Problems With the Forest Service's Graduated Rate Fee System

GAO completed a limited review of the graduated rate fee system (GRFS) used by the Forest Service to compute the fees charged to permittees for using Service-owned land. The Service estimated that approximately 80 percent of the total fees for fiscal year 1981 were paid by ski area permittees. GAO focused primarily on how these fees were established under the GRFS.

Because the GRFS uses current inflated sales dollars to compute the acquisition cost of fixed assets, it may not reflect present economic conditions and may not be the best system for computing fees for using Service-owned land. GAO noted the following flaws in the GRFS: (1) using different break-even points for various business lines within an integrated ski area enterprise may not be appropriate; (2) allowing the value of rented equipment to be included in the fee formula as gross fixed assets lowers the fee charged to the permittee; (3) computing fees with the GRFS does not fully accomplish an Office of Management and Budget recommendation that Federal agencies use a fee system in which the percentage fee charged increases as a permittee's sales increase; and (4) applying the GRFS to permit fees discriminates against permittees, because it allows recent permittees to obtain a permit at a lower cost than that charged to the previous permittee for the same piece of property. GAO believes that a fee method developed by the Service as a possible replacement for the GRFS would not result in a fully equitable system for computing fees.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Brian P. Crowley Team: General Accounting Office: Community and Economic Development Division Phone: (202) 512-9450