BLM and the Forest Service

The Bureau of Land Management (BLM) and the Forest Service have long used land exchanges, in which property owned by the federal government is traded for land owned by corporations, individuals, or state or local governments, as a way to acquire nonfederal land and dispose of federal land. GAO found that the agencies have given more than fair market value for nonfederal land they acquired and less than fair market value for federal land they conveyed because the appraisals use to estimate the lands' values did not always meet federal standards. Current law requires BLM to deposit sales proceeds into the Treasury and use appropriations to acquire nonfederal land. BLM sold federal land, deposited the sales proceeds into interest-bearing escrow accounts, and used this money to acquire nonfederal land. In using these funds and the interest earned on them to buy land, BLM augmented its appropriations. BLM also did not comply with its sale authority when it sold the land. None of the funds in escrow accounts were tracked in BLM's financial management system. Although both agencies have strengthened their management oversight policies regarding land exchanges, BLM has not addressed the unauthorized selling and buying of land under its exchange program or the financial management of these funds. Both agencies want to retain land exchanges as a way to acquire land, but cash-based transactions would be simpler and less costly. Neither agency wants Congress to discontinue their land exchange programs.

GAO noted that: (1) the Forest Service and BLM used land exchanges to acquire about 1,500 total square miles of land during fiscal years 1989 through 1999; (2) the Forest Service completed 1,265 exchanges during this period and BLM completed about 2,600 transactions, resulting in the acquisition of a net total of about 950 and 550 square miles, respectively; (3) the agencies did not ensure that the land being exchanged was appropriately valued or that exchanges served the public interest or met with certain other exchange requirements; (4) GAO found numerous problems with the exchanges, including; (a) the use of appraisals that did not always meet federal standards; (b) agencies' failure to follow requirements to ensure that the public's interest was served in making the exchange; and (c) BLM's unauthorized use of federal land sales proceeds; (5) both agencies recently increased their management oversight of exchanges by; (a) creating review teams composed of headquarters and field staff to examine proposed exchanges that are valued at $500,000 or more and are considered to be controversial; (b) revising their policies and procedures that address exchanges; and (c) creating additional training for agency personnel involved in land exchanges; (6) these efforts, if properly implemented, should improve how these programs are conducted; (7) however, they do not address all land exchanges; (8) BLM's review team has not addressed the unauthorized selling or buying of land under the program or the financial management of these funds; (9) furthermore, handbook revisions and enhanced training can clarify the agencies' land exchange policies and procedures, but they do not ensure that those policies or procedures are appropriate or followed; (10) at least some of the agencies' continuing problems may reflect inherent underlying difficulties associated with exchanging land compared with the more common buying and selling of land for cash; and (11) difficulties in land exchanges are exacerbated when the properties are difficult to value.

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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