Parks and Recreation

Problems With Fee System for Resorts Operating on Forest Service Lands Gao ID: RCED-88-94 May 16, 1988

In response to a congressional request, GAO reviewed the Forest Service's Graduated Rate Fee System (GRFS) to determine whether the: (1) system reflected fair market values; and (2) Service corrected previously identified fee system problems.

GAO found that: (1) the Service's use of standardized, industry-wide ratios and factors to establish current fee systems did not necessarily result in fair-market-value fees; (2) the Service received less than fair market value for its winter resort permits; (3) although the Service changed its procedures for valuing fixed assets, it did not update its 20-year-old GRFS fee formula; (4) the Service did not implement changes to the fee formula for gross fixed assets; and (5) the Service did not determine the percentage of profit that constituted a fair market value. GAO also found that: (1) resort buyers generally paid lower permit fees than previous owners because the Service did not implement necessary changes; (2) the Service's calculation of permit fees was complicated and its GRFS formula rates were not sufficiently progressive; (3) the Service improperly scheduled permittees' fee payments and failed to verify their gross fixed assets; and (4) as of January 5, 1988, the Service was in the process of developing a new gratuity policy.

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.

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