[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]
JOINT HEARING ON THE MANAGEMENT OF THE UNITED STATES FOREST SERVICE
=======================================================================
JOINT HEARING
before the
COMMITTEE ON RESOURCES
and
COMMITTEE ON THE BUDGET
and
SUBCOMMITTEE ON INTERIOR
of the
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTH CONGRESS
SECOND SESSION
__________
MARCH 26, 1998, WASHINGTON, DC
__________
Serial No. 105-82
__________
Printed for the use of the Committee on Resources, Committee on Budget,
and the Subcommittee on Interior of the Committee on Appropriations
-------------
U.S. GOVERNMENT PRINTING OFFICE
48-275 cc WASHINGTON : 1998
COMMITTEE ON RESOURCES
DON YOUNG, Alaska, Chairman
W.J. (BILLY) TAUZIN, Louisiana GEORGE MILLER, California
JAMES V. HANSEN, Utah EDWARD J. MARKEY, Massachusetts
JIM SAXTON, New Jersey NICK J. RAHALL II, West Virginia
ELTON GALLEGLY, California BRUCE F. VENTO, Minnesota
JOHN J. DUNCAN, Jr., Tennessee DALE E. KILDEE, Michigan
JOEL HEFLEY, Colorado PETER A. DeFAZIO, Oregon
JOHN T. DOOLITTLE, California ENI F.H. FALEOMAVAEGA, American
WAYNE T. GILCHREST, Maryland Samoa
KEN CALVERT, California NEIL ABERCROMBIE, Hawaii
RICHARD W. POMBO, California SOLOMON P. ORTIZ, Texas
BARBARA CUBIN, Wyoming OWEN B. PICKETT, Virginia
HELEN CHENOWETH, Idaho FRANK PALLONE, Jr., New Jersey
LINDA SMITH, Washington CALVIN M. DOOLEY, California
GEORGE P. RADANOVICH, California CARLOS A. ROMERO-BARCELO, Puerto
WALTER B. JONES, Jr., North Rico
Carolina MAURICE D. HINCHEY, New York
WILLIAM M. (MAC) THORNBERRY, Texas ROBERT A. UNDERWOOD, Guam
JOHN SHADEGG, Arizona SAM FARR, California
JOHN E. ENSIGN, Nevada PATRICK J. KENNEDY, Rhode Island
ROBERT F. SMITH, Oregon ADAM SMITH, Washington
CHRIS CANNON, Utah WILLIAM D. DELAHUNT, Massachusetts
KEVIN BRADY, Texas CHRIS JOHN, Louisiana
JOHN PETERSON, Pennsylvania DONNA CHRISTIAN-GREEN, Virgin
RICK HILL, Montana Islands
BOB SCHAFFER, Colorado RON KIND, Wisconsin
JIM GIBBONS, Nevada LLOYD DOGGETT, Texas
MICHAEL D. CRAPO, Idaho
Lloyd A. Jones, Chief of Staff
Elizabeth Megginson, Chief Counsel
Christine Kennedy, Chief Clerk/Administrator
John Lawrence, Democratic Staff Director
COMMITTEE ON THE BUDGET
JOHN R. KASICH, Ohio, Chairman
DAVID L. HOBSON, Ohio, JOHN M. SPRATT, Jr., South
Speaker's Designee Carolina,
CHRISTOPHER SHAYS, Connecticut Ranking Minority Member
WALLY HERGER, California JIM McDERMOTT, Washington,
JIM BUNNING, Kentucky Leadership Designee
LAMAR S. SMITH, Texas ALAN B. MOLLOHAN, West Virginia
DAN MILLER, Florida JERRY F. COSTELLO, Illinois
BOB FRANKS, New Jersey PATSY T. MINK, Hawaii
NICK SMITH, Michigan EARL POMEROY, North Dakota
BOB INGLIS, South Carolina LYNN C. WOOLSEY, California
JIM NUSSLE, Iowa LUCILLE ROYBAL-ALLARD, California
PETER HOEKSTRA, Michigan LYNN N. RIVERS, Michigan
JOHN SHADEGG, Arizona LLOYD DOGGETT, Texas
GEORGE P. RADANOVICH, California BENNIE G. THOMPSON, Mississippi
CHARLES F. BASS, New Hampshire BENJAMIN L. CARDIN, Maryland
MARK W. NEUMANN, Wisconsin DAVID MINGE, Minnesota
MIKE PARKER, Mississippi SCOTTY BAESLER, Kentucky
BOB EHRLICH, Maryland KEN BENTSEN, Texas
GIL GUTKNECHT, Minnesota JIM DAVIS, Florida
VAN HILLEARY, Tennessee ROBERT A. WEYGAND, Rhode Island
KAY GRANGER, Texas EVA M. CLAYTON, North Carolina
JOHN E. SUNUNU, New Hampshire DAVID E. PRICE, North Carolina
JOSEPH PITTS, Pennsylvania
Professional Staff
Wayne T. Struble, Staff Director
Thomas S. Kahn, Minority Staff Director and Chief Counsel
COMMITTEE ON APPROPRIATIONS
BOB LIVINGSTON, Louisiana, Chairman
JOSEPH M. McDADE, Pennsylvania DAVID R. OBEY, Wisconsin
C. W. BILL YOUNG, Florida SIDNEY R. YATES, Illinois
RALPH REGULA, Ohio LOUIS STOKES, Ohio
JERRY LEWIS, California JOHN P. MURTHA, Pennsylvania
JOHN EDWARD PORTER, Illinois NORMAN D. DICKS, Washington
HAROLD ROGERS, Kentucky MARTIN OLAV SABO, Minnesota
JOE SKEEN, New Mexico JULIAN C. DIXON, California
FRANK R. WOLF, Virginia VIC FAZIO, California
TOM DeLAY, Texas W. G. (BILL) HEFNER, North
JIM KOLBE, Arizona Carolina
RON PACKARD, California STENY H. HOYER, Maryland
SONNY CALLAHAN, Alabama ALAN B. MOLLOHAN, West Virginia
JAMES T. WALSH, New York MARCY KAPTUR, Ohio
CHARLES H. TAYLOR, North Carolina DAVID E. SKAGGS, Colorado
DAVID L. HOBSON, Ohio NANCY PELOSI, California
ERNEST J. ISTOOK, Jr., Oklahoma PETER J. VISCLOSKY, Indiana
HENRY BONILLA, Texas ESTEBAN EDWARD TORRES, California
JOE KNOLLENBERG, Michigan NITA M. LOWEY, New York
DAN MILLER, Florida JOSE E. SERRANO, New York
JAY DICKEY, Arkansas ROSA L. DeLAURO, Connecticut
JACK KINGSTON, Georgia JAMES P. MORAN, Virginia
MIKE PARKER, Mississippi JOHN W. OLVER, Massachusetts
RODNEY P. FRELINGHUYSEN, New Jersey ED PASTOR, Arizona
ROGER F. WICKER, Mississippi CARRIE P. MEEK, Florida
MICHAEL P. FORBES, New York DAVID E. PRICE, North Carolina
GEORGE R. NETHERCUTT, Jr., CHET EDWARDS, Texas
Washington ROBERT E. (BUD) CRAMER, Jr.,
MARK W. NEUMANN, Wisconsin Alabama
RANDY ``DUKE'' CUNNINGHAM,
California
TODD TIAHRT, Kansas
ZACH WAMP, Tennessee
TOM LATHAM, Iowa
ANNE M. NORTHUP, Kentucky
ROBERT B. ADERHOLT, Alabama
James W. Dyer, Clerk and Staff Director
------
SUBCOMMITTEE ON THE DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES
RALPH REGULA, Ohio, Chairman
JOSEPH M. McDADE, Pennsylvania SIDNEY R. YATES, Illinois
JIM KOLBE, Arizona JOHN P. MURTHA, Pennsylvania
JOE SKEEN, New Mexico NORMAN D. DICKS, Washington
CHARLES H. TAYLOR, North Carolina DAVID E. SKAGGS, Colorado
GEORGE R. NETHERCUTT, Jr., JAMES P. MORAN, Virginia
Washington
DAN MILLER, Florida
ZACH WAMP, Tennessee
C O N T E N T S
----------
Page
Hearing held March 26, 1998...................................... 1
Statement of Members:
Chenoweth, Hon. Helen, a Representative in Congress from the
State of Idaho............................................. 6
Costello, Hon. Jerry F., a Representative in Congress from
the State of Illinois, prepared statement of............... 1
Dicks, Hon. Norman D., a Representative in Congress from the
State of Washington........................................ 10
Herger, Hon. Wally, a Representative in Congress from the
State of California........................................ 8
Hinchey, Hon. Maurice D., a Representative in Congress from
the State of New York...................................... 7
Miller, Hon. George, a Representative in Congress from the
State of California........................................ 3
Regula, Hon. Ralph, a Representative in Congress from the
State of Ohio.............................................. 4
Prepared statement of.................................... 5
Schaffer, Hon. Bob, a Representative in Congress from the
State of Colorado, prepared statement of................... 29
Young, Hon. Don, a Representative in Congress from the State
of Alaska.................................................. 1
Letter to James F. Hinchman, Acting Comptroller of the
United States, GAC..................................... 146
Letter to Dan Glickman, Secretary, United States
Department of Agriculture.............................. 147
Statement of Witnesses:
Dombeck, Michael, Chief, United States Forest Service, United
States Department of Agriculture, Washington, DC........... 44
Prepared statement of.................................... 121
Response to questions from Mrs. Chenoweth................ 152
Hill, Barry, Associate Director, Energy, Resources and
Science Issues, Resources, Community and Economic
Development Division, General Accounting Office,
Washington, DC, accompanied by Charlie Cotton and McCoy
Williams, General Accounting Office, Washington, DC........ 12
Prepared statement of Mr. Hill........................... 86
Lewis, Robert T., Jr., Acting Associate Chief, Department of
Agriculture, Washington, DC, response to questions from Mr.
DeFazio and Mr. Nethercutt................................. 148
Reponse to questions from Mr. Herger..................... 181
Viadero, Roger C., Inspector General, U.S. Department of
Agriculture, Washington, DC, accompanied by Robert Young,
Deputy Assistant Inspector General for Audit, U.S.
Department of Agriculture, Washington, DC.................. 37
Prepared statement of.................................... 107
Additional material supplied:
Henderson-Bramlette, Diane, letter to Mike Dombeck, Chief,
U.S. Forest Service........................................ 72
Communications submitted:
Department of Agriculture, USFS, ``Modernizing Financial
Management at the Forest Service''......................... 131
OVERSIGHT HEARING ON THE MANAGEMENT OF THE UNITED STATES FOREST SERVICE
----------
THURSDAY, MARCH 26, 1998
House of Representatives, Committee on Resources,
Committee on Budget, Subcommittee on Interior,
and Committee on Appropriations, Washington,
DC.
The Committees met jointly, pursuant to notice, at 11 a.m.,
Hon. Don Young, chairman of the Committee on Resources,
presiding.
STATEMENT OF HON. DON YOUNG, A REPRESENTATIVE IN CONGRESS FROM
THE STATE OF ALASKA
Chairman Young. The Resources Committee, the Budget
Committee, the Interior Appropriations Subcommittee will come
to order.
I believe this is the first time the three different
Committees have come together in hearings of this magnitude.
Because of the size of the Committee today we have agreed to
limit opening statements to the Chairman and Ranking Minority
Members of the two full Committees and the three Subcommittees.
This should allow us to hear from our witnesses sooner, and
help members to keep their schedules. Therefore, if any other
members have opening statements, they can be included in the
hearing record by unanimous consent.
[The information referred to follows:]
Statement of Hon. Jerry F. Costello, a Representative in Congress from
the State of Illinois
Mr. Chairmen, I thank you for calling this joint hearing.
As is so often in the case with matters before this body,
management of the United States Forest Service falls under the
jurisdiction of several House committees, and I appreciate this
unique opportunity for many of the concerned parties to examine
this issue together.
The U.S. Forest Service is responsible for managing more
than 191 million acres of public lands located in 44 states,
Puerto Rico, and the Virgin Islands. The Administration has
requested $3.3 billion in the Presidents fiscal year 1999
budget to fund the Forest Service in the next fiscal year.
The Shawnee Forest, one of the 155 national forests
overseen by the Forest Service, is located, in part, in my
Congressional District. This beautiful area of 265,000 acres in
Southern Illinois offers thousands of people each year the
opportunity to observe bald eagles, witness annual snake
migrations, and enjoy wonderful recreational opportunities.
Because I know the value of this forest, I am concerned by
reports that Forest Service inefficiency and waste are costing
taxpayers millions of dollars each year. Mr. Chairmen, I look
forward to learning more about the management of this agency.
Thank you.
Chairman Young. In my opening statement, I am going to sort
of ramble through it as I usually do, but I would like to
suggest one thing: that this is not about personalities. It is
not about individuals. It is not about Chief Dombeck.
I believe that our forests are in terrible, deplorable
shape, and we must address the problem of forest health and
where we are headed. We do know that there are some serious
problems because of the GAO report, and that will be addressed
today by the GAO. And contrary to what some people say, leave
Chief Dombeck alone, this not Dombeck's problem, particularly,
this is a problem of the Forest Service, collectively.
I believe this is a terrible mess and has to be addressed
by this Congress, and we must quit burying our heads in the
sand. There are enough complaints going around from all walks
of the Congress, different political philosophies and parties.
But in reality, our forests today are in worse shape than
they have been in in the last 55 years. Not from logging, but
mismanagement. We have burned more trees in the last 10 years
than we have cut for commercial use during the time that man
arrived on these shores. And that is a loss to not only
mankind, but it is a loss to the management of the forest.
It may be natural, but it is not realistic, nor should it
be allowed to take place.
We are losing more to beetle kill and wind blows. All
across this Nation this is occurring because there is no
management of the forest. In an area the size of 178 million
acres, we are now producing less timber than they are in a very
small amount of privately held timber lands, of less quality,
and less, in fact, availability. And being so we have left less
timber for the future generations.
We have to keep in mind, though, the Forest Service budget
has increased dramatically, 11 times above inflation since
1952. And I think that is another example of terrible
mismanagement. The idea that we can have Forest Service
employees painting rocks so they look old for the general
public. They cannot account for $215 million. Do not know where
it went. That is a hell of a vacation as far as I am concerned.
They had a $500,000 alternative reality rally last year,
paid for by the taxpayers. A loss of true foresters and
retention of anthropologists and biologists. All the
``ologists'' are all left, but no foresters are left.
And, very frankly, what is brought to this head is this
administration has deprived the Nation of not only the log
resources, but for the first time the Forest Service has lost
money, and doing so, now they have been exposed in their weak
underside.
And so our attempt today is to find out where we are going
and where we are headed. I have talked to the people in the
Forest Service to give us some ideas on solutions to the GAO
report. If that does not occur, I suggest you come back here
next year, and you will have, as I said before, less of a
budget.
There is no reason for the taxpayer to be paying for an
agency that is in fact in shambles and is operated very
foolishly, and is not really doing what is right for the
general public.
I think it is crucially important that we address this
issue correctly, with enthusiasm and direction, and I expect to
hear answers today.
The gentleman from California.
STATEMENT OF HON. GEORGE MILLER, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF CALIFORNIA
Mr. Miller. Thank you, Mr. Chairman, and I am happy to hear
you state in your opening remarks that this is not about
personalities. That would be a tragic mistake, if we assembled
these three Committees to come together and decide that somehow
this all falls on the shoulders of one person.
Because the fact is that the problems pointed out by the
GAO, and I think I see stacked on the table the history of
reports done about the Forest Service, goes back many years
through many chiefs of the Forest Service and through numerous
administrations.
The fact of the matter is that we do have some systemic
problems within the Forest Service, but for someone to try to
decide that this is the current chief's problems and his fault
only, and he is to be held accountable for all of those past
practices would be a mistake.
First of all, it would be a mistake because this chief has
the full support of the President, the Vice President, the
Security of Agriculture in his efforts to broaden the mission
of the Forest Service, in keeping with the outlook of the
American people.
We all understand on this Committee, as we have watched the
transitions and the changes that have taken place in the
perception of the American people, the desires of the American
people, the needs and the uses of the American people, on our
Federal lands.
They are truly multiple use lands at this point, and while
at one time this agency was simply governed by the notion of
what yield it could provide on a yearly basis, and what kind of
cut it could provide, that no longer is the single purpose
mission of the Forest Service.
It now has to manage competing interests, strong competing
interests, as the West becomes more and more urban, and as
Americans move more and more around the country and enjoy our
public lands.
So I am encouraged by your remarks. Let us not suggest that
efforts have not been made to try to reform a number of the
problems that will be addressed in the GAO report and in the
Inspector General's report, but most of those have met with a
lack of success on the floor of the House of Representatives or
in the Appropriations Committee, or elsewhere, as we have tried
to remedy one of the major problems outlined in the GAO report,
and that is the failure of the Forest Service to get fair
market value for the resources that it is managing, and for
licensing those resources and renting those resources and
leasing those resources.
We have not allowed them to get that. Why? Because other
special interests come before the Congress and overrule the
notion of fair market value.
We also know that there is a whole series of accounts,
apparently, where the accounting is maybe non-existent. But we
also know there have been efforts to try to bring those
accounts on to budget, to exercise them to oversight by the
Appropriations Committee, by this Committee, by the Agriculture
Committee, and those efforts have failed because mainly the
single purpose interests of timber harvesting are benefited by
having those multiple small accounts held off of budget.
So there is clearly enough blame to go around, but
hopefully this hearing is the first in a series of hearings, as
you have pointed out, as we review really what is a new mission
under the mandate of the American public for this agency to
take care of these resources, and to provide them for multiple
use and multiple values.
We are in the middle of that transition. It started with
the train wrecks in the Northwest, where we saw the collapse of
our forest, where we saw the inherent problems, where we saw
the failure to consider other values. And that transition will
continue.
It will continue to gain support by a majority of the
American people, and it is going to be a very difficult one for
us to participate in, but it is necessary. And I look forward
to these hearings, and I thank the various chairmen for
agreeing to combine this hearing and make these joint efforts.
Chairman Young. I was supposed to recognize Mr. Kasich, but
he has not joined us at this time. So I will recognize our good
chairman, Mr. Regula.
STATEMENT OF HON. RALPH REGULA, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF OHIO
Mr. Regula. Thank you, Mr. Chairman. I think you and the
Ranking Member have pretty well outlined the concerns that
brought about this hearing. The forests are a national
treasure. I think we should look from this day forward to how
we can best manage this resource to serve people in a diverse
number of ways.
Obviously, historically there has been mismanagement. You
need only to look at the GAO report. I quote, ``the agency's
financial statements are unreliable. And expenditures of
significant amounts cannot be accounted for.''
Well, we do not want that to happen prospectively. And I am
hopeful that out of this hearing there will be techniques and
policies developed that will avoid this kind of problem in the
future.
The GAO report also focuses on internal control weaknesses,
and finally I think the Forest Service's weak contracting
practices have exposed appropriated dollars to an increase risk
of fraud, waste and abuse.
I think, frankly, the American public is somewhat
ambivalent about what they expect out of the national forests.
They obviously like to have wood fiber at a reasonable rate to
build their homes, to achieve their dreams, in terms of
housing.
But they likewise also like the multiple use aspect of the
Forest Service. I am always struck by the fact that in terms of
visitor days, the Forest Service has twice as many as does the
Park Service, and that is indicative of the fact that the
public uses these lands extensively for their enjoyment.
And as our population grows, as our society becomes more
stressful, I think the value of multiple use in our forests
will be a great resource for the enjoyment of the public.
But, likewise, it is a great resource for the production of
fiber, and it is a matter of managing this system in the most
effective way on behalf of the owners, namely the American
people.
I hope that out of this hearing and out of the leadership
in the Forest Service there will be policies developed that
will address those concerns, that will focus on how best to
manage this resource, and that in the future we will not have
to have these kinds of hearings. The Forest Service will have
responded to the GAO and the IG concerns about the way in which
they have managed the resource.
So out of this hearing today, we should be able to develop
these ideas for the future, and I look forward to hearing from
the managers of the Forest Service. It is easy to identify the
problems, but what I am interested in is identifying the
solutions.
[The prepared statement of Mr. Regula follows:]
Statement of Hon. Ralph Regula, a Representative in Congress from the
State of Ohio
I. The National Forests are a great treasure. They include
nearly 200 million acres of some of the finest lands in the
nation. These lands provide tremendous opportunities to all of
our citizens; these natural resources and open space are of
vital importance to this generation and to our children. It
serves as the working man's country club. We need to take very
good care of this special heritage.
Multiple use has been the driving force behind the
management of this land. This is a policy that must be
continued. There are proud traditions in the Forest Service for
professionalism and local independence, but these must not come
before, or at the expense, of prudent management of natural
resources and taxpayer resources.
We all share a great concern for many the issues impacting
the Forest Service, such as: forest health, providing a variety
of recreational opportunities, managing a massive road system,
and providing water, open space and habitat vital to our flora
and fauna.
We recognize that large and ongoing debates and crises have
stressed the agency during the past decade and have distracted
the agency from adequately managing its affairs.
But today we say that it is time to get serious about
managing the agency. This hearing will be focused on fiscal
management issues.
These problems have developed over many years, but they
must be solved soon.
The testimony will demonstrate that there have been many
years of promises to clean up these kinds of problems, all to
little or no avail.
The Interior subcommittee and the Forest Service developed
some budget reform in 1995, but already the Committee has had
to once again tighten up reprogramming guidelines in an attempt
to increase accountability.
II. My Committee has recently had numerous oversight hearings
dealing with Forest Service activities. In addition, I have held
regular, annual hearings with the Chief and with Secretary of
Agriculture, as well as special oversight hearings, including:
1. the Interior Columbia River Basin project
2. construction practices
3. backlog maintenance and property inventories.
Further, my Committee has required the Forest Service to closely
examine major issues affecting our nation's forests, so much so, that
the Administration complained in last year's Statement of
Administration Policy that this was excessive Congressional
micromanagement. We disagree, oversight is vital. We have required
reports on diverse issues, including:
financial system improvements and linkage to GPRA timber sales
land management planning and budget linkages
Recreational fee demonstration program
transportation and road planning and inventory backlog
maintenance, and
wildfire fuels management.
III. My Committee has also demanded more and better explanation in
the Forest Service's annual budget justification to more fully detail:
ecoregion assessments
forest planning workload
wildland fire management planning
overhead budget assessments for ``national commitments''
funding equity by Regions, and adherence to the Government
Performance and Results Act.
And, my Committee has initiated work by the GAO on the impact of
the 1995 budget reform and work by committee investigators on funding
accountability for forest planning, inventory and monitoring; the
purchase of a major new computer system; and civil rights.
IV. Today we will hear of substantial financial management problems
in the Forest Service. This includes the agency's continued inability
to take accounting seriously and get financial systems to work. The GAO
says, and I quote:
``The agency's financial statements are unreliable, and
expenditures of significant amounts cannot be accounted for.''
We will also hear of substantial problems with the major USDA
financial systems. The IG for USDA wrote,
``Our reviews at the (USDA) National Finance Center have
disclosed continuing severe internal control weaknesses,
culminating most recently with an adverse opinion we rendered
on its overall control structure.''
We will hear of other problems, such as the inability to capture
revenue and the potential for serious contracting problems resulting
from poor oversight and excessive delegating of authority to field and
regional offices. The GAO writes,
``. . . the Forest Service's weak contracting practices have
exposed appropriated dollars to an increased risk of fraud,
waste and abuse. These and other findings have led us,
Agriculture's Inspector General, and Forest Service task forces
to make numerous recommendations to improve performance. The
agency has not acted on some, has studied and restudied others
without implementing them, and has left the implementation of
others to the discretion of its independent and autonomous
regional offices and forests with mixed results.''
V. We will hear of a matter of great concern to the Interior
Committee: the inability to properly track appropriations. We will hear
that budget formulation is not based on local program needs and that
furthermore, allocations of appropriations to the field is based on odd
formulas and not on program needs or accomplishments. We will also hear
that the agency charges excessive overhead which is used to support
endless planning efforts and we will hear that there is an inadequate
link between forest plans, financial systems and budgets. For instance,
the IG writes,
. . . ``there is very limited assurance that funds have been
expended consistent with the budget. . . . funding is subjected
to absorbing overhead charges as the appropriations are
reallocated down through the organizational framework of the
agency. As a result, the amount of funds appropriated for a
specific purpose or activity are significantly reduced before
they are available for that purpose.''
VI. Based on all of this testimony, it is clear to everyone around
that we need to have better management based on performance and
results. The Government Performance and Results Act provides a
framework to help solve some of these problems, but we will need better
definitions of mission-critical goals and objectives.
Our Nation needs and wants to continue the multiple use model. We
expect to have production of goods and services in a way that does not
harm the land or waters and which provides long-term public service.
Where we focus on restoration, the Forest Service will need to have
clear goals and benchmarks whereby the public can measure success.
This is the direction we will need to go. I expect the Department
of Agriculture and the U.S. Forest Service to redouble its efforts so
the American people can once again have faith in how these tax dollars
are used and how these precious lands and waters are cared for.
Chairman Young. Mrs. Chenoweth, do you have an opening
statement, as chairman of the Subcommittee?
STATEMENT OF HON. HELEN CHENOWETH, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF IDAHO
Mrs. Chenoweth. Thank you, Mr. Chairman. I do have a short
statement. We do see a pile of reports there that have been
accumulating, and unfortunately we look to the agency to
correct their problems.
But as the Ranking Member said, and I agree with him on
this, this is not just the agency's problem. This is the
Congress's problem too. Because without regard--I have said
this before--without regard to which political party is in
power, this system has grown worse and worse.
We ask our managers, we ask our Chief to make his people
accountable, and yet that is impossible under the systems that
he has now, to require accountability. And it is up to the
Congress to make those necessary changes in the laws that will
allow him to do what we are requiring of him.
I blanche at the thought that this is the only agency, the
Forest Service, that is entrusted with billions and billions of
assets, and the Forest Service has so poorly managed those
assets, that this agency is now deep in the red.
Now the Forest Service is coming back and asking for more
money than they got last year, and they have had an increase
every single year. And they are coming back to us with this
poor track record, and asking for an increase over last year's
budget.
We do not like that. But we have got to be able to work in
tandem to solve these problems, and get serious about it. The
seriousness has to go beyond the politics of the day, and the
personal whims of the day that we turn into public policy.
We have to be able to require accountability from the
Forest Service. And as Congressmen, we have to give them the
power to require accountability from their managers.
Thank you, Mr. Chairman.
Chairman Young. Thank you, Mrs. Chenoweth.
Mr. Hinchey?
STATEMENT OF HON. MAURICE D. HINCHEY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW YORK
Mr. Hinchey. Thank you very much, Mr. Chairman. I want to
make a very brief statement, which is largely in accord with
what I have heard other members say just a few moments ago.
And that is essentially that whatever problems are
perceived here, by the members of this Committee and others in
the Congress, with regard to the Forest Service and the way the
forests are being operated, is a problem for which
responsibility is shared equitably perhaps by both the Forest
Service and the Congress.
And to the extent that it is not shared equitably, I think
a larger burden falls upon the Congress than falls upon the
Forest Service. And that burden largely has to do with our
responsibility and obligation to fund the maintenance and care
of our resources.
And it is quite clear to me that we have not done so, and
that this failure is one that dates back over a very long
period of time.
We note that in the Forest Service, for example, the Forest
Service is of course replete with roads--there are a great many
roads through the Forest Service lands. We made the point a
number of times that these roads now cover 373,000 miles--eight
time as long as the Federal Interstate Highway System, and
enough to circumnavigate the globe 16 times--and that there is
within this road system a maintenanace backlog of $10.5
billion.
In other words, in order to maintain these roads and keep
them up, there is a backlog of funding deficiencies to the tune
of $10.5 billion.
Now, that is a sad observation to make, because many of
these roads are not just roads for forests. I have heard my
friend, Mr. Hansen, talk about this, and I listen to him very
carefully, because I am very respectful of his knowledge in
this area.
And he said yesterday at a hearing that during hunting
season you almost need a traffic cop back up in some of these
roads, because of all the traffic up there. And I firmly
believe that.
I come from a part of the country in the East where we have
the Catskill Park and the Adirondack Park, and hunting is a
major occupation--an occupation to take up spare time, at
least.
So I understand the traffic that must be on these roads,
based upon what I am told by my colleagues in the West. I have
seen a little bit of it myself, with my own eyes, as a result
of being out there with Mr. Hansen and with Mrs. Chenoweth.
So I understand that these roads have a great burden placed
upon them, and that they cover traffic not just for hunters,
but for people who just need to get from one place to another.
And that includes people on school buses, going to schools, and
things of that nature.
If I am correct, I think I heard someone say that about 10
percent, at least, of the bridges in this network are
deficient.
That tells me that we need to catch up to our
responsibilities, and somehow we need to start making up that
$10.5 billion. It is not going to be made up in one year, but
it has got to be made up very quickly, and we need to get on to
it very, very rapidly.
Because unless we do, we are going to have a major accident
out there, and we are going to see loss of life. I think it is
almost inevitable, at the rate things are going.
So I just want to say that this is a responsibility of the
Congress. We need to fulfill this responsibility, and we have
not done so. And that responsibility has to do with funding
this operation properly.
The same thing might be said for the National Park System.
Anyone who has had an opportunity to be out in the National
Park System, and I have had that opportunity recently,
Yellowstone, Yosemite and places like that, you see that the
places are almost literally falling apart before our eyes.
The deterioration is clearly discernible, almost palpable.
And we need to address that problem. We need to address it by
providing the necessary funds, to maintain the road systems in
the National Parks, and maintain the other infrastructure that
makes these operations so important.
So I think there is a lot to be said here, and perhaps this
hearing is a very good thing, if it begins to open our eyes,
the eyes of Members of the Congress, to our financial
obligations to the resources owned by all of the people of the
United States, and which have been entrusted to our care and
the care of these Federal agencies.
So, I hope that we begin to do that, because our failure to
do so is only going to add to the burden, add to the
responsibility, and make it more difficult to catch up at some
point in the future.
Chairman Young. I can only suggest one thing, before I
recognize Mr. Herger, and then Mr. Dicks, and that is it. One
suggestion, good funding does not cover bad management.
Mr. Herger.
STATEMENT OF HON. WALLY HERGER, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF CALIFORNIA
Mr. Herger. Thank you, Mr. Chairman. I would like to thank
Mr. Hill, Mr. Viadero, Mr. Dombeck for being here today, and
for testifying on the management and practices of the United
States Forest Service.
I personally have all of or parts of nine national forests
in my Congressional District in Northern California. Management
decisions have a great impact on the health of our forests. As
a result, I have many grave concerns about the reports of
chronic waste of both financial and natural resources, as well
as the agency's inability to proactively manage the land under
its jurisdiction.
The Forest Service currently manages approximately 192
million acres of land--close to 9 percent of the Nation's total
surface--and yet, even by the agency's own admission, 40
million acres are currently at a high risk for catastrophic
fire.
Instead of working to improve this situation, however the
agency is plagued by what the GAO calls, quote, indecision and
delay, end quote. Instead of proactively improving forest
health, the agency recently proposed to place a moratorium on
all road building activities on roadless areas of the National
Forest System. Quite simply, if we cannot get to an area to
fight the fires, the areas will burn.
The purpose of this hearing is to explore the reasons
behind the agency's management and problems which were summed
up on a statement by former Northern California Modoc National
Forest Supervisor Diane Henderson-Bramlett. In her January 1,
1998, letter of resignation to Chief Mike Dombeck, Supervisor
Bramlett said, quote, a secondary reason for my departure is my
frustration and dismay of the ever increasing redundant and
costly agency practices, policies and regulations, the lack of
accountability, both with all employees and with agency
management, and the lack of leadership and vision throughout
all levels of the Forest Service.
Continuing, I feel we are trying to be everything to
everyone all the time. As a result, we deliver very little to
anyone. End of quote.
This lack of management referred to by Forest Supervisor
Bramlett has produced situations ranging from an inability to
account for $215 million to highly questionable programs such
as a 1996 Forest Service sponsored leadership seminar featuring
drums, improv theater, finger painting, chimes, singing, body
movement and story-telling. One Forest Service employee stated
that this seminar was more like a group therapy session than a
leadership seminar.
In November 1997, the Forest Service sponsored another
employee event which press reports indicated cost at least a
half million dollars. This event used taxpayer dollars to
explore concepts such as ``everyone's truth is truth,'' and
``alternative realities are OK.''
In construction areas, the Forest Service has also engaged
in painting rocks to make them look older. Cattle ranchers in
my district were asked probing personal questions as a
condition of receiving a Federal grazing permit. These ranchers
were asked, among other things, whether they were, quote, a
person having origins in any of the original peoples of the Far
East, the Indian Subcontinent, or the Pacific Islands, end
quote.
They were also asked whether they had any disabilities. A
Forest Service document then stated, quote, furnishing of this
information is voluntary. However, individuals administering
the permit will attempt to identify the needed information by
visual perception if not provided by the permittee, end quote.
What do these situations have to do with managing our
national forests? They all have one fact in common: they are a
waste of taxpayer dollars.
Further, the GAO has observed, quote, according to a
November 1995 internal Forest Service report, inefficiencies
within the agency's decisionmaking process cost up to $100
million a year at the individual project level alone. These
costs are not borne by the Forest Service, but by the American
taxpayer, since the agency accomplishes fewer objectives with
its yearly appropriations, end of quote.
This mismanagement is unconscionable, and must be corrected
immediately. If not, we may well end up sacrificing the very
health of our National Forest System. Thank you.
Chairman Young. I thank the gentleman. Before I recognize
my good friend from Washington, Norm Dicks, I would like to
acknowledge that Senator Craig has joined us, and he is going
to sit down just about where he was when he left.
[Laughter.]
Chairman Young. Welcome, Senator.
Mr. Dicks from Washington State.
STATEMENT OF HON. NORMAN D. DICKS, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF WASHINGTON
Mr. Dicks. Mr. Chairman, I appreciate your yielding. Chief,
obviously the allegations of the General Accounting Office and
the Department of Agriculture's Office of Inspector General are
very condemning on the Forest Service's ability to effectively
manage its finances and insure programmatic performance
efficiency.
Just pointing out a couple of things in the GAO report:
according to a November 1995 Forest Service report,
inefficiencies with the agency's decisionmaking process cost up
to $100 million a year at the individual project level along.
Another point: because it has not obtained needed information,
Federal regulatory agencies and stakeholders continue to insist
that it prepare increasingly time consuming and costly detailed
environment analysis and documentation before making a
decision, effectively front loading the process and
perpetuating a cycle of inefficiency.
Preliminary results in a soon to be issued GAO report to
the chairman of the House Committee on Agriculture on the
Forest Service contracting practices indicate that in fiscal
year 1996 the agency's weak contracting practices made $443
million in appropriated funds vulnerable to fraud, waste and
abuse.
For example, in reporting its fiscal year 1995 financial
results, the Forest Service could not identify how it spent
$215 million of its $3.4 billion operating funds and program
funds. In addition, the $7.8 billion value reported for assets,
including property, plant and equipment, was erroneous because
records for these assets were not consistently prepared,
regularly updated, or supported by adequate documentation.
Because of these and other deficiencies, Agriculture's
Inspector General concluded that the agency's financial
statement for fiscal year 1995 was unreliable.
And I understand that the remedy here is that we will just
not do any more financial statements. Now, that does not cut
it. And I think there is one thing that even those of us who
have been strong supporters of the Forest Service throughout
our careers simply cannot tolerate this kind of complete
ignoring of what these reports have shown going back to 1980.
And I think, frankly, if we needed a control board in the
District of Columbia, we need a control board for the Forest
Service. And I think just as we had to have an outside trustee
appointed to take care of the problems in terms of the
individual claims of tribes and individual members, because we
just simply could never get the Interior Department to come up
with an accounting system to follow it, we are going to have to
do the same thing here.
Now, I am just frankly appalled by the lack of commitment,
and I think this is something that we are going to have to, in
the Appropriations Committee, at least, and with the help of
the other Committees here, take action on and insist that we
get this thing straightened up, or we just have to appoint an
outside trustee to come in and manage this thing, and put in
the financial systems that are necessary.
Thank you, Mr. Chairman.
Chairman Young. I thank the gentleman. I deeply appreciate
your comments.
At this time I would like to call up the first panel. Mr.
Barry Hill, Associate Director, Energy Resources and Science
Issues, Resources, Community and Economic Development Division,
General Accounting Office, Washington, DC.
And I would ask that anybody who comments with you at the
table, please identify yourself when you do so.
At this time also I would like to have Mrs. Chenoweth chair
the rest of the meeting, because she is the chairman of the
Forest Health and Forests Subcommittee, and she will be
chairing the rest of the meeting.
I want to thank each one of the members that are not on
this Committee for attending today, and hopefully, as I
mentioned in my opening statement, this is supposed to be
constructive, somewhat objective in the sense of those that are
being questioned today, keep in mind, most of them have not
been on the watch.
This is not partisan, in the sense that this has been going
on and getting worse every year. I just think it has
accelerated in the last 3 or 4 years, and I hope that we can go
on from this day on to try to get this Forest Service, as the
gentleman from Washington mentioned, under a direct, good
business management problem that serves the people of America.
Mrs. Chenoweth.
Mrs. Chenoweth. Before we continue, I would like to explain
that I intend to place all witnesses under oath. This is a
formality of the Committee that is meant to insure open and
honest discussion, and should not affect the testimony given by
the witnesses.
I believe all of the witnesses were informed of this before
appearing here today, and they have each been provided a copy
of the Committee Rules.
If you would, all three of you, stand and raise your right
hand to the square.
[Witnesses sworn.]
Mrs. Chenoweth. The Chair recognizes testimony from Mr.
Barry Hill, the Associate Director for Energy, Resources and
Science Issues, Resources, Community and Economic Development
Division, General Accounting Office, in Washington. Mr. Hill?
STATEMENT OF BARRY HILL, ASSOCIATE DIRECTOR, ENERGY, RESOURCES
AND SCIENCE ISSUES, RESOURCES, COMMUNITY AND ECONOMIC
DEVELOPMENT DIVISION, GENERAL ACCOUNTING OFFICE, WASHINGTON,
DC, ACCOMPANIED BY CHARLIE COTTON AND McCOY WILLIAMS, GENERAL
ACCOUNTING OFFICE, WASHINGTON, DC
Mr. Hill. Thank you, Madam Chairman. And Messrs. Chairmen
and members of the Committees, before I begin, allow me to
introduce my colleagues. With me today on my right is Charlie
Cotton, who has led much of our recent and ongoing work on the
Forest Service's operational management; and on my left is
McCoy Williams, who is leading our ongoing effort to monitor
and periodically report on the agency's progress toward
financial accountability.
We are pleased to be here today to discuss the management
of the Forest Service. And, if I may, I would like to briefly
summarize my prepared statement and submit the full text of my
statement for the record.
Mrs. Chenoweth. Without objection, so ordered.
Mr. Hill. In 1987, the Forest Service proposed a quid pro
quo to the Congress. If the Congress would increase the
agency's flexibility in fiscal decisionmaking, the Forest
Service would improve its accountability and budget execution
through better accounting for its expenditures and performance.
During the intervening decade, the Congress has given the
Forest Service virtually all the flexibility in fiscal
decisionmaking that it requested. Specifically, the Congress
has simplified the agency's budget structure, and significantly
increased its spending flexibility to insure that funds are
available when and where they are needed.
However, the Forest Service has not improved its
accountability as it promised. In a March, 1988 report, we
stated that before the Forest Service could be held
accountable, it would need to correct known financial and
performance reporting deficiencies.
The report noted that the Forest Service was at the time
addressing all of these problems. However, today, 10 years
later, these problems continue to persist.
Madam Chairman, as many of you have already pointed out,
this stack of reports I have here in front of me represents
over 140 products that the General Accounting Office has issued
since 1988 on the Forest Service--a list of which I would also
like to introduce for the record.
Mrs. Chenoweth. Without objection, so ordered.
[The document may be found at end of hearing.]
Mr. Hill. These products, reinforced by our ongoing work,
have led us to observe that foregone revenue, inefficiency, and
waste throughout the Forest Service's operations and
organizations have cost taxpayers hundreds of millions of
dollars.
For example, the Forest Service has often not obtained fair
market value for goods or recovered cost for services when
authorized by the Congress. As a result, the agency forgoes at
least $50 million in revenue annually.
It also has not always acted to reduce or contain costs as
requested by the Congress. For example, concerned with the
escalating costs of the Forest Service's timber program, the
Congress in Forest Service 1991 asked the agency to develop a
multi-year program to reduce the costs of its timber program by
not less than 5 percent per year.
However, in April 1997, the Forest Service was preparing to
undertake the third major examination of its timber program in
the last 4 years. Meanwhile, the costs associated with
preparing and administering timber sales remain higher than it
was in fiscal year 1991 when the Congress first voiced its
concern, and that is despite the fact that less timber is being
sold and harvested.
In addition, up to $100 million a year is wasted as a
result of inefficiencies within the agency's decisionmaking
process. Among its shortcomings, the agency has historically
failed to live up to its own monitoring requirements, and to
comply with environmental and planning requirements.
Moreover, in fiscal year 1996, the agency's weak
contracting practices exposed $443 million in appropriated
funds to an increased risk of fraud, waste and abuse. Rather
than require its field offices to comply with government-wide
and Department of Agriculture-wide requirements intended to
reduce costs or improve performance, some Forest Service
managers merely trust that their contracting officers will
perform competently and ethically.
Furthermore, the agency's financial statements are totally
unreliable, and expenditures of significant amounts of money
cannot be accounted for. For example, in reporting its fiscal
year 1995 financial results, the Forest Service could not
identify how it spent $215 million of its $3.4 billion in
operating and program funds.
These and other findings have led us, Agriculture's
Inspector General, and Forest Service task forces to make
numerous recommendations over the years to improve the Forest
Service's financial and operational performance and to obtain a
better return on the American taxpayers's multi-billion dollar
annual investment in the agency.
The Forest Service has not acted on some, has studied and
re-studied others without implementing them, and has left the
implementation of others to the discretion of its independent
and autonomous regional offices, and forests with mixed
results.
For instance, a February 1994 report by a Forest Service
task force on accountability set forth a seven step process to
strengthen accountability and made recommendations to help the
agency change its behavior.
The concepts in this task forces's report were adopted by
the Forest Service's leadership team and distributed agency
wide. However, the task force's recommendations were never
implemented throughout the agency. And as a result, many of the
agency's processes and programs remain broken and in need of
repair.
To improve its operational efficiency and effectiveness,
the Forest Service must be accountable for its expenditures and
performance. While the agency has in recent years made some
progress, it is still years away from achieving financial
accountability and possibly a decade or more from being
accountable for its performance.
Specifically, the Forest Service has identified the actions
required to correct known accounting and financial reporting
deficiencies, and has established a schedule to attain
financial accountability by the end of fiscal year 1999.
However, serious problems have been encountered in
attempting to implement the agency's new financial accounting
system; additional accounting problems continue to hamper its
ability to produce reliable financial information; and the new
financial accounting system is not Year 2000 compliant.
According to several agency officials responsible for
implementing the new financial accounting system or taking
other corrective measures, the agency is unlikely to achieve
its goal of financial accountability by the end of fiscal year
1999.
The agency has also taken an important first step toward
becoming accountable for its performance by making clear that
its overriding mission and funding priority, consistent with
its existing legislative framework, has shifted from producing
goods and services to maintaining and restoring the health of
the lands entrusted to its care.
However, it has not identified the actions required to
correct decade old problems with its inventory data,
accomplishment measures, and reporting system. It has not
addressed new challenges resulting from its changed priorities,
and it has not established a schedule to achieve accountability
for its performance by a certain date.
In particular, revenue and commodity outputs are now
contingent on healthy aquatic, forested, and rangeland
ecosystems. However, the agency does not know the condition of
many of these ecosystems. In addition, it has not made a
serious, systematic attempt to develop objective and
independently verifiable measures or indicators of the health
and trends in the condition of these ecosystems.
As a result, it cannot predict with any reasonable degree
of certainty what levels of goods and services the national
forests can produce.
In conclusion, we recognize that the Forest Service is not
a private firm, in that its stewardship responsibilities and
conservation mandates can strain its ability to generate
revenues and provide goods and services.
We also recognize that protecting public goods, like
endangered and threatened species, and their habitats,
increases management costs on the national forests.
However, we believe that the agency is also responsible for
spending taxpayers's dollars wisely and providing taxpayers
with a complete and accurate accounting of how funds are spent,
and what is accomplished with the money.
Foregone revenue, inefficiency and waste, increased
vulnerability to fraud and abuse, and lack of financial and
performance accountability indicate to us that the American
public is not receiving a fair return for its annual investment
in the Forest Service.
Unlike the management of national forests, compliance with
the requirements for financial and performance accountability
cannot be left to choice, and strong leadership within the
agency, and sustained oversight by the Congress will be needed
to insure corrective action.
We believe that at a minimum, the agency must replace its
decade-old promises to improve with firm scheduled to correct
identified management deficiencies, and to achieve both
financial and profitability accountability.
Finally, we believe that future years funding should be
based in part on the Forest Service's demonstrated progress
toward developing and implementing these schedules.
This concludes my prepared statement. I would be pleased to
respond to any questions that you or other members of the
Committees may have.
[The prepared statement of Mr. Hill may be found at end of
hearing.]
Mrs. Chenoweth. Thank you, Mr. Hill.
Before we get to the members, I wonder if you would like to
just introduce for the record those people who are with you.
Mr. Hill. OK. To my right is Charlie Cotton, who is
responsible for much of the Forest Service operational
management work that we have done over the years.
To my left is McCoy Williams, who is responsible for
auditing the financial accounting systems in the Forest
Service.
Mrs. Chenoweth. Thank you. The Chair would like to ask the
Committee's indulgence and recognize first Senator Craig. He is
very busy, and I am very pleased--I think we all are, that he
has joined us here.
So without objection, the Senator.
Senator Craig. Thank you, Mr. Chairman. Thank you very much
for that courtesy. I am here to listen. Obviously I have spent
a good deal of time on this issue on the Senate side. I think
we are now up to 13 or 14 comprehensive hearings on the
management of the Forest Service.
I have also had the privilege of working with Mr. Hill and
his studies, and we have used those as templates from which to
try to make some decisions and propose changes. So I am very
interested in what you are all doing here in the House.
We have got a marvelous old agency that has become terribly
dysfunctional. We ought to try to get it back together and
operating. I think this effort by the House is very positive.
Thank you.
Mrs. Chenoweth. Thank you, Senator, and welcome.
The Chair recognizes Mr. Miller.
Mr. Miller. Thank you, Madam Chairman. Thank you, Mr. Hill,
for your report, and I think you have already seen the reaction
that it has created. Let me ask you a couple of general
questions on your testimony here.
It seems to me that when you start outlining sort of what
is dysfunctional in the various accounting systems, that the
first effort, if this was a business, would be, you would say
hold on here a second. If you just took over the Forest Service
in a takeover--hopefully you would go through the books before
you made that decision, but if you didn't, you would say hold
on here a second, and I want to know what the various
compartments are doing.
As I understand corporate accounting, functions are broken
down, and either there are profit centers or they are not
profit centers; either they pay for themselves or they do not,
or there are losses, and that may be acceptable. But you kind
of know what is going on across the various functions.
As I look at your report, we do not know that, because we
have unreliable accounting systems. We have costs that are real
costs, but not included in the cost as presented. In the case
of road building, road surface is not included. It is not
depreciated. An assumption is made that it will last forever.
But we do depreciate culverts and bridges and other aspects of
that.
So that in itself is a problem, because you are making an
assumption about your future cost to go back to that area. You
pointed out in your report that road building is now going into
more--or is anticipated to go into more difficult habitat, so
the immediate cost of each of those miles goes up because it is
going to be challenged, it is going to be litigated, more
scientific evidence has to be provided, more homework has to be
done to make the case affirmatively to do that.
And in some cases even the terrain is more difficult, and
yet those do not seem to be factored into anticipated road
building in roadless areas or what have you.
Obviously we have built a system of repayment here, or
remuneration, I guess, back to the agency, and to local school
districts and counties, based upon one aspect of the entire
service, and that is timber harvest.
But as the timber harvests come down from 12 billion to,
what is it now? Three, almost 4 billion, nation-wide, no
adjustments in payments, allocations, percentages or projects
has really been made.
And so we are sort of standing a larger and larger agency
on the head of an inverted pyramid here. And those timber
sales, harvests and cuts are calculated to provide a huge
amount of resources to this agency, but, in fact, it is getting
more and more difficult to do that.
It sounds to me like that has violated almost every common
sense accounting process you might want to invoke. And at the
same time, we are adding additional burdens to this Service, in
terms of the increased use for recreation, all of the fish and
wildlife protections that are incumbent in modern forest plans
and development plans and all the rest of that.
And yet those are not really factored in as part of the
cost other than that. I guess maybe you hear some of this in
the Appropriations Committee, but appropriations have been
fairly level here, and yet we are conducting smaller
activities, but more costly, and we are not accurately
accounting for them.
How do we compartmentalize the activities, whether it is
recreation, whether it is fish and wildlife protection,
ecosystem protection, timber cuts--how do we really get a
realistic picture of what are our profit centers, what are
centers that are simply paying for themselves, and what our
loss centers?
And I include in that the whole question of what are the
things we are doing below cost, that we are subsidizing
activities at the risk to the agency.
Mr. Hill. I am going to let Mr. Williams and Mr. Cotton
chime in after I have said a few words here, with their
different perspectives on this. But I think that your
summarization and explanation of what is and what has evolved
is right on target. That is exactly right.
The basic problem with their financial information is you
really cannot identify and concentrate cost along certain
activities or performance areas that they are trying to
achieve, their objectives.
A lot of their cost is based on activities, like
recreation, or timber, as you correctly pointed out, as opposed
to ecosystem management or forest health, or whatever
activities, or watershed analysis, whatever activities that you
want to measure.
And unless you can identify costs and put them into a
particular activity that you are trying to achieve, it is
impossible to have accountability, because you cannot identify
just what the true cost of any given activity is.
Mr. Cotton. I would just like to add an example. For fiscal
year 1999, only 29 percent of the Forest Service's timber
volume is going toward saw timber, green timber. Another 32
percent is salvage. Another 34 percent is vegetation
management, and 5 percent is fuel wood.
Now, if you were a private industry, you would look at your
saw timber green program, and I think you would expect that to
make a profit, that that should cover its costs. But the
salvage program, the vegetation management program, it may be
that they are working toward stewardship objectives, making the
land healthier, and the primary objective of them is not to
turn a profit.
And I think it would be very important for the agency, just
like a private company, to separate saw timber from salvage
timber, because salvage timber, you never set out to make a
profit to begin with. And they have not done that, and that to
me fuels this whole argument over below cost timber sales.
Mr. Miller. If I might, and I do not want to prolong the
point, but also in terms of the appropriators, or those of us
on the authorizing committee, we would then know the real cost
of each of the programs. We could decide whether or not that is
where we want to put the public's money or not.
Mr. Cotton. Absolutely.
Mr. Miller. And the public could decide if that is a real
value they have, or it is only a value when it was kind of
hidden and subsidized.
Mr. Cotton. Absolutely.
Mr. Miller. So, I mean, in terms of our decisionmaking
process about what we are funding or not, these sort of
shuffled costs do not allow us to know where we are investing
the public's money.
Mr. Cotton. That is correct. And could I add just one more
thing? With those percentages, only 29 percent of saw timber,
and yet the allocation criteria that the Forest Service has
used to distribute, their timber sales management funds that
you give them are based 100 percent on green timber sales. A
total disconnect between the allocation criteria and what they
are asking the money for, and what they plan to do with it.
Mr. Miller. Thank you.
Mrs. Chenoweth. Thank you. The Chair recognizes Mr. Herger.
Mr. Herger. Thank you, Madam Chair.
Mr. Hill, in your testimony you stated that your review of
the Forest Service financial procedures have revealed that
appropriated dollars are exposed to an increased risk of fraud,
waste and abuse. As a result, the GAO, the Agriculture
Inspector General, and the Forest Service task forces have made
numerous recommendations to the Service to improve its
performances.
Could you please explain to us what these exposed
shortcomings are?
Mr. Hill. The exposed shortcomings in terms of the
potential for fraud, waste and abuse?
Mr. Herger. Yes.
Mr. Hill. That information is based on some ongoing work
that we have right now for the House Agriculture Committee that
should be coming out shortly. And basically what they are
finding is that in a highly decentralized organization, such as
the Forest Service is, you have to have effective internal
controls over expenditures of money that go toward contracting.
And in this case we are talking about $443 million in
fiscal year 1996. Certain things like providing routine
supervision of contractors' work, monitoring and overseeing the
work to make sure they are performing properly, internal
controls that limit certain spending authority--thresholds,
basically.
These are all effective controls and measures that you have
to have over the contracting process in order to insure that
the money that you are providing the contractors is being used
efficiently and effectively and that there is no misuse or
waste or fraud that is going on.
What we are finding is that there is a real, inconsistent
application of the way these controls are being implemented
within the Forest Service. If you look out at the local level,
it is not being done in a consistent basis, and a lot of the
managers, forest managers, are using what they term trust. They
trust their contracting officers, they are professional, they
are educated, they know their business, and we trust them to do
an ethical and a competent job.
Mr. Herger. Now have you in the past, when you have given
recommendations to the Forest Service--let me rephrase that.
You have been discovering problems for some time, is that
not correct?
Mr. Hill. That is correct.
Mr. Herger. And you have been making recommendations to the
Forest Service for some time?
Mr. Hill. That is correct.
Mr. Herger. Could you tell me what were some of these
recommendations?
Mr. Hill. Well, as you can see by these reports--I will not
go through all of them--but some of the key ones I think have
already been mentioned. When you look at what they are
receiving for goods and services that they are providing, they
are not getting fair market value for special use permits, and
uses of the forest lands for commercial and non-commercial
purposes.
The Forest Service has traditionally not been getting fair
market value, and in some cases we found that they are only
getting maybe 10 percent of what the fair market value could be
for some of these uses. That one we could quantify.
We estimate that the Forest Service is forgoing about $50
million annually, alone, in that one. And then of course,
internally, the Forest Service themselves have identified
another $100 million annually that is being wasted in terms of
inefficiencies that are within the organization.
Some that cannot be quantified, I think, are just as
important, and the example I used deals with the maintenance
backlog. The agency estimates that there is a $7-$8 billion
maintenance backlog, and I know that has been a concern of the
Congress, not only with the Forest Service, but with the Park
Service and the other Federal land management agencies. And you
have provided a lot of funding to handle this maintenance
backlog situation.
Yet we are finding that the estimate is not really based on
reliable information. They really do not have a good handle for
what that backlog is, and whenever you are providing them
money, they really cannot give you any assurance that they are
spending those moneys on the proper projects, and that they are
addressing the highest priority needs in terms of maintenance
needs.
That is just as wasteful an example as some of the others
that we have given.
Mr. Herger. Now, these recommendations that you have been
giving for some years, would you say that the Forest Service
has been following up on them?
Mr. Hill. May I say there is a pattern here. And the
pattern is they always agree with the problems we point out and
with the recommendations we make, and they always promise
corrective action. But that is as far as it goes.
We really do not see over the long run where they have
really taken substantive action on a lot of the recommendations
that we have made and that they agree to do.
Mr. Herger. Thank you, Madam Chair.
Mrs. Chenoweth. Thank you, Mr. Herger. The Chair recognizes
Mr. Dicks.
Mr. Dicks. Thank you, Madam Chair.
Another one of your examples is, in reporting its fiscal
year 1995 financial results, the Forest Service could not
identify how it spent $215 million of its $3.4 billion in
operating and program funds.
In addition, the $7.8 billion value report for assets,
including property, plant and equipment, was erroneous because
the records for these assets were not consistently prepared,
regularly updated, or supported by adequate documentation.
Now, let us go to the $215 million first. Were there just
no documentation whatsoever for how the $215 million was spent?
Mr. Williams. As far as the $215 million, it was identified
in the Forest Service annual report as unidentified. Based on
that, we do not know----
Mr. Dicks. Unidentified?
Mr. Williams. Unidentified.
Mr. Dicks. Has this been a practice over the years, of
having a certain amount of money just unidentified?
Mr. Williams. That is the first time I have seen it in
financial statements. Listing it as unidentified, you have
various categories. For example----
Mr. Dicks. Did you ask them what unidentified meant?
Mr. Williams. No, we did not ask what unidentified meant.
Basically we knew that they had not--they could not identify if
those amounts were spent for personnel, if it was spent for
rent, and the various categories on your financial statements
that you use to identify how you spent your money.
But there was this one category that was listed as
unidentified, and that is why we reported that for fiscal year
1995, there was $215 million that the Forest Service had
reported as unidentified.
Mr. Dicks. In terms of how it was spent.
Mr. Williams. That is right.
Mr. Dicks. And out of that you then determined that their
financial statement was completely unreliable. Is that correct?
Mr. Williams. Well, it was the OIG's audit that determined
that the financial statements were unreliable.
Mr. Dicks. This is the Office of Inspector General of the
Agriculture Department.
Mr. Williams. That is correct. And we just reviewed the
financial statements to try to put in lay terms exactly what
does it mean to receive an adverse opinion on the financial
statements. And we went through the various categories that the
Office of the Inspector General identified in reaching the
conclusion that the financial statements were not correct.
Mr. Dicks. And since 1995, they have not prepared any more
financial statements. Is that not correct?
Mr. Williams. Financial statements were not prepared for
fiscal year 1996. I believe they have statements for 1997, and
the OIG is in the process of looking at those statements now.
Mr. Dicks. Now, because time is limited, and we have a lot
of members here, a lot of interest, let me ask you this bottom
line question. Either this is arrogance, or it is incompetence.
And how do you characterize it? Or is it a combination of both?
Mr. Hill. We would just characterize it as major problem.
This is a major problem.
[Laughter.]
Mr. Dicks. OK. Now, let us go to the Dicks proposal. Should
we bring in somebody from the outside to try to put in order
the financial house of the Forest Service at this juncture,
based on this, what 17 years of these reports, and the fact
that nothing has happened?
Would bringing in an outside trustee at this point to try
to put together a program and a plan be something the Congress
should give serious consideration to?
Mr. Cotton. I think if history is any indicator, the Forest
Service has had a difficult time correcting these problems
themselves. And, in fact, as far as their financial
accountability, they have brought in an accounting firm to try
to help them in their implementation of the financial
accounting system, and now with a more recent contract to help
them with other financial deficiencies and shortcomings as
well.
So they went out at least on the financial side and sought
outside help because of the difficulties they were having
delivering it themselves.
Mr. Dicks. But do you think bringing in a trustee of some
sort be an option that Congress should give consideration to?
Mr. Cotton. We most certainly have talked about a control
board internally. The GAO, has, for a number of years.
Mr. Dicks. So the President would appoint a number of
people, and they would manage the financial part of the agency.
The policy, the ecosystem protection, all the other good policy
things, but would bring in some people who could give us the
data, the information, the accounting, all the financial side
so we could track and see how the public money is being spent?
Mr. Cotton. Well, Mr. Dicks, if you think they are having
problems on the financial side, you have not seen anything yet
until you get over to the performance side. Because I would
think as appropriators you not only want to know where they are
spending that money, but what they are accomplishing with it.
So in the end you are going to have to link that financial
system with some type of promised accomplishments on their
part, and to know that if you give them money to perform a
certain activity or certain function, they are doing that, and
they are accomplishing what they set out to do.
I think a very good observation that has been made in the
past on the part of the Forest Service is that they are
rewarded just as much for failure as they are for success.
Mr. Dicks. Thank you, Madam Chairman.
Mrs. Chenoweth. Thank you, Mr. Dicks. The Chair recognizes
Mr. Nethercutt.
Mr. Nethercutt. Thank you, Madam Chairman.
Welcome, Mr. Hill and gentlemen. I had an interesting
meeting with Mr. Dombeck this week, and had a chance to meet
Mr. Pandolfi, who has been brought in to look very carefully at
the financial operations of the Forest Service.
And I was told that there are literally millions of
transactions that go on in the Forest Service annually, and
over a multi-year period there are multi-million transactions.
Is that what you found as well, that there are numerous
transactions that go on all over the country under the auspices
of the Forest Service, and the operations of the Forest
Service, relative to timber sales and all kinds of other things
that they do. Is that what you found?
Mr. Hill. There is no question. It is a large organization.
You are talking 36,000 people, 155 forests across the Nation.
It is a huge organization. And they have tremendous amounts of
responsibilities and there are a lot of activities going on out
there.
They also have a tremendously high visitation rate in terms
of the number of people that visit the forests. So there are
lots of things that they are dealing with.
Mr. Nethercutt. You know, your report is a clear indictment
of the past and the status quo. My hope is that this business
approach that is being undertaken in the Forest Service is
going to be beneficial. That is my greatest hope.
And certainly with the benefits of yours and Mr. Viadero's
reports, I think we are hopefully going to add some benefit to
the way the Forest Service does business.
Having said that, and having reviewed your report, and all
the, again, indictments essentially in Mr. Viadero's, of the
problems that exist in the agency and apparently have existed
for years, I think it is understandable in some respects with
the change in people, the leadership and the number of
employees and so on.
We in Congress have a--I will not say a short attention
span, but a desire for fast results. I am wondering if you can,
for the record here, identify three things that you would
recommend that the Forest Service undertake immediately in
order to accomplish a certain defined objective within the next
year.
Let us say by the end of the next fiscal year. By the end
of fiscal year 1999. What can you tell this Committee, this
group of members, that the Forest Service could do, based on
your knowledge, that would improve their system, whatever it
might be, and that would be a definable objective result, that
would be acceptable to us.
Mr. Cotton. I think what you will hear from the Chief of
the Forest Service today is that it will, as you just observed,
take a number of years to fix what is broken. And we agree with
that. It is not going to be fixed overnight.
And so it is going to require a sustained oversight by the
Congress and long term attention by the agency.
And what we have asked and suggested, and I think the No. 1
thing that they can do, is to establish a very clear schedule
of what it is that needs to be done and when they are going to
do it, when they are going to provide you with deliverables.
Then you at least have a schedule to hold them accountable
for ultimately being accountable. And I think that the most you
can hope for is what progress are you going to make in the next
year, so at least this time next year we can all come back and
say, yes, they are on schedule, or no, they are not, and here
is why.
Mr. Nethercutt. I am in agreement with you, sir. I am
wondering if someone else has as followup answer. If you do not
or if you do, please include in your answer what specific
things you think are subject to that accountability that we can
make judgments on in the next year.
Mr. Cotton. First of all, they have identified what is
broken in the way of their financial accounting system and
their other financial shortcomings, and have established a
schedule to meet them. They need to do the same thing on the
performance side.
And what we believe is the starting point of that is their
strategic plan and its stated goals and objectives. But right
now the budget is not linked to those goals and objectives.
Their allocation criteria are not linked to their goals and
objectives, nor are their outcome measures, which are primarily
outputs and not outcomes.
So what we would see is progress in the next year in
clearly identifying what people agree on as being appropriate
performance measures so they can come up and tell you we did or
we did not accomplish this goal with the money you gave us this
year.
Mr. Nethercutt. Any other comments?
Mr. Williams. I would like to add on the financial
management side, one of the keys to attaining financial
accountability will be to implement the new accounting system
that the agency is in the process of implementing.
To meet that goal of implementing that system successfully,
I think that the Forest Service, along with the Office of the
Chief Financial Officer, should follow recommendations made by
the Office of the Inspector General last summer, and that is to
make sure that the new system that was piloted in the three
units this fiscal year is properly tested, and all coding is
taken care of.
I guess overall, it is important from a timeliness
standpoint, but it is also more important that it is done
correctly. So I think they should take those considerations,
recommendations identified in the OIG's report, and that would
go a long way in helping the agency attain financial
accountability.
Mr. Nethercutt. Thank you. Thank you, Madam Chairman.
Mrs. Chenoweth. Thank you. Mr. Farr?
Mr. Farr. Thank you, Madam Chair.
Well, welcome to the first bicameral, tri-committee
hearing, and this room is packed, and there is 100 percent
agreement in this room that we all love forests. The difficulty
is that 50 percent of them love it vertical and 50 percent of
them love them horizontal.
[Laughter.]
Mr. Farr. And I think you can see from the testimony in
this room that we are not all going in the same direction. What
I thought was very curious, and has been overlooked, is that if
you in your summary that you gave us, the first word you lead
with is ``foregone revenue.''
You also say, for example, we have previously reported the
Forest Service has often not obtained fair market value for
goods or recovered costs for services when authorized by
Congress. And then you go on to describe in the next few pages,
as I read it, a protection of this government of special
interests in the forest.
It does not obtain fair market fees for commercial
activities on national forests, including resort lodges,
marinas, guide services for special non-commercial uses, such
as private recreational cabins, special group events, or
recovered costs incurred in reviewing and processing
applications for special use permits.
The Forest Service also has, No. 1, not charged fair market
value for rights of way for oil and gas pipelines, for power
lines, for communications lines on its lands, and has, No. 2,
not used sealed bids for certain timber sales, relying instead
on oral bids which generate lower revenue.
As a result, the agency forgoes at least $50 million
annually in revenue. It also does not suggest, which the
question gets into, I happen to represent one of the largest
national forests in California, Las Padres. In the northern
part of it we do not have any commercial sales. We have a
little bit, maybe, of grazing lands.
But it is a recreational forest. And it is a remarkable
draw for the local economy. And that is not in the formula.
What value is that? What value is there in leaving old growth
redwoods that have been historically difficult to get to
because they are in roadless areas remaining roadless, and
remaining old growth, and remaining of value to this country.
I mean I think one of the difficulties in this debate up
here is that some people see the forest as, if you mine it,
drill it, dam it, cut it there is revenue in there. And the
other part of the Committee realizes that as a public, national
forest, there are private lands, there are State lands which
have different revenue extractions, and different laws for
them.
But these are the national forests, and in some purposes,
these national forests have value in being left as is. And in a
business sense it is more cost effective.
Some of the biggest resorts in America have set aside most
of the land for non-commercial uses. It draws people. They play
golf on it, maybe. But they do not develop it.
And I am suggesting that there is a value, a land use
management value in management of these forests in some cases
in some places just leaving them as they are. Could you respond
to that, and could you respond to why these special interests
do not pay fair market value?
Mr. Hill. Well, that is quite a question you posed. Let me
see if I can attack it a little at a time here. I think there
is a central policy question that all of your comments focus
on, and that is to what extent do we want the Forest Service to
cover its costs or to cover at least a larger portion of its
costs than it is currently covering?
Clearly, as we say in our statement, there are uses of the
national forests that are not intended to generate revenue--
wildlife protection, recreation use and things like that.
There are other uses that by law they are required to get
fair market value for providing those goods and services, which
are the ones that you have already mentioned.
I think it is a question, though, of incentives here, and
policy in terms of just what you want the Forest Service to do,
to what extent do we want the taxpayers to have free or low
cost use of recreation, water sports in the national forests,
picnicking areas, camping grounds, or to what extent do we want
the users of those services to pay a portion of the cost, or at
least cover a portion, if not all the costs, so that these
forests can be more self-sustaining.
In that regard, we have recently done some work where we
have looked at various entities that are similar to the Forest
Service out in the States and in the private sector to see from
their standpoint how they are covering their costs, and the
techniques they are using.
And a lot of it deals with what their basic purpose is and
what their policy is.
Mr. Farr. As you pointed out, these are commercial
activities that are not capturing fair market value. These are
not passive activities. These are commercial activities.
Mr. Hill. Yes. And in those cases, the law is pretty clear,
that the Forest Service must obtain fair market value for those
services.
Mr. Farr. Why do they not?
Mr. Hill. We do not know.
Mr. Cotton. They could argue the fact, or one of the
arguments is that they do not get to keep the revenue that they
generate. The other thing is that the Congress has really never
held them accountable for collecting the revenue that they
should.
They have had authority since 1952 to cover their costs of
issuing special use permits, and they have never issued the
regulations.
Mrs. Chenoweth. Thank you very much. The Chair recognizes
Mr. Peterson.
Mr. Peterson. Thank you very much, Madam Chairman.
I want to congratulate the committees for doing this
jointly. I think it is outstanding. We should be doing this a
little more often.
I am new here. I do not know very much about Washington, so
I will share a few thoughts with you and then have your
reaction.
I want to say that I do not know that the Forest Service is
as bad as it is being painted here. That may surprise a few.
When we look at the Federal Government overall, when we have
HCFA, the agency that deals with health care, and there is
nothing more important than that, reports by their own
Inspector General indicate the agency spent $23 billion last
year that they did know whether it should have been spent or
not.
We look at the Treasury and the IRS, and 21 percent of the
earned income tax credits they feel are fraudulent, and that is
worth about $10 billion. And we could go on and on with a long
list.
Now, we have a lot of problems in the Forest Service, but
let us keep them in perspective. I come here from a 26 year
business background, and a 20 year State government background,
with no Federal experience. I came here with the concept that
Washington does not work. We are too big. We are too diverse.
When you look at the Tongass National Forest in Alaska, the
Boise National Forest in Idaho, the Allegheny National Forest
in Pennsylvania, in my district, the Green Mountain National
Forest in New England, and the Routt National Forest in
Colorado, they do not have much in common.
They are very different. Yet we are trying to manage them
from the national perspective.
Now, you as an agency have to deal with issues like last
year in the budget process and the year before. Two
Congressmen, one from Illinois and one from Massachussetts,
came within one vote of taking away your road budget,
destroying it, just wiping it out.
Neither of those Congressmen have a national forest in
their district, and I would debate them that neither one of
them know very much about our national forests. But their
concept almost took away your road budget. So how can you
manage?
Now, in the corporate world, the business world,
bureaucracies are a problem everywhere. When they get too big,
and they lose their focus and their mission, in business the
company goes bankrupt. Somebody takes their place, or the board
in time brings in a new leader, but they have the ability to
lead.
I do not think you have the ability to lead, because we
have Congressmen from all over this country, we have interest
groups from all over this country with their narrow special
interests who want very different things out of our public
lands.
I guess I would like you to react to a concept of where we
have a national Forest Service which sets goals and objectives,
but we have regional national forests that are managed
regionally, with boards appointed by Governors, the counties in
which they are located, conservation agencies, forestry
schools--I mean, good folks, that are from that part of the
country, where we cannot have national Congressmen destroying a
part of your budget, or having far too much influence on a part
of this country that they know very little about.
So I do not think it works in those other agencies. I do
not think it will work in your agency until we go to a regional
approach where we have people managing that know what they are
managing.
Would you respond?
Mr. Hill. Yes. If I could respond to that, being with the
General Accounting Office, we do have the benefit, I guess, of
visiting a lot of the different forests, seeing different
regions of the country, being exposed to the different cultures
and uniqueness that these forests and regions have, and I have
a couple of thoughts on that.
One, like a business, you want people who are engaged in
what they are doing and believe in what they are doing. And let
me say unequivocally, no matter what forests we have gone to,
no matter what region of the country we have been in, we have
always been impressed with the quality of the Forest Service
employees.
Their expertise, their dedication, their aggressiveness,
they are hard working individuals that really care about their
forests, and we really believe they are doing the best they
can.
Because of that, and because of the uniquenesses out there
in the regions, we do not question the need to have a
decentralized organization like the Forest Service has. But
with any decentralized organization, you need to have policy
direction and leadership and goals and objectives that everyone
agrees to and is working toward.
It is like putting eight people in a boat, a row boat, and
giving them each an oar, and having them in the row boat rowing
as fast as they can. Well, if they are all rowing in different
directions, that boat is going to go no where fast. And in some
sense, that is what the Forest Service is doing right now.
At the forest level, these employees are working very hard,
but they are not all going in the same direction. We have got
to get them focused basically on the same objectives and
mission, and have a clear understanding of what their
expectations are, and then they have to be accountable.
We have to go in there and look at what they are doing, and
seeing how they are performing to make sure we are still on
course as that boat goes down the river.
Mr. Peterson. But can we, as diverse are our forests are,
can we have a one size fits all in the top management?
Mr. Cotton. Absolutely not.
Mr. Peterson. But we do.
Mr. Cotton. Where we make the distinction is we fully agree
with you, and with the Forest Service that the management of
the lands and the resources must be tailored to the region and
to the locale that the forest is in.
And one forest may be a pure recreational forest, and
another forest may be primarily still for timber production. It
varies by forest. It varies not only by ecological needs, but
by socio-economic needs.
And so we strongly support the fact that a one size fits
all approach to managing the lands and the resources is not
appropriate. But in return for that flexibility, for that
discretion in decisionmaking that is critical for this agency
to operate efficiently and effectively, we think you deserve
accountability on their part on where they have spent this
money and what they have accomplished with it.
So we separate management of the land, which has to be
decentralized, and has to be tailored to a certain locale from
the Federal requirements of being accountable to the Congress,
to the American taxpayer of where you spent the money and what
you accomplished with it.
And that is where we are looking for consistency, at that
level. Not at the management level.
Mr. Peterson. You think we should look at, maybe, a
regional management approach.
Mr. Cotton. It is a regional management approach now. It is
a forest by forest approach.
Mr. Peterson. Not governing. We are governed by Washington.
Washington governs. I mean regional boards of people who are
helping to manage each regional forest, that are somewhere from
that part of the country that understand that forest.
We have far too much pressure from vice presidents and
presidents, and interest groups who have very single purposes--
on both sides--who have very single purposes in mind for our
public lands.
And you should not let anybody run the ship. We have a
Forest Service who spends more time in lawsuits because there
are interest groups who use the lawsuit to stop whatever they
do not want to stop and to make their job impossible.
I mean, the legal system in this country we all know is out
of control, but the Forest Service, they have been fighting
lawsuits by the score. So the costs of managing a forest when
you are dealing with all of those lawsuits, I mean I just think
in my view, if we keep it as it is, with national management
over all the forests with a lot of similarity, we will be here
in 10 years with another pile of books like that, and
everything will be the same.
Mr. Cotton. Mr. Peterson, if I could add one thing, the
problem I think that you have here is that they are national
forests. They are not regional forests or State forests. They
are national forests. So I think everybody feels that they have
an equal vote in how those forests are managed.
Mr. Peterson. Thank you, Mr. Chairman.
Mr. Herger. [presiding] Thank you, Mr. Peterson. Mrs. Smith
will inquire.
Mrs. Linda Smith. Thank you, Mr. Chairman. I thank you
gentlemen. You have been very patient with us. I think you are
feeling a lot of the frustration. We are picking up your
frustration.
I was just re-reading some of your testimony that I was not
privileged to hear at the beginning because I was a little
late. And I want to go over quickly, because there are sections
of it that lead me to believe that we are at a point of
decision. I do not want to have this hearing again next year,
that next year we have lost a lot between now and then.
It starts with while the agency has in recent years made
some progress, it is still years away from achieving financial
accountability and possibly a decade or more away from being
accountable for its performance.
And then it goes on and says the Forest Service has said
that in, maybe, the next few years they might--might--attain
financial accountability. Then it goes down to say, however, it
has not identified the actions required to correct decades old
problems with its system. And then it goes on.
I cannot imagine sitting before a judge with one of the
corporations that is in trouble and saying, I will tell you
what, maybe in 10 years I will be accountable, and I might be
able to get the books straightened out in a few years, and
having that judge not look at me and say, we are going to put
you into someone else's hands for stability.
As I have just gone through both your report and the
Inspector General's report, this would not be acceptable
anywhere else but in government. Now, I have heard that it is
complex, and that we have gone into the debate over whether it
should be managed on a regional or national basis.
Management is really important, but you can figure out the
goal. The goal is legislative. It is already in law. We are to
manage the health and productivity of the forests, and, yes, in
a lot of different varieties. But it should be able to be done.
I guess where I am at right now is asking you a very blunt
question. If you were to make the choice today of leaving it in
the hands of the people that it is in, or giving it to another
entity, whether that be a group of experts or whatever, would
you risk changing for hope of some progress forward? Are you
willing to wait for 10 years?
Mr. Hill, or whichever of you want to respond may begin.
Mr. Cotton. Well, for those of us who have been doing this
for more than 10 years, we have already waited 10 years for
improvement, and it has not happened. And like I said earlier,
I think that the Forest Service, at least on the financial
side, has realized that they could not do it alone, and has
brought in outside help.
And I would have to imagine that if you wanted more
assurance, and a quicker delivery date on the performance
accountability side, that they are going to have outside help
as well.
Mrs. Linda Smith. So you would say now it not too soon?
Mr. Cotton. I think it is 10 years overdue.
Mrs. Linda Smith. Because I would agree with the statement
of the local personnel and their expertise, and also their
dedication to what they do. But I can also share with you their
total frustration in what they will tell you about the
management over them with no clear direction, like a boat
without a rudder, I think someone said earlier, going in a
circle.
And nothing can be worse to good people than to have no
direction, and feel like they have nowhere to go.
What we are seeing, too, is people saying I just want to
get out of this. You get your best people wanting to retire and
then you have a bigger problem.
Mr. Hill, do you agree with that?
Mr. Hill. Yes, I agree with that. If I could add, the
problem is a little more complex than that. There will be no
quick fixes here, regardless of whether it is done inside, or
if you bring an outside group in.
There is a lot that needs to be done. There is a lot that
is overdue. And I will give you an example. If you go out there
and you establish a clear objective, if you say your objective
is improved forest health, so there is improvement in the
sustainability of the resource, there is no data on the
forest's health.
And as far back as 1980 we were recommending that they
needed to establish an inventory of data of forest resources, a
baseline data that you could use to measure performance.
How can you determine if you are meeting a goal of
improving forest health when you do not even know what
resources are in the forest? You have no baseline to work on,
much less what condition they are in.
So even if they get this clear vision, and even if they all
agree on what the objectives should be in individual forests,
they do not have the data and the reporting systems and the
accounting systems in place to really make a difference in the
short term.
It is going to be a huge undertaking on their part.
Mrs. Linda Smith. Thank you, Mr. Hill. I guess in
conclusion what I want to say, though, is I have seen
reasonable people in a short time work miracles when they
wanted to work together, and you remove the bureaucracy from
the decisionmaking.
So I think somehow we have to find somebody who can make
the decisions and move forward within the Congressional
mandate.
And, no, it is not just trees down or trees standing. We
can manage the forests for both, and we can have a beautiful
resource without the trees down burning up the trees standing,
when we have the forest fires because we have not managed those
forests.
So I thank you for coming and putting up with all of us. We
hope to see you again with a good report next year on how we
have progressed.
Mr. Hill. We would like that, too.
Mrs. Linda Smith. Thank you.
Mrs. Chenoweth. [presiding] Thank you, Mrs. Smith. Mr.
Schaffer.
Mr. Schaffer. Thank you, Madam Chairman.
I would ask the Committee's permission to enter some
introductory remarks for the record, so I can get right to the
questioning.
Mrs. Chenoweth. Without objection, so ordered.
[The prepared statement of Mr. Schaffer follows:]
Statement of Hon. Bob Schaffer, a Representative in Congress from the
State of Colorado
Thank you Mr. Chairman. I am grateful for this opportunity
to examine the U.S. Forest Service, an agency in need of
repair. This hearing into the workings and management of the
U.S. Forest Service should be an impetus for positive reform in
an agency that has lost sight of its mission, its
accountability and its management. For years, Congress has
pressed for positive reform only to be assured time and time
again that ``steps were being taken'' or that the Forest
Service is ``implementing changes'' or ``adopting new
policies.'' Those assurances have rung hollow for long enough.
I am dismayed at the General Accounting Office (GAO)
reports on the Forest Service. Poor accounting; the inability
to track costs and revenues. We are not talking about a decimal
point here and there. We are talking about billions of dollars!
Allow me to cite some examples from the GAO's findings. The
Forest Service lost track of $215 million. They don't know how
that money was spent. They do know that they allocated $500,000
on a conference to explore ``diversity and alternative
realities.'' Yet our forests are dying and are at risk of
catastrophic fires. The Forest Service complains of losing
money on timber sales while the Forest Service has been
drastically reducing the timber put up for sale. They
underestimated accounts payable by $38 billion! Yet, as
justification for blocking access for management to at the very
least 34 million acres, the Forest Service cites a $10 billion
road maintenance backlog. How are we to believe anything the
Forest Service says?
I have seen recreation statistics from the Routt National
Forest in Colorado. If we are to believe those statistics on
recreation, then the entire population of Routt County, plus
four thousand people are up recreating on the Routt every day!
If we are to believe the Forest Service, then the streets, the
highways and the businesses of Routt County should be empty
today and every day because people are up recreating in the
National Forest! If we are to believe Forest Service
statistics, every one of those people is putting $125 every day
into the economy for recreation alone. How are we to believe
anything the Forest Service tells us?
Any good company is accountable to its board of directors
and to the public. I think its time we consider the Forest
Service a company with a job to do. We will not stand for
inefficiency and waste at the expense of the health of our
national forests. As Members of Congress we will no longer
accept the Forest Service's word. Only real reform is
acceptable. We demand good management of our resources. Good
management means management for multiple uses. We demand
accountability, and most importantly, we demand public input.
Thank you Mr. Chairman. I look forward to this opportunity to
work towards those goals.
Mr. Schaffer. Let me ask a couple of questions. Mr. Hill,
in your testimony you indicated the agency has not responded to
some of your recommendations. What is the most significant
recommendations the agency has not acted which has a budgetary
impact?
Mr. Hill. I think the one that we have been able to
quantify the best would be the one dealing with obtaining fair
market value for special use permits from commercial and not-
commercial interests.
That certainly was one that we were able to quantify, but
there are lots of others that are not as easy to quantify that
are just as significant.
Mr. Schaffer. In terms of easy to quantify, why don't you
do that for us now. What would you estimate the expense of that
one failure to be?
Mr. Hill. Well, for these special use permits, it is $50
million each year.
Mr. Schaffer. Could you make any recommendations to us now
in how we might go about addressing that particular or problem?
Or have you made recommendations to the agency itself?
Mr. Hill. We have made numerous recommendations. We have
done numerous reports in this area dealing with commercial
special use permits, non-commercial special use permits, right
of ways for transmission lines and things like that.
We have talked about, in some of those areas they are using
a payment schedule fee system as opposed to getting appraised
value for some of the goods and services that they are
providing.
And we made a host of recommendations.
Mr. Schaffer. How many times and over how many years has
that recommendation been made?
Mr. Hill. Well, I know we have done at least three reports
in the last 5 years, I believe, that have talked about various
aspects of the special use permit program.
Mr. Schaffer. Has there been any rationale put forward by
the agency in resisting your recommendations and suggestions?
Mr. Hill. The agency usually agrees with those
recommendations, and in all fairness the agency has tried, in
some cases, to raise the special use permit fees that they have
charged, and they have met resistance upon occasion.
Mr. Schaffer. The notion that the agency continuously
acknowledges the many problems that it has is nothing new. It
is almost as long as the history of the agency itself.
I guess I just want to ask a general question, as one of my
constituents might ask it, and that is can the agency be fixed
at all in your opinion, and do you see any real cause for
optimism?
Mr. Hill. Well, we definitely think it can be fixed. It is
going to take a lot of work. Whether we are optimistic, based
upon all the work we have done over all the years and all these
reports, I would have to say we are not on the optimistic side
of the fence.
Mr. Schaffer. In response to Mrs. Smith's questions, you
referred to the financial management progress reports. That
because inventories are incomplete, the Congress be assured
that requests are fully warranted.
In light of that statement, why should roads and buildings
be funded at all in fiscal year 1999?
Mr. Cotton. There is not a question that they not only have
a significant backlog in their infrastructure, their facilities
out there, including the roads, but they also have a
significant backlog, as has already been discussed here, as far
as their backlog in treating their natural resources, their
forest health problems, dead and dying trees.
So being the Congress, you would want to give them money to
fix their infrastructure, and to fix the resource. Now, you
cannot in any reasonable scenario give them enough money to fix
everything.
The problem that you have and they have is they cannot tell
you how big a problem they have, where it is, and where they
have prioritized--if you give us this much money we will spend
it here and accomplish this, and if you give us this much more,
we can do these many more things.
They cannot tell you the size of their backlog. They cannot
even tell you if the money that you would give them for
infrastructure would be spent on maintenance and repair or on
building a new facility.
And that is the type of information you need if you are
going to fund them.
Mr. Schaffer. Right. Well, for some in Congress, that level
of confusion is a compelling cause for more funding, not for
many people here, I would submit.
How optimistic are you that the new financial system will
be implemented in the way the Forest Service has indicated it
will be?
Mr. Williams. At this time, as we reported on two
occasions, there is a lot of work that still remains to be
done. They have taken some steps to improve the financial,
reporting, but unless those issues that we identified earlier
as far as properly testing the system, making sure the coding
is correct, and all of those things that you need to do before
you bring the system up, if those things are not done, then it
is highly unlikely that implementation of the new system will
be successful.
In addition to that, it is really a two part process the
way I see it. No. 1, you have to have this new system to
account for your activity, but in addition to that, you have to
have good information that you are transferring over from your
old system.
So there is a lot of work that still must be done in that
area also. So unless the agency is able to clean up the old
data that is in the old system, as well as properly test and
make sure the new system is operating properly, it is going to
be very difficult to achieve financial accountability.
Mr. Schaffer. Getting back to my original question, though,
I am interested in your opinions. Are you optimistic or not
about the Forest Service actually following through as they
indicate they will?
Mr. Williams. I am not that optimistic at this particular
point in time. Things could change down the road, but based on
what I have seen so far, I have reservations.
Mr. Schaffer. Do your colleagues concur?
Mr. Hill. What I wanted to say is I think the success could
be increased if the Congress maintains close oversight and not
wait until the end to see if they have done it or not.
I think you have to have them come to you with a pretty
specific schedule of events that need to unfold if they are
going to get to there--either on the financial side or the
performance side, and then you need to keep visiting that
schedule, and when these various milestones come due, you need
to talk to them and find out were you successful at reaching
this milestone, if not, why not, and make sure there is no
slippage.
So I think if the oversight were increased, you would be
improving the chances for success. We are certainly going to be
on the job.
Mr. Schaffer. Thank you, Madam Chair.
Mrs. Chenoweth. Thank you, Mr. Schaffer.
Mrs. Cubin?
Mrs. Cubin. Madam Chairman, since I came in late, so I will
not repeat other questions, I do not have any questions of this
panel.
Mrs. Chenoweth. Thank you.
Mr. Hill, I have some questions for you. Mrs. Smith asked
about the inventory, and why there was not better control of
the inventory, and you said somehow they did not have the data.
What did you mean by that?
What happened? Why do they not have the data?
Mr. Hill. I think there are two types of inventories we
have talked about today. One dealt with the problems they have
had in their financial statements in terms of accounting for
the inventory.
And the other inventory that I think I was referring to
with Mrs. Smith dealt with forest resources, and a
recommendation we made back as far as 1980 to collect and
obtain data in terms of what were the forest resources that
were out there, what are the condition of those resources, to
use as a baseline from which you can measure performance or
success.
Mrs. Chenoweth. That is what I was referring to
specifically. Why is not the data there?
Mr. Cotton. They have, over the years, given a very low
priority not only to inventory, but to monitoring. And
monitoring would tell you whether or not this inventory is
getting better or getting worse.
And the Forest Service, in their 1995 proposed revisions to
their planning regulations, said that they did not have good
data when they did their first set of plans, they are getting
ready to revise and amend those plans 10 years later, and they
still do not have good data.
They have not done their job as far as inventorying their
resource, and monitoring the outcomes of their decisions, so
they do not know.
Mrs. Chenoweth. Can you tell me also about the assessments
and valuations on the financial statement with regard to fixed
assets, plant, property and equipment? How has that been
handled, and how would you recommend it be improved?
Mr. Williams. On the fixed asset side, you are talking
about assets that in some cases were acquired many years ago,
and over the years the supporting documentation, as far as how
much was paid for an item, has been misplaced, or that
information is just not available.
What you need to do in a situation like that is you need to
go out and you need to count your inventory, to identify what
you actually own. My understanding is that the Forest Service
is in the process of performing these inventories now, and
according to the Forest Service schedule, they should be
completed by this summer.
Once you get that inventory count completed, then you have
to go through a process to make sure you put a proper value on
that particular asset. I think that this is a task that we are
talking about that should be completed in a few months.
So I think we will be monitoring that really closely, and
we should be able to say exactly what has been done in that
particular area.
To carry that a step further, it is very important that
those inventories are completed from the standpoint of when you
are looking at areas such as deferred maintenance, you need to
know how many assets you own, where those assets are, and what
condition those assets are in.
And unless you have a good handle on that inventory, you
probably do not have a good handle on what your overall
deferred maintenance is for the organization.
Mrs. Chenoweth. Thank you. Mr. Hill, I want to ask you, do
you believe that the new expanded ecosystem assessments and
eco-region plans are accomplishing any of the following:
Are they accomplishing being able to provide improved and
usable data?
Mr. Cotton. Could I comment on that?
Mrs. Chenoweth. Yes, please.
Mr. Cotton. We are in the process now of looking at the
implementation of the President's Northwest Plan in development
of the interior Columbia River Basin record of decision.
And we are looking at not only the ecological information
that they are using to reach decisions, as far as what to do
and how to do it, but also at the socio-economic information as
well.
Right now that work is ongoing. We have promised the
requesters a report sometime toward the end of the summer, and
we would be in a position at that time to better address these
questions.
Mrs. Chenoweth. What we will need to, and if you want--I
will be putting it in writing--we need to have you analyze that
with regards to the usable data; the reduced planning costs--if
this will really be achieved; more efficient decisionmaking;
improved accountability; reduced controversy; improved legal
defensibility; and the achievement of the agency's goals.
I listened with great interest, gentlemen, and what I am
hearing, too, even from our GAO auditors is unlike what we see
in business, that there should be a definable time with certain
goals set to reach these objectives, that we are all here
together to try to reach, we are not quite in tune yet. We are
not seeing it happen.
And so we take the responsibility also of having built up
over the years a system that has made it difficult to meet
those goals and reach those objectives.
But I also ask the GAO to think crisply and to think
precisely about timeliness as we would in business. I
appreciate your reports. I have plowed through, personally, an
awful lot of them, and appreciate the good work that you have
done.
But there has to be a whole paradigm shift, not only with
us and you and the agencies, but even with the American people,
because they are getting frustrated out there, and we have to
begin to operate as a business would.
We are at critical mass, so to speak, with this agency,
that we are responsible for, and the American people are
running out of patience.
I thank you gentleman. This has been a long session, and I
thank you for your patience. Mr. Miller.
Mr. Miller. Thank you, Madam Chairman. I have a couple of
questions if I might.
An interesting GAO report would also be list all the times
that the agency has recommended changes to recover more
revenues and the Congress has stopped them from doing that.
That would be a very interesting report because time and
again we see the agency in the 20 years, 25 years I have been
here, the agency has tried to change directions, tried to make
improvements, and they just do not go down well in the Congress
of the United States.
We keep saying we want this to be like a business, and we
want those timeframes, but we are reminded that it took Jack
Welch about 10 years to turn GE around to what is now
considered one of the great worldwide corporations. Sears took
something like 5 to 7 years to turn itself around.
Union Pacific, we are hoping they will turn themselves
around in the next decade. Chrysler, of course, took almost a
decade to turn itself around, with substantial public help.
We could go the route of Scott Paper. We could just get rid
of those things that we do not like and then reach out and grab
a profitable company and marry them. But that is not allowed
under this system.
Or we could be like Sunbeam, and just get rid of those
things that do not make money any more. Simply get rid of them
at a fire sale.
The problem would be all of those would run into a
political buzz saw here. A simple moratorium to try to get a
handle on the road issue has now spawned a bill that requires
120 different hearings.
This is a program that everybody agrees, the IG, the GAO,
the Forest Service, everybody agrees is losing money. When you
try to figure out how it's losing money, Congress says do not
do that, just do not do that.
So you do not get to operate like a business here. I mean,
part of the mystery, if it is a mystery for this Committee and
the Budget Committee and the Appropriations Committee--Mr.
Pandolfi was up here, the gentlewoman from Idaho had the
hearing, and he said, look, it does not make any difference to
the Congress. If we do our job or we do not do our job, you
give us $2.8 billion.
So there is something wrong with this side of the board of
directors. We do not want to hear about those things that are
losing money because they are popular. We have more and more
obligations dependent upon green cuts, but we have never
thought, are all of these communities that are getting money
from us from the timber cut, are they enjoying additional
benefits because of their recreational days and the development
and the infrastructure and all that is put in the forest.
Could we rejigger how maybe we share that revenue? It is
like the old days when we had revenue sharing here. We are
sharing revenue we do not have. We are running a deficit to
share revenue with local communities.
Now, maybe we ought to analyze what are the benefits of
recreation and all these other concessions and things that are
going on, and maybe we could reconfigure. Maybe that is better
for the local communities, if they got a share of that pie, as
opposed to a declining share of a timber cut.
But I bet you Congress will not let you look at that one
either. And it goes on and on and on. And, you know, the fact
that Congress, looking at the CRS report, talks about 23
different accounts that provide 30 percent of the Forest
Service funds every year, that range from $100,000 to $300
million and they are off budget and nobody is paying attention
to them from the Congress of the United States.
Why? Because that is the way they used to like it in the
Forest Service with its constituents. Now we are yelling you
are not accountable. Well, I think it is about time for the
Congress to grow up and think about accountability.
But I tell you what you have to do. You have to put each
one of these special accounts on the table, and ask a question:
is this the most efficient use of this money? Is this
consistent with the national mandate on national forests? Is
this consistent with generating revenues? Is this consistent
with the environment?
I bet you that is not what they want to do around here,
because each forest has a client that is dipping into that
$100,000 account, that $300 million account. Relationships have
built up over the years. Communities come to rely on that.
So we really do not get to reinvent this Service. We will
have more reports like this unless Congress faces up to the
fact, the Appropriations Committee takes back these accounts,
we take back our oversight, and we do not hammer this agency
every time they say we think we have a better idea, or we think
there is another way to do this.
Because again, Mr. Pandolfi, who comes from the private
sector, he does not come from the Forest Service, he does not
come from government, he says the Forest Service takes an
enormous price in decentralization.
And that is because not only do we decentralize what you
are talking about--the local running of the forests, to make
them consistent with what people in California or Pennsylvania
think, but we have decentralized the accounting and the
financial aspects so far beyond even that that nobody can tell
us what they do.
Even the Congress, where we found ourselves, I think, when
the Republicans took over, with about 8,000 more desks than we
had people or something. Even we in the day of bar codes can
tell you where every one of our pieces of office equipment is,
and when we purchased it, and at what rate it is being
appreciated. Even the Congress can do this. But I am not sure
we want to do that for the Forest Service.
So there has to be a political gut check here, on whether
we really want this to operate like a business. Because that is
what our constituents always ask us. Why do not you operate it
like a business. The minute we try, or we try, the politics
overwhelms the business sense.
Mrs. Chenoweth. The gentleman's time is up. Thank you, Mr.
Miller.
Mr. Miller. Thank you, Madam Chairman, it has been a
pleasure. I think there is a question there, but we will get a
response in writing.
[The information referred to may be found at end of
hearing.]
Mrs. Chenoweth. I just love his enthusiasm.
Mr. Miller, I do have to say I love your enthusiasm. I just
wish we could have seen the enthusiasm directed this way 10
years ago.
Mr. Miller. I have been there, Madam Chairman. Losing to
your side on these votes day in and day out on the floor of the
House and everywhere else.
Mrs. Chenoweth. Thank you, Mr. Miller.
Mr. Hill, gentlemen, thank you very much for your time. The
Chair now recognizes now Mr. Roger Viadero, Inspector General,
U.S. Department of Agriculture in Washington, DC.
Mr. Viadero, I wonder if you might introduce the gentleman
who will be with you.
Mr. Viadero. Yes, Madam Chairman. This is Mr. Robert Young.
He is the Deputy Assistant Inspector General for Audits.
Mrs. Chenoweth. I wonder if both of you might rise and take
the oath. If you will stand and raise your right arm to the
square.
[The witnesses were sworn.]
Mrs. Chenoweth. Mr. Viadero, we welcome your testimony.
STATEMENT OF ROGER C. VIADERO, INSPECTOR GENERAL, U.S.
DEPARTMENT OF AGRICULTURE, WASHINGTON, DC, ACCOMPANIED BY
ROBERT YOUNG, DEPUTY ASSISTANT INSPECTOR GENERAL FOR AUDIT,
U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, DC
Mr. Viadero. Thank you, Madam Chairman, and members of this
Committee.
I am pleased to be here to provide testimony about the
Forest Service's financial management. With me today is Mr.
Robert Young, Deputy Assistant Inspector General for Audit.
I would like to submit my statement for the record, and
present some highlights to you at this time.
Mrs. Chenoweth. That would be fine. Please proceed.
Mr. Viadero. Thank you.
Reliable financial data is essential to provide the basis
for informed decisionmaking and program assessment. The United
States Department of Agriculture has made significant strides
in improving its financial management systems since the advent
of the Chief Financial Officers Act in 1990.
But much remains to be done, particularly with the Forest
Service. The Forest Service's financial statements are not
reliable. Reliability is defined by the Financial Accounting
Standards Board as the quality of information that assures that
information is reasonably free from error and faithfully
represents what it purports to represent.
Our annual financial statement audits, which we have
performed since 1991, have only disclosed a limited correlation
between the Forest Service's accounting numbers they report and
the resources or events those numbers are to represent.
The weaknesses in the agency's financial management system
are longstanding, and very, very significant. The deficiencies
are prevalent throughout the accounting process, from the
rudimentary recording of accounting transactions through to
material internal control weaknesses at the National Finance
Center.
I will briefly describe these problems to provide you with
a sense of the lack of reliability of the financial data, and
the pervasiveness of these problems. I will try to avoid a lot
of accounting jargon and detail. I know the subject of
accounting is one which generally does not trigger the release
of endorphins.
Let us start with accounting at the field level. The lack
of accountability which besets the Forest Service's financial
data stems from the data entry level. Transactions historically
have not been adequately documented, and supporting records
have not been maintained.
A prime example of this rudimentary problem is the
property, plant and equipment account, commonly called PP&E.
The most recent Forest Service financial statement in 1995
disclosed that the agency had property, plant and equipment
with a book, meaning depreciated value, of almost $8 billion.
The Forest Service does not, however, have any support for the
values reported, and the property records in the field do not
agree with the accounting system.
In addition, inventories of real property have not been
routinely performed. As a result, no reasonable determination
can be made as to what the real property balance should be.
I would now like to discuss the agency's use of management
codes. At the crux of the Forest Service's accounting process
is the use of management codes to account for expenditures.
Management codes are established as pre-structured budgets. An
operating plan is developed at the beginning of the year which
sets forth the prospective distribution of expenditures. The
methodology used to develop these allocations is based on
empirical data and generally is not adequately documented.
The Forest Service uses about 100,000 management codes,
which can contain up to 99 lines of accounting each. Though
some codes are centrally prescribed, the vast preponderance are
locally developed and are unique to each venue.
The accounting distribution for each management code
contains several fields. For example, one field is called the
fund code, which equates to an expanded budget line item.
Another is the work activity code. There are hundreds of work
activity codes from which to choose, spanning program areas
such as wildlife, to functional areas, such as planning, to
administrative areas, such as human resources.
All semblance of accountability is greatly impaired,
however, through modifications of the management codes that may
occur at any time during the year. This process, referred to as
retroactive redistribution, provides the capability to change,
for example, the predetermined percentages of expense
allocation or even the appropriation account.
When the retroactive redistribution occurs, all
transactions are reversed and reposted according to the revised
criteria. It is difficult to identify where changes occurred
and all record of prior activity can be potentially retrieved
only after arduous reconstruction.
Our reviews have disclosed the vulnerabilities associated
with the management code process. For example, a recent audit
we performed on the Wildlife and Fisheries Habitat Management
program found an incurred cost was shifted from Wildlife to
another program to avoid overspending Wildlife funds.
We concluded that the process provides the latitude to
charge costs to fund codes based upon the availability of
funding, rather than where they were actually expended.
Another key issue is the problems at the National Finance
Center. The Forest Service utilizes the National Finance
Center's Central Accounting System, commonly called CAS. Even
if the agency's financial systems were adequate, the CAS is
not.
Our reviews at the National Finance Center have disclosed
continuing severe internal control weaknesses, culminating most
recently with an adverse opinion we rendered on its overall
control structure.
These weaknesses impair and hinder the Forest Service's
financial management as well as other user agencies. As an
example, the National Finance Center relies on numerous
automated and manual reconciliation routines. Reconciliations,
however, are frequently achieved through plugs, or by simply
denoting unidentified differences.
For example, in 1997, the National Finance Center adjusted
its cash account by increasing disbursements by a net of about
$1 billion, and increasing deposits by a net of $174 million in
order to agree with Treasury records. The reasons for these
differences were not identified.
Let's talk about budgeted versus the actual expenses. Of
concern to Congress, we know, is the reliability of the data
presented in the agency's budget, and assurance that funds have
been expended in accordance with the budget.
Although the Office of Management and Budget initially
required an annual financial statement entitled Budget and
Actual Expenses, the statement was eliminated with the passage
of the Government Management Reform Act of 1994.
As a result, we do not audit this process. It does appear,
however, based upon the weaknesses I have just described, that
there is no assurance that the funds have been expended
consistent with the budget.
The requirement to audit the reconciliation of budget to
financial has been reinstated, however, for 1998.
The Department decided in 1993 to develop a new accounting
system, known as the Foundation Financial Information System,
to replace the General Ledger in the Central Accounting System.
The FFIS, as it is called, is supposed to serve the
Department as a single integrated financial management system,
and bring USDA in compliance with Treasury, OMB and the Federal
Accounting Standards Advisory Board requirements.
FFIS, which was originally proposed to be fully functional
by October 1st, 1998, has been plagued by numerous problems,
and schedules have slipped.
The central segment, or core of the system, is a commercial
off the shelf product purchased from an outside vendor. The
Office of the Chief Financial Officer, in consultation with the
user agencies, opted to retain the legacy or feeder systems at
the National Finance Center, and interface them with the core
package.
Mrs. Chenoweth. Mr. Viadero, I am sorry to interrupt you,
but I wonder if you could wrap up your testimony.
Mr. Viadero. Well, let us go to the good news, then.
Mrs. Chenoweth. All right.
Mr. Viadero. All is not lost, however, and improvements are
under way. The Forest Service, the Office of Inspector General,
and the Chief Financial Officer have worked together since mid-
fiscal 1996 to plan and implement changes to strengthen the
agency's financial accounting processes.
Forest Service management has emphasized the importance of
financial health to its line managers, and developed core
financial competencies training for managers, financial staff
and others.
Most staff have now received some training geared toward
improving financial accountability. The Forest Service issued a
financial health desk guide designed as a reference source for
all staff to use in properly recording financial transactions.
The guide provides uniform accounting instructions for
accounts receivable, accounts payable, real and personal
property and other transactions.
In conclusion, the Forest Service's financial management
has been materially deficient for many years. With the efforts
under way to achieve financial health and implement a new
accounting system, the road to recovery has been laid, and the
Department is headed in the right direction.
However, the corrective action remains a long term venture,
and continued emphasis and discipline will be needed to stay
the course.
Thank you, Madam Chairman, and I would be pleased to answer
any questions you or other members may have.
[The prepared statement of Mr. Viadero may be found at end
of hearing.]
Mr. Herger. [presiding] Thank you, Mr. Viadero. Any
questions?
Mr. Nethercutt. Roger, you always do good work, and I think
I will submit questions for the record, if you do not mind, and
ask that they be answered in due course, and we will move
forward.
Chairman Young. Yes, sir. Thank you.
[The information referred to may be found at end of
hearing.]
Mr. Herger. Mr. Miller.
Mr. Miller. Thank you, Mr. Chairman.
Thank you for your testimony. I think it is depressingly
straight forward. Let me ask you, on page 7, in the middle of
the large paragraph there. You say timber sales, for example,
are accounted for in an automated timber sales accounting
system, which due to the timing problems, does not adequately
reflect accrued sales.
Can you decipher that for me?
Mr. Viadero. I am going to ask Mr. Young to do that for
you.
Mr. Young. Not all sales are properly handled on the
accrual basis. In other words, if sales were made and the money
had not been received, then it oftentimes would not be counted
in that year's transactions.
Mr. Miller. Let me ask you: what is the general practice?
Why would there be a delay, or why would different sales be
different?
Mr. Young. Essentially what they are doing is that at year
end they are not recognizing all sales activity.
At the end of the year, if there is a timber cut for which
they have not yet received the money, then, not all of those
accruals are included in their sales numbers.
Mr. Miller. So they are not counting money they have
received. But they are not counting money they have not
received.
Mr. Young. Right. They are not counting money on all sales
that have been consummated, but the cash has not been received.
In other words, the sales have taken place, but they have not
received the funds in hand yet, nonetheless, the sales should
be counted.
Mr. Miller. Why would you do that?
Mr. Young. Well, it gives you a true picture of what you
are earning each year. In other words, if you had so many
timber sales throughout the year, you would want to show the
value of that timber which was sold.
If you wait and do not record it until a subsequent period,
you do not give a true picture of what your operation earned in
relation to sales expenses.
Mr. Miller. I guess I am still not clear.
Mr. Viadero. Mr. Miller, if I can, what we end up here is--
--
Mr. Miller. Is this an acceptable practice that you point
out here, or is this something that should be changed?
Mr. Viadero. No, it is not. What you want to do in
accounting to make financial information useful is to show the
actual cost and the actual revenues each year.
Mr. Miller. OK.
Mr. Viadero. What you are doing is in some years is giving
a false impression, showing that you received more money than
you actually did.
Mr. Miller. We theoretically could have expenses to produce
a sale in one year, and three years later we could be getting
revenues from that sale. And so that does not accurately
reflect on a fiscal year basis what really transpired.
Mr. Viadero. There is no matching here. If you are
operating a business, you want to match your expenses against
your revenues----
Mr. Miller. Right.
Mr. Viadero. [continuing] what we find here is they are
taking the expenses all in one year, and there were no
expenses, let us say, three years later to offset the revenue.
So it is an accounting issue. It is a timing difference.
Accounting principles require matching of revenue and expense.
Again we get back to that endorphin statement.
Mr. Miller. If we were to look at that, we would not
necessarily get an accurate picture of what took place on the
ground in each fiscal year.
Mr. Viadero. That is correct. You have to match your
revenues with the expenses in the individual accounting period.
That is all we are stating.
Mr. Miller. Is that a recommendation of yours to change
that, to do that?
Mr. Viadero. Yes, sir. We would like the Forest Service to
adhere to the fundamental Federal Accounting Advisory Board
Standards.
Mr. Miller. Thank you. One quick question: what about the
issue, is there any method by which we can properly assess what
is generically referred to as timber thefts?
I mean, is there any mechanism here within the Service to
determine what they are losing off of the forest? It has been
alleged from time to time that this is substantial, but other
people have said it is not much. What do we know about it?
Are they set up to look at it?
Mr. Viadero. Let me backtrack, if I may, sir. This past
summer myself and the Deputy Under Secretary for Natural
Resources, Mr. Brian Burke, went out to Region 6 in Oregon, and
visited the Ochoco National Forest, to see what was going on.
I am from the South Bronx. A big forest to me is three
trees.
We went out there, and we observed the entire sales process
from the time that the sales are issued. We met with the
manager of the sale, we visited the cutting site, we followed
it to the mill, we watched it be sample graded at the mill, and
we watched the logs leave.
My prior career was with the Federal Bureau of
Investigation, and I have identified at least six separate ways
you can get timber theft into the system. And that was my first
day on a national forest.
I think by nature, the cutting and transporting of these
large timbers out lends itself to the possibility of some
abuse. We have worked with the Forest Service enforcement side
on many occasions in large timber theft sales.
To give you a more definitive answer as to the exact dollar
amount, the only thing I would feel safe saying is it is a lot.
It is a lot. That is all I can say, because I really have not
had the opportunity----
Mr. Miller. So your vision of the system is that a lot of
timber can seep through the current system of checks and
balances.
Mr. Viadero. Yes, sir. As when we do the Food Stamp
reviews, a lot of the food stamps seem to go out.
Mr. Miller. OK. We will pursue that later. Thank you very
much.
Mr. Viadero. Yes, sir.
Mr. Herger. Thank you, Mr. Miller. I thank you very much,
Mr. Viadero. We will recess and then come back.
Mr. Dicks. Mr. Chairman, we have 10 minutes before we have
to leave.
Mr. Herger. OK. Would you like to go ahead?
Mr. Dicks. We are going back and forth.
Mr. Herger. That will be fine.
Mr. Dicks. OK. And then we can walk over together.
Let us go back to, the Forest Service uses about 100,000
management codes which can contain up to 99 lines of accounting
each. Though some codes are essentially prescribed, the
preponderance are locally developed and are unique to each
venue.
Is that system still in place?
Mr. Viadero. Yes, sir.
Mr. Dicks. I mean, if you do not straighten that out, you
do not have a prayer.
Mr. Viadero. We have made recommendations, sir----
Mr. Dicks. You can bring in Price Waterhouse or anybody
else, but if you do not change that basic system, you do not
have a chance of getting this turned around.
Mr. Viadero. That is correct, sir.
Mr. Dicks. Is there any plan to do that?
Mr. Viadero. We have made recommendations that the Forest
Service follow basically the same outline as the Natural
Resource Conservation Service, in so far as a time utilization
record keeping, for lack of a better term, and back these codes
out on a time basis, and then you can make your budget
reconciliation at the end of the year on a separate system, not
the financial management system.
Mr. Dicks. Are they doing that?
Mr. Viadero. No, sir.
Mr. Dicks. Second question. You mentioned this little
change they did because of the Treasury. Let me see if I can
find that one. You said NFC relies on numerous automated and
manual reconciliation routines. These reconciliations, however,
are frequently achieved through the use of plugs or by simply
by denoting the unidentified differences.
For example, in 1997, the NFC adjusted its cash account by
increasing disbursements by a net of about $1 billion, and
increasing deposits by a net of $174 million in order to agree
with Treasury records.
And there is no identification on this whatsoever?
Mr. Viadero. No, sir.
Mr. Dicks. I mean, that is pretty hard to do. I mean, a
billion dollars, they just created it out of thin air?
Mr. Viadero. That is at the National Finance Center, sir,
not by the Forest Service.
Mr. Dicks. And so how did the National Finance Center
justify this?
Mr. Viadero. That is why we gave them an adverse opinion
this week, sir.
Mr. Dicks. And we still do not have any documentation or
information for these amounts?
Mr. Viadero. I would ask Mr. Young to give me a hand here.
Mr. Young. The accounting system at NFC does not provide
for reconciliations, period. They take the amounts that the
Treasury shows and they do not match with the amounts that they
show on their books.
So as a result, they say we will adjust our books to match
with Treasury because they assume Treasury would be correct.
Mr. Dicks. But without any basis for doing that.
Mr. Young. The only basis for doing that is they are out of
balance, and they have to balance with Treasury. So they do not
go behind to find out why there is a difference. So it is made
essentially to equal the numbers. That's the adjustments that
are made.
Mr. Dicks. Now, you mentioned, you said they hired an
accounting firm, and they are doing this and that. But if you
do not put enough money into this, if you do not take out of
your budget and say we are going to have to have X millions of
dollars to get the outside help, and to buy the financial
systems and the accounting and all the other things that go
into putting together a financial management system, they are
not going to get there.
I mean, it is fine to say we are going to hire an
accounting firm to help us. But if you do not put the resources
behind that, you are not going to get there, is not that
correct?
Mr. Viadero. Sir, we do have the commitment. And, again----
Mr. Dicks. Commitment, verbally, we have heard does not
work very well. What about resources? What about budget?
Mr. Viadero. We are working. We are working. I have got on
average about 20 people working with the Forest Service at the
data entry level--at the data entry level on their financial
health plan.
Where additional issues arise is at the National Finance
Center, with the Foundation Financial Information System.
Mr. Dicks. Where in the hell is the National Financial
Center? Where is that?
Mr. Viadero. That is in New Orleans, sir.
Mr. Dicks. Is it a part of the Department of Agriculture?
Mr. Viadero. It certainly is, sir.
Mr. Dicks. This was created to bring fiscal integrity to
the process?
Mr. Young. The National Finance Center has been in business
for years, and it was established at a time when the Department
wanted to consolidate all the payment functions of the USDA
into one center, so they would have the economy of
centralization.
So the National Finance Center not only handles the
Department of Agriculture, but numerous other government
agencies, as far as payroll personnel, and the accounting
functions.
Mr. Dicks. And you are saying it is broke?
Mr. Viadero. We are saying, sir, with the new system that
they went off the shelf with, and they opted to stay with the
legacy systems which basically take other software, let's say,
that the Forest Service has in place, and integrates it to this
off the shelf package.
That is where the problems are. They are known as feeders.
Those feeders are really messed up. The Forest Service
attempted on October 1st of 1997, in conjunction with the
Office of the Chief Financial Officer, and against the
recommendations of this office, the Office of Inspector
General, to put that system on line October 1st as if it were
going to be a magical panacea to all accounting woes.
We said test it, test it thoroughly, test each feeder one
at a time. And as those feeders came on line, sir, they failed.
And that is why we are in the condition we are in right now.
Now, people want us to think that NFC can bring on seven
additional Forest Service regions October 1st, 1998 and have
those regions flip the switch and it will magically work.
We cannot reconcile the closing balance of 1997 to an
actual balance and beginning balance, and the new year moneys
in fiscal 1998. So we are less than cautiously optimistic that
this system will be ready by October 1st of 1999.
Mr. Dicks. Thank you, Mr. Chairman.
Mr. Herger. Thank you, Mr. Dicks. Thank you, Mr. Viadero,
for your testimony. We will recess for a half an hour, and then
return with the Forest Service, with the next panel.
Thank you.
[Recess.]
Mr. Herger. We will reconvene the hearing, and call our
next witness, Chief Dombeck of the Forest Service.
Chief Dombeck, if you could first raise your right arm to
be sworn.
[Witness sworn.]
Mr. Herger. Please proceed.
STATEMENT OF MICHAEL DOMBECK, CHIEF, UNITED STATES FOREST
SERVICE, UNITED STATES DEPARTMENT OF AGRICULTURE, WASHINGTON,
DC
Mr. Dombeck. Thank you, Mr. Chairman. I appreciate the
opportunity to appear before this extraordinary joint committee
hearing.
For someone from Northern Wisconsin who grew up on a
national forest, this really is an extraordinary event for me.
I know we all care very, very deeply about the Forest Service,
and the resources it manages, and I thank you for the hearing
today.
I acknowledge the issues put forth by both the GAO and the
IG, and they indeed have identified many issues that the Forest
Service needs to deal with, and I stand here ready to work with
Congress, the Secretary and others to move forward on these
problems.
I want you to know that I am strongly committed to
addressing the issues of accountability, of financial
management, of performance within the Forest Service. I also
want you to know that while I was acting director of BLM, BLM
received its first unqualified audit, in 1995, and has received
unqualified audits since that time.
The process was not that complicated to achieve that. First
of all, we stressed and pursued working relationships with the
Inspector General to create an atmosphere of positive working
environment. We placed high priority and a management
commitment to sound financial management, as well as
stewardship of resources.
We insured that managers recognized and were accountable
for insuring and applying sound financial practices and project
planning in meeting stewardship responsibilities. And we placed
a very high priority on data integrity and accuracy and also
brought in a very highly qualified Chief Financial Officer.
Now, it is important to understand that this comparison
that I have just made with the Bureau of Land Management, the
BLM has much simpler procedures. And it is also important to
note that the problems that we are talking about here
associated with the financial system and accountability within
the Forest Service evolved over time.
I sort of view it as an accretion of things that developed
over time, and I want to say, No. 1, it is the complexity that
we have to cut through. It is the complexity that is killing us
in achieving what we need to do.
The cumulative effect over time of the many things, a
decentralized culture that is important for natural resource
management. But a credit and a debit is the same, whether we
are in Alaska, in Florida or in your State of California.
Essentially over time, and I have said this at many, many
hearings, that we have essentially moved the resource manager
out of the field and into the office. And I think the thing
that we want to achieve is to move the resource manager back
out into the field, to simply the processes that we work in.
And, most importantly, that our financial and accounting
systems have to be integrated to get the best resource
management decisions.
The question was asked, can it be fixed, and the answer is
yes, it can be fixed, but it will take time, and it will take
commitment. And I want to say that from my very first day on
the job, I stressed accountability, financial management. We
have made some progress, but we have a long way to go, and I
want to stress, a long way to go. But we can show progress on
an annual basis.
Well, what is needed? First of all, we need general
agreement on resource priorities. We need the properly trained
people, and to really focus on business management skills that
have eroded over time, through downsizing and other efforts.
We need accurate and current information. We need to
operate in partnership with our constituencies, with Congress,
the IG, the GAO and others. And we need time. We need time. As
was mentioned earlier in this hearing, it took Jack Welch 10
years to get GE where it is today.
The Forest Service is a large organization. It is
equivalent to a Fortune 500 company, and we need to apply the
best management practices to that agency.
In the 14 or 15 months that I have been on the job, I just
want to highlight some of the things that have moved forward. I
brought in Francis Pandolfi from the private sector, a highly
successful CEO, very familiar with running large businesses.
I have made leadership changes, and have more to go. And I
am most importantly interested in leadership, committed to
change, committed to moving the Forest Service into the 21st
century.
We initiated the Coopers & Lybrand study, which I know the
Committee has a copy of. And this study basically lays out many
of the solutions that we can move forward with, and begin
moving forward with fairly quickly, and are prepared to do
that.
We have reduced the number of direct reports to the Chief.
When I came on the job, I had 30 employees reporting directly
to me. We have reduced that. We have moved the decisionmaking
levels down in the organization to where the experts are.
We have begun the implementation of land-based performance
measures, that are going to be tied to the Government
Performance and Results Act. I have initiated the Chief's
Reviews to begin moving forward, and identifying issues, and to
move management into a proactive mode, sort of looking ahead of
the headlights, to help move the Forest Service out of the
reactive atmosphere it has been in.
We have begun to implement the Foundation Financial
Information System that was mentioned earlier today. We have
focused on accountability, and I have issued a Natural
Resources Agenda, to bring clarity to the mission.
And I want to emphasize that this is a multiple-use agenda.
It is an agenda designed to protect and restore watersheds, to
move forward with sustainable forest management, to deal with
Forest Service roads issues, and to focus on an increasing
recreation workload.
I want to acknowledge the many, many Forest Service
employees, for decades, for the good work that they have done,
and I want to emphasize that those employees did what was
expected of them. They did what Congress directed and what the
leadership of the Forest Service directed.
The lists of accomplishments are many, and I want to just
highlight a few from 1996. We had over 66,000 acres of
watershed improvements; 357,000 acres reforested; 258,000 acres
of timber stand improvements; 117 abandoned mine sites
reclaimed.
We assisted in tree planting on 760,000 acres of private
lands. We reconstructed 2,800 miles of roads. We exchanged
65,000 acres of land. We located 65,000 miles of boundaries. We
sold 4 billion board feet of timber. And the list goes on and
on of the many accomplishments of the employees that I am proud
of.
And I have got to say that the best resource managers in
the world work for this agency, the best wild land fire
fighters, the best silviculturalists. And I believe you know
many of them in your State of California, as Madam Chairman,
you know in the State of Idaho.
I stand ready to work with Congress, the GAO, the IG, the
Secretary, to move a retooled and revitalized Forest Service
into the 21st century. And the benefactors will be the
resources and the individuals and the owners of the national
forests in the United States.
And I think I share with you a common goal that our
objective is to have a Forest Service that will work better and
that will be a better place to work.
Thank you, and I ask that my statement be entered into the
record, and I would also like to acknowledge Under Secretary
Jim Lyons, who is here; Deputy Chief of the National Forest
System Bob Joslin; and I also have all of the deputy chiefs of
the Forest Service with me here today should additional
expertise be needed to answer any questions you might have.
Thank you.
[The prepared statement of Mr. Dombeck may be found at end
of hearing.]
Mr. Herger. Thank you very much, Chief Dombeck. I want to
concur with you on your statement on the quality and dedication
of the Forest Service employees that we have. As you are aware
I have all of or parts of nine national forests within the
district that I represent, and certainly some of the most
dedicated and hardworking individuals that I have ever known
are your employees.
I really believe that the challenges that we have and seem
to be recognizing in this hearing, the purpose of this hearing,
really is not the quality of the people we have working on the
grounds in these forests. It is more directed toward the policy
of lack thereof and the management that seems to be coming down
that seems to be the overwhelming problem.
As a matter of fact, maybe I will just start in that line.
There is a Forest Service manager who retired back about a year
ago, and she wrote a letter of resignation to you, Mrs.
Henderson-Bramlett. And in that letter that she wrote, she
spoke of ever increasing redundant and costly agency practices,
polices and regulations, the lack of accountability both with
all employees and with agency management, and the lack of
leadership and vision throughout all levels of the Forest
Service.
Now, that was a quote from her letter of concerns that she
has. She went on in the letter saying that the Forest Service
makes vague commitments in attempting to please all parties and
be politically correct. I could go on and on about the concerns
that she stated in the letter to you.
Some of the main concerns that I have had have really
almost all come from Forest Service employees, and that is
really the nature of our concern.
Maybe with that in mind, Chief Dombeck, there has been much
that has been said about the problems with the financial and
management accountability. There seems to be no shortage of
agreement from the Forest Service, and I thank you for that,
when it comes to the statement that there are financial and
management accountability problems.
What there is a shortage of is action. This morning we
heard from both witnesses that the GAO and OIG continue to
point out to the Forest Service the problems associated with
their financial and management systems, and in addition have
provided solutions to those problems.
Yet the Forest Service has not implemented these solutions.
My question is do you realize that any success the Forest
Service believes it is making will be scrutinized because there
is no accurate financial data to qualify your results?
Mr. Dombeck. Yes. We understand that. In fact, from the
standpoint of solutions, the Coopers & Lybrand report that I
mentioned begins to layout solutions. In fact, the top five
recommendations that they make in this report, and that is to
establish a Chief Financial Officer, and a strengthened
organization to lead the entire effort; to increase the
leverage of the Foundation Financial Information System to
better support the production of financial information; to
simplify--and I want to underline that word, simplify--the
budget and accounting structure to generate more useful
corporate data; to provide a financial operating plan at the
beginning of fiscal year 1999; to instill a sense of
discipline.
And there are many, many suggestions like that that we are
prepared to move on, and many suggestions also from within the
organization and recommendations of both the IG and the GAO.
As the IG mentioned, we have a financial health team in
partnership with the IG, and I believe that we need to work
together on these systems, and then we will begin to achieve
success. And I want you to know that I am committed to do that,
and that is why I have got Mr. Pandolfi here, to bring an
outside perspective, and some private sector expertise to the
organization.
Mr. Herger. Thank you. Mr. Miller?
Mr. Miller. I will pass for the moment.
Mr. Herger. Mrs. Chenoweth.
Mrs. Chenoweth. Thank you, Mr. Herger. Chief Dombeck, in
your recent State of the Forest Address, it was a very
interesting speech, but it lacked your expression with regard
to the fiscal concerns.
I would like to know, Chief Dombeck, on how you plan on
raising revenues within the forest, from the forest,
activities, and how are you going to significantly cut costs?
Mr. Dombeck. The Natural Resources Agenda that you
mentioned, the objective of it was to focus on the four primary
objectives of moving forward with recreation, the forest roads
issue, moving forward with sustainable forest management, and
the watershed health and restoration.
The most important thing we lack from the standpoint of the
items you mentioned is good data, and then the systems to
process that data in a simple, meaningful way. And I might ask
Francis to further elaborate on some ideas and some of the
conclusions.
Mrs. Chenoweth. I welcome hearing from you, but to focus,
exactly what I need to know is how you are going to raise
revenues. It would appear that that is a reason why the Forest
Service ran into the red. So how are we going to raise revenues
and significantly cut costs?
Mr. Dombeck. There are many revenue generators in the
Forest Service. Of course, as you know, the harvest of timber,
various permitting fees, but it is also important to keep in
mind that objective of the Forest Service and the national
forest was not to run a profit. The objective was to protect
the land, to provide good watershed conditions, and a
sustainable supply of timber for the Nation.
Now, I do not want to leave you with a false impression
that revenue generation is not important. It is very, very
important to offset costs every place that we can, and we are
using things like the recreation fee demonstration pilot
project as you know, and many others, and I would be happy to
provide any detail on any specific that you might be interested
in discussing.
Mrs. Chenoweth. You know, Chief Dombeck, with all due
respect, and I have a lot of respect for you, the fact is this
is an agency that was set up in order to generate revenues. And
also to be able to generate revenues for those counties that
were impacted with large blocks of Federal land.
And so I think that if we try to depend on fees, and cut
out our timber harvest activities, that we are missing the
point here.
I recognize and have done so publicly the encumbrances that
we as a Congress over the last few decades have placed on
managers like you, the top manager. But the fact is that we
have really got to get serious about generating revenues again,
and at the same time cleaning up the health of our forests.
I guess I want to hear you say that there really will be an
aggressive but sustainable timber harvest program. It was the
vision of Teddy Roosevelt and Gifford Pinchot that we do begin
to meet the market demand of the Nation for wood supply, and
that is being shifted, Chief Dombeck, to the Eastern States.
And they are meeting most of the market demand, while the
Western forests seem to be degenerating.
That is of great concern to me. So I really would like to
ask you again, other than fees, how do you plan on raising
revenues, and how do you plan on cutting costs?
Mr. Dombeck. Well, as I mentioned earlier, we can cut costs
through increasing efficiency, through better data systems.
What we are talking about from the standpoint of data systems
and business management will actually free managers up from the
many, many hours they spend dealing with a data system that may
be cumbersome and maybe inaccurate.
In fact, one of my managers told me just recently that we
could probably save in excess of $100 million in NEPA costs and
planning costs using the newer technologies that we have and we
are moving forward as aggressively as we can with those
projects.
Mrs. Chenoweth. Other than fees, how do you plan on raising
revenues? How do you plan on sustaining a steady flow of
receipts for the Forest Service?
Mr. Dombeck. Timber harvests will continue to be an
important tool, and an important activity on national forests.
But I think part of the debate that we are in today is we need
to continually move toward more extensive and active management
to deal with the urban/wild land interface, to deal with the
forest health issues, to deal with the threat of fire, to deal
with the mosaic, the appropriate mosaic on the landscape that
promote forest health.
And when we do that, the products will flow. The fiber will
flow, the water will flow, the mosaic of wildlife habitats, the
recreational opportunities, and this is the overall direction
that I see the Forest Service going in. And I think it is
something that we can work on together.
Mrs. Chenoweth. Thank you, Mr. Chairman.
Mr. Herger. Mr. Nethercutt to inquire.
Mr. Nethercutt. Thank you, Mr. Chairman. Welcome,
gentlemen.
Mr. Dombeck, it seems that in listening to the testimony
this morning that there is additional burden being placed upon
you. Mr. Miller talked about it in terms of Congressional
requirements or lack of Congressional strictness.
The accounting system is in a mess, there are a lot of
business functions that are lacking in your agency. And I know
you are relatively new to it, and I feel as though your heart
is in improving the agency and getting good results.
Perhaps you heard my question this morning in terms of what
identifiable outcomes can be reached in the near term, rather
than the long term. You may or may not be there in the next 5
years.
Even coming from the White House and the highest levels of
environmental policy decisions, it seems that you and other
land management agencies, other national resource agencies are
being faced with additional burdens.
For example, the issue of the Interior Columbia Basin
Management Project that is one that I have weighed in heavily
on with you, and I think you know my feelings, and I think the
other agencies do as well.
I sense clearly that that directive by the White House is
going to cause your agency a lot of effort and expenditure of
funds when you are worrying about how you are going to spend
your money. I just think you are facing a huge obligation there
in terms of your budget in the future. It is going to put
additional pressure on you.
I have tried to say this for the last few years, that
science collection is a good thing, but in terms of all the
studies that your agency is going to be required to do, the
sub-basin studies and the watershed studies, and all of those
things that relate to the Endangered Species Act, I think you
are facing a huge budget crunch.
So I would be interested, sir, in trying to get some sense
of how you plan to do all that you are mandated to do, or that
others expect you to do, when you are facing not only financial
problems, but accounting problems as well as other problems
that plague the agency that have been mentioned by the IG and
the GAO, not the least of which is this determination by the IG
that there is little assurance that funds have been expended
consistent with the budget.
The IG says that funding is subjected to absorbing overhead
charges, that the appropriations are reallocated down through
the organizational framework of the agency. As a result, the
amount of funds appropriated for a specific purpose or activity
are significantly reduced before they are available for that
purpose.
You have a daunting task, it seems to me, especially in
trying to take on new initiatives like the Interior Columbia
Basin Project. So I would be happy to have some assurance that
you think you can get there, but also what can you do in the
near term that can assure the Committee that you are on the
right track?
Mr. Dombeck. The information that we have on the Columbia
Basin is likely the best science and the best information that
we have in any area that the Forest Service manages, and this
encompasses about 24 percent of the National Forest System
lands, in the Columbia Basin.
That information will be used to update, I believe it is 72
plans, both Forest Service and BLM plans. And what we will have
is we will have the best information base we have ever had as
we update these plans.
From the standpoint of the overall costs, what we need to
get from that is a significant savings, given the information
base that we have, better decisions. And also there is an
important aspect from the entire Columbia Basin effort that I
know I hear when I talk to county commissioners, whether it is
in Idaho or in Oregon or Washington, is the concern.
But the simple fact is that because of that effort, there
are many, many projects that are moving forward that would
likely be enjoined on a project by project basis today. And we
are all looking for the best solution, and that is not an easy
task, and it will not be an easy task, but it is the best
approach that we know of at this time.
Mr. Nethercutt. We will get back to that, and we can carry
that debate further. My time has expired. I will ask more
questions during the next round.
Mr. Herger. Thank you, Mr. Nethercutt. Mr. DeFazio.
Mr. DeFazio. Thank you, Mr. Chairman.
Chief Dombeck, I want to followup on the answer and the
direction that Mrs. Chenoweth started on in terms of your
revenues. I have raised some concern about your parking, trail
access permits, and I will not go into that again here.
But while we are aiming at the public, individuals with low
impact use, I am concerned that things of much higher impact on
the forests are not carrying their load.
What sort of fee do we assess for like microwave towers,
radio-TV towers on the forests?
Mr. Dombeck. Let me ask Bob Joslin if he has that
information.
Mr. Joslin. Congressman, the Forest Service and the BLM
have developed an interagency schedule of fee rates for
communications uses on lands administered by each agency. The
scheduled fee rates are based upon the particular type of
communication use being exercised, and the population of the
community served by the site on which the use is located. For
facilities having more than one use colocated in them, the base
fee for such a facility is the type of use occurring in it
which has the highest valued rate on our fee schedule, with an
additional fee of 25 percent of the scheduled rate for all
other commercial uses within that facility. The Forest Service
and BLM update their fee schedule rates annually using the
Consumer Price Index-Urban rate maintained by the Department of
Commerce.
Mr. DeFazio. So, fair market value. So if they come in, you
have to harvest the timber in that area to build the tower, and
the Forest Service gets the revenue from harvesting the timber,
I assume.
And then they pay rent? Is that it?
Mr. Joslin. Yes, sir. That is correct.
Mr. DeFazio. What happens on private lands?
Mr. Joslin. Pardon?
Mr. DeFazio. On private lands? I mean, how would your fees
compare to rents they pay on private lands or State lands?
Mr. Joslin. I really cannot answer that. I am not sure of
that. We can get that information for you, though.
Mr. DeFazio. Yes. I would be interested in a comparison,
because I believe the Forest Service fees are much lower.
[The information referred to may be found at end of
hearing.]
Mr. DeFazio. You are also engaged in an effort to raise the
fees on vacation homes, as I understand in a number of forests.
Mr. Joslin. Yes, sir.
Mr. DeFazio. Has there been some problem with Congress on
that issue, I think?
Mr. Joslin. The areas that we have gone in and done the
same thing as I described before, to update those fees, and
certainly there is a concern.
Some of those sometimes increase quite substantially, and
there has been a concern with some of that work that has been
done.
Mr. DeFazio. I thought Congress took some action to delay
the implementation of the higher rents.
Mr. Joslin. That is correct.
Mr. Miller. Would the gentleman yield?
How often is that reassessment made?
Mr. DeFazio. Five years.
Mr. Miller. That has been done every 5 years?
Mr. Joslin. Vacation homes or, as we call them, recreation
residence lots, are appraised once every 20 years. For each
year in between appraisals, the annual rental fee is adjusted
based on the Implicit Price Deflator-Gross National Product
(IPD-GNP) index maintained by the Department of Commerce.
Mr. Joslin. It is on a 5-year cycle now.
Mr. Miller. How long has it been since the last one.
Mr. Joslin. The fees now being assessed to nearly all of
our 15,200 recreation residence permit holders are based on an
appraisal that was last conducted sometime during the 5-year
window between 1978 and 1982. So the 20-year anniversary of
those last appraisals is coming due over the course of the next
5 years, 1998 through 2002. In 1997, we started a 5-year effort
to appraise all recreation residence tracts and lots to
establish a new base fee for the next 20-year billing period.
Mr. DeFazio. But to reclaim my time, there is some sort of
limit you have self-imposed, because my understanding is we are
seeing dramatic increases to go to market now. So you were
limited in terms of your past adjustments every 5 years.
You were not allowed to go and reassess it at market value.
You were just allowed an inflation adjustment, or something
like that. Is that correct? I mean, as I understand it you are
way under market.
Mr. Miller. If the gentleman would yield, my understanding
was, in our hearing, that in some of these cases it has been 20
years since these have been updated.
Mr. Dombeck. Yes. The information that I have, as I recall,
we were instructed by a GAO audit to go ahead and move forward
more quickly on the reappraisals. We did that, and we basically
Congress got involved. I believe we delayed it, is it one year?
We are moving into a 3-year phase in.
But there was, yes, there was involvement of Congress in
that.
Mr. DeFazio. OK. And that was intervention by Congress, who
at that point was not concerned about market value or
maximizing revenues. I think I could go on in some other areas
than that. But let me get to something else, and I do not know
if this is general or specific. But this would be the most
outrageous example to me.
There is a proposed mining claim in an area of critical
environment concern in the Siskiyou National Forest by an
individual, it is a nickel mine operating under the name Nicor.
It is not patented, and apparently the individual does not
intend to take it to patent at this time, and instead wants to
operate the claim within the Forest Service. And since it is
such a fragile area in the drainage, the Forest Service has put
in very significant demands in terms of an EIS before the
person gets an operating permit.
But the Forest Service is paying for the EIS. Now, can you
explain that to me? So not only are we not charging like any
other land owner--and I know you are constrained by law--a
royalty fee or some substantial fee for the use of these lands,
we are paying for their environment impact statements?
Is that a general policy, or is that specific to this one
particular claim? I mean, that is incredible to me. If you want
to talk about subsidies and not running like a business, here
we are subsidizing for profit activities on the public lands.
I know you may not know that individual claim, but is that
a general policy, if people are not going forward to patent, we
just generally pay for EIS's for private, for profit activities
on public lands?
Mr. Dombeck. Yes, that is correct. In fact, we did in the
neighborhood of 20,000 decisions. We do about 20,000 decisions
a year in the Forest Service that are made up of EIS's, EA's,
and categorical exclusions. The largest number being the
categorical exclusions.
Mr. DeFazio. But I mean, for private, for profit
activities, we pay for the EIS's, when someone is going to come
in and utilize the public resource, paying virtually no rent,
no royalty.
We then actually pay to develop the EIS instead of
requiring them to develop the EIS?
Mr. Dombeck. I believe that is correct.
Mr. DeFazio. Is that a policy? Is that statutory? What
brings us to that point? If I could just get an answer to this,
Mr. Chairman, I would appreciate it.
Mr. Dombeck. I am not sure if it is statutory, but there
are instances where the proponent does pay.
Mr. DeFazio. OK. I guess I would like know, what are the
instances where they pay and where they do not pay, and how are
those decisions made? And I would very much like to have an
answer on that, and particularly on this one case, because it
is a place where we should not be mining, someone is going to
mine, and to add insult to injury, the public is paying to
enable that person to mine in an area where we should not be
mining.
Mr. Dombeck. We will get that specific case looked at and
provide you that for the record.
[The information referred to may be found at end of
hearing.]
Mr. DeFazio. Thank you, Chief. Thank you, Mr. Chairman.
Mr. Herger. Thank you, Mr. DeFazio. Mr. Schaffer to
inquire.
Mr. Schaffer. Thank you, Mr. Chairman.
In June, last year, out in Colorado in the Denver Post,
there was an article that stated that Mr. Pandolfi, the former
president and CEO of Times-Mirror Magazines, was hired by the
Forest Service as chief of staff to create brand equity for
Forest Service lands.
What does that mean, brand equity?
Mr. Dombeck. I will let Mr. Pandolfi talk about brand
equity.
Mr. Pandolfi. I will tell you what brand equity means. I
never read the article, Mr. Congressman, but brand equity means
that you try to take a brand, like Tide or Pampers, let us say,
and give it value, so the people understand that when they buy
that product they get a good product.
That is brand equity.
Mr. Schaffer. So with respect to Forest Service lands, they
quoted you, and it says you wanted to create brand equity for
Forest Service lands.
Mr. Pandolfi. We want people to understand the value of
Forest Service lands.
Mr. Schaffer. The article said, the quote was, we want the
Forest Service to be the Proctor & Gamble of outdoor
recreation. Could you elaborate on that a little bit, too?
Mr. Pandolfi. Sure, I would be happy to.
The Forest Service has probably the most outstanding, in my
view, recreation brands, outdoor recreation brands in the
world. Forest Service skiing, Forest Service hiking, Forest
Service fishing, Forest Service camping, and the like.
It is important to have both our constituents, the people
of this Nation, who use the lands for those purposes, and our
employees to realize the values we create in those various
activities. That is what I meant by that statement.
Mr. Schaffer. I dug up the Proctor & Gamble annual report,
which goes to its corporate board members and others who are
interested in the corporation as well. The information supplied
as to the exact value, product value of investments and so on
is laid out very clearly.
The Forest Service is a long way from achieving, becoming
the Proctor & Gamble of outdoor recreation. To Chief Dombeck, I
wanted to ask in a general way, how are we going to break the
mold? I think you heard my questions to the previous panel, Mr.
Hill, about whether there is any hope or optimism from his
professional perspective on whether we are going to be able to
see the Forest Service move from a hamstrung bureaucratic model
to what approximates a business model.
How do we become the Proctor & Gamble of outdoor
recreation?
Mr. Dombeck. The answer to that is we have to, and we can
only achieve it by doing it together. Working with the IG, the
GAO, the Forest Service adopting modern business management
practices as quickly as is possible. And we propose to do is to
set up a framework that involves the points that I mentioned in
my initial testimony.
We need a general agreement on resource priorities. We need
properly trained people, with the right disciplines,
particularly in the business management side of what we do. As
we went through the downsizing of the last several years, the
largest percentage of employees that left the agency were those
in the administrative areas, the areas that we need to move
forward in with business management and accountability and the
such.
And we need accurate information. We need the partnership,
and then of course the appropriate amount of time. And I am not
sure you were here when it was mentioned, Congressman Miller
mentioned that it took Jack Welch 10 years at GE.
This is not a problem that is going to be fixed quickly.
But I believe that with the appropriate milestones, with the
appropriate framework, with the appropriate oversight that we
can achieve this.
It is interesting that it was not until 1990, I believe,
that the Chief Financial Officer Act was passed by the
Congress. And as we look at previous decades, the focus of what
was expected of the Forest Service was different. And we need
to readapt, we need to retool, and we have got the message.
Mr. Schaffer. Let me try to beat this light here with one
more question. And that is leadership is a big component of
making Forest Service the Proctor & Gamble of recreation,
outdoor recreation as well. I want to ask a specific question
because there was a contradiction in two different bits of
testimony that this Committee--or a portion of this Committee--
received recently.
When you were here last time in front of Chairman
Chenoweth's Committee I asked about the moratorium, and whether
the Council on Environmental Quality had played any role in
developing the policy and pushing it forward, and you said no,
that you had not had any input or feedback from them.
Ms. McGinty, head of the Council on Environmental Quality,
was here last week, and the same question was put to her, and
she said that they had, the Council on Environmental Quality
had a tremendous amount of influence and direction in pushing
the moratorium forward.
Now that you are here again, I would like to ask you one
more time whether the Council on Environmental Quality played a
significant role, or to what extent they played a role in
developing the plans and leadership with respect to the
roadless moratorium.
Mr. Dombeck. They played no role in the development of the
policy. I am not sure of the date that the President signed the
appropriations bill, but because of the controversy associated
with the roads issue, there was a statement that accompanied
the Interior appropriations bill that basically charged the
Forest Service with developing new roads policy based upon
science.
And from the standpoint of needing to do, face this issue,
there was that dialog. I had a similar dialog with the
Secretary. The Forest Service took the policies, developed
them. In fact, Deputy Chief Joslin, as well as Tom Mills from
our Portland office, took the lead in developing the policies,
looking at the alternatives.
Sometime around Christmas we briefed the Under Secretary's
Office, we briefed the Secretary's Office. We briefed CEQ, and
then the Forest Service went ahead and laid out the proposals
as you see them today.
Mr. Schaffer. Just for clarity you maintain that the
Council on Environmental Quality did not propose the moratorium
or pressure the Department in any way to implement it.
Mr. Dombeck. That is correct.
Mr. Schaffer. Thank you, Mr. Chairman.
Mr. Herger. Thank you. Chief Dombeck, we heard some pretty
alarming testimony earlier from the General Accounting Office,
from the Inspector General, concerning the management or their
concern of very dramatic mismanagement of the Forest Service.
Another concern I have is that this mismanagement is not
only in the area of finances, but also is in the area of
personnel. I alluded to, earlier, a quote from a letter from a
constituent of mine who was the forest supervisor of the Modoc
National Forest, Mrs. Henderson-Bramlett.
Are you aware of the letter that she sent you on the 1st of
January?
Mr. Dombeck. Yes, I am.
Mr. Herger. Within that letter, just to quote parts of
this, and quoting from her letter now, I am 38 years old, and
have been the forest supervisor of the Modoc in Region Five for
almost 6 years. Going on to another part, she goes on to state
what high quality people she works with there, as we both
stated earlier.
But then she goes on again to quote, a secondary reason for
my departure is my frustration and dismay over the ever
increasing redundant and costly agency practices, policies and
regulations, the lack of accountability, both with all
employees and with agency management, and the lack of
leadership and vision throughout all levels of the Forest
Service.
Again, going to another part of her letter, and again
quoting, I feel we are trying to be everything to everyone all
the time. As a result, we deliver very little to anyone. This
causes distrust within the agency and with the public, since we
make vague commitments in an attempt to please all parties and
be politically correct.
Again this only increases the distrust as we continue with
bureaucratic rhetoric, which the public does not understand,
nor want.
Continuing on a little later in her letter, yet we are
fearful to make any decisions, to take any action that may
result in litigation, an appeal or public uproar, especially if
that leads to political or administration involvement. The end
result to the agency is a state of paralysis that produces
costly and ineffective or poor decisions.
Then continuing on a little bit later, we will continue to
make non-decisions and muddle through the next crisis, wasting
taxpayers' money and employees time and energy, and lowering
morale.
It has been difficult and frustrating to lead a forest into
the 21st century when I have had little or no idea of the
future of this agency, nor its direction. Leaving that decision
to each forest is setting this agency up for continued and
increased chaos, dysfunction, and ultimately the agency's
demise.
And you are familiar with this letter, Mr. Dombeck?
Mr. Dombeck. Yes, I recall reading the letter.
Mr. Miller. Mr. Chairman, could we have the letter in its
entirety put into the record?
Mr. Herger. Yes, without objection.
[The information referred to may be found at end of
hearing.]
Mr. Herger. Chief Dombeck, are you concerned that a forest
supervisor would resign based in part on the frustration of
dealing with these types of problems? And now let me quote from
this part of her letter: ever increasing redundant and costly
agency practices, policies and regulations, the lack of
accountability, both with all employees and with agency
management, and the lack of leadership and vision throughout
all levels of the Forest Service.
Are you concerned that forest supervisor would resign based
in part on this?
Mr. Dombeck. Yes, I am very much concerned. In fact, I have
other letters similar to that from people at all levels of the
organization. And I think it is important to note that this
amplifies the need to bring about the change that we have been
discussing here, to simplify the organization, and streamline
it.
I also want to point out, from the standpoint of lawsuits,
I have never had a job where I am sued so much as this one, and
the level of controversy that we deal with. And I also want to
mention that some of the areas that we go into are
controversial.
And one of the reasons that I came forward with a temporary
suspension of road building in roadless areas was for a large
part not only a science based decision, but also an economic
based decision, because these roadless areas are the most
expensive areas for us to go into.
The reason they are roadless is because the easy stuff is
gone, from the standpoint of timber. It is tough terrain and it
is sometimes low value wood. And these areas were repeatedly
litigated and appealed, and from the standpoint of business
management decisions we would be much better off directing our
resources to areas to work that are less controversial.
There are many areas in the forest that need work that can
also produce fiber and all the other values that we associated
with the variety of timber management practices, thinnings and
all those kinds of things.
Mr. Herger. Well, Chief Dombeck, again, to be specific to
this letter, and you mentioned you know of other letter like
this. I can tell you, I know of many Forest Service employees
who have expressed the same concern.
But could you outline what steps you are taking in response
to these concerns that were expressed by this former forest
supervisor regarding redundancy, cost, lack of leadership, lack
of accountability and agency paralysis?
Mr. Dombeck. Well, I believe the Natural Resources Agenda,
clarifying the vision, is the first step. In fact, I recently
received a letter from forest supervisors that I would be happy
to send to you, of strong support of the agenda.
The focus on the core values, the core values of working
within the limits of the land that sustained generation after
generation of not only fiber production but all of the values,
the water values, the recreation values, the values that are
out on the national forests.
Mr. Herger. Thank you, Chief Dombeck. Mr. Miller will
inquire.
Mr. Miller. Thank you, Mr. Chairman.
We have done a lot of comparison, and I think that is quite
proper because it is driving a lot of our thinking, between the
private sector and the public sector here. And, Mr. Pandolfi, I
think your appointment is truly one of the creative ideas in
the Forest Service here, to try to get control of this.
I am thinking of the chairman of General Electric, or
Proctor & Gamble has been brought up here, and I wonder how
well those CEOs would do their job if every time they made a
decision they had a subpoena on their desk, or a letter with 50
or 60 questions about how they arrived at that decision, and
what were their motives and who did they talk to, and who did
they discuss it with.
And it would seem to me that when I look at most of the
people in the private sector who are going through downsizing
and reorganizations, and especially if people are brought in
for that purpose, one of the things they want is the authority
to make changes, recognizing that changes bring about some
pain, change in direction, change in culture, in thinking, in
outcome.
We keep saying we want the change, but I look here, Mr.
Craig, March 4th of this year sends to Mr. Dombeck, speaking of
letter, some 60 questions about why three people were changed
and retired or resigned from the Service. And this goes on and
on and on.
We see now land managers being hit with subpoenas from this
Committee who are trying to make a decision out there on the
land, and, bang. A subpoena tends to focus the mind to think
about what you will be able to leave your children and what
your annual costs are going to be, and are you going to pay for
litigation, is everything going to be OK.
Yet somehow we want people to make change. I just wondered
if you knew whether there was anything comparable to that in
the private sector?
Mr. Pandolfi. You are asking me?
Mr. Miller. Yes, I am asking you, Mr. Pandolfi.
Mr. Pandolfi. No.
Mr. Miller. Do you know anybody who would operate a
corporation with those infringements?
Mr. Pandolfi. No. No one operates this way in the private
sector. In the private sector, you are exactly right. If this
were a corporation--first of all I would tell you that if this
were a corporation, the Forest Service, it would be one of the
best leveraged buy out opportunities in the world.
We could come here and bring in a management team, as we
have right here, an excellent management team that the Chief
has assembled, and if we were allowed the incentives that the
private sector offers its employees, we would spend far less,
far, far less in this agency, and we would find answers to the
questions that are bothering us so intensely.
But it is not possible to hire, to change people in their
jobs, or to incentivize people the way we do in the private
sector.
Therefore, I must tell you that a challenge to me has been
to try to find ways that the things that I have learned over
the years can be applied here. It has been very frustrating.
Mr. Miller. I hope that we do not discourage you, because
you are the breath of fresh air that for 10 years the GAO and
others have been telling us we ought to seek, and this
administration of the current Forest Service had enough courage
to bring you in.
Usually we bring someone in who is sort of part of the
family, to kind of give us an assessment. This is the first
time we have had some fresh thinking. I am reading the
testimony that you gave back in July of last year.
And we do not get a lot of testimony like that. We do not
get people telling the Congress that maybe we are part of the
problem, and maybe the fact that we do not have standards for
performance, that we give you the money whether you do it right
or wrong.
That is not very often that we get offered that kind of
testimony. The question is whether we will react to it.
I was also taken, because it is kind of interesting, you
were asked by, I think, Mrs. Chenoweth, or Mr. Hill, I am not
sure, Mr. Hill, how you would rate the Service. This was back
in July. On a one to ten. And you said it is a one.
And they said, where do you think you will be in the year
2000, and you said my guess is we certainly will have made
improvements, but we will be no General Electric.
One of your ardent critics, for a number of years the
Inspector General's Office, told us before we went off to vote,
that in conclusion the Forest Service's financial management
has been materially deficient for many years. With efforts
under way to achieve financial health and implement new
accounting systems, the road to recovery has been laid and the
Department is heading in the right direction.
We asked a question a year ago. We are back here a year
later. We asked the question of an independent review, and the
say they are headed in the right direction, and what we want to
do is hit you with a lot of subpoenas and 50 page questions.
I don't get it. Maybe we cannot stand success because you
would have to deliver some real bad news about some very tough
ingrained constituencies within the jurisdiction of the Forest
Service.
But again, I do not get how that is consistent with what I
see going on in base closures, what I see going on in corporate
reorganizations, and mergers and acquisitions and buy outs and
downsizing. We just do not want to hear the bad news. We do not
want to hear that one of our friends got transferred across the
mountain, or to another town or different State.
Geez, I don't know, I am living in a town full of people
that have been transferred between corporations and
subsidiaries, and their offices have been taken out from
underneath them, and they are still working for people, but
they believe it is part of the endeavor to get the effort right
side up in a tough, competitive world.
And we want to just continue to run loss leaders. We are
like a store. We are like Cosco where we say we will sell
everything at a loss, but we will make it up on volume. Just
cut more trees, but we are all going to do it at a loss.
I don't get it. I mean, we keep saying we want business, we
want business, but you cannot transfer anybody in this
operation, you cannot take anybody because they are not
competent or not on the team and suggest that they might be
better off working somewhere else, when all you get from
Congress is a long list of subpoenas.
And I do not mind subpoenaing you guys. You are big guys.
You can take it. But we are second guessing, now, with
subpoenas people on the ground in the BLM and the Forest
Service. These are people who are getting shot at, getting
threats of violence and everything else. And here are your
champions in the Congress.
Thank you.
Mr. Herger. Thank you, Mr. Miller. Mrs. Chenoweth will
inquire.
Mrs. Chenoweth. Thank you, Mr. Chairman.
I am familiar with that subpoena, Mr. Pandolfi, and I would
think that you would know that anyone in business who exercised
authority without the basis and cover of law would get one
whale of a lot more than a subpoena to explain their actions.
They would get a pink slip but fast. The fact is that
Tucson Rod and Gun Club is employing gun control laws, and
there is not a law that allows them to do that. There is not
even a written policy that allows them to do that.
Mr. Miller. If the Chairwoman would yield?
Mrs. Chenoweth. No. The lady will not yield.
I think a subpoena to ask people to come before this
Committee is the least that we can do, and ask them to explain
their actions.
Another thing. The gentleman from Oregon made some comments
with regards to the National Environmental Policy Act, and the
requirement of government to do an environmental impact
statement for certain uses on the land.
And for the record, I think it is quite simple. NEPA is a
requirement of the Federal Government, not of the private
sector, not of the users. NEPA, it is stated in Supreme Court
decisions, starting with National Helium v. Morton, followed by
Sierra Club v. Morton, and various other Supreme Court
decisions have consistently said it is up to the Federal
Government to do the NEPA requirement.
Furthermore, Mr. Pandolfi, while I appreciate the fact that
together we have to approach the problems we are facing today
in a business like manner, I am worried that Mr. Dombeck is
putting too much on himself by trying to say--or let me just
ask you, Mr. Dombeck, trying to say that we need to establish
the new vision, new policy and new goals.
I submit that has already been established by the Congress.
The policies and goals have even been codified with the
National Forest Management Act.
And for you to try to expand out beyond that makes your job
even more difficult. And I resent the pressures that are put on
you to do that. I think that if you were allowed politically
just to keep the focus on what the law is, and I think you
should be, and it would sure lessen a lot of the lawsuits, your
job would be one whale of a lot easier.
And, finally, before we go to vote, I would like to say
that we have got to remember, these Forest Service lands are
not owned by the Forest Service. I mean, it is not like the
Forest Service is a big Fortune 500 company. These lands really
are the public's lands, or the resources on the lands are the
public's lands.
And the Forest Service is the manager, and we expect you to
be efficient managers. But if we lose focus on that, I and my
colleagues will be even crankier than we are today. If we try
to start running the Forest Service as a business, by running
up more fees, and making it more costly for people to get on
the land, and to use the resources, whether it is skiing or
recreation, or horseback riding or whatever it might be.
Mr. Chairman, I do have a series of questions that I do
want to ask. But I see that we do have a vote. Will we be able
to ask another round of questions?
Mr. Herger. Yes. We will recess for 20 minutes and come
back for more questions. Thank you.
[Recess.]
Mrs. Chenoweth. [presiding] The Committee will come to
order, and the Chair will recognize Mr. Nethercutt.
Mr. Nethercutt. Thank you, Madam Chairman.
Mr. Dombeck, would you agree that a substantial amount of
administrative work and cost associated with timber sales is
directly attributable to either appeals or preparing to resist
appeals?
Mr. Dombeck. Yes. In some of the most controversial areas
that we work in, those costs exceed 50 percent, the office
costs. The additional expenses associated with those has to do
with dealing with law enforcement issues, protests, those kinds
of things. It is very labor intensive. The whole process is
labor intensive.
Mr. Nethercutt. Could you put a number on the cost of it
for the Committee?
Mr. Dombeck. I am not sure I could. It is highly variable
from situation to situation. Do you want to venture a guess,
Bob?
Mr. Nethercutt. In terms of the amount of money you spend
on personnel and people working on the ground and so on, is it
50 percent of your time, 75 percent of your time, 25 percent of
your time? Maybe an outside figure.
Mr. Joslin. Could I give you some information, Congressman?
Mr. Nethercutt. Sure.
Mr. Joslin. On appeals, 5 year average cost is just over $5
million. And the same 5 year average cost for lawsuits is just
under $5 million. So it is right at $10 million for that 5 year
average cost.
Mr. Nethercutt. Would it be helpful in the administration
of a sound forest policy if there were restrictions or
limitations on appeals, and some limitations perhaps on the
length of appeals and the time for determining appeals from an
administration standpoint? Would that be helpful to you?
Mr. Dombeck. I know this is an issue that has been around
for some time, and the thing that we continually hear from
people is that people want the ability to question government,
they want the ability to question decisions. The more we can do
to build support, to build trust, to expend energy in areas
that are not controversial, the more efficient it is.
Mr. Nethercutt. Would it be helpful to you in the
administration of your program to have a limitation, as I have
described it?
Mr. Dombeck. From the financial standpoint, I think the----
Mr. Nethercutt. From the standpoint of financial, the
standpoint of administrative operations, efficiency of the
Forest Service, implementation of your policies. Would that be
a helpful step?
Mr. Dombeck. Well, certainly from the standpoint of cost.
It would reduce the cost. However, people litigate, and choose
to litigate, as you know much better than I, in the United
States, and what sort of insulation could be built around that,
I am sure you have a better understanding than I.
Mr. Nethercutt. I take it, in all honesty it would be
helpful to you, would it not? It would make your life a little
easier? Whether it is constitutional or not, or whether it is
going to happen or not is another matter. But it would help
you, would it not?
Mr. Dombeck. Yes.
Mr. Nethercutt. In the way you do your work.
Mr. Joslin. Congressman, if I could.
Mr. Nethercutt. Yes, sir.
Mr. Joslin. In regard to the NEPA process, that part of it
creates a tremendous opportunity, I think, for public
involvement that we have, and I think as a result of that that
we do get better decisions.
Mr. Nethercutt. I understand. I appreciate that. And you
may be right. But my question goes to the practicality of how
you do what you are charged with doing. This causes you some
stress, I am sure.
I also have the impression that there are more
environmental interests, if I can call them that, that exercise
their rights of appeal than, shall we say, industry interests,
if we can sort of agree on what those two categories of people
are. Would that be accurate?
Mr. Dombeck. Does anyone have that information? We could
provide that for the record. I know that we routinely get sued
from both sides.
Mr. Nethercutt. But in your record, to date, is there a
higher number of environmental interests that exercise their
rights of appeal, or is it the other way? Do the industry
interests exercise their rights of appeal?
Mr. Dombeck. We can provide that for the record.
Mr. Nethercutt. Well, what is your impression, Chief? I
mean, you just have some sense of who is responsible. Which
group is more responsible for appeals and the consequent delays
that you have to deal with?
Mr. Dombeck. In the salvage area, it was mostly
environmental groups.
Mr. Nethercutt. How about the green sales, or any other
timber sales?
Mr. Joslin. What I would say in regard to that is most of
the appeals and litigation that we get are from individuals or
groups that really do not have an interest as far as the
commodity that we are dealing with.
Mr. Nethercutt. And I think that is a big problem. If I
live in Maryland or Virginia and I do not like the sale that is
going on in the Colville National Forest, I could probably stop
that, couldn't I, under the current condition of the law and
regulations that exist today. Is that correct?
Mr. Joslin. Well, you could certainly appeal.
Mr. Nethercutt. I could slow it down.
Mr. Joslin. You could appeal it, or certainly enter into a
lawsuit.
Mr. Nethercutt. And is that a common occurrence for you,
these so called outside interest appeals?
Mr. Dombeck. I believe certainly there are some. Specific
numbers, again, we could provide you a breakdown.
[The information referred to may be found at end of
hearing.]
Mr. Nethercutt. Is it your impression that it is a common
occurrence? I am not trying to test your memory. What is your
impression? Is it your sense that this is a common occurrence,
that this happens regularly? Would you disagree with that?
Mr. Dombeck. I would not disagree with that, but I am not
sure from the standpoint of the long distance lawsuits. There
are interest groups in all areas and all States. Everybody from
those who think it is a sin to cut a tree to those that want to
cut them all, and we deal with the whole spectrum of those
interests.
Mr. Nethercutt. I understand you deal with the whole
spectrum, Chief. I am just trying to understand who do you have
to deal with more? Is it the industry that is disaffected by
the limitation a timber sale, or is it those who do not want
any timber sale to occur, or some variation of that position?
Mr. Joslin. Well, I would go back to my earlier statement
that I made there, Congressman, that the appeals primarily come
from people who are not connected with whatever those commodity
interests, or whatever you referred to them, are.
Mr. Nethercutt. Let me ask one other question. After you
became the Chief, Mr. Dombeck, you indicated you were going to
institute a new performance measuring system for all line
officers in the Forest Service.
What is the status of that effort?
Mr. Dombeck. That was initiated last July, and we will be
tying that to GPRA. But as was heard earlier today in
testimony, performance is also an issue, and I believe we
should evaluate and reward land managers based upon the
condition of the land.
And we looked at measures like soil stability, forest
health, are we making progress with noxious weeds, the trends
in water quality, those kinds of things, and move away from as
much of the process measuring as we could.
Being one whose general philosophy is what we measure, that
is what we get. And if we measure process we are going to get
it, and we have plenty of it.
Mr. Nethercutt. Are the performance measures in place now?
Mr. Dombeck. Yes.
Mr. Nethercutt. Did they differ substantially from earlier
performance measures?
Mr. Dombeck. I would ask someone on the staff. They are
tied to GPRA, but specifically how they are tied in, and the
personnel mechanism. This is Ron Stewart. Ron is Deputy Chief
for Programs and Legislation.
Mr. Nethercutt. Yes, sir.
Mr. Stewart. Good afternoon.
Mr. Nethercutt. Good afternoon.
Mr. Stewart. One of my responsibilities is managing the
GPRA effort. And I would say that first of all it is somewhat
difficult to compare, because the whole Department changed the
entire--at least Senior Executive Service performance
standards--in the process of implementing a change throughout
the organization in which we will use more generic performance
elements.
The approach we have used is in those appropriate, what we
would call elements. For instance, program management. We
attach a specific list of performance measures that are
assigned to that line officer, and they are disaggregated, if
you will, from the performance plan, the GPRA performance plan.
So, for instance, we are in the process right now of taking
the first formal GPRA performance plan, which was submitted
with the budget, as you know, and disaggregating that back out
to the line officers through the organization.
There are two kinds. There is a set that deals with the
natural resource goals around the Forest Service agenda. And
then there are ones for organizational effectiveness, and those
are more associated with financial management, and information
management and those kinds of things.
And there is specific performance tied to each of those.
They are somewhat different than last year's, in that we
learned some from last year, and we think we have improved.
One of the things we are trying to do is narrow the number
of things, because one of our problems is we are trying to do
everything and measure everything. So we are trying to focus on
those corporate measures which best determine the agency's
performance, particularly against the agenda and the
organizational effectiveness which includes, as I said,
financial management and so forth.
Mr. Nethercutt. Do you feel there has been an improvement,
then, since the time you put the new measurement standards, and
you have had a chance to look at them? Have you been impressed
that there has been improvement, or are things sort of moving
slowly? How can you characterize it?
Mr. Stewart. That is my sense, that we have improved. One
of the things that we would like to be able to do, that we have
not done in the past, is look at trends. In other words, when
you are looking at condition on the land, it is not necessarily
an annual change, and unfortunately we do annual performance
evaluations.
So what we are trying to do is begin now establishing some
trends. And not only look at what the current accomplishment
is, but what has the trend been. Have things been getting
better, in other words, over the last 3 years or so?
And so I think it is much better, but we still have a ways
to go.
Mr. Nethercutt. Well, I wish you well. I want you to
succeed. I really do. I just think we are all struggling,
trying to figure out how we can help you, and be constructively
critical.
But I think you have implemented good management changes,
and if these performance measurement standards are going go
work, you have a big job. We all want you to succeed, in my
humble opinion. But on the other hand, we are going to tell you
what we feel will help you succeed.
So I wish you well, and thank you for being here today.
Mr. Dombeck. Thank you.
Mr. Nethercutt. Thank you, Madam Chair, for the extra time.
Mrs. Chenoweth. Thank you, Mr. Nethercutt.
Chief Dombeck, you have received a copy of the letter that
you signed and sent out March 18th. Or it says reply due March
18th and March 30th.
You have it?
Mr. Dombeck. Yes.
Mrs. Chenoweth. I wanted to ask you some questions about
it. Reading from the memo, it says as many of you know, the
administration is proposing legislation to stabilize payments
to States. I support this proposal, and request you and your
employees to assist me in sharing information with your
internal and external customers.
The letter goes on to say that station directors, the
Northeastern Area Director, the IITF Director are also to
participate in communicating this important part of our Forest
Service Natural Resource Agenda.
What is the Conservation Leadership Policy Initiative,
reforming Forest Service payments to States that you address in
this memo?
Mr. Dombeck. The proposal in the President's budget to
stabilize payments to counties, the 25 percent fund that
basically proposes to make the payment at the 1997 level, or 76
percent of the average of 1986 to 1990, whichever is higher.
Mrs. Chenoweth. OK. Who was involved in developing this
memo, and the directives contained in the memo?
Mr. Dombeck. Employees of the Forest Service, of the
programs. Sandra Key is leading that effort, one of the
associate deputy chiefs.
Mrs. Chenoweth. All right. Were there any outside
contractors, consultants or employees not directly working for
the Forest Service involved in the development of any portion
of this memo, including the lobbying, briefing and support
material?
Mr. Dombeck. Not that I am aware of.
Mrs. Chenoweth. In your memo you refer to the effectiveness
of this package for means of pushing this proposal. Is the
package meant to be used to garner support for your proposed
policy?
Mr. Dombeck. The package is meant to make sure that the
appropriate information is available to all individuals of the
Forest Service so they can converse with their constituents,
the public, people who ask questions, that they discuss this
with.
Mrs. Chenoweth. So it is meant to garner support for the
proposal?
Mr. Dombeck. It is meant to provide all of the information,
yes.
Mrs. Chenoweth. Let us again talk about the fiscal year
1998 Interior Appropriations Bill, Public Law 105-83. We have
been through this before. The President did sign this
legislation, didn't he, Chief?
Mr. Dombeck. Yes.
Mrs. Chenoweth. And since he signed the legislation it is
now the law of the land, is it not?
Mr. Dombeck. Yes.
Mrs. Chenoweth. Do you know that Section 303 of the Act
provides that no part of any appropriation contained in this
Act shall be available for any activities or the publication or
distribution of literature that in any way tends to promote
public support or opposition to any legislative proposal on
which Congressional action is not complete?
Did you know that is what is contained in Section 303 of
the Act? And I read from the Act.
Mr. Dombeck. Yes, I recall from our previous dialogue.
Mrs. Chenoweth. As you know from previous dialogue and
discussions about H.R. 2378, the fiscal year 1998 Department of
Treasury and Postal Service Appropriations bill, did the
President sign this legislation into law?
Mr. Dombeck. I presume so.
Mrs. Chenoweth. And since the President signed the
legislation, it is now the law of the land, right?
Mr. Dombeck. That is correct.
Mrs. Chenoweth. Since it is the law of the land, are you
bound by its provisions?
Mr. Dombeck. Yes.
Mrs. Chenoweth. Do you believe that one of your
responsibilities is to obey the law?
Mr. Dombeck. Yes.
Mrs. Chenoweth. And do you think that Section 624 of the
Act provides that, and I read from the Act, no part of any
funds appropriated in this to any other Act shall be used by an
agency of the executive branch other than for normal and
recognized executive legislative relationships, for publicity
or propaganda purposes, and for the preparation, distribution,
or use of any kit, pamphlet, booklet, publication, radio,
television or film presentation designed to support or defeat
legislation pending before the Congress except in presentation
to the Congress itself.
And, Chief, I have just read from Section 624 of the Act.
So here are two additional statutes which seem to limit your
activities in this area.
So as we look at your compliance with Section 303 of
Interior and Section 624 of Treasury appropriations, and as we
focus on the publication or distribution of literature, even
though that is only part of the prescription of these statutes,
your memo directs the employees to lobby county commissioners
or supervisors, or school administrators to explain the
proposal and get their concerns and key items of support by
March 30th.
Also, in your memo, you state that field units should seek
opportunities to brief media on the proposal. In your mind,
does that activity, or does that involve the distribution of
literature or attempting to influence legislative proposals
before the Congress?
Mr. Dombeck. No. From the standpoint of--the questions that
I asked myself with regard to your points on lobbying, and that
is our responsibility is to provide information to our
employees. And I believe this memo was an internal memo
providing information to employees, so they were conversant on
the issues proposed in the President's budget.
And I would be happy to discuss this with you and staff.
Questions that I ask myself are is the information that we are
disseminating, is it complete, is it objective. Are we
discussing proposals by the administration, since the Forest
Service is also a part of the executive branch.
Mrs. Chenoweth. Well, I think Section 624 and Section 303
address that very, very clearly, and that is why I read very
specifically from those Acts. That it prohibits lobbying
activities of any kind by an agency to influence legislation
before the Congress.
Also, on page 1 of your memo, you indicate that by March
30th the forest supervisors or district rangers must meet with
and brief country commissioners or supervisors and district
school administrators to explain their proposal and get their
concerns and key items of support.
In your mind does this activity involve influencing a
legislative proposal currently before the Congress?
Mr. Dombeck. No. I believe that since these constituents
are those most affected by proposed policies, it is very
important that they understand what those effects will be.
Mrs. Chenoweth. Chief Dombeck, then I ask why do you want
to get their support on legislation before the Congress?
Mr. Dombeck. This is a proposal put forth by the
administration and it is part of the President's budget and the
agency proposal. We are not advocating a pass/fail. We are
telling them what it means to them, what the impacts will be,
in an attempt to lay out the pros and the cons.
Mrs. Chenoweth. Why are you attempting to get their
support?
Mr. Dombeck. What we are doing----
Mrs. Chenoweth. I mean, that is lobbying, by definition.
Mr. Dombeck. I think I would again just say that the
counsel that I have received is that our responsibility is to
provide information so our constituents, people that we deal
with, can make an appropriate decision.
The specific definition that I work from on lobbying, and
this could be where we have a difference, that I would be happy
to discuss, is that lobbying is specifically the act of trying
to influence a legislator.
And one of the things we are very careful not to do, and
that I always advise employees, is that our responsibility is
to provide information to constituents so they can make
reasoned decisions.
Mrs. Chenoweth. Chief Dombeck, it would seem that we would
not be at a point of disconnect if we knew that rather than
pushing your proposal through a communication plan and those
activities laid out in the communication plan if we knew indeed
that you were responsive to those who asked certain questions.
I think that is the difference. If somebody asks you a
specific question, then by all means I think you should answer
the question that is asked. No more, no less.
But to initiate the activity is, I believe, and a court
will ultimately probably have to answer this, initiating
lobbying activity. But I was interested in your answer because
did the administration direct you to lobby, and influence these
groups?
I mean, these are grassroots groups. Was it the
administration that directed you to do this?
Mr. Dombeck. No, they did not. We provide a wide variety of
information on many, many topics to many people. Again, this
was a proposal. The information that we put out, the letter was
drafted by career Forest Service employees that have been in
the field and are involved in many, many programs and have had
experience in dealing with the whole array of people that we
deal with in the field.
Mrs. Chenoweth. Well, Chief, you did sign the letter.
Mr. Dombeck. Yes.
Mrs. Chenoweth. I want to look a little more broadly. Since
Section 303 prohibits any activity that in any way tends to
promote public support or opposition to any legislative
proposal on which Congressional action is not complete, and I
was reading from the law, this involves a rather broad
restriction on agency actions.
Since the activities outlined in your memo are meant to
gain support for this legislative initiative, is it not a
direct and blatant violation of Section 303?
Mr. Dombeck. I do not believe so, no. And, again, I would
be happy to get additional interpretations from counsel on
this.
Mrs. Chenoweth. Chief Dombeck, let me ask you, did you
provide the same information and initiate providing the
information, as you call it--I call it lobbying--with other
industry groups, such as the logging and timber industry
groups, grazing, other people, private sector individuals?
Mr. Dombeck. I have personally discussed this proposal
with, for example, when I was out in your State, most recently
with county commissioners. I met with a wide variety of groups,
including industry groups, unions.
We went to the National Association of Counties at their
request to provide this information.
Mrs. Chenoweth. I wonder if you would provide a list, by
close of business tomorrow, of the names, addresses, and all
the groups you provided information to.
Mr. Dombeck. That I provided the information to personally?
Mrs. Chenoweth. Yes. As directed through your memo, yes.
Would you provide by close of business tomorrow a list of the
people who were contacted as a result of your memo?
Mr. Dombeck. Well, of course the memo was sent to regional
foresters, and to many, many Forest Service employees. But the
information is also all on the Internet for public viewing, for
whoever wants to make it available.
Now, I would be happy to provide you that information. I am
not sure we could, given the fact that we wouldn't even get the
request out probably till the close of business today, I would
be reluctant to promise that I could have it to you by the
close of business tomorrow.
Mrs. Chenoweth. Let us make it 10 days, 10 working days.
Mr. Dombeck. Yes.
Mrs. Chenoweth. Is that all right?
Mr. Dombeck. Yes.
Mrs. Chenoweth. Chief Dombeck, this line of questioning is
the second line of questioning like this that I have tendered.
I just want to ask you, as a Member of Congress and as chairman
of this Committee, because the Committee members respect you
and like you, I think you are treading, or your legal people
are letting you tread on very, very tenuous legal grounds.
I join Mr. Nethercutt in the feeling that we want to help
you succeed. We are very sincere about that, but this makes it
exceedingly difficult for us when the Acts of Congress are
blatantly ignored.
And I do not think that is your intention, but it is
happening, and the buck stops with you.
I guess just personally I want to say, this awful dangerous
for a man as young as you are, and has a long way to continue
with your successful career. I am just speaking as an
individual, but I feel very badly about this, and I hope that
you will ask your people to re-evaluate this kind of activity.
I really mean it.
I want to just close, Mr. Chairman, by saying we have heard
some very startling information from GAO, from the Inspector
General, and from you, Mr. Dombeck, today. And I know that
there is a lot of frustration on both parts, and I want to come
full circle and say there is a lot of blame to spread all over
the place.
We are at critical mass, and I sincerely hope, in spite of
the fact that this year gets crazy, because it is an election
year, I really hope that we can work together to come up with
solutions that take us out of critical mass, or we may have to
look in an entirely different direction.
And that is not what our top priority is now. It may be
what we have to resort to. And I appreciate you for your
tenacity, Mr. Dombeck. Thank you very much.
Mr. Dombeck. Thank you.
Mr. Herger. [presiding] Thank you, Mrs. Chenoweth.
Mr. Dombeck. I particularly appreciate the compliment about
my age. I think that is only the second compliment I have
received today, so thank you.
Mr. Herger. Well, Chief Dombeck, I want to give you your
third compliment. You and your entire team, everyone, really
can be complimented for this long day, for answering these
questions the best way you can.
I know this is difficult for you. It is difficult for all
of us. As has been pointed out today, this is not a new
problem. The problem that has been identified specifically by
the GAO and IG and during this hearing today is one of
mismanagement, including the mismanagement of $215 million
during fiscal year 1995, with the Forest Service, that cannot
be accounted for, and that was before you took over.
It is during this administration, but again this problem
goes back even prior to this administration. I guess the
concern I have is one that I would dislike very much to be back
here 2 years from now or 4 years from now and see that things
are not any different than they are today.
Perhaps to conclude this hearing today, if you could, I
would like to ask you if you could be as specific as you can,
Mr. Dombeck, on what some specific things that we are doing, as
far as keeping the Forest Service's fiscal house in order, both
in the fiscal area as well as the personnel area, which at
least I alluded to earlier.
And also some specific dates of completion of these
changes, if you could comment on that, please.
Mr. Dombeck. I can comment on a few of these items, and
then I would like to ask Mr. Pandolfi to elaborate. Much of
this is in his area of expertise, as well as Clyde Thompson,
also in this area.
But what I would suggest, we talked about the Foundation
Financial Information System, the FFIS, and that is moving
forward. We are not out of the woods on that system, but the
fact is it is moving forward.
We have brought Coopers & Lybrand in. We have got a wide
variety of recommendations that we will be moving forward on
this. And, again, what we really need is we really need the
climate to bring about change.
And I think the time is right. For example, by mid-summer
we will have a complete inventory of the Forest Service's real
and personal property. And that includes location, the item,
and the value.
There are a variety of steps. Before you can run you have
to crawl. And we are moving ahead on some of these items. And
are there more items that you would like to highlight, Francis?
Mr. Pandolfi. There has been a lot of progress made to
date, Congressman Herger. For example, in cleaning up data. We
are expecting, and the IG has reported on this, and has
indicated that in fact the data going into our systems now is a
lot cleaner than it used to be, and a lot more useful.
Yes, the Chief just indicated, for example, that by June 30
we will have real and personal property assets in our system.
So we can give you some more dates on this.
We are still struggling, though, with the FFIS, that the
Chief just mentioned. You should know that. Our hope is that
the system will be up and running--this is our general ledger--
for all of the Forest Service units on October 1 of 1998.
But we cannot guarantee that. There are many problems yet
to be overcome. And one of the things that you heard this
morning was the Inspector General indicated that there was a
qualified opinion given to the National Financial Center. They
are our partner in this. We need to work together with them.
I wish we could give you firm dates, but it is going to be
very hard. There a number of things that perhaps we could
provide you that would be useful.
Mr. Herger. Well, I would appreciate you considering the
question that I asked, and if you could provide this Committee,
this joint committee with some specific dates.
[The information referred to may be found at end of
hearing.]
Mr. Herger. I can assure you, and I do not say this to be
down on you, but the fact is that the Congress is going to be
watching this very closely. The Budget Committee that I sit on
is going to be watching this very closely.
Again, we do not want to be here a year from now and look
and see that we are not any further than we were today. So I
want to encourage you to go out of your way to be very specific
on what it is that we are going to be changing.
I want you to be very specific in analyzing these reports
that have come out from the IG and the Government Accounting
Office, because we are going to be watching those very closely.
And we are also here to work with you. The areas where you
need help, you need assistance. I have in past years--it might
seem ironic to you--but I have probably been one of your
strongest supporters, as far as supporting your budget.
But I am serving notice, letting you know that I am going
to be--if we are not getting the results, and if year after
year we continue to not get the results, not only am I not
going to be supporting your budgets, I think you can look for
some pretty dramatic decreases.
And that is not a threat. That is just merely be
responsible to the American taxpayer.
So again, I do want to compliment you. You do have a very
tough job. You have an incredibly tough job. I certainly
recognize that, and your whole team.
Let me just conclude with this, and that is I believe
everyone has indicated that we are very supportive, and
recognize the outstanding effort of you and those who work for
you.
It is the direction, and the policy that we have very
serious question with, and I believe question for very good
reason.
With that, this hearing stands adjourned. Thank you very
much.
[Whereupon, at 4:02 p.m. the Committee was adjourned.]
[Additional material submitted for the record follows.]
Letter written to Hon. Mike Dombeck, Chief, U.S. Forest Service, by
Diane Henderson-Bramlette
On the eve of the end of my eighteen year career, I feel compelled
to give you some feedback and reflections from ``the field.'' I am 38
years old and have been the Forest Supervisor of the Modoc in R 5 for
almost six years.
I love this position, the Forest and the Agency. I believe the
Forest Service has one of the greatest workforce. We have employees
that are well trained, educated and are dedicated to doing the best
they can and care for the land.
We are world leaders in natural resource management. So it is with
a mixture of sadness and joy as I leave my position to pursue my life-
long dream as an entrepreneur in the private sector. However, a
secondary reason for my departure is my frustration and dismay of the
ever-increasing redundant andcostly Agency practices, policies and
regulations, the lack of accountability both with all employees and
with Agency management, and the lack of leadership and vision
throughout all levels of the Forest Service.
I share my reflections and concerns not as criticism based in
malice or bitterness, rather as feedback based in a positive and caring
light.
Hopefully, they may invoke some pondering and along with other
feedback,ultimately lead to some change.
ACCOUNTABILITY
Somehow over the years, the Agency's leadership has created an
environment that is not accountable personally nor professionally. To
further compound the problem, many Supervisors have confused
accountability with caring foremployees. I believe that many times
Supervisors have not been honest with employees concerning performance,
work behavior, and controversialissues, such as downsizing because they
don't want to hurt employees, they fear complaints/grievances will be
filed or they will not be supported from above. As a result, trust,
morale, productivity and efficiency suffer. I believe the long-held
traditional maternalistic/paternalistic attitudes of this Agency need
to end. The Agency must deal with nonperformance, ethicaland Civil
Rights violations in a more direct and active manner.
In addition employees need honest and direct information concerning
their future and that of this Agency. Please remember, employees are
savvy and intelligent and usually have most information
instantaneously, often times before Administrators do. Unfortunately,
many Management attempts to help employees by not being open and direct
and sharing information has hindered our ability to be an effective and
efficient Agency. In the end this usually creates worse and more
drastic effects on the workforce.
I encourage you to continue to be open and direct with the
workforce. In addition, require all management to be honest and
forthright regardless of the nature of the information. Lastly, please
support those individuals whom are pro-active with dealing with
sensitive issues. Most employees would rather have the ``bad news'' and
make their own decisions than allow others to do so for them, or wait
until options are more limited.
Sadly, I wish I had practiced this more throughout my career.
LEADERSHIP AND VISION
I feel we are trying to be everything, to everyone, all the time.
As a result, we deliver very little to anyone. This causes distrust
within the Agency and with the public since we make vague commitments
in an attempt to please all parties and be politically correct. Again,
this only increases the distrust, as we continue with bureaucratic
rhetoric which the public does not understand nor want.
Increasing collaboration with the public in our process is a great
idea. However, our Society is so polarized today, that difficult
decisions still need to be made at times that may not please any or all
of our Stakeholders. Yet we are fearful to make any decision or take
any action that may result in litigation, an appeal or public uproar,
especially if that leads to political or administration involvement.
The end result to the Agency is a state of paralysis that produces
costly and ineffective or poor decisions. We need an environment that
allows employees to take risks and pursue decisions or actions that are
the best for the land even if there is controversy from some groups or
appeals/litigations. Without that environment, we will continue to make
non-decisions and muddle through to the next crisis, wasting taxpayer's
money and employees time and energy and lowering morale.
Therefore, I believe it is imperative to have a clear vision and
purpose for this Agency which is articulated to the entire workforce.
It has been difficult and frustrating to lead a Forest into the 21st
Century when I have had little or no idea of the future of this Agency
nor its direction.
Leaving that decision to each Forest is setting this Agency up for
continued and increased chaos, dysfunction and ultimately the Agency
demise. I realize change is inevitable and will continue to occur at an
increasing pace.
However, I strongly encourage you to work with Congress, the
Administration and Employees to clearly define that vision and
articulate it, even if it changes periodically. Then employees can make
decisions effectively and efficiently more sure they are promoting the
Agency's goals, and do so without fear. Thus ultimately enhancing the
Agency image and increasing trust between all parties.
CIVIL RIGHTS & EEO
I believe the Civil Rights/EEO programs and policies are outdated,
ineffective and antiquated. I read the Civil Rights Action Team Report
with dismay. This Agency has been trying many of the items as outlined
in the reports for decades, apparently with little success and with
great cost yet we continue to expect different results with the same
actions.
I really feel many of the problems would be resolved if individuals
were held accountable for their actions, including management at all
levels. In the early years of my career, I experienced a lot of sexual
harassment and discrimination. I never filed a complaint and yet I
always felt the situations were resolved and corrected. They were
corrected through open and honest communication, education for all
parties and through adverse actions if necessary. We were held
accountable for our actions.
Sadly, I have experienced more gender and sexual harassment and
physical assault in the last six years then I have in previous years.
Much to my amazement I watched many of those individuals be promoted.
Thus, I feel many of this Agency's challenges lie within the upper
levels of Management, their actions and attitudes, and not within the
lower organization levels.
Until Management is held accountable there will be little change.
Why should there be? Why should employees at lower organizational
levels be held to a higher standard or be more accountable than that of
their leaders?
As I watch the present backlog of EEO complaints be settled, I am
again dismayed. It appears to many of us that the direction is ``settle
at any cost.'' I am perplexed when I see cases settled for large sums
which have little merit, with the only rationale being ``it makes good
business sense.''
If the Agency is in the wrong then settle and hold the responsible
individual(s) accountable. If the Agency is not in the wrong then don't
agree to large monetary settlements. I realize that many times it is
good business to settle rather than go to court. However, it does send
a strong negative message. Is it a message you want to send? I believe
the system is broken and needs repair. Until both grievant, or
complainant and the Agency is truly held accountable, it is too easy to
abuse the system and little will change.
Overall, my career has been fantastic. I have worked with great,
intelligent, and ethical individuals. I have learned so much and I will
continue to care about this Agency. I only hope my next career is as
successful, memorable and great as this one.
I wish you well in the difficult and formidable challenges you and
the Agency face. You have one of the greatest workforces around,
involve them, trust them and be honest with them. Thank you.
Diane Henderson-Bramlette,
Forest Supervisor
[GRAPHIC] [TIFF OMITTED] T8275.001
[GRAPHIC] [TIFF OMITTED] T8275.002
[GRAPHIC] [TIFF OMITTED] T8275.003
[GRAPHIC] [TIFF OMITTED] T8275.004
[GRAPHIC] [TIFF OMITTED] T8275.005
[GRAPHIC] [TIFF OMITTED] T8275.006
[GRAPHIC] [TIFF OMITTED] T8275.007
[GRAPHIC] [TIFF OMITTED] T8275.008
[GRAPHIC] [TIFF OMITTED] T8275.009
[GRAPHIC] [TIFF OMITTED] T8275.010
[GRAPHIC] [TIFF OMITTED] T8275.011
[GRAPHIC] [TIFF OMITTED] T8275.012
[GRAPHIC] [TIFF OMITTED] T8275.013
[GRAPHIC] [TIFF OMITTED] T8275.014
[GRAPHIC] [TIFF OMITTED] T8275.015
[GRAPHIC] [TIFF OMITTED] T8275.016
[GRAPHIC] [TIFF OMITTED] T8275.017
[GRAPHIC] [TIFF OMITTED] T8275.018
[GRAPHIC] [TIFF OMITTED] T8275.019
[GRAPHIC] [TIFF OMITTED] T8275.020
[GRAPHIC] [TIFF OMITTED] T8275.021
[GRAPHIC] [TIFF OMITTED] T8275.022
[GRAPHIC] [TIFF OMITTED] T8275.023
[GRAPHIC] [TIFF OMITTED] T8275.024
[GRAPHIC] [TIFF OMITTED] T8275.025
[GRAPHIC] [TIFF OMITTED] T8275.026
[GRAPHIC] [TIFF OMITTED] T8275.027
[GRAPHIC] [TIFF OMITTED] T8275.028
[GRAPHIC] [TIFF OMITTED] T8275.029
[GRAPHIC] [TIFF OMITTED] T8275.030
[GRAPHIC] [TIFF OMITTED] T8275.031
[GRAPHIC] [TIFF OMITTED] T8275.032
[GRAPHIC] [TIFF OMITTED] T8275.033
[GRAPHIC] [TIFF OMITTED] T8275.034
[GRAPHIC] [TIFF OMITTED] T8275.035
[GRAPHIC] [TIFF OMITTED] T8275.036
[GRAPHIC] [TIFF OMITTED] T8275.037
[GRAPHIC] [TIFF OMITTED] T8275.038
[GRAPHIC] [TIFF OMITTED] T8275.039
[GRAPHIC] [TIFF OMITTED] T8275.040
[GRAPHIC] [TIFF OMITTED] T8275.041
[GRAPHIC] [TIFF OMITTED] T8275.042
[GRAPHIC] [TIFF OMITTED] T8275.043
[GRAPHIC] [TIFF OMITTED] T8275.044
[GRAPHIC] [TIFF OMITTED] T8275.045
[GRAPHIC] [TIFF OMITTED] T8275.046
[GRAPHIC] [TIFF OMITTED] T8275.047
[GRAPHIC] [TIFF OMITTED] T8275.048
[GRAPHIC] [TIFF OMITTED] T8275.049
[GRAPHIC] [TIFF OMITTED] T8275.050
[GRAPHIC] [TIFF OMITTED] T8275.051
[GRAPHIC] [TIFF OMITTED] T8275.052
[GRAPHIC] [TIFF OMITTED] T8275.053
[GRAPHIC] [TIFF OMITTED] T8275.054
[GRAPHIC] [TIFF OMITTED] T8275.055
[GRAPHIC] [TIFF OMITTED] T8275.056
[GRAPHIC] [TIFF OMITTED] T8275.057
[GRAPHIC] [TIFF OMITTED] T8275.058
[GRAPHIC] [TIFF OMITTED] T8275.059
[GRAPHIC] [TIFF OMITTED] T8275.060
[GRAPHIC] [TIFF OMITTED] T8275.061
[GRAPHIC] [TIFF OMITTED] T8275.062
[GRAPHIC] [TIFF OMITTED] T8275.063
[GRAPHIC] [TIFF OMITTED] T8275.064
[GRAPHIC] [TIFF OMITTED] T8275.065
[GRAPHIC] [TIFF OMITTED] T8275.066
[GRAPHIC] [TIFF OMITTED] T8275.067
[GRAPHIC] [TIFF OMITTED] T8275.068
[GRAPHIC] [TIFF OMITTED] T8275.069
[GRAPHIC] [TIFF OMITTED] T8275.070
[GRAPHIC] [TIFF OMITTED] T8275.071
[GRAPHIC] [TIFF OMITTED] T8275.072
[GRAPHIC] [TIFF OMITTED] T8275.073
[GRAPHIC] [TIFF OMITTED] T8275.074
[GRAPHIC] [TIFF OMITTED] T8275.075
[GRAPHIC] [TIFF OMITTED] T8275.076
[GRAPHIC] [TIFF OMITTED] T8275.077
[GRAPHIC] [TIFF OMITTED] T8275.078
[GRAPHIC] [TIFF OMITTED] T8275.079
[GRAPHIC] [TIFF OMITTED] T8275.080
[GRAPHIC] [TIFF OMITTED] T8275.081
[GRAPHIC] [TIFF OMITTED] T8275.082
[GRAPHIC] [TIFF OMITTED] T8275.083
[GRAPHIC] [TIFF OMITTED] T8275.084
[GRAPHIC] [TIFF OMITTED] T8275.085
[GRAPHIC] [TIFF OMITTED] T8275.086
[GRAPHIC] [TIFF OMITTED] T8275.087
[GRAPHIC] [TIFF OMITTED] T8275.088
[GRAPHIC] [TIFF OMITTED] T8275.089
[GRAPHIC] [TIFF OMITTED] T8275.090
[GRAPHIC] [TIFF OMITTED] T8275.091
[GRAPHIC] [TIFF OMITTED] T8275.092
[GRAPHIC] [TIFF OMITTED] T8275.093
[GRAPHIC] [TIFF OMITTED] T8275.094
[GRAPHIC] [TIFF OMITTED] T8275.095
[GRAPHIC] [TIFF OMITTED] T8275.096
[GRAPHIC] [TIFF OMITTED] T8275.097
[GRAPHIC] [TIFF OMITTED] T8275.098
[GRAPHIC] [TIFF OMITTED] T8275.099
[GRAPHIC] [TIFF OMITTED] T8275.100
[GRAPHIC] [TIFF OMITTED] T8275.101
[GRAPHIC] [TIFF OMITTED] T8275.102
[GRAPHIC] [TIFF OMITTED] T8275.103
[GRAPHIC] [TIFF OMITTED] T8275.104
[GRAPHIC] [TIFF OMITTED] T8275.105
[GRAPHIC] [TIFF OMITTED] T8275.106
[GRAPHIC] [TIFF OMITTED] T8275.107
[GRAPHIC] [TIFF OMITTED] T8275.108
[GRAPHIC] [TIFF OMITTED] T8275.109