GAO Finds Mismanagement in National Forest Fund, Smith Seeks Accountability from Glickman; Owl Payments, Fire Suppression, Forest Health could be Threatened by Shortfall

Sep 12, 1997

WASHINGTON, D.C. - Fresh on the heels of a General Accounting Office report showing mismanagement of the National Forest Fund, Oregon Congressman Bob Smith, Chairman of the House Committe on Agriculture, has written Agriculture Secretary Dan Glickman, demanding accountability in Forest Service management of public lands and resources, even as Smith prepares to introduce national forest health legislation next week.

Today, Smith released a report by the General Accounting Office (GAO), widely known as the investigative arm of Congress, identifying questionable policies and practices that nearly caused a Forest Service default on revenue-sharing payments to rural counties in fiscal year 1996 and which, if not fully corrected, could jeopardize the agency's ability to meet long-term legal obligations to counties and improve forest health.

"The problems of insufficient funds in its National Forest Fund (NFF) and the loss of $56.1 million to other timber-related funds could have been lessened, if not mitigated, if the Forest Service had better financial controls over the adjustments made among the Salvage Sale Fund, the Knutson-Vandenberg Fund, and the NFF and more oversight of its funds' management practices. The inability of the Forest Service to initiate the spotted owl guarantee appropriation in a timely manner greatly contributed to the problems experienced at the forest, regional, and national levels. However, the fiscal year 1996 occurrences are an illustration of the much larger fiscal accountability problems facing the Forest Service," GAO found (GAO/RCED-97-216, p.12).

"I am deeply concerned about severe reductions in payments to rural counties from federal timber sale receipts and an apparent lack of sound financial controls over the National Forest Fund (NFF) from which these payments are made. According to the GAO, these two factors converged during fiscal year 1996, causing a shortfall in revenue-sharing funds from timber receipts available to counties. Although, according to the GAO, the Forest Service ultimately averted a crisis, I question why steps were not taken sooner, particularly with regard to the agency's authority to make it's so-called 'Spotted Owl Guarantee Payments' from the General Treasury, to ensure well in advance that sufficient funds were available for distribution to counties," Smith wrote Glickman.

"Second, I have grave reservations about the long-term economic viability of the Knutson-Vandenberg Fund (K-V Fund) and the Salvage Sale Fund (SSF) under the 'distribution priorities' established by the Forest Service to maintain a sufficiency of funds in the NFF. Specifically, I question whether, under such priorities, sufficient funds will be deposited in the K-V Fund and SSF to support their respective missions in the long term. As you know, these funds are used principally for reforestation and the restoration of areas destroyed by fire, insects, disease, and other natural causes. Inadequate distributions to either fund could seriously compromise the agency's ability to address the mounting decline in forest health nationwide," Smith wrote.

"Because I am unsatisfied that the policies put into place by the Forest Service for FY97 will guarantee the long-term viability of the NFF, the K-V Fund, and the SSF, I request that the agency provide me a full accounting of the specific steps it will take to properly manage these funds in the long term and thereby meet its obligations to our counties and to maintain the health of our forests," Smith concluded.

Smith represents Oregon's Second Congressional District, which includes most of eastern, central, and southern Oregon, in the U.S. House of Representatives. The district is home to ten national forests.