Forest Service Reforestation Funding

The Forest Service is responsible for reforesting areas harvested for timber or destroyed by natural causes in national forests. The Forest Service, which manages 191 million acres of forests, rangelands, and grasslands, obligated about $163 million for reforestation during fiscal year 1994. More than 70 percent of the money for reforestation comes from the Knudson-Vandenberg Trust Fund. Although the Fund had a reported balance of about $338 million as of September 1995, not enough money will be available to pay for all the planned projects, whose cost is now estimated at $942 million. The shortfall has occurred because during the 1990s the Forest Service transferred $420 million from the Fund to pay for emergency firefighting. However, the Agriculture Department has yet to restore these funds, and the Forest Service continues to run the program as if the transfers had never occurred. In addition, the Forest Service lacks reliable financial management information and effective controls to ensure compliance with the Knutson-Vandenberg Act's prohibition against spending more trust funds on an individual sale area than had been collected from that area.

GAO found that: (1) the K-V Trust Fund, which is funded from timber sales receipts, provides over 70 percent of the Forest Service's total funding for reforestation and appropriations and the Reforestation Trust Fund provide the other 30 percent; (2) in fiscal year (FY) 1994, the Service obligated over $163 million for reforestation activities, but program support costs accounted for about 6 percent of these funds; (3) as of September 30, 1995, the K-V fund had an unobligated balance of about $338 million; (4) the K-V fund will not be able to provide the approximately $942 million needed for planned reforestation projects, since the Service transferred $420 million from the K-V fund for emergency firefighting during the 1990s and there is no legal obligation to restore these funds; (5) the Department of Agriculture (USDA) did not request supplemental appropriations to restore these funds until March 1996, but the Forest Service continued to operate the reforestation program as if the funds had never been transferred; (6) the Forest Service has not informed Congress of the funding shortfall or planned how to reallocate the remaining funds to the highest-priority projects; (7) the Service lacks reliable financial management information and effective controls to ensure that K-V expenditures do not exceed collections on individual sale areas; and (8) the Service's main accounting systems are not able to provide sale-specific information on expenditures.

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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