Major Management Challenges at the Department of the Interior

Overall, the Department of the Interior has made some or good progress in addressing three of the six key management challenges GAO identified in 2003. Despite this progress, the department continues to face challenges related to its ecosystem restoration efforts, deferred maintenance backlog, and financial management. Generally, for the other three key management challenges—Indian and island programs, management of the national parks, and land exchanges and appraisals, GAO has not conducted sufficient new audit work since its 2003 report to fully assess the department's progress in addressing those challenges.

The department has made some progress toward improving the management of its ecosystem restoration efforts , specifically, in managing the restoration of forest ecosystems that have become overgrown and fire-prone, the restoration of a major ecosystem in the southeast—the Everglades, and the control of invasive nonnative species in different areas around the country. The department has made progress in addressing the nation's wildland fire threats by funding improvements in data on wildland fire hazards, accelerating completion of local fire management plans, adopting outcome-based performance measures, and coordinating its efforts with the Forest Service and others working on the wildland fire problem. But other actions GAO recommended, such as improving agency guidance on risk assessment, monitoring, and prioritizing of fuel reduction activities, and identifying for the Congress different long-term options and related costs for reducing fuels, have yet to be implemented. The department has improved its planning for the South Florida ecosystem restoration by refining the strategic plan and developing a land acquisition plan. However, the department, through its South Florida Ecosystem Restoration Task Force, has not yet completed action on several GAO recommendations. These include one to develop a conflict resolution process and a science plan. Regarding invasive species, the department has placed an increased emphasis on managing invasive species and has developed two performance measures to reflect its progress in eradicating invasive species.

On the need to address persistent management problems with Indian and island programs , GAO has not conducted any new work since its 2003 report which addressed the challenges that the department faces in managing Indian trust funds or Indian self-determination issues. Regarding programs for island communities, the overall poor accountability of federal expenditures continues to be a challenge. Specifically, GAO's review of financial reports for the Federated States of Micronesia and the Republic of the Marshall Islands for the years 1996 through 2000 identified pervasive and persistent noncompliance with funding requirements and financial statement-related audit findings. GAO made a number of recommendations based on its review, including that the Secretary of the Interior delegate responsibility to and hold the department's Office of Insular Affairs accountable for monitoring and reporting on Micronesia's and the Marshall Islands' actions to respond to financial statement-related audit findings. New economic assistance to Micronesia and the Marshall Islands includes improved accountability requirements, but successful implementation will require appropriate resources and sustained commitment from the United States, Micronesia, and the Marshall Islands.

The National Park Service, an agency within the department, has initiatives under way to improve the management of the national parks . As noted in GAO's 2003 report, those initiatives will take years to fully and properly implement. GAO has not done any work since the 2003 report on addressing the National Park Service's need to collect better information on its resources and the specific problems identified with the concessions program. However, in the concessions management area, GAO has identified an emerging issue concerning the role of nonprofits—primarily cooperating associations—that coupled with the already identified problems, will have an effect on the agency's management and oversight of concessioners' performance. To minimize conflicts between the National Park Service, concessioners, and cooperating associations and to improve the National Park Service's accountability in managing nonprofit contributions, GAO made a number of recommendations, including that the National Park Service revise its policy to ensure that all parks offering visitor sales and services develop Commercial Services Plans and that such plans include explanations of the roles and responsibilities of both the concessioners and cooperating associations in providing such sales and services.

GAO has not conducted any new work on the need to address controversies and problems with land exchanges and appraisals since the 2003 report. However, the department has restructured the land appraisal reporting hierarchy by removing the Bureau of Land Management's appraisal function and placing it within the department. Also, the Bureau of Land Management received 23 financial reports from an independent accounting firm on land exchange escrow accounts with reported balances in 2000 in response to a recommendation in GAO's June 2000 land exchange report ( GAO/RCED-00-73 ). GAO is working with the department to gain access to these 23 financial reports to verify whether the department has fully addressed its recommendation.

Regarding the deferred maintenance backlog , the department has made good progress toward identifying the maintenance needs for National Park Service facilities and Bureau of Indian Affairs schools. Specifically, the National Park Service is developing and implementing a new asset management process that will aid in providing the agency with a (1) reliable inventory of its assets, (2) process for reporting on the condition of the assets in its inventory, and (3) consistent systemwide methodology for estimating deferred maintenance costs for its assets. While complete implementation of the new process will not occur until fiscal year 2006, the agency has completed, or has nearly completed, a number of substantial and important steps. Similarly, the Bureau of Indian Affairs has implemented a new Facilities Management Information System to better track and access the condition of its schools. To ensure that the Bureau of Indian Affairs' new system continues to contain accurate and complete information, GAO recommended, among other things, that the Assistant Secretary of Indian Affairs establish better guidance and performance expectations for employees who are responsible for entering and reviewing the accuracy and completeness of data in the system.

Another key aspect of the challenge that the department faces regarding its deferred maintenance backlog is whether the National Park Service will be sufficiently funded to significantly reduce or eliminate the maintenance backlog. One source of funding that the Congress authorized to aid in this effort is called the Recreational Fee Demonstration Program. Under this program, the National Park Service and other participating agencies are authorized to establish, charge, collect, and use fees at a number of sites, among other things, to address the backlog of repair and maintenance needs. Since 1996, the National Park Service has collected over $867 million in recreation fees at sites under this program. Congress recently approved a bill to make the program permanent thus providing a permanent source of funding for the National Park Service, and other participating agencies to help address their deferred maintenance needs.

Although some progress has been noted, financial management continues to be a challenge facing the department. Interior has received unqualified opinions on its annual consolidated financial statements since GAO last reported in this series. However, the department's auditors continue to report several concerns related to financial management that need improvement. The material weaknesses, reportable conditions, and other internal control deficiencies noted cover various aspects of the department's financial management and, in some cases, delayed the financial reporting process. In addition, the department is still not in compliance with the Federal Financial Management Improvement Act (FFMIA) of 1996, indicating that the department's financial management systems did not substantially comply with federal financial management systems requirements, federal accounting standards, or the U.S. Government Standard General Ledger at the transaction level. Interior needs to make improvements in these areas so that timely and reliable financial and performance information can be routinely produced.

Related GAO Products

Ecosystem Restoration Efforts

Wildland Fires: Forest Service and BLM Need Better Information and a Systematic Approach for Assessing the Risks of Environmental Effects . GAO-04-705 . Washington, D.C.: June 24, 2004.

Wildfire Suppression: Funding Transfers Cause Project Cancellations and Delays, Strained Relationships, and Management Disruptions . GAO-04-612 . Washington, D.C.: June 2, 2004.

Biscuit Fire: Analysis of Fire Response, Resource Availability, and Personnel Certification Standards . GAO-04-426 . Washington, D.C.: April 12, 2004.

Invasive Species: State and Other Nonfederal Perspectives on Challenges to Managing the Problem . GAO-03-1089R . Washington, D.C.: September 5, 2003.

Wildland Fire Management: Additional Actions Required to Better Identify and Prioritize Lands Needing Fuels Reduction . GAO-03-805 . Washington, D.C.: August 15, 2003.

Invasive Species: Federal Efforts and State Perspectives on Challenges and National Leadership . GAO-03-916T . Washington, D.C.: June 17, 2003.

Wildland Fires: Better Information Needed on Effectiveness of Emergency Stabilization and Rehabilitation Treatments . GAO-03-430 . Washington, D.C.: April 4, 2003.

South Florida Ecosystem Restoration: Task Force Needs to Improve Science Coordination to Increase the Likelihood of Success . GAO-03-345 . Washington, D.C.: March 18, 2003.

Indian and Island Programs

Compact of Free Association: Single Audits Demonstrate Accountability Problems over Compact Funds. GAO-04-7 . Washington, D.C.: October 7, 2003.

Compact of Free Association: An Assessment of the Amended Compacts and Related Agreements. GAO-03-1007T . Washington, D.C.: July 15, 2003.

Compact of Free Association: An Assessment of the Amended Compacts and Related Agreements. GAO-03-988T . Washington, D.C.: July 10, 2003.

Compact of Free Association: An Assessment of the Amended Compacts and Related Agreements. GAO-03-890T . Washington, D.C.: June 18, 2003.

Management of the National Parks

National Park Foundation: Better Communication of Roles and Responsibilities Is Needed to Strengthen Partnership with the National Park Service. GAO-04-541 . Washington, D.C.: May 17, 2004.

Park Service: Agency Needs to Better Manage the Increasing Role of Nonprofit Partners. GAO-03-585 . Washington, D.C.: July 18, 2003.

Land Exchanges and Appraisals

No new GAO reports in this area since the 2003 report.

Deferred Maintenance Backlog

Recreation Fees: Comments on the Federal Lands Recreation Enhancement Act, H.R. 3283. GAO-04-745T . Washington, D.C.: May 6, 2004.

National Park Service: Efforts Underway to Address Its Maintenance Backlog. GAO-03-1177T . Washington, D.C.: September 27, 2003.

Bureau of Indian Affairs Schools: Expenditures in Selected Schools Are Comparable to Similar Public Schools, but Data Are Insufficient to Judge Adequacy of Funding and Formulas. GAO-03-955 . Washington, D.C.: September 4, 2003.

Bureau of Indian Affairs Schools: New Facilities Management Information System Promising, but Improved Data Accuracy Needed. GAO-03-692 . Washington, D.C.: July 31, 2003.

National Park Service: Status of Agency Efforts to Address Its Maintenance Backlog. GAO-03-992T . Washington, D.C.: July 8, 2003.

Financial Management

Compact of Free Association: Single Audits Demonstrate Accountability Problems over Compact Funds. GAO-04-7 . Washington, D.C.: October 7, 2003.

National Park Service: Actions Needed to Improve Travel Cost Management. GAO-03-354 . Washington, D.C.: February 13, 2003.