Federal Lands

In May 1992, the Interior Department's Office of Inspector General reported on problems it found with land acquisitions between nonprofit conservation organizations and three federal agencies--the Bureau of Land Management, the Fish and Wildlife Service, and the National Park Service. The Inspector General said that the prices for some acquisitions exceeded fair market values, the related land appraisals were sometimes out of date or were not well reviewed, and nonprofits reaped financial windfalls on land acquisitions by the Interior Department. This report discusses the (1) extent to which agencies other than the Interior Department buy land from or with the help of nonprofits, (2) adequacy of controls for protecting the government's interest in such acquisitions, and (3) extent to which nonprofits realize large financial gains in such transactions.

GAO found that: (1) from fiscal year (FY) 1988 through FY 1992, 18 nonprofit organizations were involved in 246 Forest Service acquisitions for $138.8 million and 3 Bonneville Power Administration (BPA) acquisitions for $10.7 million; (2) the Forest Service relied heavily on nonprofit organizations for its land acquisitions; (3) acquisitions from nonprofits tended to involve significantly larger properties; (4) the Forest Service and BPA had adequate controls to safeguard the government's interest in the acquisitions; (5) the agencies generally offered fair market prices for the properties, and the prices were established by qualified appraisers and adequately reviewed; (6) all the acquired properties were designated by Congress or the agencies as priority acquisitions to help achieve the agencies' missions and goals; (7) although 4 of the nonprofit organizations reviewed made substantial financial gains on some properties, they had net losses on their total transactions when their acquisition, direct, and indirect costs were factored in; (8) the 4 nonprofit organizations accounted for about 49 percent of the acres acquired and about 37 percent of the dollar value of the agencies' acquisitions; and (9) agency officials believed that nonprofit gains or losses were irrelevant to their acquisitions, since they based their purchase offers on the properties' fair market value.