forward to the distribution of this plan in its final form.
Although SAF has not seen the final dollar amount requested by the FIA program to implement the goals of this draft strategic plan, we realize that moving toward the new annualized inventories and increasing the range of data collected will create new expenses for this important program. In order to support these endeavors, we encourage the subcommittee to continue support increased funding for this program. In addition to funding for the overall program we would like to see a separate line item in the National Forest System budget to enable the collection of FIA data on the NFS. While Congress has given the NFS funds to implement the FIA program on its lands before, the Forest Service has not always been able to collect this data. The NFS has many priority issues to deal with. We have discussed their need to address backlog after backlog, and the accountability issues from which the agency suffers are no stranger to this committee. FIA is a priority as well, and data from the NFS must be collected. We hope that by establishing a separate line item Congress will give the agency the opportunity to adequately fund its share of the FIA program, and address the priority ecological issues it must to ensure these forests for the next generation.
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Statement of Jeffrey D. Arnold
Mr. Chairman, thank you for providing the National Association of Counties (NACo) the opportunity to testify on the fiscal year 2000 budget of the U.S. Forest Service. My name is Jeffrey D. Arnold, and I am NACo's Deputy Legislative Director. At the outset, I would like the committee to know that the Forest Service and NACo have a close working relationship, and while we do not always agree on policy and priorities, Chief Dombeck and his staff have been very open to discussing issues with NACo and county officials from across the country. We look forward to maintaining that relationship.
NACo would like to address three issues in this testimony: timber sales receipts, forest health and state and private forestry.
Mr. Chairman, as you know, 25 percent of the gross receipts from timber sales are returned to the states on behalf of the counties from which the receipts were obtained. The receipts are then distributed to schools and county road programs based on a ratio determined by the state legislature. In the past few years, timber sales receipts have dropped precipitously from a high of $474.3 million in 1986 to $240.3 million in 1998. But this only tells part of the story, because stumpage prices have risen as volume has decreased. Sales volume has declined at a substantially greater rate than receipts, and the negative economic effect on counties relying on timber activity for jobs and economic activity has been substantial. There is the human factor as well, and that is the longstanding tie between the people of forest counties and the resource. This heritage is extremely important to county officials and the people they represent.
The administration's fiscal year 2000 budget proposes to decouple payments to counties from actual receipts and to provide a stable payment to timber counties based on a capped formula. The proposal assumes a permanent appropriation to cover the estimated $275.3 million cost of the program. This is approximately $46 million above the current baseline for fiscal year 2000, with the numbers increasing substantially in the outyears. County officials have expressed considerable concerns about the decoupling proposal, particularly since there is not a provision for counties to benefit from any increased 25 percent Fund sales receipts that might exceed their stable payment in a particular year. At a recent conference in Reno, Nevada hosted by the Forest Schools Coalition a wide range of groups expressed strong reservations and outright opposition to decoupling.
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The Public Lands Steering Committee of NACo has put forth an alternative proposal which, while possible, more expensive in the short term, would put in place a ''safety net'' for forest counties for a finite period, setting in motion a process for resolving this problem once and for all.
This is the adopted policy of NACo:
NACo supports legislation that will:
Cover all National Forest counties, nationwide and include O&C counties.
Require payments be guaranteed based on 100 percent of the highest three-year period during 1986–1995.
Require ''either/or'' language which provides for the above payment, or the actual 25 percent Fund receipts whichever is greater.
Provide for indexing of the payments to the CPI.
Make no changes to existing law. Specifically, no ''decoupling'' of payments from actual timber receipts.
Provide for a process to develop a long-term solution to ensure long-term forest management and a return to actual timber receipts.
O&C counties are those in the Pacific Northwest managed by the Bureau of Land Management under different statutes than the National Forest System. The safety net for O&C counties would be based on their receipt-sharing formula.
NACo understands there are a variety of differing concepts as to how to approach this problem, and we want to work with the entire range of groups to reach an equitable and balanced solution for the near and long terms. This willingness extends to the committees on Capitol Hill, the administration, interested interest groups and, of course, the schools coalition that has been working on this issue for some time.
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We do not believe this proposal should be considered an entitlement since we would propose sunsetting the safety net within a sufficiently reasonable period to work out a long term solution that meets the needs of counties and the expectations of all parties. We are aware of the need to identify offsets to meet the requirements of the budget agreement, and we are willing to examine the entire range of options. Two areas of possible offsetting expenditures would be in the areas of planning and land acquisition. As it relates to the potential planning offsets, the GAO, in their report of April 29, 1997 (RCED97–71), stated, ''The decision-making process used by the Forest Service to carry out its mission is costly and time-consuming, and the agency often fails to achieve its objectives. The agency has spent more than 20 years and $250 million to develop multiyear plans for managing national forests. It also spends about $250 million annually on environmental studies to support individual projects. According to an internal Forest Service report, however, this process is plagued by inefficiencies that have cost as much as $100 million annually at the project level alone.'' NACo believes this is an area where substantial savings can be realized, with minimal effect on operations.
Another area we feel needs to be looked at as a possible offset is land acquisition. Of great concern to many county officials, and to the Interior Appropriations Subcommittee Chairman Ralph Regula, is the backlog of maintenance and management needs of our public lands. When we are having a hard time just maintaining our resources, we don't believe it is in the Forest Service's best interest to be acquiring additional land. Every acre of land acquired by the Forest Service from private interests, reduces the tax roles of the local county and puts additional strain on the Payments In Lieu of Taxes program, which is severely underfunded at this time. We believe using these acquisition funds for the safety net, at least in the short term, is a better use of the financial resources.
This policy debate will revolve around the cost of whatever is decided upon by Congress. We believe the incremental cost of such a safety net to be quite low, particularly when it is still tied to actual receipts with the either/or approach. The only true need for offsets is the difference between the gross sales receipts and the safety net payment. We think this is surmountable.
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Another area of the Forest Service budget I would like to comment on is the area of forest health. NACo has a longstanding policy of supporting measures that will improve forest health throughout our forests, both those under the National Forest System and others that interface with the national forest resource. NACo supports aggressive forest health initiatives and also believes that there is a clear and imminent danger to our public forest resources stemming from a century of fire suppression. In addition to creating a problem of fuel loading, these management practices have lead to generally unhealthy forests which are much more susceptible to insect infestation and disease. We note the fiscal year 2000 budget proposes increases from $37,325,000 to $40,325,000 for National Forest System lands and from $17,200,000 to $21,400,000 in the Cooperative Forestry arena. We believe these modest expenditures will more than pay for themselves by reducing potential fire suppression costs and in the long run, produce better, more sustainable forests for future generations.
The last area I want to mention is the State & Private Forestry arm of the Forest Service. This lesser known component of the Forest Service connects people to resources, ideas, and to one another, so they can care for the nation's private forestlands and sustain their communities. There are nearly 500 million acres of non-Federal forest land in the United States, comprising about 20 percent of the Nation's land mass, and two-thirds of the Nation's forests. Over 50 percent of the Nation's forests are privately owned. Cooperative Forestry programs within the Forest Service provide technical and financial assistance to help rural and urban citizens, including individual private landowners and communities, to care for forests and sustain the communities where they work and live. Although these programs are small, NACo believes the return to counties and their communities is large.
The Economic Action Programs help rural counties, communities and businesses dependent on forest-based resources become sustainable and self-sufficient. This again speaks to NACo's interest in maintaining the historical connection between the people and the land. These programs have a three-pronged focus. The Rural Community Assistance programs help rural communities build skills, networks, and strategies to address social, environmental, and economic changes. The Forest Products Conservation and Recycling program helps communities and businesses find new and expanded business opportunities based on forest resources. The Market Development and Expansion program helps develop new markets for forest-based goods and services. Each of these programs assists counties in developing a sustainable future.
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The Urban and Community Forestry Program helps people in urban areas and community settings sustain shade trees, forestlands, and open spaces. This program helps State forestry agencies, local and tribal governments, and the private sector improve natural resource management of trees and forests in urban areas and community settings. The program also encourages and facilitates the active involvement of volunteers in the management and protection of their community's natural resources. Finally, the program analyzes, develops, disseminates, and demonstrates scientific information about protecting, managing, and maintaining community forest resources.
The Landowner Assistance Programs help private landowners protect, improve, restore, and sustain forests. The Forest Legacy program protects private forestlands from being converted to non-forest uses. The Forest Stewardship program helps private forest landowners develop resource plans for the sustainable management of all resources within their forests. The Stewardship Incentives program provides financial assistance to private landowners to carry out their stewardship plans. These programs also support implementation of forestry practices by other Federal and State agencies through their land conservation programs.
These programs collectively only represent 3.7 percent of the President's 2000 budget proposal for the Forest Service. Most of the funding for these programs will be distributed to counties, communities and individual landowners in the form of financial and technical assistance. These are the types of programs that can assist in ameliorating the effects of limitations on traditional forest uses.
Mr. Chairman, NACo wants to thank you for the opportunity to testify today, and hopes that our presence here today will assist you in your review.
Statement of Linda Calbom
Mr. Chairman and Members of the Subcommittee:
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I am pleased to be here today to discuss our ongoing monitoring of the Forest Service's efforts to improve its financial accountability. In January 1999, we designated Forest Service financial management as a high-risk area because of serious and long-standing accounting and financial reporting weaknesses plaguing its operations. For several years it has been unable to obtain a positive audit opinion on its financial statements, continuing today with the Department of Agriculture (USDA) Inspector General's (IG) disclaimer of opinion A disclaimer of opinion means that the auditor is unable to form an opinion on the financial statements. A disclaimer results when a pervasive material uncertainty exists, or there is a significant restriction on the scope of the audit.
on the Forest Service's fiscal year 1998 financial statements. These problems have included a lack of basic accountability for major assets and liabilities, the inability to accurately track the cost of programs and activities, and significant reporting errors in the Forest Service's financial statements and the records that support those statements. Additionally, the Forest Service has experienced significant problems in implementing its new accounting system, which is key to correcting its financial management deficiencies and attaining fundamental accountability over billions of dollars in taxpayer funds and investments.
These shortcomings mean that the agency and the Congress do not have accurate financial data to help make informed decisions about future funding. Further, the inaccuracy of the financial statement data raises questions about the accuracy of program performance measures and certain budget data that is drawn from the same database.
My testimony today will
briefly describe the historical pattern of the Forest Service's financial management weaknesses;
discuss the fundamental problems which the Forest Service must resolve in order to achieve financial accountability;
outline GAO's criteria for placing Forest Service financial management on our high-risk list and what must take place for the agency to be removed from the list; and
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highlight corrective measures the agency has under way.
HISTORY OF FINANCIAL MANAGEMENT WEAKNESSES
Since its first audit of the Forest Service's financial statements, which covered fiscal year 1991, the USDA IG has found serious accounting and financial reporting weaknesses. The IG issued an adverseAn adverse opinion means that the financial statements as a whole are not fairly stated.
opinion on the fiscal years 1991 and 1992 financial statements, due to major inaccuracies in those statements. For fiscal years 1993 and 1994, the IG issued qualified audit opinions and reported that the Forest Service's financial statements were unreliable due to pervasive errors in the field-level data supporting the land, buildings, equipment, accounts receivable, and accounts payable accounts. This unfavorable pattern continued the following year when the IG issued an adverse audit opinion on the Forest Service's fiscal year 1995 financial statements.
Due to the severity of the accounting and reporting deficiencies, the Forest Service did not prepare financial statements for fiscal year 1996, but chose instead to focus on trying to resolve these problems. The Forest Service's initial goal was to correct some of the deficiencies during fiscal years 1997 and 1998 and to complete corrective actions and receive an unqualified audit opinion on its fiscal year 1999 financial statements. The Forest Service subsequently revised this goal to receiving an unqualified opinion on its fiscal year 2000 financial statements.
Many of the Forest Service's long-standing accounting and reporting problems are the result of outdated accounting systems—a problem that exists USDA-wide. USDA's current financial accounting system, the Central Accounting System (CAS) is not U.S. Government Standard General Ledger compliant,The U.S. Government Standard General Ledger provides a standard chart of accounts and standardized transactions that agencies are to use in all their financial systems.
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not well integrated, and is generally outdated. In December 1994, the Office of the Chief Financial Officer (OCFO) purchased a new accounting system, the Foundation Financial Information System (FFIS), to replace CAS USDA-wide. Because of the reported financial deficiencies at the Forest Service, it was decided that the Forest Service would be one of the first USDA agencies to implement FFIS.
The Forest Service implemented FFIS in three of its operating units, representing about one-third of all Forest Service transactions, on October 1, 1997. While the overall responsibility and oversight for implementing FFIS rests with the USDA OCFO, implementation at the Forest Service is a joint effort. In addition, OCFO uses Agriculture's National Finance Center (NFC) to help carry out its FFIS responsibilities.
As a result of serious implementation problems, in January 1998, USDA retained an outside consultant to independently review and assess FFIS management and implementation and to report its findings to the Office of the Chief Information Officer and the Office of the Chief Financial Officer. Several positive actions, which I will discuss later, were taken by USDA in response to recommendations by the consultant. The Forest Service also asked that consultant to evaluate its financial management structure and workload requirements. Such an evaluation was needed to determine if its organizational structure and resources were sufficient to accomplish the remaining tasks required to achieve financial accountability.
FUNDAMENTAL PROBLEMS NEED RESOLUTION
As we discussed in our October 1998 report,Forest Service: Barriers to Financial Accountability Remain (GAO/AIMD-99-1, October 2, 1998).
there are three fundamental problems that the Forest Service must resolve before it can achieve the most basic levels of financial accountability.
First, the Forest Service must correct the basic accounting and reporting deficiencies that have plagued the agency for years.
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Second, it must overcome the initial implementation problems it encountered with its new accounting system, FFIS, and complete the implementation of the system agencywide.
And finally, the Forest Service needs to revise its field structure to provide functional lines of accountability for financial management.
I will now discuss each of these issues in a little more detail.
Major Accounting and Reporting Deficiencies Remain. The IG's most recent report on his audit of the Forest Service's fiscal year 1998 financial statements—a disclaimer of opinion—shows that the Forest Service continues to be unable to reliably keep track of billions of dollars of major assets, cannot accurately allocate revenues and costs to its programs in its Statement of Net Costs, and made significant errors in preparing its financial statements. The report also identified major internal control weaknesses related to each of these areas. Specifically, the report stated that
continuing financial management deficiencies prevented the Forest Service from preparing complete, reliable, and consistent financial statements;
the lack of an integrated accounting system and material weaknesses within the current system resulted in inaccurate and unreliable financial data; and
internal controls were not sufficient to safeguard assets or to ensure that field-level data were accurate.
The IG's report identified numerous financial reporting errors and internal control weaknesses, including the following examples.
The Forest Service's reported $3 billion in Fund Balance Accounts with the U.S. Treasury,The Forest Service records its budget authority in asset accounts called Fund Balance with Treasury and increases or decreases these accounts as it collects or disburses funds.
maintained by the National Finance Center (NFC), were not in balance with the amounts reported by Treasury.For the last 8 years, the IG has reported numerous material control weaknesses in the operations at NFC. The Center processes the majority of the Forest Service*s financial transactions, and the control weaknesses negatively impact the reliability of Forest Service data. Our upcoming report on NFC will address computer security issues we identified at the Center.
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A net adjustment of $535 million to Fund Balance with Treasury was made by NFC to balance these accounts for all of USDA, an undetermined portion of which pertained to the Forest Service. NFC adjusted its records for the differences without establishing or analyzing the cause of the differences. Because most assets, liabilities, revenues, and expenses stem from, or result in, cash transactions, errors in these accounts may affect the accuracy of various Forest Service financial reports, including budget execution reports and information reported to the Congress.
The accuracy of the reported $2.6 billion in net Property, Plant, and Equipment could not be determined because of the lack of procedures and controls for reporting real property and discrepancies found by the Forest Service after most units had reportedly certified and validated their respective amounts of property, plant, and equipment. Additionally, the Forest Service did not complete physical inventories of personal property. Until a system of controls is put into place to accurately track the quantities, locations, and costs of these assets, the Congress cannot be assured that the Forest Service's requests for additional funds to acquire property, plant, or equipment are warranted.
The Forest Service still lacks supporting records (a subsidiary ledger system) to substantiate, at a detailed level, amounts the agency either owes or is owed by others. Forest Service officials stated that when the new accounting system is implemented in all Forest Service units, the agency will have more reliable accounts receivable and accounts payable data. However, the accuracy of these accounts after the new system is implemented throughout the agency will be driven to a great extent by the reliability of the data entered at the field level. The lack of reliable accounts receivable information severely impairs the Forest Service's ability to collect money owed it by other agencies. Accounts payable data deficiencies impede the agency's ability to readily determine the costs it has incurred and amounts owed on projects at any given point.
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The Forest Service did not properly allocate $2.87 billion in reported net costs among the major components of the agency. This occurred because the team responsible for preparing the Statement of Net Costs was not provided the necessary training on how to properly allocate revenues and costs to the appropriate units that generated those revenues or incurred those costs. The ability to properly match revenues and costs with the appropriate sources is especially important in the case of the Forest Service, where significant revenue-generating activities occur. Without such information, it is not possible to tell the extent to which taxpayers bear the cost of these activities. Additionally, proper cost information is necessary to assess the effectiveness and efficiency with which resources are used to achieve results.
In addition to the above deficiencies, the IG also reported that the Forest Service's use of a vast and complex process to classify and allocate costs in its accounting system increases the risk of errors or irregularities and the potential unauthorized use of appropriations or trust funds. The report indicated that the Forest Service shifted costs through at least 269,000 management codes during fiscal year 1997, and that this practice continued during fiscal year 1998. The report further stated that controls were not adequately prescribed to ensure that the actions were properly authorized, approved, justified, or documented. Accordingly, the IG concluded that there was insufficient assurance that the shifting of costs from one account to another was done in a manner consistent with appropriations law.
SERIOUS PROBLEMS IMPEDE ACCOUNTING SYSTEM IMPLEMENTATION
Successfully completing the implementation of FFIS agencywide is critical to the Forest Service's efforts to achieve financial accountability. In reports issued since January 1998, we, the IG, and the USDA's outside consultant have identified serious problems with the FFIS implementation process. In our February 1998 report, Forest Service: Status of Progress Toward Financial Accountability (GAO/AIMD-98-84, February 27, 1998).
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we noted problems with FFIS processing data and transferring data between FFIS and its feeder systems that raised questions about the FFIS implementation process. In that report, we also noted that the three operating units where FFIS was implemented were unable to produce critical budgetary and accounting reports that track the Forest Service's obligations, assets, liabilities, revenues, and costs, in part because ending balances could not be converted from the old accounting system, which is no longer functional for the implementation units, to the new accounting system.
USDA's outside consultant also identified numerous problems with the FFIS implementation process. For example, the consultant reported in March 1998 that:
The program has suffered from insufficient oversight, undisciplined management control, conflicting goals, and a lack of clear lines of authority and accountability. This fragmentation of responsibility among OCFO, the Forest Service, and NFC left no one with an overall view of all the efforts needed to make the program succeed.
Failure of the Forest Service to simplify its business processes had a significant negative impact on the successful implementation of FFIS. One major problem is the onerous process the agency uses to classify and allocate costs in its accounting records for work performed, which has led to greater operational costs. Further, the process is virtually impossible to perform because of its demands on computer capacity.
The Forest Service must correct these implementation problems before it attempts to bring the new system on-line agencywide on October 1, 1999.
Another critical issue that needs to be addressed is ensuring that FFIS and its feeder systems, as well as all of the Forest Service's mission-critical computer systems, are Year 2000 compliant. The Forest Service reported on March 3, 1999, that it expects to have all 17 of its mission-critical systems compliant by the end of the month. The Forest Service must also take other actions, such as business continuity and contingency planning, to ensure that it can continue to carry out its core business functions after the century change.
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CURRENT FIELD STRUCTURE HAMPERS ACCOUNTABILITY
In our February 1998 report, we stated that the Forest Service's autonomous organization may hinder top management's ability to gain full participation of all regional fiscal directors in efforts to achieve financial accountability. An independent contractor's report issued in March 1998, which addressed financial management and organizational analysis at the Forest Service, also raised the issue of the agency's autonomous structure. Specifically, the contractor noted that the Forest Service lacked a consistent structure for financial management practices. Further, the contractor reported that whether the subject is budget execution, financial plan development, accounting for reimbursable agreements, or creating management codes, each unit operates independently. The consultant characterized it as a ''chaotic financial environment'' and stated that it creates inconsistent practices and credibility problems.
The contractor recommended that the Forest Service establish a new position of Deputy Chief, Chief Financial Officer, at the national office in Washington, D.C. In addition, the contractor stated that the creation of a Chief Financial Officer and a consolidated financial management organization in the Washington, D.C., office needed to be mirrored throughout the field organization and recommended that a Deputy Regional Forester for Financial Management/Chief Financial Officer be established within each region. The contractor based this recommendation on the need to ensure clear lines of responsibility and accountability by having a single executive within each region who is in charge of financial management, including all accounting, budgeting, financial planning and analysis, and strategic planning.
The Forest Service restructured its national office management team in April 1998 to create functional lines of accountability for fiscal management that report directly to the Chief of the Forest Service. Three new management positions were created and filled—a Chief Operating Officer, Chief Financial Officer, and Deputy Chief for Business Operations. A Forest Service official told us that a decision about hiring chief financial officers at the regional level will be made after the implementation of FFIS is completed agencywide.
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The national office restructuring addresses some of the concerns we have previously raised regarding management structure. However, the key issue regarding the autonomous field structure, as it relates to financial management, remains unresolved.
HIGH-RISK DESIGNATION
Since 1990, we have periodically reported on government operations that we have identified as high risk because of their greater vulnerabilities to waste, fraud, abuse, and mismanagement. Our high-risk status report is now provided at the start of each new Congress. The latest, High-Risk Series: An Update (January 1999, GAO/HR–99–1), was recently issued. Because of the severe weaknesses in the Forest Service's accounting and financial reporting, we designated it as a new high-risk area in that update report.
We used specific criteria in making that designation. First, we identified agencies that are material to the government's financial statements and have been unable to produce auditable financial statements for the agency as a whole. USDA, with reported assets of $121.7 billion, met this criteria, since it has received disclaimers of opinions on its departmentwide financial statement audits for the last 2 years. However, while USDA as a whole has been unable to produce auditable financial statements, significant parts of the organization have been able to do so, while other major components have not.USDA prepares financial statements for its mission areas, agencies, and corporations. The Food and Nutrition Service, Federal Crop Insurance Corporation, and Rural Telephone Bank received unqualified audit opinions on their fiscal year 1998 financial statements.
Thus, our next step was to identify the problem component of USDA that is most vulnerable to waste, fraud, abuse, and mismanagement and that is not likely to correct its financial management deficiencies in the near future. The Forest Service met this criteria.
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In order to be removed from the list, the Forest Service will need to demonstrate sustained financial accountability. At a minimum, it will need to obtain an unqualified opinion on its financial statements for 2 consecutive years. In order to achieve this, the Forest Service will not only need to correct previously identified financial management deficiencies, but also implement key accounting and financial reporting requirements which became effective in fiscal year 1998. Achieving financial accountability also goes beyond receiving an unqualified audit opinion. Consequently, the Forest Service will need to address material internal control weaknesses that adversely affect its ability to maintain accountability over its assets on an ongoing basis. For example, it needs to implement a system of controls to properly record, track, and depreciate property and equipment from acquisition to disposition, which is essential to properly safeguarding these assets.
Major reforms, such as the Chief Financial Officers Act (CFO Act), focus on maintaining a strong system of internal controls and providing accurate, timely, and relevant financial information needed for management decision-making and accountability, on a systematic basis, throughout the year. If the Forest Service's efforts result in obtaining reliable year-end data, but are not backed up by fundamental improvements in underlying internal controls, financial management systems, and operations that enable the routine production of accurate, relevant, and timely data to support ongoing program management and accountability, the agency will not achieve the intended results of the CFO Act or removal from the high-risk list.
Assuming that the Forest Service meets its revised goal of correcting its financial management deficiencies by fiscal year 2000, which we believe is optimistic, the earliest it could be removed from the high-risk list—given our requirement that it must receive two consecutive unqualified audit opinions—is 2003.
CORRECTIVE MEASURES ARE UNDER WAY
While major barriers remain, the Forest Service has begun and/or completed several actions, that, if successfully carried through, represent important steps towards achieving financial accountability. The following specific positive actions were taken during fiscal year 1998 or thereafter.
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The USDA OCFO established an FFIS Project Management Office that is responsible for managing the full implementation of FFIS across all USDA agencies. This office, which reports directly to OCFO, has FFIS implementation as its only objective and has been charged with developing a strategic plan for implementing FFIS and managing the execution of the plan. These actions, if accomplished, should provide the focused attention and independence that is needed to help successfully implement FFIS.
The Forest Service has completed work on the design of a proposed new budget structure. According to the Forest Service, this proposed structure, if approved by the Congress, would reduce the number of budget line items (which contain funding specified for particular uses) and would allow for better tracking of expenditures and reporting on performance. With regard to the structure of management codes, the Forest Service proposes reducing the number of codes by more than 50 percent. The Forest Service believes this reduction would simplify the tracking of expenditures and would standardize codes throughout the agency.
The practice of shifting incurred costs from one account to another has been discontinued for the three units currently using FFIS.
The Forest Service has recently hired experienced staff to fill key financial management and systems positions. Several of these newly hired individuals have experience successfully implementing FFIS at other agencies.
The Forest Service is in the process of consolidating its budgeting, financial management, financial systems development and operations, and related analytical and quality assurance functions into a new central office headed by the Chief Financial Officer. This new organization and management team should help provide the strong
management and leadership needed by the Forest Service to correct its long-standing accounting and reporting deficiencies.
Corrective measures are under way, but few of the problems reported by the IG and GAO have been fully resolved. These problems have been embedded in the Forest Service's basic way of doing business for many years, and correcting them is no easy task. Additionally, the problems the Forest Service encountered in implementing FFIS have cost valuable time. Forest Service senior management states that they are committed to correcting the agency's financial management deficiencies; however, much work remains to be done before the Forest Service is able to reduce the risk of waste, fraud, abuse, and mismanagement caused by its current lack of financial accountability. Mr. Chairman, this concludes my statement. I would be happy to answer any questions that you or the Members of the Subcommittee may have.
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Statement of Michael A. Francis
Mr. Chairman, Thank you for the opportunity to testify on behalf of the 200,000 members of The Wilderness Society on the USDA Forest Service's budget to manage our National Forest System in Fiscal Year 2000.
A month ago today, February 11, The Wilderness Society unveiled the results of two years of work by The Society's staff and an advisory panel of distinguished scientists and forest policy experts. The Society's goal was to capture the thinking of some of the most innovative minds in forestry today and from that develop a positive vision designed to insure the future of America's National Forest System into the 21st century. Under The Wilderness Society's vision, the primary objective of National Forest management is to maintain and restore the ecological integrity of the forest ecosystem. The production of commodity resources will no longer be the prime objective. Rather, such uses are limited to those that respect the limits of the land, adhere to principles of stewardship, are supported by sound science and economics, and lead to the recovery of damaged lands, fish and wildlife populations, and watersheds. In short, The Society seeks to ensure that management of the National Forest System honors the philosophy underlying the American land ethic, an ethic that recognizes we cannot meet the needs of the people without first securing the health, diversity, and productivity of our lands and waters.
Since 1950, the nation's 192 million-acre National Forest System has been subjected to intense resource extraction. Unfortunately, the emphasis placed on commodity production has placed in doubt the capacity of the National Forests to be sustainable. The administration's proposed fiscal year 2000 budget is a welcome change in direction toward conservation of our forest resources. The Wilderness Society urges this subcommittee to support more changes in the Forest Service fiscal year 2000 budget to make it better reflect the ecological needs of our forests and the vision The Society is articulating for the 21st century.
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In keeping with our vision, The Wilderness Society offers the following recommendations to the Congress for consideration in the fiscal year 2000 appropriations process:
1. Reduce the timber sale levels on the National Forest In Fiscal Year 2000 the Forest Service timber sales program plans to offer 3.25 billion board feet (bbf) of National Forest trees. The Fiscal Year 2000 proposed timber program is a 10 percent reduction from Fiscal Year 1999. While this continues a downward trend, the proposed sales level exceeds what is sustainable. The Wilderness Society recommends a 51 percent reduction in timber sale preparations funding level for fiscal year 2000. Sale preparation should not exceed 1.1 billion board feet in ''green tree'' sales and .5 billion board feet in salvage sales (''dead trees only'').
Mr. Chairman, the notion of managing a forest only for its outputs is an anachronistic principle that is contrary to principles of ecosystem management. This is true even if we consider those outputs to include clean water and recreational visitor days, catchable fish and huntable elk. For a forest ecosystem to function, all the natural resources of the forest must also be maintained. This includes biological diversity, old-growth forests, gene pools, and carbon storage. It extends to the existence of places, which have inherent worth and beauty from which people derive spiritual or aesthetic value.
The Wilderness Society's recommendation of a 51 percent decrease in the fiscal year 2000 timber sales management and salvage sale appropriations request would reduce the appropriation to $150 million. The $159 million savings should be used to increase funding for wildlife and fisheries habitat, watershed restoration, hazard fuels reduction nationwide, recreation and wilderness management, and to increase the agency's research programs.
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The Wilderness Society strongly recommends that the Congress prohibit logging in all Ancient Forest Groves, prohibit logging in all roadless areas on the National Forest System, and prohibit all new logging road construction in fiscal year 2000. Despite the recently announced interim road building moratorium for roadless areas, the moratorium does not prohibit helicopter and cable logging of roadless areas and it exempts 15 to 25 million forest roadless acres from the moratorium altogether. As the Forest Service shifts to ecosystem management, the last roadless areas need protection from development, because that is the only way to retain nature's baseline and thereby judge the Forest Service's success or failure. Further, we recommend that the Congress restrict the use of Salvage Trust Fund monies so that they are used to prepare the sales of dead trees only.
2. Phase out below-cost commodity timber sales and de-couple twenty-five percent payments to counties: The Wilderness Society recommends that Congress demonstrate to the American people its commitment to fiscal responsibility and accountability by eliminating the current subsidy to the timber industry in the form of below-cost timber sales. We request the Congress require that beginning in fiscal year 2000 agency spending for any ''commodity'' timber sale should be contingent upon the implementation of a three-year plan to systematically phase out these money-losing sales nationwide. The most environmentally damaging and most costly sales should be eliminated first. At the end of three years, all ''commodity'' timber sales from National Forest System lands should recover the government's total cost and should not carry any subsidy from the U.S. Treasury.
The House Agriculture Committee should enact legislation that would protect counties from the continued downward trend of the so-called twenty-five percent county payments. Instead of the current system of county payments, The Society recommends Congress enact the administration's proposal to permanently sever county payments from logging levels and provide county governments with a predictable level of funding towards schools and roads.
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3. Timber roads: In fiscal year 2000, The Wilderness Society supports the administration's budget request that does not fund construction of new appropriated timber roads. At the sales level that The Society recommends, the Forest Service can easily conduct the timber program with the existing 383,000 miles of forest roads. Road building is the single most environmentally damaging management activity undertaken by the Agency. As part of The Society's recommendation of a 51 percent decrease in timber sales expenditures, funding for engineering support for timber roads can be reduced by the same percentage. This would leave $18 million for engineering support for the reconstruction of existing timber roads to support the reduced timber program. The $19 million saved by reducing the engineering support for timber roads should be combined with $27 million in timber sales management savings. The $46 million should be added to the road maintenance account to increase the funding for fiscal year 2000 to $168 million. While this is still far short of estimated annual need of $431 million, it will more than double the percentage of road miles maintained in fiscal year 2000.
4. State and Private Forestry: The Wilderness Society recommends a funding level of $50 million for the Forest Legacy Program. The Forest Legacy Program conserves environmentally important forests threatened by conversion to non-forest uses. While the funds can be used for acquisition of private forestland, the primary tool for the Program is conservation easements. Forest Legacy provides an avenue for the Forest Service to work with States and willing private landowners to conserve important forest economic and environmental values that represent national priorities. Landowner participation in the program is entirely voluntary, and the States guide the selection process. Growing public concern with conservation of unique natural places and open spaces, both at the national and the local level, has led to growing interest from the States in the Forest Legacy Program. The increased funding for fiscal year 2000 will allow progress in preserving important national lands in all active States, including areas in New England's Northern Forest, Southern New England, New Jersey Highlands, Illinois River valleys and bluffs, and Washington State's Mountains - Sound Greenway, as well as many other areas.
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5. Forest Research: The Wilderness Society recommends a total Forest Research appropriation of $250 million for fiscal year 2000. This is an increase of $15 million above the administration's requested level. In particular, we recommend an increase in funding for Wildlife, Fish, Watershed and Atmospheric Sciences Research of $11.6 million. This would bring the funding level to $64.7 million. This type of research will help us better understand the sustainability of our National Forests and Rangelands. In addition, we recommend $5.0 million in wilderness research funding, an increase of $3.8 million. The impacts of increasing human use of designated wilderness for recreation need to be understood to develop better management practices that will protect the nation's wilderness resource.
6. Wildlife and Fisheries Habitat Management: The Wilderness Society recommends an appropriation of $214 million for the wildlife and fisheries management program. This is a $90 million increase over the administration's recommendation for fiscal year 2000. We recommend that the increased funding be divided evenly between the four program areas.
7. Recreation Use Programs: The Wilderness Society recommends a $50 million increase to the Recreation Use Program to a level of $244.6 million. Of this, increase of $13.4 to wilderness management funding in fiscal year 2000 is recommended above the administration's request. This level of $50 million is needed to meet the management demands of the increasing recreation use of designated wilderness.
8. Land and Water Conservation Fund: The Wilderness Society supports the administration's request for $190 million in Land Acquisition for the USDA Forest Service. The Wilderness Society recommends that the Congress earmark $1 million within the Forest Service's FY 2000 Land Acquisition Program for Wilderness ''Inholdings'' to provide money to fund the emergency acquisition of inholdings in the National Wilderness Preservation System.
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9. National Forest Trails System: The Wilderness Society recommends an increase to $30.6 million for forest trail maintenance and restoration for fiscal year 2000.
Finally, Mr. Chairman I would like to comment on three proposals related to the timber sales program in the Forest Service's FY 2000 Budget Justification for the Committee on Appropriations. None of these serve to advance the Chief's goal of improving accountability and incentives. These proposals are troubling from a taxpayer stand-point and raise questions about the Forest Service's real intent.
The first one entitled ''Sealed versus Opened Bids'' seeks to avoid responsibility for doing what the Forest Service already can do. Until the early 1950's sealed bidding was used exclusively. It was only at the insistence of the timber industry that oral bidding was introduced.
The authority to use sealed or oral bids has not only existed since the 1897 Act but also was clearly spelled out in 1978 in 16 USC 472a. The Forest Service already has discretion to use sealed bids, therefore legislation is unnecessary. Congress should soundly reject this specious request.
The second one, entitled ''Timber User Fees Pilot,'' would authorize the Forest Service to collect timber sale preparation and harvest administration fees from commodity timber sales. The agency would be allowed to retain the fees to enhance logging opportunities on the National Forest System. This is nothing more than an attempt by the Forest Service and the administration to hide the true cost of logging on the National Forests from the American taxpayer. This pilot program will create a perverse incentive in two ways. First, the timber industry will have more influence over the preparation and monitoring of timber sales on the National Forests. Secondly, the retention of the fees will add to the perverse incentives that already exist with the Forest Service's ability to freely use the trust fund monies without Congressional oversight or appropriations. For an agency that cannot account for vast expenditures of taxpayer dollars, this proposal is not good public policy.
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The third one is the administration's proposal to use deposits from timber sales to the Knutson-Vandenberg (K-V), Brush Disposal, and Cooperative Work-Other funds, without regard to the State from which deposits were derived, to reduce hazardous fuels build-ups, including in the urban-wildland interface. While this goal is laudable and supported by many in the conservation community, the conversion of these trust fund monies to so-called forest health work is far beyond the legislative mandate of the funds. Such activities are already specifically funded in Wildland Fire Management; if additional monies are needed then appropriations for that line item should be increased. This proposal will divert already limited funds available for resource restoration in logged-over areas. The House of Representatives rejected a similar salvage logging approach to forest health when it defeated H.R. 2515 in March of 1998.
Thank you, Mr. Chairman, for this opportunity to offer The Wilderness Society's views on the fiscal year 2000 USDA Forest Service Budget request.
Statement of Bill Imbergamo
The National Association of State Foresters is proposing a major increase in the Forest Service's budget for the State and Private Forestry programs in fiscal year 2000. The increases NASF is proposing are intended to respond to the recommendations for increased public investment identified in the National Research Council's landmark study: Forested Landscapes in Perspective: Prospects and Opportunities for Sustainable Management of America's non-Federal Forests. The State Foresters feel strongly that the need for these programs is higher than ever, and that these increases are more than justified by the important benefits that non-Federal forests provide to our country. These State and Private programs are the Forest Service's major tools to work in partnership with the State Foresters and others to encourage sound management on non-Federal forests using a non-regulatory, voluntary, incentive-based approach. These programs reach out to the nation's nearly 10 million non-industrial private landowners, who own over 60 percent of this Nation's forests and provide well over half our annual wood supply. Private lands are also important for they provide wildlife habitat, carbon sinks, and sources of high quality drinking water. In our view, and as concluded in the NRC study, the current Forest Service budget is woefully short of providing adequate resources to help these landowners capitalize on the opportunities their forests hold.
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The State Foresters are actively involved in developing, implementing, and managing the State and Private Forestry programs. These programs are a model of State-Federal cooperation, and allow us to leverage scarce resources by working with the Federal Government and private landowners to improve the management, protection, and utilization of our 490 million acres of non-Federal forests. The NRC study lays out in stark terms, however, that the Federal investment in these programs is not adequate to reflect the level of Federal interest in these lands. Our testimony develops budget recommendations that more closely reflect the values at stake and the opportunities to improve forest management and sustain America's vital forest resources.
The Federal Role on non-Federal Forests: The value of the timber harvest delivered to mills is worth over $19 billion annually. This is higher than the value of the annual crop of corn ($18 billion), soybeans ($11 billion), or hay ($10 billion). The forest products industry employs about 1.6 million people and pays annual wages of over $45 billion. More than 60 percent of the harvest that supports this important sector of the economy comes from nonindustrial private lands, the lands that could benefit the most from targeted Federal investments. State Forestry agencies from all fifty states help match Federal investments in State & Private Forestry, and landowners work with us to pass on a lasting legacy of forest management to the future.
Non-Federal lands make up almost 80 percent of the nation's forests. Almost two thirds are held by non-industrial private landowners, private landowners who are not affiliated in any way with the forest products industry. States and localities, as well as the forest products industry, own about another 15 percent of the forests. While these landowners have direct responsibility to manage their lands, there is a strong role for the Federal Government in assisting these landowners because with better management comes such public benefits as the long-term health of watersheds, wildlife and fisheries conservation, stabilization of rural economies, and support for a major sector of the national economy.
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This role becomes particularly important in light of the diminishing role of federally held public lands in meeting these public benefits.
Among other things, non-Federal forests produce the following public benefits, all of which are supported in law and policy by the Federal Government:
Forested watersheds provide some of the highest quality water in the Nation. Investments that allow landowners to improve the management of their lands represent a more efficient way to address water quality problems than building publicly owned treatment works or requiring additional restrictions on industrial activities.
Over 90 percent of endangered species have all or part of their habitat requirements met on private forested lands. The Federal role in protecting imperiled species is better carried out through incentives and assistance, rather than strict command and control regulation. The State and Private programs can help landowners to address species' needs while meeting their land management objectives.
Forests play a crucial role in meeting air quality objectives, and can significantly help mitigate carbon dioxide emissions, a major component of global climate change.
Federally owned forests abut non-Federal forests, and in these areas many local entities share responsibility for wildfire and structural fire protection with Federal agencies. With the new Federal fire policy, which removes structural fire protection as a Federal responsibility, the Federal Government must assist these local governments to prepare them to cope with their fire occurrences. This level of preparedness is necessary to protect life and property on non-Federal lands, as well as to protect federally managed forest and rangeland resources.
Congress recognized these and other aspects to the Federal role in the Cooperative Forestry Assistance Act of 1978 (PL 95–313), and the Forestry Title of the 1990 Farm Bill (PL 101–624). Since the passage of the 1990 Farm Bill, funding support for the State and Private Forestry programs has been quite variable, sinking to a low of around $136 million in 1996. Currently, the State and Private Programs are funded at around $170 million. NASF has recommended a level of $284 million for the coming fiscal year. This program just begins to address the recommendations of the NRC report.
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Principles and Core Programs: As we consider ways of implementing the Federal role outlined in the NRC study, the following principles and core programs can help guide Federal investment.
First, Federal programs for non-Federal forest lands should be non-regulatory, incentive-based, and voluntary. While there are a number of Federal and State regulatory programs with impacts on private forest resources, we feel strongly that participation in land management and planning assistance programs should be voluntary.
Second, Federal programs should add value to private property by fostering investment through incentives and protection of forest resources. A major Federal role exists in creating an atmosphere conducive to investment. Changes in the tax code and other programs can help create this atmosphere and will help keep private forests producing the public benefits outlined above.
With these two principles, NASF believes our core programs within the USDA Forest Service State and Private budget can provide a framework for increased investments in our nonFederal forests. Our core programs are:
Landowner assistance programs, including the Forest Stewardship, Stewardship Incentives, and Forestry Incentives programs. These form the backbone of State-Federal-landowner cooperation in improving the management of our forested landscape.
NASF is recommending an increase of $5 million for the Forest Stewardship program and we are seeking funding for the Stewardship Incentives Program at a level of $15 million. The number of non-industrial private landowners is growing rapidly nationwide, and parcel sizes are shrinking rapidly. These two dynamics make increased support for landowner assistance programs imperative. Working with landowners using incentives and technical assistance is a preferable way of securing public benefits that landowners may be unwilling to provide otherwise.
The Forest Stewardship program works with landowners to develop long-term forest management plans for their forest properties. Landowners work with service foresters or private sector consultants to develop plans that meet objectives ranging from wildlife habitat to wetland protection to timber management. In many cases, these plans are the first step landowners take to more active management of their forests, and provide an important source of information that is not otherwise available. In many States, landowners also establish ongoing relationships with consulting foresters through the Stewardship program. This helps build a foundation of forestry expertise in the private sector as well.
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Once a Forest Stewardship plan is complete, landowners become eligible for the Stewardship Incentives Program, which provides cost-share assistance to complete projects and practices called for in the Stewardship plan. The State Foresters plan on working with the USDA Forest Service to target SIP funds to specific regional priority areas to address specific resource concerns, such as wildlife habitat, water quality, and forest health.
Cooperative Fire Protection to protect lives, property and natural resources, particularly in the wildland urban interface and where Federal agencies are lowering the levels of fire protection service under the new fire policy. Supporting State and volunteer fire programs helps provide a trained cadre of fire fighters who are frequently called upon to help Federal land managers cope with large fires, and to provide capabilities to carry out prescribed fire for fuel reduction programs.
There are two components of the Cooperative Fire Protection programs; the State Fire Assistance (SFA) program and the Volunteer Fire Assistance (VFA) program.
The State Fire Assistance program provides State forestry agencies with assistance in delivering a coordinated wildfire response and in complying with national safety and training standards which allow State and local crews to be deployed on Federal fires and other emergency or disaster situations. The program also assists States with hazard assessments, fuels treatment projects, and public education efforts. NASF recommends that this program be funded at $31.509 million for fiscal year 2000.
State Forestry agencies administer the Volunteer Fire Assistance program through 50–50 cost-sharing grants to local fire departments for training and equipment. The program's main focus is on rural and urban interface communities that need assistance in meeting both existing and expanded fire suppression responsibilities. NASF recommends that this program be funded at $10 million for fiscal year 2000.
The National Association of State Foresters recommends that the $10 million increase proposed for the SFA program in fiscal year 2000 be focused, through a competitive grant process, on Wildland-Urban Interface hazard mitigation projects. State Fire Managers identified the several areas as opportunities to use both the SFA and VFA Programs to improve the safety and effectiveness of firefighters in the interface as well as other wildland fire situations, including improved risk assessments, fuels treatments, and public information and education.
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Urban and community forestry programs which support local efforts to plant trees, improve communities, and reduce energy costs. This low cost, high leverage program helps bring forestry to urban and suburban publics who do not understand or appreciate forest management challenges. With that awareness and contact comes an ability more effectively influence the health and well-being of rural forest properties.
Communities need assistance to help make them aware of the importance of managing their natural resources and to help them begin developing long-term comprehensive plans. Many small to mid-sized communities benefit from this assistance. In many cases, the ability to provide small amounts of up-front technical and financial assistance enables these communities to institute programs that will mature into sustainable programs that have lasting benefits. This in turn has a positive multiplier effect on the livability and economics of that community and eventually the nation.
Time after time, tree programs have proven to be the best vehicle to get community leaders and citizens energized about their natural resources. Trees and their resulting benefits are something that all people can easily relate to. Tree planting efforts serve as a means to build citizen involvement. Across the country, tree planting events have repeatedly resulted in the development of citizen lead groups that are committed to the long-term improvement and care of a community's natural resources. These citizen groups become catalysts for community leaders and others in the community to support efforts to properly plan for and manage their natural resources.
NASF is recommending that the Urban and Community Forestry program be funded at $40.040 million for the coming fiscal year. As part of this recommendation, we are recommending that the Forest Service institute a challenge-cost share grant program aimed specifically at assisting local, non-profit tree planting groups.
Forest health protection to provide detection, monitoring, and treatment of high priority forest insects, diseases, and other pathogens. This program helps provide the foundation for the others, since forest health monitoring is critical to making key decisions about how to allocate other resources and investments. This program is made up of Forest Health Monitoring and Forest Pest Prevention and Suppression.
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Forest Health Monitoring is a national, interagency program that uses aerial surveys and on-site plots to monitor, assess, and report on the health of the Nation's forest ecosystems. The program is undergoing significant restructuring in 1999, as directed under the Agricultural Research, Extension, and Education Reform Act of 1998 (PL 105–185) enacted in 1998. To increase efficiency, the plot work portion of FHM program is being integrated with the USDA Forest Service Forest Inventory & Analysis program to create the Forest Inventory and Monitoring program. The information gathered through the FHM program is compiled into an annual report which serves as an early warning system for broader impacts of insects and diseases, human activities, and climate change on forested landscapes.
States value the FHM program because it enables them to conduct survey work within an established national framework and provides forest health data that can be aggregated and compared at regional and national levels.
Through 1998, full-scale FHM monitoring has been implemented in 27 States (Alabama, California, Colorado, Connecticut, Delaware, Georgia, Idaho, Illinois, Indiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming). For 1999, Hawaii, Missouri, New York, Tennessee, and Utah will join this list, and for 2000, the new integrated FIM program plans to expand full-scale FHM monitoring to all fifty States.
State Forestry agencies receive additional forest health assistance from the Pest Prevention and Suppression program which supports projects aimed at controlling forest insects and diseases on forest lands of all ownerships. Activities conducted under PPS include presuppression surveys, post-suppression assessments, and comprehensive environmental analyses documenting the need for and anticipated results of a given treatment plan.
The Forest Service estimates that for every dollar of suppression funding needed, but not available, timber losses to forest insects and diseases alone amount to an average of $5.82. This figure is based on timber losses only and does not include the losses of recreation, water, or wildlife which are difficult to quantify.
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Critical pest problems currently exist in all regions of the country. Situations which need new or expanded treatment include: the western spruce bud worm and Douglas-fir tussock moth in western mixed-conifer stands; mountain pine and Douglas fir bark beetle in the Rocky Mountains; gypsy moth in the hardwoods of the Northeast, Mid-Atlantic States and now the Pacific Northwest; southern pine bark beetle in the Southeast; spruce beetle in Alaska; sugar maple decline in New England; buck moth in the live oaks of New Orleans; oak wilt disease in central Texas and Minnesota; and the recent outbreaks of Asian long horned beetle in the hardwood urban forests of Chicago and New York City.
The Forest Service and its cooperators employ an Integrated Pest Management approach to both the prevention and suppression components of their forest health programs. State and Federal field foresters use cultural, biological, chemical, and mechanical methods to combat forest pests which weaken and kill trees, and negatively impact a forest's biological diversity.
According to Forest Service statistics, land managers completed pest suppression treatments on approximately 175,300 acres of State and private lands during fiscal year 1998. Numbers must increase in fiscal year 2000 to counteract expected increases in gypsy moth populations. NASF supports full implementation of the Forest Service's ''Slow the Spread'' program to control the gypsy moth. Through these efforts, Federal and State Foresters protected trees and timber as well as clean water, wildlife habitat, scenic beauty, and a wide variety of recreational opportunities.
As an important part of this effort to strengthen Federal programs for non-Federal forests, we also commend to your attention the widely recognized need for better inventory and monitoring data on forest resources on all ownerships. This need has been highlighted by the State Foresters efforts to promote Criteria and Indicators as a nationwide framework for forest inventory, monitoring, and assessment, and by the strong recommendations for increased investment in the Forest Service Forest Inventory and Assessment program reflected in the Farm Bill Research title and the Second Blue Ribbon Panel on FIA.
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In order to meet the objectives of the Forest Inventory and Analysis program set out in the Research Title of the Farm Bill, NASF proposes a strong state and Federal partnership. There is unanimous support for shorter forest inventory cycles across the country and for full integration of the FIA and Forest Health Monitoring (FHM) programs into a comprehensive Forest Inventory and Monitoring (FIM) program. National Forest Systems (NFS) lands must be fully incorporated into this system in order to provide consistent resource data needed for national assessments and policy development.
Forest Inventory & Monitoring will serve as the strategic scale base for forest ecosystem data on all land ownerships; Federal, state, and private.
NASF recommends that the Forest Service Research & Development branch provide leadership and a collaborative structure for developing and implementing the FIM program nationally. This includes coordination of data collection efforts, data quality assurance, information management, Regional/State analysis and reports including intensive site ecosystem monitoring projects, and development of sampling technology, new monitoring techniques and indicators. NASF is recommending an increase of $4 million over the administration's request for the Research branch.
We are also recommending that the Forest Service State & Private Forestry (SPF) branch establish a new line item in their budget for Forest Inventory and Monitoring. This will provide seed funding to contract with states to collect FIM Federal program data, as well as to conduct annual aerial surveys of all states to support FHM detection monitoring program. This will also enable coordination among regions to report results of all detection work to an FIM regional research leader. We are recommending that this pilot effort be funded at $4 million for fiscal year 2000.
NASF is also very concerned that the National Forest System be directed to participate in the National FIM program and that NFS resources be used to accomplish this. NASF is recommending $4 million from the National Forest System Inventory and Monitoring programs to cover this small expense, which will provide for high quality, consistent inventory data across the forested landscape at a relatively low cost.
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All data collection, analysis, and reporting will be done according to agreed-upon standards of quality assurance and peer review, and must follow the standards, definitions and methods determined for the core program.
Improving water quality through forestry, including helping forest landowners to protect water quality while meeting their ownership objectives and using trees to protect and enhance water quality in agricultural and urban settings.
With a reported need of $20 million for full implementation of current State water quality prevention measures on forested lands, NASF is seeking an initial $10 million Water Quality line item within the Forest Service's Cooperative Forestry section dedicated to addressing water quality concerns. Consistent with Congressional intent and agency discretion; cost-share funding would leverage State resources for a variety of water quality improvement needs: coordination of activities across all ownerships; implementation of highly visible watershed restoration projects; and completion of landscape scale water quality improvement plans.
If forest land managers are to make noticeable improvements in the quality of our nation's waters, more landowners must be reached. A door to the non-industrial landowner is already in place thanks to Forest Stewardship Program, and with a dedicated increase to a Water Resources line item, significant and measurable improvements to forested watersheds can be realized.
Other Programs: The NASF strongly supports the budget level proposed by the administration for the Forest Legacy program. Forest fragmentation is fast becoming a major threat to forest ecosystems and forest-products based economies. This program has become particularly effective since the State grant option was created in 1996, and interest and participation in the program are growing. So far, 17 States are participating, and we expect several other States to begin assessments of need this year.
The NASF also recognizes the importance of the Economic Action programs for their role in promoting stability and growth in rural communities through new or underutilized forest products. These programs are playing an increasingly valuable role in providing economic options for rural communities that encourage forest health and reduce fire dangers. We are supportive of efforts in the Four Corners Region to assist local communities with forest product development projects and fuels treatment options that are mutually supportive of each other.
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Statement of David Brown
Mr. Chairman and distinguished Members, I am David Brown and I serve as member of the Board of Directors of the American Recreation Coalition (ARC). ARC is a national federation of more than 100 organizations actively involved in meeting the recreation needs of Americans. ARC members produce recreational products ranging from canoes to motorhomes to tents, provide services ranging from campsites to downhill skiing and represent the interests of tens of millions of enthusiasts belonging to individual membership groups such as the Good Sam Club, BOAT/U.S. and the National Off-Road Bicycle Association. The industry represented by our member associations and companies is large and pervasive, representing in excess of $400 billion in sales annually and touching the lives of nearly every American. Our research indicates that 57 percent of all Americans engage in outdoor recreation at least monthly. My role on the ARC Board is based upon my role as executive director of America outdoors, the national trade association for outfitters, guides, and other recreation focused businesses assisting the public enjoy their time outdoors on public lands and waters.
We applaud the committee's initiative in looking at the fiscal year 2000 budget request for the Forest Service and seeking comments on broader issues, including the oft-cited backlogs facing the agency in recreation facilities and roads critical to accessing recreation sites.
We wish to address five key concerns today:
(1) our concerns about the apparent evaporation of appropriated funds between the Congressionally approved budget and in-the-field expenditures;
(2) our support for, and yet our related concerns about, use of innovative tools and mechanisms by the agency to extend its recreation program capabilities;
(3) our concerns about the ability of the agency to accurately project its future needs and to subsequently develop a realistic strategy for meeting those needs;
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(4) the agency's partnership doctrine; and
(5) recreation needs for roads and trails to utilize America's national forests.
APPROPRIATED FUNDS VERSUS IN-FIELD EXPENDITURES
Tracking recreation program expenditures of the Forest Service is a frustrating process. Expenditures on trails (both construction and maintenance)and facility maintenance costs have been reclassified several times. Moreover, there have been significant changes in the way the agency has funded specific national initiatives and general overhead costs. In some cases, conversion of campground operations to concessioners has reduced agency manpower needs. In other cases, growth in demand has added to local manpower and resource needs. Consequently, it is difficult to assess the relative changes in available resources to service recreation program needs in the field.
Some of the changes are clear. Funding for recreation facility construction and reconstruction has declined markedly. In fiscal year 1993, this category received $73,604,000 in funding; in fiscal year 1999, construction/reconstruction funding had declined to $32,949,000, or nearly $40,000,000. Although it is possible that a portion of this reduction has been offset by funding available under ISTEA and TEA–21 and other programs, our information suggests that the reduced construction funding is exacerbating the agency's current backlog of deferred maintenance. In the draft RPA released three years ago,
the Forest Service estimated that some 40 percent of all visits to the forests were to sites that failed to meet the agency's own basic standards because of aging and inadequate facilities. We expect that no improvements in this statistic are being made.
Yet construction/reconstruction is not our greatest concern. We have also seen a decline in funding for recreation management and maintenance nationally, especially in fiscal year 1995 and fiscal year 1996. More recently, recreation management funding has grown slightly.
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Yet reports from the field suggest a far more ominous decline than the national numbers would suggest. In one key recreation district after another, we are told of recreation program cutbacks of 25 percent or more. And disturbingly, the most serious cutbacks appear to be occurring where recreation fee demonstration projects are underway. At the inception of the fee demonstration program, a clear understanding was reached among Members of Congress, the recreation community leadership and the administration that new receipts from the program needed to be supplemental to base appropriations, both to allow progress in tackling the backlog and so that recreationists paying the new fees could be protected from paying more and getting the same—or less.
In our testimony before this committee in 1998, we shared information on declines in the recreation programs at a number of key forests including the Wasatch-Cache and San Bernardino. Sadly, we find that a pattern of substantial funding declines exists. While addressing more than 150 agency officials involved in local recreation efforts through the fee demonstration program, ARC's President asked for a show of hands of those from a district where the available recreation funding between fiscal year 1998 and fiscal year 1999 had remained stable or risen—nationally, the total recreation program climbed 6 percent. Not a single hand was raised. We find this disturbing—more so because recreation demand is climbing and recreation is one of four identified agency priorities under the Natural Resources Agenda cited by the agency as its strategic plan.
What we are told is that recreation funds are prime candidates for diversion to fund national initiatives—from EEO to telecommunications upgrades—and that recreation is now bearing a large portion of the agency's general overhead charges of 19.8 percent, we are told. Yet recreation comprises just over 10 percent of the total agency budget.
A specific example is available fro the Blackrock Ranger District in the Bridger-Teton National Forest. The district's staffing has been reduced from nine full-time and more than five seasonal employees to three full-time employees. While we certainly encourage efforts to improve agency efficiency, our outfitters are telling us that these staffing levels are inadequate to support the agency's mission in that district. The forest supervisor recognizes this problem and is making adjustments. But this illustrates why field level recreation programs are in trouble. Increased overhead assessments and pay increases for existing staff, with minimal increases in overall recreation funding, are forcing staffing cuts at the field level.
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I was also personally told by a Forest Service employee in Colorado who is involved in budget issues that only 20 percent of the budget his forest receives for recreation actually reaches the district level. Furthermore, according to this same employee, there is an inequitable allocation of overhead to the administration of outfitter and guides permits. According to this Forest Service official, some construction projects are implemented without any overhead assessment, and are subsidized by the assessment on outfitter and guide permit administration.
We urgently seek this committee's assistance in assessing the appropriateness of the use of Congressionally-provided recreation funding and help in establishing guidelines for diversion of funds for ''national initiatives'' and overhead.
USE OF INNOVATIVE TOOLS
The recreation community is proud of its leadership in the fees area, including our central role in the development of the National Recreation Fee Demonstration Program under Public Law 104–134. We believe that those directly enjoying the use of certain recreation facilities and services are willing to pay a portion of the directly-related costs, especially since an under-funded Forest Service recreation budget now makes some of these services and facilities inadequate and poor in quality. Furthermore, we believe that an equitable fee system will produce improved relations between the agency and the visitors it serves.
Overall, the fee demonstration program is a valid concept with the potential to be very successful. The Forest Service already has some clear successes. We testified before the Senate Committee on Energy and Natural Resources earlier this year on this program and have provided the committee a copy of our testimony for your review. We are delighted by important experiments underway to make fees convenient and equitable, and to seek expressions of preference in the spending of those fees by paying visitors. We applaud the establishment of new interpretive programs and the hiring of new trail crews, expansion of websites and informational resources.
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We believe that the fee demonstration effort is merely the first of several innovative programs that the Forest Service and other Federal land agencies should pursue. We favor exploration of mechanisms that would reduce the need for investing tax dollars in recreation facilities such as campgrounds and picnic sites where management of those sites will be provided under concessioner agreements. We believe that visitor centers can and often should be designed for joint use by the Forest Service and another agency, a for-profit provider of services or a non-profit organization. An example is the Outdoor Recreation Information Center (ORIC) located within REl's flagship store in Seattle.
Yet we are very concerned by uses of the fee demonstration tool in ways we consider to be hostile to other vital goals and practices of the agency. Fee demonstration managers have suggested use of the fee demonstration authority to replace partnerships with quality private sector operators at campgrounds with Forest Service-run campgrounds. Contributing to this effort is new and burdensome requirements facing campground concessioners under the Service Contract Act that may render their operations economically unviable.
Recently, we learned that the Forest Service has provided its managers with a mechanism for ''taking back'' campgrounds under fee demo. A fee demonstration ''slot'' has been reserved for all campgrounds returned from concessioner operation to direct Forest Service management. We will be communicating shortly to the Congress and to the agency that we strongly oppose this use of a project ''slot'' and feel that it violates the very spirit of the legislation creating the fee demo program.
To prevent misuse of fee demo authority and other innovative tools—some of which we believe can result in cost efficiencies of tens of millions of dollars annually we urge the Congress to continue to authorize innovative tools like the National Recreation Fee Demonstration Program for periods of three to four years. Close oversight is needed during this period of experimentation, followed by enactment of legislation based upon lessons learned. For this reason, we ask your help in opposing as premature a legislative initiative from the President to convert the fee demo program into permanent fee authorization in the 106th Congress.
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PROJECTING FUTURE NEEDS
We believe that the Forest Service is seriously handicapped in projecting its future needs in the recreation arena. Its recreation-related research is too little and too oriented to simply tabulating participation data. It fails to adequately address motivation and satisfaction issues and is not able to help on-the-ground managers anticipate new and changed demands. Moreover, there is no effective way to translate recreation demand information into a strategic plan, where supply and demand issues are resolved using a mix of appropriated funding, resources earned through fees, partnership programs involving volunteers, concessioners and permit holders, and cooperative endeavors with state agencies.
We applaud the decision of a growing number of Federal agencies to participate in a research series undertaken by the Recreation Roundtable, beginning in 1994, entitled Outdoor Recreation in America. A copy of the 1998 report of this research is being supplied to the committee for its use.
After acquiring better information about future needs, the agency must convert information to a strategic plan, and particularly a strategic plan at the operating unit level. Current planning is overly focused on natural resource/environmental decisions, undercutting the contributions that recreation can play in aiding the Nation's physical and mental well-being -as well as in protecting the sustainability of communities associated with the forests. Our experience is that the agency is deficient in talent related to effective use of capital and management of personnel.
THE PARTNERSHIP DOCTRINE
Although the national forests host nearly one billion recreation visits annually, many of the visitors have little or no contact with the Forest Service. Downhill skiers are frequent visitors to the forests: 60 percent of the Nation's ski capacity is on national forests. Yet to most skiers, their visits are to areas with names such as Snowbird and Mammoth, Vail and Aspen. Similarly, the national forests host millions who hunt and fish on national forests—using state hunting and fishing licenses and obeying state regulations and laws. Rivers through national forests host hundreds of rafting, tubing
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and kayaking opportunities, operated by private businesses operating under permits.
We believe that the partnership doctrine underlying Forest Service recreation programs is sound and essential for success in the Twenty-First Century, and we urge the Congress to underscore this doctrine. One impediment to partnerships is overly restrictive implementation of the Federal Advisory Committee Act. In some cases, this law has been cited as the rationale for failing to hold regular meetings between the Forest Service and its partners in providing quality recreation experiences.
In their best forms, partnerships between the Forest Service and other organizations serving visitors to the forests do more than enhance recreation experiences. They also protect resources and provide invaluable natural resource education.
We find many Forest Service employees are largely insensitive to the tradition of partnerships in the agency's recreation program. They also lack insights into other important principles of the Forest Service. To remedy this, the agency needs to revise and augment its early-and mid-career education efforts with a series of programs designed to define and explain the agency's corporate culture, as well as its legislative mandates.
RECREATION NEEDS FOR ROADS AND TRAILS
Today's forest road system is largely the product of the agency's past timber production. Yet recreationists unquestionably are now the principal users of these routes, with an estimated 1.8 million vehicles daily on the system today and a rapid growth rate.
Unfortunately, the Forest Service's recreation facility backlog is dwarfed by the magnitude of the forest roads system backlog. The backlog for needed reconstruction of the arterial and collector roads alone—some 85,000 miles out of a system totaling 400,000 miles—is reported as $10.5 billion. In a report entitled ''The Road to Recovery,'' the Forest Service provides clear evidence of the challenge it faces. The agency is responsible for over 7,000 bridges on its system. Of these, 940 are deficient and need immediate attention. Yet at the current level of funding, only 40 bridges are being replaced annually. The lack of investment is already creating a loss of access to forest lands—areas which should be employed to disperse growing levels of use now become unavailable.
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The agency projects meeting just 40 percent of its maintenance needs for arterial and collector roads, which receive 84 percent of all traffic, and actions on a very small portion of its local road system -essentially only to mitigate major environmental and safety impacts or where a timber sale generates the need and the funding for the roadwork. The consequence is disturbing. In the last three fiscal years, the agency reports a drop in its arterial and corridor mileage of nearly 10 percent. This drop is not because these roads no longer lead to trailheads and campgrounds, lakes and other recreation sites. It is a reflection of the reclassification of these routes as now requiring use of high clearance vehicles for safe passage. This closure of routes by default, not by design, cannot continue.
We believe that the forest road system is vital to the multiple use mission of the agency, as well as to rural transportation in America. Sustaining this network cannot rely solely, or even principally, upon timber sales for funding. There is great logic for earmarking a portion of the receipts of the Highway Trust Fund to forest roads. In part, the logic arises from the national responsibility we bear for providing public access to the forests; it is also based upon the reality that millions of dollars in Federal fuel taxes are paid by those who drive on the forest roads.
We are aware that the administration envisions an aggressive ''decommissioning'' of roads in the forests based upon environmental and fiscal costs. The recreation community does not necessarily oppose some road closures provided that access to recreation sites on the forests, as well as general travel through the forests, is not significantly impaired. In comments to the agency, we have urged the Forest Service to revise its focus regarding local roads to emphasize an ambitious ''roads to trails'' initiative, funded in part through recreation fees and cooperative agreements with states, and a ''road-banking program.'' Under ''road-banking,'' local routes might be obliterated visually but retained legally, recognizing that the routes might again become important for recreation or other purposes at a later time and thus be re-established.
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Mr. Chairman, the recreation community loves America's national forests and looks at the Forest Service as a friend. The work of the agency deserves the support of this committee and the appropriations committees of the Congress. We urge you to do the following:
(1) support recreation program spending for operations and maintenance at or above fiscal year 1993 levels in constant dollars;
(2) support appropriations for the national forest road program of at least $300 million minus timber purchaser credits, if any;
(3) support private sector investment in facilities on public lands needed to restore and improve the recreation infrastructure;
(4) provide strong guidance to the Forest Service regarding use of recreation appropriations for ''national initiatives'' and general agency overhead; and
(5) provide new guidance regarding implementation of the National fee Demonstration Program (a) requiring respect for the importance to rural communities of affordable recreation opportunities, as well as the increasing dependency of these communities upon the tourism revenues derived from forest-based recreational activities and (b) directing the agencies not to displace current concessioner-operated recreation services with agency-or volunteer operated programs; and
(6) underscore the importance of the partnership doctrine in meeting recreation needs on the forests, and make clear that no new tools—such as fee demonstration—should jeopardize this doctrine.