SPEAKERS CONTENTS INSERTS
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48–275 CC l
1998
JOINT HEARING ON THE MANAGEMENT OF THE UNITED STATES FOREST SERVICE
JOINT HEARING
before the
COMMITTEE ON RESOURCES
and
COMMITTEE ON THE BUDGET
and
SUBCOMMITTEE ON INTERIOR
of the
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
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ONE HUNDRED FIFTH CONGRESS
SECOND SESSION
MARCH 26, 1998, WASHINGTON, DC
Serial No. 105–82
Printed for the use of the Committee on Resources, Committee on Budget, and the Subcommittee on Interior of the Committee on Appropriations
COMMITTEE ON RESOURCES
DON YOUNG, Alaska, Chairman
W.J. (BILLY) TAUZIN, Louisiana
JAMES V. HANSEN, Utah
JIM SAXTON, New Jersey
ELTON GALLEGLY, California
JOHN J. DUNCAN, Jr., Tennessee
JOEL HEFLEY, Colorado
JOHN T. DOOLITTLE, California
WAYNE T. GILCHREST, Maryland
KEN CALVERT, California
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RICHARD W. POMBO, California
BARBARA CUBIN, Wyoming
HELEN CHENOWETH, Idaho
LINDA SMITH, Washington
GEORGE P. RADANOVICH, California
WALTER B. JONES, Jr., North Carolina
WILLIAM M. (MAC) THORNBERRY, Texas
JOHN SHADEGG, Arizona
JOHN E. ENSIGN, Nevada
ROBERT F. SMITH, Oregon
CHRIS CANNON, Utah
KEVIN BRADY, Texas
JOHN PETERSON, Pennsylvania
RICK HILL, Montana
BOB SCHAFFER, Colorado
JIM GIBBONS, Nevada
MICHAEL D. CRAPO, Idaho
GEORGE MILLER, California
EDWARD J. MARKEY, Massachusetts
NICK J. RAHALL II, West Virginia
BRUCE F. VENTO, Minnesota
DALE E. KILDEE, Michigan
PETER A. DeFAZIO, Oregon
ENI F.H. FALEOMAVAEGA, American Samoa
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NEIL ABERCROMBIE, Hawaii
SOLOMON P. ORTIZ, Texas
OWEN B. PICKETT, Virginia
FRANK PALLONE, Jr., New Jersey
CALVIN M. DOOLEY, California
CARLOS A. ROMERO-BARCELÓ, Puerto Rico
MAURICE D. HINCHEY, New York
ROBERT A. UNDERWOOD, Guam
SAM FARR, California
PATRICK J. KENNEDY, Rhode Island
ADAM SMITH, Washington
WILLIAM D. DELAHUNT, Massachusetts
CHRIS JOHN, Louisiana
DONNA CHRISTIAN-GREEN, Virgin Islands
RON KIND, Wisconsin
LLOYD DOGGETT, Texas
LLOYD A. JONES, Chief of Staff
ELIZABETH MEGGINSON, Chief Counsel
CHRISTINE KENNEDY, Chief Clerk/Administrator
JOHN LAWRENCE, Democratic Staff Director
COMMITTEE ON THE BUDGET
JOHN R. KASICH, Ohio, Chairman
DAVID L. HOBSON, Ohio,
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Speaker's Designee
CHRISTOPHER SHAYS, Connecticut
WALLY HERGER, California
JIM BUNNING, Kentucky
LAMAR S. SMITH, Texas
DAN MILLER, Florida
BOB FRANKS, New Jersey
NICK SMITH, Michigan
BOB INGLIS, South Carolina
JIM NUSSLE, Iowa
PETER HOEKSTRA, Michigan
JOHN SHADEGG, Arizona
GEORGE P. RADANOVICH, California
CHARLES F. BASS, New Hampshire
MARK W. NEUMANN, Wisconsin
MIKE PARKER, Mississippi
BOB EHRLICH, Maryland
GIL GUTKNECHT, Minnesota
VAN HILLEARY, Tennessee
KAY GRANGER, Texas
JOHN E. SUNUNU, New Hampshire
JOSEPH PITTS, Pennsylvania
JOHN M. SPRATT, Jr., South Carolina,
Ranking Minority Member
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JIM McDERMOTT, Washington,
Leadership Designee
ALAN B. MOLLOHAN, West Virginia
JERRY F. COSTELLO, Illinois
PATSY T. MINK, Hawaii
EARL POMEROY, North Dakota
LYNN C. WOOLSEY, California
LUCILLE ROYBAL-ALLARD, California
LYNN N. RIVERS, Michigan
LLOYD DOGGETT, Texas
BENNIE G. THOMPSON, Mississippi
BENJAMIN L. CARDIN, Maryland
DAVID MINGE, Minnesota
SCOTTY BAESLER, Kentucky
KEN BENTSEN, Texas
JIM DAVIS, Florida
ROBERT A. WEYGAND, Rhode Island
EVA M. CLAYTON, North Carolina
DAVID E. PRICE, North Carolina
Professional Staff
WAYNE T. STRUBLE, Staff Director
THOMAS S. KAHN, Minority Staff Director and Chief Counsel
COMMITTEE ON APPROPRIATIONS
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BOB LIVINGSTON, Louisiana, Chairman
JOSEPH M. MCDADE, Pennsylvania
C. W. BILL YOUNG, Florida
RALPH REGULA, Ohio
JERRY LEWIS, California
JOHN EDWARD PORTER, Illinois
HAROLD ROGERS, Kentucky
JOE SKEEN, New Mexico
FRANK R. WOLF, Virginia
TOM DELAY, Texas
JIM KOLBE, Arizona
RON PACKARD, California
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SONNY CALLAHAN, Alabama
JAMES T. WALSH, New York
CHARLES H. TAYLOR, North Carolina
DAVID L. HOBSON, Ohio
ERNEST J. ISTOOK, Jr., Oklahoma
HENRY BONILLA, Texas
JOE KNOLLENBERG, Michigan
DAN MILLER, Florida
JAY DICKEY, Arkansas
JACK KINGSTON, Georgia
MIKE PARKER, Mississippi
RODNEY P. FRELINGHUYSEN, New Jersey
ROGER F. WICKER, Mississippi
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MICHAEL P. FORBES, New York
GEORGE R. NETHERCUTT, Jr., Washington
MARK W. NEUMANN, Wisconsin
RANDY ''DUKE'' CUNNINGHAM, California
TODD TIAHRT, Kansas
ZACH WAMP, Tennessee
TOM LATHAM, Iowa
ANNE M. NORTHUP, Kentucky
ROBERT B. ADERHOLT, Alabama
DAVID R. OBEY, Wisconsin
SIDNEY R. YATES, Illinois
LOUIS STOKES, Ohio
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JOHN P. MURTHA, Pennsylvania
NORMAN D. DICKS, Washington
MARTIN OLAV SABO, Minnesota
JULIAN C. DIXON, California
VIC FAZIO, California
W. G. (BILL) HEFNER, North Carolina
STENY H. HOYER, Maryland
ALAN B. MOLLOHAN, West Virginia
MARCY KAPTUR, Ohio
DAVID E. SKAGGS, Colorado
NANCY PELOSI, California
PETER J. VISCLOSKY, Indiana
ESTEBAN EDWARD TORRES, California
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NITA M. LOWEY, New York
JOSÉ E. SERRANO, New York
ROSA L. DELAURO, Connecticut
JAMES P. MORAN, Virginia
JOHN W. OLVER, Massachusetts
ED PASTOR, Arizona
CARRIE P. MEEK, Florida
DAVID E. PRICE, North Carolina
CHET EDWARDS, Texas
ROBERT E. (BUD) CRAMER, Jr., Alabama
JAMES W. DYER, Clerk and Staff Director
SUBCOMMITTEE ON THE DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES
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RALPH REGULA, Ohio, Chairman
JOSEPH M. MCDADE, Pennsylvania
JIM KOLBE, Arizona
JOE SKEEN, New Mexico
CHARLES H. TAYLOR, North Carolina
GEORGE R. NETHERCUTT, Jr., Washington
DAN MILLER, Florida
ZACH WAMP, Tennessee
SIDNEY R. YATES, Illinois
JOHN P. MURTHA, Pennsylvania
NORMAN D. DICKS, Washington
DAVID E. SKAGGS, Colorado
JAMES P. MORAN, Virginia
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C O N T E N T S
Hearing held March 26, 1998
Statement of Members:
Chenoweth, Hon. Helen, a Representative in Congress from the State of Idaho
Costello, Hon. Jerry F., a Representative in Congress from the State of Illinois, prepared statement of
Dicks, Hon. Norman D., a Representative in Congress from the State of Washington
Herger, Hon. Wally, a Representative in Congress from the State of California
Hinchey, Hon. Maurice D., a Representative in Congress from the State of New York
Miller, Hon. George, a Representative in Congress from the State of California
Regula, Hon. Ralph, a Representative in Congress from the State of Ohio
Prepared statement of
Schaffer, Hon. Bob, a Representative in Congress from the State of Colorado, prepared statement of
Young, Hon. Don, a Representative in Congress from the State of Alaska
Letter to James F. Hinchman, Acting Comptroller of the United States, GAC
Letter to Dan Glickman, Secretary, United States Department of Agriculture
Statement of Witnesses:
Dombeck, Michael, Chief, United States Forest Service, United States Department of Agriculture, Washington, DC
Prepared statement of
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Response to questions from Mrs. Chenoweth
Hill, Barry, Associate Director, Energy, Resources and Science Issues, Resources, Community and Economic Development Division, General Accounting Office, Washington, DC, accompanied by Charlie Cotton and McCoy Williams, General Accounting Office, Washington, DC
Prepared statement of Mr. Hill
Lewis, Robert T., Jr., Acting Associate Chief, Department of Agriculture, Washington, DC, response to questions from Mr. DeFazio and Mr. Nethercutt
Reponse to questions from Mr. Herger
Viadero, Roger C., Inspector General, U.S. Department of Agriculture, Washington, DC, accompanied by Robert Young, Deputy Assistant Inspector General for Audit, U.S. Department of Agriculture, Washington, DC
Prepared statement of
Additional material supplied:
Henderson–Bramlette, Diane, letter to Mike Dombeck, Chief, U.S. Forest Service
Communications submitted:
Department of Agriculture, USFS, ''Modernizing Financial Management at the Forest Service''
OVERSIGHT HEARING ON THE MANAGEMENT OF THE UNITED STATES FOREST SERVICE
THURSDAY, MARCH 26, 1998
House of Representatives, Committee on Resources, Committee on Budget, Subcommittee on Interior, and Committee on Appropriations, Washington, DC.
The Committees met jointly, pursuant to notice, at 11 a.m., Hon. Don Young, chairman of the Committee on Resources, presiding.
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STATEMENT OF HON. DON YOUNG, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ALASKA
Chairman YOUNG. The Resources Committee, the Budget Committee, the Interior Appropriations Subcommittee will come to order.
I believe this is the first time the three different Committees have come together in hearings of this magnitude. Because of the size of the Committee today we have agreed to limit opening statements to the Chairman and Ranking Minority Members of the two full Committees and the three Subcommittees.
This should allow us to hear from our witnesses sooner, and help members to keep their schedules. Therefore, if any other members have opening statements, they can be included in the hearing record by unanimous consent.
[The information referred to follows:]
STATEMENT OF HON. JERRY F. COSTELLO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS
Mr. Chairmen, I thank you for calling this joint hearing. As is so often in the case with matters before this body, management of the United States Forest Service falls under the jurisdiction of several House committees, and I appreciate this unique opportunity for many of the concerned parties to examine this issue together.
The U.S. Forest Service is responsible for managing more than 191 million acres of public lands located in 44 states, Puerto Rico, and the Virgin Islands. The Administration has requested $3.3 billion in the Presidents fiscal year 1999 budget to fund the Forest Service in the next fiscal year.
The Shawnee Forest, one of the 155 national forests overseen by the Forest Service, is located, in part, in my Congressional District. This beautiful area of 265,000 acres in Southern Illinois offers thousands of people each year the opportunity to observe bald eagles, witness annual snake migrations, and enjoy wonderful recreational opportunities.
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Because I know the value of this forest, I am concerned by reports that Forest Service inefficiency and waste are costing taxpayers millions of dollars each year. Mr. Chairmen, I look forward to learning more about the management of this agency. Thank you.
Chairman YOUNG. In my opening statement, I am going to sort of ramble through it as I usually do, but I would like to suggest one thing: that this is not about personalities. It is not about individuals. It is not about Chief Dombeck.
I believe that our forests are in terrible, deplorable shape, and we must address the problem of forest health and where we are headed. We do know that there are some serious problems because of the GAO report, and that will be addressed today by the GAO. And contrary to what some people say, leave Chief Dombeck alone, this not Dombeck's problem, particularly, this is a problem of the Forest Service, collectively.
I believe this is a terrible mess and has to be addressed by this Congress, and we must quit burying our heads in the sand. There are enough complaints going around from all walks of the Congress, different political philosophies and parties.
But in reality, our forests today are in worse shape than they have been in in the last 55 years. Not from logging, but mismanagement. We have burned more trees in the last 10 years than we have cut for commercial use during the time that man arrived on these shores. And that is a loss to not only mankind, but it is a loss to the management of the forest.
It may be natural, but it is not realistic, nor should it be allowed to take place.
We are losing more to beetle kill and wind blows. All across this Nation this is occurring because there is no management of the forest. In an area the size of 178 million acres, we are now producing less timber than they are in a very small amount of privately held timber lands, of less quality, and less, in fact, availability. And being so we have left less timber for the future generations.
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We have to keep in mind, though, the Forest Service budget has increased dramatically, 11 times above inflation since 1952. And I think that is another example of terrible mismanagement. The idea that we can have Forest Service employees painting rocks so they look old for the general public. They cannot account for $215 million. Do not know where it went. That is a hell of a vacation as far as I am concerned.
They had a $500,000 alternative reality rally last year, paid for by the taxpayers. A loss of true foresters and retention of anthropologists and biologists. All the ''ologists'' are all left, but no foresters are left.
And, very frankly, what is brought to this head is this administration has deprived the Nation of not only the log resources, but for the first time the Forest Service has lost money, and doing so, now they have been exposed in their weak underside.
And so our attempt today is to find out where we are going and where we are headed. I have talked to the people in the Forest Service to give us some ideas on solutions to the GAO report. If that does not occur, I suggest you come back here next year, and you will have, as I said before, less of a budget.
There is no reason for the taxpayer to be paying for an agency that is in fact in shambles and is operated very foolishly, and is not really doing what is right for the general public.
I think it is crucially important that we address this issue correctly, with enthusiasm and direction, and I expect to hear answers today.
The gentleman from California.
STATEMENT OF HON. GEORGE MILLER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA
Mr. MILLER. Thank you, Mr. Chairman, and I am happy to hear you state in your opening remarks that this is not about personalities. That would be a tragic mistake, if we assembled these three Committees to come together and decide that somehow this all falls on the shoulders of one person.
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Because the fact is that the problems pointed out by the GAO, and I think I see stacked on the table the history of reports done about the Forest Service, goes back many years through many chiefs of the Forest Service and through numerous administrations.
The fact of the matter is that we do have some systemic problems within the Forest Service, but for someone to try to decide that this is the current chief's problems and his fault only, and he is to be held accountable for all of those past practices would be a mistake.
First of all, it would be a mistake because this chief has the full support of the President, the Vice President, the Security of Agriculture in his efforts to broaden the mission of the Forest Service, in keeping with the outlook of the American people.
We all understand on this Committee, as we have watched the transitions and the changes that have taken place in the perception of the American people, the desires of the American people, the needs and the uses of the American people, on our Federal lands.
They are truly multiple use lands at this point, and while at one time this agency was simply governed by the notion of what yield it could provide on a yearly basis, and what kind of cut it could provide, that no longer is the single purpose mission of the Forest Service.
It now has to manage competing interests, strong competing interests, as the West becomes more and more urban, and as Americans move more and more around the country and enjoy our public lands.
So I am encouraged by your remarks. Let us not suggest that efforts have not been made to try to reform a number of the problems that will be addressed in the GAO report and in the Inspector General's report, but most of those have met with a lack of success on the floor of the House of Representatives or in the Appropriations Committee, or elsewhere, as we have tried to remedy one of the major problems outlined in the GAO report, and that is the failure of the Forest Service to get fair market value for the resources that it is managing, and for licensing those resources and renting those resources and leasing those resources.
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We have not allowed them to get that. Why? Because other special interests come before the Congress and overrule the notion of fair market value.
We also know that there is a whole series of accounts, apparently, where the accounting is maybe non-existent. But we also know there have been efforts to try to bring those accounts on to budget, to exercise them to oversight by the Appropriations Committee, by this Committee, by the Agriculture Committee, and those efforts have failed because mainly the single purpose interests of timber harvesting are benefited by having those multiple small accounts held off of budget.
So there is clearly enough blame to go around, but hopefully this hearing is the first in a series of hearings, as you have pointed out, as we review really what is a new mission under the mandate of the American public for this agency to take care of these resources, and to provide them for multiple use and multiple values.
We are in the middle of that transition. It started with the train wrecks in the Northwest, where we saw the collapse of our forest, where we saw the inherent problems, where we saw the failure to consider other values. And that transition will continue.
It will continue to gain support by a majority of the American people, and it is going to be a very difficult one for us to participate in, but it is necessary. And I look forward to these hearings, and I thank the various chairmen for agreeing to combine this hearing and make these joint efforts.
Chairman YOUNG. I was supposed to recognize Mr. Kasich, but he has not joined us at this time. So I will recognize our good chairman, Mr. Regula.
STATEMENT OF HON. RALPH REGULA, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO
Mr. REGULA. Thank you, Mr. Chairman. I think you and the Ranking Member have pretty well outlined the concerns that brought about this hearing. The forests are a national treasure. I think we should look from this day forward to how we can best manage this resource to serve people in a diverse number of ways.
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Obviously, historically there has been mismanagement. You need only to look at the GAO report. I quote, ''the agency's financial statements are unreliable. And expenditures of significant amounts cannot be accounted for.''
Well, we do not want that to happen prospectively. And I am hopeful that out of this hearing there will be techniques and policies developed that will avoid this kind of problem in the future.
The GAO report also focuses on internal control weaknesses, and finally I think the Forest Service's weak contracting practices have exposed appropriated dollars to an increase risk of fraud, waste and abuse.
I think, frankly, the American public is somewhat ambivalent about what they expect out of the national forests. They obviously like to have wood fiber at a reasonable rate to build their homes, to achieve their dreams, in terms of housing.
But they likewise also like the multiple use aspect of the Forest Service. I am always struck by the fact that in terms of visitor days, the Forest Service has twice as many as does the Park Service, and that is indicative of the fact that the public uses these lands extensively for their enjoyment.
And as our population grows, as our society becomes more stressful, I think the value of multiple use in our forests will be a great resource for the enjoyment of the public.
But, likewise, it is a great resource for the production of fiber, and it is a matter of managing this system in the most effective way on behalf of the owners, namely the American people.
I hope that out of this hearing and out of the leadership in the Forest Service there will be policies developed that will address those concerns, that will focus on how best to manage this resource, and that in the future we will not have to have these kinds of hearings. The Forest Service will have responded to the GAO and the IG concerns about the way in which they have managed the resource.
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So out of this hearing today, we should be able to develop these ideas for the future, and I look forward to hearing from the managers of the Forest Service. It is easy to identify the problems, but what I am interested in is identifying the solutions.
[The prepared statement of Mr. Regula follows:]
STATEMENT OF HON. RALPH REGULA, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO
I. The National Forests are a great treasure. They include nearly 200 million acres of some of the finest lands in the nation. These lands provide tremendous opportunities to all of our citizens; these natural resources and open space are of vital importance to this generation and to our children. It serves as the working man's country club. We need to take very good care of this special heritage.
Multiple use has been the driving force behind the management of this land. This is a policy that must be continued. There are proud traditions in the Forest Service for professionalism and local independence, but these must not come before, or at the expense, of prudent management of natural resources and taxpayer resources.
We all share a great concern for many the issues impacting the Forest Service, such as: forest health, providing a variety of recreational opportunities, managing a massive road system, and providing water, open space and habitat vital to our flora and fauna.
We recognize that large and ongoing debates and crises have stressed the agency during the past decade and have distracted the agency from adequately managing its affairs.
But today we say that it is time to get serious about managing the agency. This hearing will be focused on fiscal management issues.
These problems have developed over many years, but they must be solved soon.
The testimony will demonstrate that there have been many years of promises to clean up these kinds of problems, all to little or no avail.
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The Interior subcommittee and the Forest Service developed some budget reform in 1995, but already the Committee has had to once again tighten up reprogramming guidelines in an attempt to increase accountability.
II. My Committee has recently had numerous oversight hearings dealing with Forest Service activities. In addition, I have held regular, annual hearings with the Chief and with Secretary of Agriculture, as well as special oversight hearings, including:
1. the Interior Columbia River Basin project
2. construction practices
3. backlog maintenance and property inventories.
Further, my Committee has required the Forest Service to closely examine major issues affecting our nation's forests, so much so, that the Administration complained in last year's Statement of Administration Policy that this was excessive Congressional micromanagement. We disagree, oversight is vital. We have required reports on diverse issues, including:
financial system improvements and linkage to GPRA timber sales
land management planning and budget linkages
Recreational fee demonstration program
transportation and road planning and inventory backlog maintenance, and
wildfire fuels management.
III. My Committee has also demanded more and better explanation in the Forest Service's annual budget justification to more fully detail:
ecoregion assessments
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forest planning workload
wildland fire management planning
overhead budget assessments for ''national commitments''
funding equity by Regions, and adherence to the Government Performance and Results Act.
And, my Committee has initiated work by the GAO on the impact of the 1995 budget reform and work by committee investigators on funding accountability for forest planning, inventory and monitoring; the purchase of a major new computer system; and civil rights.
IV. Today we will hear of substantial financial management problems in the Forest Service. This includes the agency's continued inability to take accounting seriously and get financial systems to work. The GAO says, and I quote:
''The agency's financial statements are unreliable, and expenditures of significant amounts cannot be accounted for.''
We will also hear of substantial problems with the major USDA financial systems. The IG for USDA wrote,
''Our reviews at the (USDA) National Finance Center have disclosed continuing severe internal control weaknesses, culminating most recently with an adverse opinion we rendered on its overall control structure.''
We will hear of other problems, such as the inability to capture revenue and the potential for serious contracting problems resulting from poor oversight and excessive delegating of authority to field and regional offices. The GAO writes,
''. . . the Forest Service's weak contracting practices have exposed appropriated dollars to an increased risk of fraud, waste and abuse. These and other findings have led us, Agriculture's Inspector General, and Forest Service task forces to make numerous recommendations to improve performance. The agency has not acted on some, 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.''
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V. We will hear of a matter of great concern to the Interior Committee: the inability to properly track appropriations. We will hear that budget formulation is not based on local program needs and that furthermore, allocations of appropriations to the field is based on odd formulas and not on program needs or accomplishments. We will also hear that the agency charges excessive overhead which is used to support endless planning efforts and we will hear that there is an inadequate link between forest plans, financial systems and budgets. For instance, the IG writes,
. . . ''there is very limited assurance that funds have been expended consistent with the budget. . . . funding is subjected to absorbing overhead charges as the appropriations are reallocated down through the organizational framework of the agency. As a result, the amount of funds appropriated for a specific purpose or activity are significantly reduced before they are available for that purpose.''
VI. Based on all of this testimony, it is clear to everyone around that we need to have better management based on performance and results. The Government Performance and Results Act provides a framework to help solve some of these problems, but we will need better definitions of mission-critical goals and objectives.
Our Nation needs and wants to continue the multiple use model. We expect to have production of goods and services in a way that does not harm the land or waters and which provides long-term public service.
Where we focus on restoration, the Forest Service will need to have clear goals and benchmarks whereby the public can measure success.
This is the direction we will need to go. I expect the Department of Agriculture and the U.S. Forest Service to redouble its efforts so the American people can once again have faith in how these tax dollars are used and how these precious lands and waters are cared for.
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Chairman YOUNG. Mrs. Chenoweth, do you have an opening statement, as chairman of the Subcommittee?
STATEMENT OF HON. HELEN CHENOWETH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF IDAHO
Mrs. CHENOWETH. Thank you, Mr. Chairman. I do have a short statement. We do see a pile of reports there that have been accumulating, and unfortunately we look to the agency to correct their problems.
But as the Ranking Member said, and I agree with him on this, this is not just the agency's problem. This is the Congress's problem too. Because without regard—I have said this before—without regard to which political party is in power, this system has grown worse and worse.
We ask our managers, we ask our Chief to make his people accountable, and yet that is impossible under the systems that he has now, to require accountability. And it is up to the Congress to make those necessary changes in the laws that will allow him to do what we are requiring of him.
I blanche at the thought that this is the only agency, the Forest Service, that is entrusted with billions and billions of assets, and the Forest Service has so poorly managed those assets, that this agency is now deep in the red.
Now the Forest Service is coming back and asking for more money than they got last year, and they have had an increase every single year. And they are coming back to us with this poor track record, and asking for an increase over last year's budget.
We do not like that. But we have got to be able to work in tandem to solve these problems, and get serious about it. The seriousness has to go beyond the politics of the day, and the personal whims of the day that we turn into public policy.
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We have to be able to require accountability from the Forest Service. And as Congressmen, we have to give them the power to require accountability from their managers.
Thank you, Mr. Chairman.
Chairman YOUNG. Thank you, Mrs. Chenoweth.
Mr. Hinchey?
STATEMENT OF HON. MAURICE D. HINCHEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK
Mr. HINCHEY. Thank you very much, Mr. Chairman. I want to make a very brief statement, which is largely in accord with what I have heard other members say just a few moments ago.
And that is essentially that whatever problems are perceived here, by the members of this Committee and others in the Congress, with regard to the Forest Service and the way the forests are being operated, is a problem for which responsibility is shared equitably perhaps by both the Forest Service and the Congress.
And to the extent that it is not shared equitably, I think a larger burden falls upon the Congress than falls upon the Forest Service. And that burden largely has to do with our responsibility and obligation to fund the maintenance and care of our resources.
And it is quite clear to me that we have not done so, and that this failure is one that dates back over a very long period of time.
We note that in the Forest Service, for example, the Forest Service is of course replete with roads—there are a great many roads through the Forest Service lands. We made the point a number of times that these roads now cover 373,000 miles—eight time as long as the Federal Interstate Highway System, and enough to circumnavigate the globe 16 times—and that there is within this road system a maintenanace backlog of $10.5 billion.
In other words, in order to maintain these roads and keep them up, there is a backlog of funding deficiencies to the tune of $10.5 billion.
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Now, that is a sad observation to make, because many of these roads are not just roads for forests. I have heard my friend, Mr. Hansen, talk about this, and I listen to him very carefully, because I am very respectful of his knowledge in this area.
And he said yesterday at a hearing that during hunting season you almost need a traffic cop back up in some of these roads, because of all the traffic up there. And I firmly believe that.
I come from a part of the country in the East where we have the Catskill Park and the Adirondack Park, and hunting is a major occupation—an occupation to take up spare time, at least.
So I understand the traffic that must be on these roads, based upon what I am told by my colleagues in the West. I have seen a little bit of it myself, with my own eyes, as a result of being out there with Mr. Hansen and with Mrs. Chenoweth.
So I understand that these roads have a great burden placed upon them, and that they cover traffic not just for hunters, but for people who just need to get from one place to another. And that includes people on school buses, going to schools, and things of that nature.
If I am correct, I think I heard someone say that about 10 percent, at least, of the bridges in this network are deficient.
That tells me that we need to catch up to our responsibilities, and somehow we need to start making up that $10.5 billion. It is not going to be made up in one year, but it has got to be made up very quickly, and we need to get on to it very, very rapidly.
Because unless we do, we are going to have a major accident out there, and we are going to see loss of life. I think it is almost inevitable, at the rate things are going.
So I just want to say that this is a responsibility of the Congress. We need to fulfill this responsibility, and we have not done so. And that responsibility has to do with funding this operation properly.
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The same thing might be said for the National Park System. Anyone who has had an opportunity to be out in the National Park System, and I have had that opportunity recently, Yellowstone, Yosemite and places like that, you see that the places are almost literally falling apart before our eyes.
The deterioration is clearly discernible, almost palpable. And we need to address that problem. We need to address it by providing the necessary funds, to maintain the road systems in the National Parks, and maintain the other infrastructure that makes these operations so important.
So I think there is a lot to be said here, and perhaps this hearing is a very good thing, if it begins to open our eyes, the eyes of Members of the Congress, to our financial obligations to the resources owned by all of the people of the United States, and which have been entrusted to our care and the care of these Federal agencies.
So, I hope that we begin to do that, because our failure to do so is only going to add to the burden, add to the responsibility, and make it more difficult to catch up at some point in the future.
Chairman YOUNG. I can only suggest one thing, before I recognize Mr. Herger, and then Mr. Dicks, and that is it. One suggestion, good funding does not cover bad management.
Mr. Herger.
STATEMENT OF HON. WALLY HERGER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA
Mr. HERGER. Thank you, Mr. Chairman. I would like to thank Mr. Hill, Mr. Viadero, Mr. Dombeck for being here today, and for testifying on the management and practices of the United States Forest Service.
I personally have all of or parts of nine national forests in my Congressional District in Northern California. Management decisions have a great impact on the health of our forests. As a result, I have many grave concerns about the reports of chronic waste of both financial and natural resources, as well as the agency's inability to proactively manage the land under its jurisdiction.
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The Forest Service currently manages approximately 192 million acres of land—close to 9 percent of the Nation's total surface—and yet, even by the agency's own admission, 40 million acres are currently at a high risk for catastrophic fire.
Instead of working to improve this situation, however the agency is plagued by what the GAO calls, quote, indecision and delay, end quote. Instead of proactively improving forest health, the agency recently proposed to place a moratorium on all road building activities on roadless areas of the National Forest System. Quite simply, if we cannot get to an area to fight the fires, the areas will burn.
The purpose of this hearing is to explore the reasons behind the agency's management and problems which were summed up on a statement by former Northern California Modoc National Forest Supervisor Diane Henderson–Bramlett. In her January 1, 1998, letter of resignation to Chief Mike Dombeck, Supervisor Bramlett said, quote, a secondary reason for my departure is my frustration and dismay of the ever increasing redundant and costly agency practices, policies and regulations, the lack of accountability, both with all employees and with agency management, and the lack of leadership and vision throughout all levels of the Forest Service.
Continuing, I feel we are trying to be everything to everyone all the time. As a result, we deliver very little to anyone. End of quote.
This lack of management referred to by Forest Supervisor Bramlett has produced situations ranging from an inability to account for $215 million to highly questionable programs such as a 1996 Forest Service sponsored leadership seminar featuring drums, improv theater, finger painting, chimes, singing, body movement and story-telling. One Forest Service employee stated that this seminar was more like a group therapy session than a leadership seminar.
In November 1997, the Forest Service sponsored another employee event which press reports indicated cost at least a half million dollars. This event used taxpayer dollars to explore concepts such as ''everyone's truth is truth,'' and ''alternative realities are OK.''
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In construction areas, the Forest Service has also engaged in painting rocks to make them look older. Cattle ranchers in my district were asked probing personal questions as a condition of receiving a Federal grazing permit. These ranchers were asked, among other things, whether they were, quote, a person having origins in any of the original peoples of the Far East, the Indian Subcontinent, or the Pacific Islands, end quote.
They were also asked whether they had any disabilities. A Forest Service document then stated, quote, furnishing of this information is voluntary. However, individuals administering the permit will attempt to identify the needed information by visual perception if not provided by the permittee, end quote.
What do these situations have to do with managing our national forests? They all have one fact in common: they are a waste of taxpayer dollars.
Further, the GAO has observed, quote, according to a November 1995 internal Forest Service report, inefficiencies within the agency's decisionmaking process cost up to $100 million a year at the individual project level alone. These costs are not borne by the Forest Service, but by the American taxpayer, since the agency accomplishes fewer objectives with its yearly appropriations, end of quote.
This mismanagement is unconscionable, and must be corrected immediately. If not, we may well end up sacrificing the very health of our National Forest System. Thank you.
Chairman YOUNG. I thank the gentleman. Before I recognize my good friend from Washington, Norm Dicks, I would like to acknowledge that Senator Craig has joined us, and he is going to sit down just about where he was when he left.
[Laughter.]
Chairman YOUNG. Welcome, Senator.
Mr. Dicks from Washington State.
STATEMENT OF HON. NORMAN D. DICKS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON
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Mr. DICKS. Mr. Chairman, I appreciate your yielding. Chief, obviously the allegations of the General Accounting Office and the Department of Agriculture's Office of Inspector General are very condemning on the Forest Service's ability to effectively manage its finances and insure programmatic performance efficiency.
Just pointing out a couple of things in the GAO report: according to a November 1995 Forest Service report, inefficiencies with the agency's decisionmaking process cost up to $100 million a year at the individual project level along. Another point: because it has not obtained needed information, Federal regulatory agencies and stakeholders continue to insist that it prepare increasingly time consuming and costly detailed environment analysis and documentation before making a decision, effectively front loading the process and perpetuating a cycle of inefficiency.
Preliminary results in a soon to be issued GAO report to the chairman of the House Committee on Agriculture on the Forest Service contracting practices indicate that in fiscal year 1996 the agency's weak contracting practices made $443 million in appropriated funds vulnerable to fraud, waste and abuse.
For example, in reporting its fiscal year 1995 financial results, the Forest Service could not identify how it spent $215 million of its $3.4 billion operating funds and program funds. In addition, the $7.8 billion value reported for assets, including property, plant and equipment, was erroneous because records for these assets were not consistently prepared, regularly updated, or supported by adequate documentation.
Because of these and other deficiencies, Agriculture's Inspector General concluded that the agency's financial statement for fiscal year 1995 was unreliable.
And I understand that the remedy here is that we will just not do any more financial statements. Now, that does not cut it. And I think there is one thing that even those of us who have been strong supporters of the Forest Service throughout our careers simply cannot tolerate this kind of complete ignoring of what these reports have shown going back to 1980.
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And I think, frankly, if we needed a control board in the District of Columbia, we need a control board for the Forest Service. And I think just as we had to have an outside trustee appointed to take care of the problems in terms of the individual claims of tribes and individual members, because we just simply could never get the Interior Department to come up with an accounting system to follow it, we are going to have to do the same thing here.
Now, I am just frankly appalled by the lack of commitment, and I think this is something that we are going to have to, in the Appropriations Committee, at least, and with the help of the other Committees here, take action on and insist that we get this thing straightened up, or we just have to appoint an outside trustee to come in and manage this thing, and put in the financial systems that are necessary.
Thank you, Mr. Chairman.
Chairman YOUNG. I thank the gentleman. I deeply appreciate your comments.
At this time I would like to call up the first panel. Mr. Barry Hill, Associate Director, Energy Resources and Science Issues, Resources, Community and Economic Development Division, General Accounting Office, Washington, DC.
And I would ask that anybody who comments with you at the table, please identify yourself when you do so.
At this time also I would like to have Mrs. Chenoweth chair the rest of the meeting, because she is the chairman of the Forest Health and Forests Subcommittee, and she will be chairing the rest of the meeting.
I want to thank each one of the members that are not on this Committee for attending today, and hopefully, as I mentioned in my opening statement, this is supposed to be constructive, somewhat objective in the sense of those that are being questioned today, keep in mind, most of them have not been on the watch.
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This is not partisan, in the sense that this has been going on and getting worse every year. I just think it has accelerated in the last 3 or 4 years, and I hope that we can go on from this day on to try to get this Forest Service, as the gentleman from Washington mentioned, under a direct, good business management problem that serves the people of America.
Mrs. Chenoweth.
Mrs. CHENOWETH. Before we continue, I would like to explain that I intend to place all witnesses under oath. This is a formality of the Committee that is meant to insure open and honest discussion, and should not affect the testimony given by the witnesses.
I believe all of the witnesses were informed of this before appearing here today, and they have each been provided a copy of the Committee Rules.
If you would, all three of you, stand and raise your right hand to the square.
[Witnesses sworn.]
Mrs. CHENOWETH. The Chair recognizes testimony from Mr. Barry Hill, the Associate Director for Energy, Resources and Science Issues, Resources, Community and Economic Development Division, General Accounting Office, in Washington. Mr. Hill?
STATEMENT OF BARRY HILL, ASSOCIATE DIRECTOR, ENERGY, RESOURCES AND SCIENCE ISSUES, RESOURCES, COMMUNITY AND ECONOMIC DEVELOPMENT DIVISION, GENERAL ACCOUNTING OFFICE, WASHINGTON, DC, ACCOMPANIED BY CHARLIE COTTON AND McCOY WILLIAMS, GENERAL ACCOUNTING OFFICE, WASHINGTON, DC
Mr. HILL. Thank you, Madam Chairman. And Messrs. Chairmen and members of the Committees, before I begin, allow me to introduce my colleagues. With me today on my right is Charlie Cotton, who has led much of our recent and ongoing work on the Forest Service's operational management; and on my left is McCoy Williams, who is leading our ongoing effort to monitor and periodically report on the agency's progress toward financial accountability.
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We are pleased to be here today to discuss the management of the Forest Service. And, if I may, I would like to briefly summarize my prepared statement and submit the full text of my statement for the record.
Mrs. CHENOWETH. Without objection, so ordered.
Mr. HILL. In 1987, the Forest Service proposed a quid pro quo to the Congress. If the Congress would increase the agency's flexibility in fiscal decisionmaking, the Forest Service would improve its accountability and budget execution through better accounting for its expenditures and performance.
During the intervening decade, the Congress has given the Forest Service virtually all the flexibility in fiscal decisionmaking that it requested. Specifically, the Congress has simplified the agency's budget structure, and significantly increased its spending flexibility to insure that funds are available when and where they are needed.
However, the Forest Service has not improved its accountability as it promised. In a March, 1988 report, we stated that before the Forest Service could be held accountable, it would need to correct known financial and performance reporting deficiencies.
The report noted that the Forest Service was at the time addressing all of these problems. However, today, 10 years later, these problems continue to persist.
Madam Chairman, as many of you have already pointed out, this stack of reports I have here in front of me represents over 140 products that the General Accounting Office has issued since 1988 on the Forest Service—a list of which I would also like to introduce for the record.
Mrs. CHENOWETH. Without objection, so ordered.
[The document may be found at end of hearing.]
Mr. HILL. These products, reinforced by our ongoing work, have led us to observe that foregone revenue, inefficiency, and waste throughout the Forest Service's operations and organizations have cost taxpayers hundreds of millions of dollars.
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For example, the Forest Service has often not obtained fair market value for goods or recovered cost for services when authorized by the Congress. As a result, the agency forgoes at least $50 million in revenue annually.
It also has not always acted to reduce or contain costs as requested by the Congress. For example, concerned with the escalating costs of the Forest Service's timber program, the Congress in Forest Service 1991 asked the agency to develop a multi-year program to reduce the costs of its timber program by not less than 5 percent per year.
However, in April 1997, the Forest Service was preparing to undertake the third major examination of its timber program in the last 4 years. Meanwhile, the costs associated with preparing and administering timber sales remain higher than it was in fiscal year 1991 when the Congress first voiced its concern, and that is despite the fact that less timber is being sold and harvested.
In addition, up to $100 million a year is wasted as a result of inefficiencies within the agency's decisionmaking process. Among its shortcomings, the agency has historically failed to live up to its own monitoring requirements, and to comply with environmental and planning requirements.
Moreover, in fiscal year 1996, the agency's weak contracting practices exposed $443 million in appropriated funds to an increased risk of fraud, waste and abuse. Rather than require its field offices to comply with government-wide and Department of Agriculture-wide requirements intended to reduce costs or improve performance, some Forest Service managers merely trust that their contracting officers will perform competently and ethically.
Furthermore, the agency's financial statements are totally unreliable, and expenditures of significant amounts of money cannot be accounted for. For example, in reporting its fiscal year 1995 financial results, the Forest Service could not identify how it spent $215 million of its $3.4 billion in operating and program funds.
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These and other findings have led us, Agriculture's Inspector General, and Forest Service task forces to make numerous recommendations over the years to improve the Forest Service's financial and operational performance and to obtain a better return on the American taxpayers's multi-billion dollar annual investment in the agency.
The Forest Service has not acted on some, has studied and re-studied 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.
For instance, a February 1994 report by a Forest Service task force on accountability set forth a seven step process to strengthen accountability and made recommendations to help the agency change its behavior.
The concepts in this task forces's report were adopted by the Forest Service's leadership team and distributed agency wide. However, the task force's recommendations were never implemented throughout the agency. And as a result, many of the agency's processes and programs remain broken and in need of repair.
To improve its operational efficiency and effectiveness, the Forest Service must be accountable for its expenditures and performance. While the agency has in recent years made some progress, it is still years away from achieving financial accountability and possibly a decade or more from being accountable for its performance.
Specifically, the Forest Service has identified the actions required to correct known accounting and financial reporting deficiencies, and has established a schedule to attain financial accountability by the end of fiscal year 1999.
However, serious problems have been encountered in attempting to implement the agency's new financial accounting system; additional accounting problems continue to hamper its ability to produce reliable financial information; and the new financial accounting system is not Year 2000 compliant.
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According to several agency officials responsible for implementing the new financial accounting system or taking other corrective measures, the agency is unlikely to achieve its goal of financial accountability by the end of fiscal year 1999.
The agency has also taken an important first step toward becoming accountable for its performance by making clear that its overriding mission and funding priority, consistent with its existing legislative framework, has shifted from producing goods and services to maintaining and restoring the health of the lands entrusted to its care.
However, it has not identified the actions required to correct decade old problems with its inventory data, accomplishment measures, and reporting system. It has not addressed new challenges resulting from its changed priorities, and it has not established a schedule to achieve accountability for its performance by a certain date.
In particular, revenue and commodity outputs are now contingent on healthy aquatic, forested, and rangeland ecosystems. However, the agency does not know the condition of many of these ecosystems. In addition, it has not made a serious, systematic attempt to develop objective and independently verifiable measures or indicators of the health and trends in the condition of these ecosystems.
As a result, it cannot predict with any reasonable degree of certainty what levels of goods and services the national forests can produce.
In conclusion, we recognize that the Forest Service is not a private firm, in that its stewardship responsibilities and conservation mandates can strain its ability to generate revenues and provide goods and services.
We also recognize that protecting public goods, like endangered and threatened species, and their habitats, increases management costs on the national forests.
However, we believe that the agency is also responsible for spending taxpayers's dollars wisely and providing taxpayers with a complete and accurate accounting of how funds are spent, and what is accomplished with the money.
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Foregone revenue, inefficiency and waste, increased vulnerability to fraud and abuse, and lack of financial and performance accountability indicate to us that the American public is not receiving a fair return for its annual investment in the Forest Service.
Unlike the management of national forests, compliance with the requirements for financial and performance accountability cannot be left to choice, and strong leadership within the agency, and sustained oversight by the Congress will be needed to insure corrective action.
We believe that at a minimum, the agency must replace its decade-old promises to improve with firm scheduled to correct identified management deficiencies, and to achieve both financial and profitability accountability.
Finally, we believe that future years funding should be based in part on the Forest Service's demonstrated progress toward developing and implementing these schedules.
This concludes my prepared statement. I would be pleased to respond to any questions that you or other members of the Committees may have.
[The prepared statement of Mr. Hill may be found at end of hearing.]
Mrs. CHENOWETH. Thank you, Mr. Hill.
Before we get to the members, I wonder if you would like to just introduce for the record those people who are with you.
Mr. HILL. OK. To my right is Charlie Cotton, who is responsible for much of the Forest Service operational management work that we have done over the years.
To my left is McCoy Williams, who is responsible for auditing the financial accounting systems in the Forest Service.
Mrs. CHENOWETH. Thank you. The Chair would like to ask the Committee's indulgence and recognize first Senator Craig. He is very busy, and I am very pleased—I think we all are, that he has joined us here.
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So without objection, the Senator.
Senator CRAIG. Thank you, Mr. Chairman. Thank you very much for that courtesy. I am here to listen. Obviously I have spent a good deal of time on this issue on the Senate side. I think we are now up to 13 or 14 comprehensive hearings on the management of the Forest Service.
I have also had the privilege of working with Mr. Hill and his studies, and we have used those as templates from which to try to make some decisions and propose changes. So I am very interested in what you are all doing here in the House.
We have got a marvelous old agency that has become terribly dysfunctional. We ought to try to get it back together and operating. I think this effort by the House is very positive. Thank you.
Mrs. CHENOWETH. Thank you, Senator, and welcome.
The Chair recognizes Mr. Miller.
Mr. MILLER. Thank you, Madam Chairman. Thank you, Mr. Hill, for your report, and I think you have already seen the reaction that it has created. Let me ask you a couple of general questions on your testimony here.
It seems to me that when you start outlining sort of what is dysfunctional in the various accounting systems, that the first effort, if this was a business, would be, you would say hold on here a second. If you just took over the Forest Service in a takeover—hopefully you would go through the books before you made that decision, but if you didn't, you would say hold on here a second, and I want to know what the various compartments are doing.
As I understand corporate accounting, functions are broken down, and either there are profit centers or they are not profit centers; either they pay for themselves or they do not, or there are losses, and that may be acceptable. But you kind of know what is going on across the various functions.
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As I look at your report, we do not know that, because we have unreliable accounting systems. We have costs that are real costs, but not included in the cost as presented. In the case of road building, road surface is not included. It is not depreciated. An assumption is made that it will last forever. But we do depreciate culverts and bridges and other aspects of that.
So that in itself is a problem, because you are making an assumption about your future cost to go back to that area. You pointed out in your report that road building is now going into more—or is anticipated to go into more difficult habitat, so the immediate cost of each of those miles goes up because it is going to be challenged, it is going to be litigated, more scientific evidence has to be provided, more homework has to be done to make the case affirmatively to do that.
And in some cases even the terrain is more difficult, and yet those do not seem to be factored into anticipated road building in roadless areas or what have you.
Obviously we have built a system of repayment here, or remuneration, I guess, back to the agency, and to local school districts and counties, based upon one aspect of the entire service, and that is timber harvest.
But as the timber harvests come down from 12 billion to, what is it now? Three, almost 4 billion, nation-wide, no adjustments in payments, allocations, percentages or projects has really been made.
And so we are sort of standing a larger and larger agency on the head of an inverted pyramid here. And those timber sales, harvests and cuts are calculated to provide a huge amount of resources to this agency, but, in fact, it is getting more and more difficult to do that.
It sounds to me like that has violated almost every common sense accounting process you might want to invoke. And at the same time, we are adding additional burdens to this Service, in terms of the increased use for recreation, all of the fish and wildlife protections that are incumbent in modern forest plans and development plans and all the rest of that.
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And yet those are not really factored in as part of the cost other than that. I guess maybe you hear some of this in the Appropriations Committee, but appropriations have been fairly level here, and yet we are conducting smaller activities, but more costly, and we are not accurately accounting for them.
How do we compartmentalize the activities, whether it is recreation, whether it is fish and wildlife protection, ecosystem protection, timber cuts—how do we really get a realistic picture of what are our profit centers, what are centers that are simply paying for themselves, and what our loss centers?
And I include in that the whole question of what are the things we are doing below cost, that we are subsidizing activities at the risk to the agency.
Mr. HILL. I am going to let Mr. Williams and Mr. Cotton chime in after I have said a few words here, with their different perspectives on this. But I think that your summarization and explanation of what is and what has evolved is right on target. That is exactly right.
The basic problem with their financial information is you really cannot identify and concentrate cost along certain activities or performance areas that they are trying to achieve, their objectives.
A lot of their cost is based on activities, like recreation, or timber, as you correctly pointed out, as opposed to ecosystem management or forest health, or whatever activities, or watershed analysis, whatever activities that you want to measure.
And unless you can identify costs and put them into a particular activity that you are trying to achieve, it is impossible to have accountability, because you cannot identify just what the true cost of any given activity is.
Mr. COTTON. I would just like to add an example. For fiscal year 1999, only 29 percent of the Forest Service's timber volume is going toward saw timber, green timber. Another 32 percent is salvage. Another 34 percent is vegetation management, and 5 percent is fuel wood.
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Now, if you were a private industry, you would look at your saw timber green program, and I think you would expect that to make a profit, that that should cover its costs. But the salvage program, the vegetation management program, it may be that they are working toward stewardship objectives, making the land healthier, and the primary objective of them is not to turn a profit.
And I think it would be very important for the agency, just like a private company, to separate saw timber from salvage timber, because salvage timber, you never set out to make a profit to begin with. And they have not done that, and that to me fuels this whole argument over below cost timber sales.
Mr. MILLER. If I might, and I do not want to prolong the point, but also in terms of the appropriators, or those of us on the authorizing committee, we would then know the real cost of each of the programs. We could decide whether or not that is where we want to put the public's money or not.
Mr. COTTON. Absolutely.
Mr. MILLER. And the public could decide if that is a real value they have, or it is only a value when it was kind of hidden and subsidized.
Mr. COTTON. Absolutely.
Mr. MILLER. So, I mean, in terms of our decisionmaking process about what we are funding or not, these sort of shuffled costs do not allow us to know where we are investing the public's money.
Mr. COTTON. That is correct. And could I add just one more thing? With those percentages, only 29 percent of saw timber, and yet the allocation criteria that the Forest Service has used to distribute, their timber sales management funds that you give them are based 100 percent on green timber sales. A total disconnect between the allocation criteria and what they are asking the money for, and what they plan to do with it.
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Mr. MILLER. Thank you.
Mrs. CHENOWETH. Thank you. The Chair recognizes Mr. Herger.
Mr. HERGER. Thank you, Madam Chair.
Mr. Hill, in your testimony you stated that your review of the Forest Service financial procedures have revealed that appropriated dollars are exposed to an increased risk of fraud, waste and abuse. As a result, the GAO, the Agriculture Inspector General, and the Forest Service task forces have made numerous recommendations to the Service to improve its performances.
Could you please explain to us what these exposed shortcomings are?
Mr. HILL. The exposed shortcomings in terms of the potential for fraud, waste and abuse?
Mr. HERGER. Yes.
Mr. HILL. That information is based on some ongoing work that we have right now for the House Agriculture Committee that should be coming out shortly. And basically what they are finding is that in a highly decentralized organization, such as the Forest Service is, you have to have effective internal controls over expenditures of money that go toward contracting.
And in this case we are talking about $443 million in fiscal year 1996. Certain things like providing routine supervision of contractors' work, monitoring and overseeing the work to make sure they are performing properly, internal controls that limit certain spending authority—thresholds, basically.
These are all effective controls and measures that you have to have over the contracting process in order to insure that the money that you are providing the contractors is being used efficiently and effectively and that there is no misuse or waste or fraud that is going on.
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What we are finding is that there is a real, inconsistent application of the way these controls are being implemented within the Forest Service. If you look out at the local level, it is not being done in a consistent basis, and a lot of the managers, forest managers, are using what they term trust. They trust their contracting officers, they are professional, they are educated, they know their business, and we trust them to do an ethical and a competent job.
Mr. HERGER. Now have you in the past, when you have given recommendations to the Forest Service—let me rephrase that.
You have been discovering problems for some time, is that not correct?
Mr. HILL. That is correct.
Mr. HERGER. And you have been making recommendations to the Forest Service for some time?
Mr. HILL. That is correct.
Mr. HERGER. Could you tell me what were some of these recommendations?
Mr. HILL. Well, as you can see by these reports—I will not go through all of them—but some of the key ones I think have already been mentioned. When you look at what they are receiving for goods and services that they are providing, they are not getting fair market value for special use permits, and uses of the forest lands for commercial and non-commercial purposes.
The Forest Service has traditionally not been getting fair market value, and in some cases we found that they are only getting maybe 10 percent of what the fair market value could be for some of these uses. That one we could quantify.
We estimate that the Forest Service is forgoing about $50 million annually, alone, in that one. And then of course, internally, the Forest Service themselves have identified another $100 million annually that is being wasted in terms of inefficiencies that are within the organization.
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Some that cannot be quantified, I think, are just as important, and the example I used deals with the maintenance backlog. The agency estimates that there is a $7–$8 billion maintenance backlog, and I know that has been a concern of the Congress, not only with the Forest Service, but with the Park Service and the other Federal land management agencies. And you have provided a lot of funding to handle this maintenance backlog situation.
Yet we are finding that the estimate is not really based on reliable information. They really do not have a good handle for what that backlog is, and whenever you are providing them money, they really cannot give you any assurance that they are spending those moneys on the proper projects, and that they are addressing the highest priority needs in terms of maintenance needs.
That is just as wasteful an example as some of the others that we have given.
Mr. HERGER. Now, these recommendations that you have been giving for some years, would you say that the Forest Service has been following up on them?
Mr. HILL. May I say there is a pattern here. And the pattern is they always agree with the problems we point out and with the recommendations we make, and they always promise corrective action. But that is as far as it goes.
We really do not see over the long run where they have really taken substantive action on a lot of the recommendations that we have made and that they agree to do.
Mr. HERGER. Thank you, Madam Chair.
Mrs. CHENOWETH. Thank you, Mr. Herger. The Chair recognizes Mr. Dicks.
Mr. DICKS. Thank you, Madam Chair.
Another one of your examples is, in reporting its fiscal year 1995 financial results, the Forest Service could not identify how it spent $215 million of its $3.4 billion in operating and program funds.
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In addition, the $7.8 billion value report for assets, including property, plant and equipment, was erroneous because the records for these assets were not consistently prepared, regularly updated, or supported by adequate documentation.
Now, let us go to the $215 million first. Were there just no documentation whatsoever for how the $215 million was spent?
Mr. WILLIAMS. As far as the $215 million, it was identified in the Forest Service annual report as unidentified. Based on that, we do not know——
Mr. DICKS. Unidentified?
Mr. WILLIAMS. Unidentified.
Mr. DICKS. Has this been a practice over the years, of having a certain amount of money just unidentified?
Mr. WILLIAMS. That is the first time I have seen it in financial statements. Listing it as unidentified, you have various categories. For example——
Mr. DICKS. Did you ask them what unidentified meant?
Mr. WILLIAMS. No, we did not ask what unidentified meant. Basically we knew that they had not—they could not identify if those amounts were spent for personnel, if it was spent for rent, and the various categories on your financial statements that you use to identify how you spent your money.
But there was this one category that was listed as unidentified, and that is why we reported that for fiscal year 1995, there was $215 million that the Forest Service had reported as unidentified.
Mr. DICKS. In terms of how it was spent.
Mr. WILLIAMS. That is right.
Mr. DICKS. And out of that you then determined that their financial statement was completely unreliable. Is that correct?
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Mr. WILLIAMS. Well, it was the OIG's audit that determined that the financial statements were unreliable.
Mr. DICKS. This is the Office of Inspector General of the Agriculture Department.
Mr. WILLIAMS. That is correct. And we just reviewed the financial statements to try to put in lay terms exactly what does it mean to receive an adverse opinion on the financial statements. And we went through the various categories that the Office of the Inspector General identified in reaching the conclusion that the financial statements were not correct.
Mr. DICKS. And since 1995, they have not prepared any more financial statements. Is that not correct?
Mr. WILLIAMS. Financial statements were not prepared for fiscal year 1996. I believe they have statements for 1997, and the OIG is in the process of looking at those statements now.
Mr. DICKS. Now, because time is limited, and we have a lot of members here, a lot of interest, let me ask you this bottom line question. Either this is arrogance, or it is incompetence. And how do you characterize it? Or is it a combination of both?
Mr. HILL. We would just characterize it as major problem. This is a major problem.
[Laughter.]
Mr. DICKS. OK. Now, let us go to the Dicks proposal. Should we bring in somebody from the outside to try to put in order the financial house of the Forest Service at this juncture, based on this, what 17 years of these reports, and the fact that nothing has happened?
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Would bringing in an outside trustee at this point to try to put together a program and a plan be something the Congress should give serious consideration to?
Mr. COTTON. I think if history is any indicator, the Forest Service has had a difficult time correcting these problems themselves. And, in fact, as far as their financial accountability, they have brought in an accounting firm to try to help them in their implementation of the financial accounting system, and now with a more recent contract to help them with other financial deficiencies and shortcomings as well.
So they went out at least on the financial side and sought outside help because of the difficulties they were having delivering it themselves.
Mr. DICKS. But do you think bringing in a trustee of some sort be an option that Congress should give consideration to?
Mr. COTTON. We most certainly have talked about a control board internally. The GAO, has, for a number of years.
Mr. DICKS. So the President would appoint a number of people, and they would manage the financial part of the agency. The policy, the ecosystem protection, all the other good policy things, but would bring in some people who could give us the data, the information, the accounting, all the financial side so we could track and see how the public money is being spent?
Mr. COTTON. Well, Mr. Dicks, if you think they are having problems on the financial side, you have not seen anything yet until you get over to the performance side. Because I would think as appropriators you not only want to know where they are spending that money, but what they are accomplishing with it.
So in the end you are going to have to link that financial system with some type of promised accomplishments on their part, and to know that if you give them money to perform a certain activity or certain function, they are doing that, and they are accomplishing what they set out to do.
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I think a very good observation that has been made in the past on the part of the Forest Service is that they are rewarded just as much for failure as they are for success.
Mr. DICKS. Thank you, Madam Chairman.
Mrs. CHENOWETH. Thank you, Mr. Dicks. The Chair recognizes Mr. Nethercutt.
Mr. NETHERCUTT. Thank you, Madam Chairman.
Welcome, Mr. Hill and gentlemen. I had an interesting meeting with Mr. Dombeck this week, and had a chance to meet Mr. Pandolfi, who has been brought in to look very carefully at the financial operations of the Forest Service.
And I was told that there are literally millions of transactions that go on in the Forest Service annually, and over a multi-year period there are multi-million transactions.
Is that what you found as well, that there are numerous transactions that go on all over the country under the auspices of the Forest Service, and the operations of the Forest Service, relative to timber sales and all kinds of other things that they do. Is that what you found?
Mr. HILL. There is no question. It is a large organization. You are talking 36,000 people, 155 forests across the Nation. It is a huge organization. And they have tremendous amounts of responsibilities and there are a lot of activities going on out there.
They also have a tremendously high visitation rate in terms of the number of people that visit the forests. So there are lots of things that they are dealing with.
Mr. NETHERCUTT. You know, your report is a clear indictment of the past and the status quo. My hope is that this business approach that is being undertaken in the Forest Service is going to be beneficial. That is my greatest hope.
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And certainly with the benefits of yours and Mr. Viadero's reports, I think we are hopefully going to add some benefit to the way the Forest Service does business.
Having said that, and having reviewed your report, and all the, again, indictments essentially in Mr. Viadero's, of the problems that exist in the agency and apparently have existed for years, I think it is understandable in some respects with the change in people, the leadership and the number of employees and so on.
We in Congress have a—I will not say a short attention span, but a desire for fast results. I am wondering if you can, for the record here, identify three things that you would recommend that the Forest Service undertake immediately in order to accomplish a certain defined objective within the next year.
Let us say by the end of the next fiscal year. By the end of fiscal year 1999. What can you tell this Committee, this group of members, that the Forest Service could do, based on your knowledge, that would improve their system, whatever it might be, and that would be a definable objective result, that would be acceptable to us.
Mr. COTTON. I think what you will hear from the Chief of the Forest Service today is that it will, as you just observed, take a number of years to fix what is broken. And we agree with that. It is not going to be fixed overnight.
And so it is going to require a sustained oversight by the Congress and long term attention by the agency.
And what we have asked and suggested, and I think the No. 1 thing that they can do, is to establish a very clear schedule of what it is that needs to be done and when they are going to do it, when they are going to provide you with deliverables.
Then you at least have a schedule to hold them accountable for ultimately being accountable. And I think that the most you can hope for is what progress are you going to make in the next year, so at least this time next year we can all come back and say, yes, they are on schedule, or no, they are not, and here is why.
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Mr. NETHERCUTT. I am in agreement with you, sir. I am wondering if someone else has as followup answer. If you do not or if you do, please include in your answer what specific things you think are subject to that accountability that we can make judgments on in the next year.
Mr. COTTON. First of all, they have identified what is broken in the way of their financial accounting system and their other financial shortcomings, and have established a schedule to meet them. They need to do the same thing on the performance side.
And what we believe is the starting point of that is their strategic plan and its stated goals and objectives. But right now the budget is not linked to those goals and objectives. Their allocation criteria are not linked to their goals and objectives, nor are their outcome measures, which are primarily outputs and not outcomes.
So what we would see is progress in the next year in clearly identifying what people agree on as being appropriate performance measures so they can come up and tell you we did or we did not accomplish this goal with the money you gave us this year.
Mr. NETHERCUTT. Any other comments?
Mr. WILLIAMS. I would like to add on the financial management side, one of the keys to attaining financial accountability will be to implement the new accounting system that the agency is in the process of implementing.
To meet that goal of implementing that system successfully, I think that the Forest Service, along with the Office of the Chief Financial Officer, should follow recommendations made by the Office of the Inspector General last summer, and that is to make sure that the new system that was piloted in the three units this fiscal year is properly tested, and all coding is taken care of.
I guess overall, it is important from a timeliness standpoint, but it is also more important that it is done correctly. So I think they should take those considerations, recommendations identified in the OIG's report, and that would go a long way in helping the agency attain financial accountability.
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Mr. NETHERCUTT. Thank you. Thank you, Madam Chairman.
Mrs. CHENOWETH. Thank you. Mr. Farr?
Mr. FARR. Thank you, Madam Chair.
Well, welcome to the first bicameral, tri-committee hearing, and this room is packed, and there is 100 percent agreement in this room that we all love forests. The difficulty is that 50 percent of them love it vertical and 50 percent of them love them horizontal.
[Laughter.]
Mr. FARR. And I think you can see from the testimony in this room that we are not all going in the same direction. What I thought was very curious, and has been overlooked, is that if you in your summary that you gave us, the first word you lead with is ''foregone revenue.''
You also say, for example, we have previously reported the Forest Service has often not obtained fair market value for goods or recovered costs for services when authorized by Congress. And then you go on to describe in the next few pages, as I read it, a protection of this government of special interests in the forest.
It does not obtain fair market fees for commercial activities on national forests, including resort lodges, marinas, guide services for special non-commercial uses, such as private recreational cabins, special group events, or recovered costs incurred in reviewing and processing applications for special use permits.
The Forest Service also has, No. 1, not charged fair market value for rights of way for oil and gas pipelines, for power lines, for communications lines on its lands, and has, No. 2, not used sealed bids for certain timber sales, relying instead on oral bids which generate lower revenue.
As a result, the agency forgoes at least $50 million annually in revenue. It also does not suggest, which the question gets into, I happen to represent one of the largest national forests in California, Las Padres. In the northern part of it we do not have any commercial sales. We have a little bit, maybe, of grazing lands.
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But it is a recreational forest. And it is a remarkable draw for the local economy. And that is not in the formula. What value is that? What value is there in leaving old growth redwoods that have been historically difficult to get to because they are in roadless areas remaining roadless, and remaining old growth, and remaining of value to this country.
I mean I think one of the difficulties in this debate up here is that some people see the forest as, if you mine it, drill it, dam it, cut it there is revenue in there. And the other part of the Committee realizes that as a public, national forest, there are private lands, there are State lands which have different revenue extractions, and different laws for them.
But these are the national forests, and in some purposes, these national forests have value in being left as is. And in a business sense it is more cost effective.
Some of the biggest resorts in America have set aside most of the land for non-commercial uses. It draws people. They play golf on it, maybe. But they do not develop it.
And I am suggesting that there is a value, a land use management value in management of these forests in some cases in some places just leaving them as they are. Could you respond to that, and could you respond to why these special interests do not pay fair market value?
Mr. HILL. Well, that is quite a question you posed. Let me see if I can attack it a little at a time here. I think there is a central policy question that all of your comments focus on, and that is to what extent do we want the Forest Service to cover its costs or to cover at least a larger portion of its costs than it is currently covering?
Clearly, as we say in our statement, there are uses of the national forests that are not intended to generate revenue—wildlife protection, recreation use and things like that.
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There are other uses that by law they are required to get fair market value for providing those goods and services, which are the ones that you have already mentioned.
I think it is a question, though, of incentives here, and policy in terms of just what you want the Forest Service to do, to what extent do we want the taxpayers to have free or low cost use of recreation, water sports in the national forests, picnicking areas, camping grounds, or to what extent do we want the users of those services to pay a portion of the cost, or at least cover a portion, if not all the costs, so that these forests can be more self-sustaining.
In that regard, we have recently done some work where we have looked at various entities that are similar to the Forest Service out in the States and in the private sector to see from their standpoint how they are covering their costs, and the techniques they are using.
And a lot of it deals with what their basic purpose is and what their policy is.
Mr. FARR. As you pointed out, these are commercial activities that are not capturing fair market value. These are not passive activities. These are commercial activities.
Mr. HILL. Yes. And in those cases, the law is pretty clear, that the Forest Service must obtain fair market value for those services.
Mr. FARR. Why do they not?
Mr. HILL. We do not know.
Mr. COTTON. They could argue the fact, or one of the arguments is that they do not get to keep the revenue that they generate. The other thing is that the Congress has really never held them accountable for collecting the revenue that they should.
They have had authority since 1952 to cover their costs of issuing special use permits, and they have never issued the regulations.
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Mrs. CHENOWETH. Thank you very much. The Chair recognizes Mr. Peterson.
Mr. PETERSON. Thank you very much, Madam Chairman.
I want to congratulate the committees for doing this jointly. I think it is outstanding. We should be doing this a little more often.
I am new here. I do not know very much about Washington, so I will share a few thoughts with you and then have your reaction.
I want to say that I do not know that the Forest Service is as bad as it is being painted here. That may surprise a few. When we look at the Federal Government overall, when we have HCFA, the agency that deals with health care, and there is nothing more important than that, reports by their own Inspector General indicate the agency spent $23 billion last year that they did know whether it should have been spent or not.
We look at the Treasury and the IRS, and 21 percent of the earned income tax credits they feel are fraudulent, and that is worth about $10 billion. And we could go on and on with a long list.
Now, we have a lot of problems in the Forest Service, but let us keep them in perspective. I come here from a 26 year business background, and a 20 year State government background, with no Federal experience. I came here with the concept that Washington does not work. We are too big. We are too diverse.
When you look at the Tongass National Forest in Alaska, the Boise National Forest in Idaho, the Allegheny National Forest in Pennsylvania, in my district, the Green Mountain National Forest in New England, and the Routt National Forest in Colorado, they do not have much in common.
They are very different. Yet we are trying to manage them from the national perspective.
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Now, you as an agency have to deal with issues like last year in the budget process and the year before. Two Congressmen, one from Illinois and one from Massachussetts, came within one vote of taking away your road budget, destroying it, just wiping it out.
Neither of those Congressmen have a national forest in their district, and I would debate them that neither one of them know very much about our national forests. But their concept almost took away your road budget. So how can you manage?
Now, in the corporate world, the business world, bureaucracies are a problem everywhere. When they get too big, and they lose their focus and their mission, in business the company goes bankrupt. Somebody takes their place, or the board in time brings in a new leader, but they have the ability to lead.
I do not think you have the ability to lead, because we have Congressmen from all over this country, we have interest groups from all over this country with their narrow special interests who want very different things out of our public lands.
I guess I would like you to react to a concept of where we have a national Forest Service which sets goals and objectives, but we have regional national forests that are managed regionally, with boards appointed by Governors, the counties in which they are located, conservation agencies, forestry schools—I mean, good folks, that are from that part of the country, where we cannot have national Congressmen destroying a part of your budget, or having far too much influence on a part of this country that they know very little about.
So I do not think it works in those other agencies. I do not think it will work in your agency until we go to a regional approach where we have people managing that know what they are managing.
Would you respond?
Mr. HILL. Yes. If I could respond to that, being with the General Accounting Office, we do have the benefit, I guess, of visiting a lot of the different forests, seeing different regions of the country, being exposed to the different cultures and uniqueness that these forests and regions have, and I have a couple of thoughts on that.
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One, like a business, you want people who are engaged in what they are doing and believe in what they are doing. And let me say unequivocally, no matter what forests we have gone to, no matter what region of the country we have been in, we have always been impressed with the quality of the Forest Service employees.
Their expertise, their dedication, their aggressiveness, they are hard working individuals that really care about their forests, and we really believe they are doing the best they can.
Because of that, and because of the uniquenesses out there in the regions, we do not question the need to have a decentralized organization like the Forest Service has. But with any decentralized organization, you need to have policy direction and leadership and goals and objectives that everyone agrees to and is working toward.
It is like putting eight people in a boat, a row boat, and giving them each an oar, and having them in the row boat rowing as fast as they can. Well, if they are all rowing in different directions, that boat is going to go no where fast. And in some sense, that is what the Forest Service is doing right now.
At the forest level, these employees are working very hard, but they are not all going in the same direction. We have got to get them focused basically on the same objectives and mission, and have a clear understanding of what their expectations are, and then they have to be accountable.
We have to go in there and look at what they are doing, and seeing how they are performing to make sure we are still on course as that boat goes down the river.
Mr. PETERSON. But can we, as diverse are our forests are, can we have a one size fits all in the top management?
Mr. COTTON. Absolutely not.
Mr. PETERSON. But we do.
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Mr. COTTON. Where we make the distinction is we fully agree with you, and with the Forest Service that the management of the lands and the resources must be tailored to the region and to the locale that the forest is in.
And one forest may be a pure recreational forest, and another forest may be primarily still for timber production. It varies by forest. It varies not only by ecological needs, but by socio-economic needs.
And so we strongly support the fact that a one size fits all approach to managing the lands and the resources is not appropriate. But in return for that flexibility, for that discretion in decisionmaking that is critical for this agency to operate efficiently and effectively, we think you deserve accountability on their part on where they have spent this money and what they have accomplished with it.
So we separate management of the land, which has to be decentralized, and has to be tailored to a certain locale from the Federal requirements of being accountable to the Congress, to the American taxpayer of where you spent the money and what you accomplished with it.
And that is where we are looking for consistency, at that level. Not at the management level.
Mr. PETERSON. You think we should look at, maybe, a regional management approach.
Mr. COTTON. It is a regional management approach now. It is a forest by forest approach.
Mr. PETERSON. Not governing. We are governed by Washington. Washington governs. I mean regional boards of people who are helping to manage each regional forest, that are somewhere from that part of the country that understand that forest.
We have far too much pressure from vice presidents and presidents, and interest groups who have very single purposes—on both sides—who have very single purposes in mind for our public lands.
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And you should not let anybody run the ship. We have a Forest Service who spends more time in lawsuits because there are interest groups who use the lawsuit to stop whatever they do not want to stop and to make their job impossible.
I mean, the legal system in this country we all know is out of control, but the Forest Service, they have been fighting lawsuits by the score. So the costs of managing a forest when you are dealing with all of those lawsuits, I mean I just think in my view, if we keep it as it is, with national management over all the forests with a lot of similarity, we will be here in 10 years with another pile of books like that, and everything will be the same.
Mr. COTTON. Mr. Peterson, if I could add one thing, the problem I think that you have here is that they are national forests. They are not regional forests or State forests. They are national forests. So I think everybody feels that they have an equal vote in how those forests are managed.
Mr. PETERSON. Thank you, Mr. Chairman.
Mr. HERGER. [presiding] Thank you, Mr. Peterson. Mrs. Smith will inquire.
Mrs. Linda SMITH. Thank you, Mr. Chairman. I thank you gentlemen. You have been very patient with us. I think you are feeling a lot of the frustration. We are picking up your frustration.
I was just re-reading some of your testimony that I was not privileged to hear at the beginning because I was a little late. And I want to go over quickly, because there are sections of it that lead me to believe that we are at a point of decision. I do not want to have this hearing again next year, that next year we have lost a lot between now and then.
It starts with while the agency has in recent years made some progress, it is still years away from achieving financial accountability and possibly a decade or more away from being accountable for its performance.
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And then it goes on and says the Forest Service has said that in, maybe, the next few years they might—might—attain financial accountability. Then it goes down to say, however, it has not identified the actions required to correct decades old problems with its system. And then it goes on.
I cannot imagine sitting before a judge with one of the corporations that is in trouble and saying, I will tell you what, maybe in 10 years I will be accountable, and I might be able to get the books straightened out in a few years, and having that judge not look at me and say, we are going to put you into someone else's hands for stability.
As I have just gone through both your report and the Inspector General's report, this would not be acceptable anywhere else but in government. Now, I have heard that it is complex, and that we have gone into the debate over whether it should be managed on a regional or national basis.
Management is really important, but you can figure out the goal. The goal is legislative. It is already in law. We are to manage the health and productivity of the forests, and, yes, in a lot of different varieties. But it should be able to be done.
I guess where I am at right now is asking you a very blunt question. If you were to make the choice today of leaving it in the hands of the people that it is in, or giving it to another entity, whether that be a group of experts or whatever, would you risk changing for hope of some progress forward? Are you willing to wait for 10 years?
Mr. Hill, or whichever of you want to respond may begin.
Mr. COTTON. Well, for those of us who have been doing this for more than 10 years, we have already waited 10 years for improvement, and it has not happened. And like I said earlier, I think that the Forest Service, at least on the financial side, has realized that they could not do it alone, and has brought in outside help.
And I would have to imagine that if you wanted more assurance, and a quicker delivery date on the performance accountability side, that they are going to have outside help as well.
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Mrs. Linda SMITH. So you would say now it not too soon?
Mr. COTTON. I think it is 10 years overdue.
Mrs. Linda SMITH. Because I would agree with the statement of the local personnel and their expertise, and also their dedication to what they do. But I can also share with you their total frustration in what they will tell you about the management over them with no clear direction, like a boat without a rudder, I think someone said earlier, going in a circle.
And nothing can be worse to good people than to have no direction, and feel like they have nowhere to go.
What we are seeing, too, is people saying I just want to get out of this. You get your best people wanting to retire and then you have a bigger problem.
Mr. Hill, do you agree with that?
Mr. HILL. Yes, I agree with that. If I could add, the problem is a little more complex than that. There will be no quick fixes here, regardless of whether it is done inside, or if you bring an outside group in.
There is a lot that needs to be done. There is a lot that is overdue. And I will give you an example. If you go out there and you establish a clear objective, if you say your objective is improved forest health, so there is improvement in the sustainability of the resource, there is no data on the forest's health.
And as far back as 1980 we were recommending that they needed to establish an inventory of data of forest resources, a baseline data that you could use to measure performance.
How can you determine if you are meeting a goal of improving forest health when you do not even know what resources are in the forest? You have no baseline to work on, much less what condition they are in.
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So even if they get this clear vision, and even if they all agree on what the objectives should be in individual forests, they do not have the data and the reporting systems and the accounting systems in place to really make a difference in the short term.
It is going to be a huge undertaking on their part.
Mrs. Linda SMITH. Thank you, Mr. Hill. I guess in conclusion what I want to say, though, is I have seen reasonable people in a short time work miracles when they wanted to work together, and you remove the bureaucracy from the decisionmaking.
So I think somehow we have to find somebody who can make the decisions and move forward within the Congressional mandate.
And, no, it is not just trees down or trees standing. We can manage the forests for both, and we can have a beautiful resource without the trees down burning up the trees standing, when we have the forest fires because we have not managed those forests.
So I thank you for coming and putting up with all of us. We hope to see you again with a good report next year on how we have progressed.
Mr. HILL. We would like that, too.
Mrs. Linda SMITH. Thank you.
Mrs. CHENOWETH. [presiding] Thank you, Mrs. Smith. Mr. Schaffer.
Mr. SCHAFFER. Thank you, Madam Chairman.
I would ask the Committee's permission to enter some introductory remarks for the record, so I can get right to the questioning.
Mrs. CHENOWETH. Without objection, so ordered.
[The prepared statement of Mr. Schaffer follows:]
STATEMENT OF HON. BOB SCHAFFER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF COLORADO
Thank you Mr. Chairman. I am grateful for this opportunity to examine the U.S. Forest Service, an agency in need of repair. This hearing into the workings and management of the U.S. Forest Service should be an impetus for positive reform in an agency that has lost sight of its mission, its accountability and its management. For years, Congress has pressed for positive reform only to be assured time and time again that ''steps were being taken'' or that the Forest Service is ''implementing changes'' or ''adopting new policies.'' Those assurances have rung hollow for long enough.
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I am dismayed at the General Accounting Office (GAO) reports on the Forest Service. Poor accounting; the inability to track costs and revenues. We are not talking about a decimal point here and there. We are talking about billions of dollars! Allow me to cite some examples from the GAO's findings. The Forest Service lost track of $215 million. They don't know how that money was spent. They do know that they allocated $500,000 on a conference to explore ''diversity and alternative realities.'' Yet our forests are dying and are at risk of catastrophic fires. The Forest Service complains of losing money on timber sales while the Forest Service has been drastically reducing the timber put up for sale. They underestimated accounts payable by $38 billion! Yet, as justification for blocking access for management to at the very least 34 million acres, the Forest Service cites a $10 billion road maintenance backlog. How are we to believe anything the Forest Service says?
I have seen recreation statistics from the Routt National Forest in Colorado. If we are to believe those statistics on recreation, then the entire population of Routt County, plus four thousand people are up recreating on the Routt every day! If we are to believe the Forest Service, then the streets, the highways and the businesses of Routt County should be empty today and every day because people are up recreating in the National Forest! If we are to believe Forest Service statistics, every one of those people is putting $125 every day into the economy for recreation alone. How are we to believe anything the Forest Service tells us?
Any good company is accountable to its board of directors and to the public. I think its time we consider the Forest Service a company with a job to do. We will not stand for inefficiency and waste at the expense of the health of our national forests. As Members of Congress we will no longer accept the Forest Service's word. Only real reform is acceptable. We demand good management of our resources. Good management means management for multiple uses. We demand accountability, and most importantly, we demand public input. Thank you Mr. Chairman. I look forward to this opportunity to work towards those goals.
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Mr. SCHAFFER. Let me ask a couple of questions. Mr. Hill, in your testimony you indicated the agency has not responded to some of your recommendations. What is the most significant recommendations the agency has not acted which has a budgetary impact?
Mr. HILL. I think the one that we have been able to quantify the best would be the one dealing with obtaining fair market value for special use permits from commercial and not-commercial interests.
That certainly was one that we were able to quantify, but there are lots of others that are not as easy to quantify that are just as significant.
Mr. SCHAFFER. In terms of easy to quantify, why don't you do that for us now. What would you estimate the expense of that one failure to be?
Mr. HILL. Well, for these special use permits, it is $50 million each year.
Mr. SCHAFFER. Could you make any recommendations to us now in how we might go about addressing that particular or problem? Or have you made recommendations to the agency itself?
Mr. HILL. We have made numerous recommendations. We have done numerous reports in this area dealing with commercial special use permits, non-commercial special use permits, right of ways for transmission lines and things like that.
We have talked about, in some of those areas they are using a payment schedule fee system as opposed to getting appraised value for some of the goods and services that they are providing.
And we made a host of recommendations.
Mr. SCHAFFER. How many times and over how many years has that recommendation been made?
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Mr. HILL. Well, I know we have done at least three reports in the last 5 years, I believe, that have talked about various aspects of the special use permit program.
Mr. SCHAFFER. Has there been any rationale put forward by the agency in resisting your recommendations and suggestions?
Mr. HILL. The agency usually agrees with those recommendations, and in all fairness the agency has tried, in some cases, to raise the special use permit fees that they have charged, and they have met resistance upon occasion.
Mr. SCHAFFER. The notion that the agency continuously acknowledges the many problems that it has is nothing new. It is almost as long as the history of the agency itself.
I guess I just want to ask a general question, as one of my constituents might ask it, and that is can the agency be fixed at all in your opinion, and do you see any real cause for optimism?
Mr. HILL. Well, we definitely think it can be fixed. It is going to take a lot of work. Whether we are optimistic, based upon all the work we have done over all the years and all these reports, I would have to say we are not on the optimistic side of the fence.
Mr. SCHAFFER. In response to Mrs. Smith's questions, you referred to the financial management progress reports. That because inventories are incomplete, the Congress be assured that requests are fully warranted.
In light of that statement, why should roads and buildings be funded at all in fiscal year 1999?
Mr. COTTON. There is not a question that they not only have a significant backlog in their infrastructure, their facilities out there, including the roads, but they also have a significant backlog, as has already been discussed here, as far as their backlog in treating their natural resources, their forest health problems, dead and dying trees.
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So being the Congress, you would want to give them money to fix their infrastructure, and to fix the resource. Now, you cannot in any reasonable scenario give them enough money to fix everything.
The problem that you have and they have is they cannot tell you how big a problem they have, where it is, and where they have prioritized—if you give us this much money we will spend it here and accomplish this, and if you give us this much more, we can do these many more things.
They cannot tell you the size of their backlog. They cannot even tell you if the money that you would give them for infrastructure would be spent on maintenance and repair or on building a new facility.
And that is the type of information you need if you are going to fund them.
Mr. SCHAFFER. Right. Well, for some in Congress, that level of confusion is a compelling cause for more funding, not for many people here, I would submit.
How optimistic are you that the new financial system will be implemented in the way the Forest Service has indicated it will be?
Mr. WILLIAMS. At this time, as we reported on two occasions, there is a lot of work that still remains to be done. They have taken some steps to improve the financial, reporting, but unless those issues that we identified earlier as far as properly testing the system, making sure the coding is correct, and all of those things that you need to do before you bring the system up, if those things are not done, then it is highly unlikely that implementation of the new system will be successful.
In addition to that, it is really a two part process the way I see it. No. 1, you have to have this new system to account for your activity, but in addition to that, you have to have good information that you are transferring over from your old system.
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So there is a lot of work that still must be done in that area also. So unless the agency