Forest Service

Members of Congress have raised concerns about whether the Forest Service will have enough funds available in the future to meet its National Forest Fund obligations, including its required payments to the states. Although the Forest Service has historically returned large sums of money from the sale of timber to the U.S. Treasury, it found itself in a deficit position in fiscal year 1996 and had to use appropriated funds to fund the shortfall. This report provides information on (1) the timber harvest volumes, the timber receipts for fiscal years 1990 through 1996, and the timber sale funds returned to the Treasury from the National Forest Fund; (2) actions taken by the Forest Service toward the end of fiscal year 1996 to cover the shortfall in the National Forest Fund; (3) whether the Forest Service has been using the proper funding source for the spotted owl guarantee payment; and (4) the Forest Service's plans for fiscal year 1997 to ensure that the National Forest Fund has enough money to make the payments to the states.

GAO noted that: (1) GAO's analysis of timber sales activities in FY 1990 through 1996 showed that the key indicators of the timber program--harvested volumes, timber receipts, and amounts available for return to the U.S. Treasury--have dramatically decreased; (2) in FY 1996, the forest service was faced with having insufficient funds available in the National Forest Fund to make the required payments to the states--including the legislatively required payment to compensate certain counties in California, Oregon, and Washington for the listing of the northern spotted owl as a threatened species (spotted owl guarantee)--and to meet its other required obligations; (3) in August and September 1996, the Forest Service transferred to the National Forest Fund a total of $56.1 million in timber sale receipts originally intended for deposit in other specific Forest Service funds; (4) however, even with this adjustment, a shortfall of $17.8 million remained; (5) in mid-September, the Forest Service requested that the Treasury make available $135 million appropriated under the Omnibus Budget Reconciliation Act of 1993, for the 1996 payment of the spotted owl guarantee; (6) the Forest Service received approval for the appropriation on November 26, 1996; (7) as of August 12, 1997, the National Forest Fund had a balance of about $116 million for FY 1996 activities; (8) the Forest Service plans to return this amount to the Treasury's General Fund; (9) the Forest Service used the National Forest Fund in FY 1994 and 1995 to make the spotted owl guarantee payments to certain counties in California, Oregon, and Washington; (10) this was an unauthorized use of the fund; (11) instead, the Forest Service was required to use the spotted owl guarantee appropriation specifically enacted for this purpose; (12) on January 29, 1997, the Forest Service: (a) provided initial guidance to its regions on the priority for the distributions of receipts to ensure that funds are available to make payments to the states and to meet other obligations; and (b) required the regions to initiate a review process to ensure that the receipts were managed in accordance with these priorities; (13) in May 1997, the Forest Service established a National Task Force for Trust Funds and Payments to the States; and (14) the task force was charged with developing a national policy for the management of receipts and trust funds so that there would be sufficient receipts available in the National Forest Fund to make the payments to the states and to meet other mandatory obligations.

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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