WASHINGTON, D.C. – PROPOSING FINANCIAL AND PERFORMANCE REFORMS FOR THE BENEFIT OF NATIONAL FOREST USERS, WORKERS, AND TAXPAYERS, CONGRESSMAN BOB SMITH (R-OR), CHAIRMAN OF THE HOUSE AGRICULTURE COMMITTEE, BROUGHT HIS FOREST SERVICE COST REDUCTION AND FISCAL ACCOUNTABILITY ACT OF 1998 (H.R. 4149) BEFORE A HEARING WITH USDA FOREST SERVICE OFFICIALS, TAXPAYER GROUPS, AND CONSTITUTENTS OF NATIONAL FORESTS.

A General Accounting Office (GAO) study found that overhead charges to five off-budget fund have increased 80 percent from $65.9 million in 1993 to $118.7 million in 1997, while total expenditures have remained relatively constant during the same period. In addition, as a percentage of total expenditures, overhead expenses have increased from 15.9 percent in 1993 to 27.1 percent in 1997.

To remedy this situation, Smith introduced the Forest Service Cost Reduction and Accountability Act of 1998 on June 26. Specifically, H.R. 4149 would:

1. Require the USFS to account for the costs associated with all of the programs it administers by moving to an "all resources" financial reporting system.
2. Impose limitations on overhead the agency may charge to off-budget funds.
3. Require the USFS to fully disclose in each year’s budget request the amount of overhead implicit in each budget line item.
4. Require the USFS, in cooperation with the GAO and USDA Inspector General, to develop a five-year strategic plan for identifying and reducing overhead and unnecessary costs.
5. Require periodic GAO audits of the implementation of the strategic plan and corresponding reports to Congress.
6. Require fiscal reforms structured and implemented to improve outputs of goods and services to the taxpaying public.

"The intent of the Forest Service Cost Reduction and Fiscal Accountability Act is to help the Forest Service reduce costs, limit overhead, improve outputs of goods and services, and be more accountable to Congress and the taxpayer. My goal is to discipline the Forest Service in a way that will benefit the millions of Americans who live, work, and recreate in our national forests every day," Smith said in his opening statement.

"Congress is not willing to wait ten years for the Forest Service to fix its fiscal accountability and overhead problems. The time to fix them is now," Smith said.

Under Chairman Smith’s leadership, the Agriculture Committee has focused attention on how the Forest Service manages its financial resources to minimize overhead costs and improve on-the-ground results by putting more money into the hands of forest managers. Today’s hearing, the Committee’s 11^th addressing forest health and management, reviewed Smith’s Forest Service Cost Reduction and Fiscal Accountability Act of 1998. The Committee will mark-up H.R. 4149 on August 6.

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.

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