oversight

Major Management Challenges and Program Risks: Department of the Interior

Published by the Government Accountability Office on 1999-01-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

               United States General Accounting Office

GAO            Performance and Accountability
               Series




January 1999
               Major Management
               Challenges and Program
               Risks
               Department of Interior




GAO/OCG-99-9
GAO   United States
      General Accounting Office
      Washington, D.C. 20548

      Comptroller General
      of the United States



      January 1999
      The President of the Senate
      The Speaker of the House of Representatives

      This report addresses the major performance and
      management challenges that have limited the
      effectiveness of the Department of the Interior in carrying
      out its mission. It also addresses corrective actions that
      Interior has initiated or plans to take, as well as further
      actions that are needed. For many years, we have
      reported significant problems and weaknesses in the
      management of Interior’s programs. These problems are
      the results of serious deficiencies in organizational
      structure, information systems, and the management
      controls that provide oversight and accountability. These
      deficiencies cut across Interior’s program areas.

      Interior has acknowledged the need to address many of
      these deficiencies and, for the most part, has begun to do
      so. Actions being taken by the agency to improve
      performance and accountability are largely playing out
      through the development and implementation of the
      strategic and performance plans required by the
      Government Performance and Results Act. However,
      much remains to be done, and it is still too early to
      determine whether Interior’s actions will be effective. In
      addition, resolving some of these problems, such as
      streamlining and reorganizing the Department’s structure
      to achieve greater coordination and integration of
functions and obtaining better information on resource
conditions, will be difficult and take time.

This report is part of a special series entitled the
Performance and Accountability Series: Major
Management Challenges and Program Risks. The series
contains separate reports on 20 agencies—one on each of
the cabinet departments and on most major independent
agencies as well as the U.S. Postal Service. The series
also includes a governmentwide report that draws from
the agency-specific reports to identify the performance
and management challenges requiring attention across
the federal government. As a companion volume to this
series, GAO is issuing an update to those government
operations and programs that its work has identified as
“high risk” because of their greater vulnerabilities to
waste, fraud, abuse, and mismanagement. High-risk
government operations are also identified and discussed
in detail in the appropriate performance and
accountability series agency reports.

The performance and accountability series was done at
the request of the Majority Leader of the House of
Representatives, Dick Armey; the Chairman of the House
Government Reform Committee, Dan Burton; the
Chairman of the House Budget Committee, John Kasich;
the Chairman of the Senate Committee on Governmental
Affairs, Fred Thompson; the Chairman of the Senate
Budget Committee, Pete Domenici; and Senator Larry
Craig. The series was subsequently cosponsored by the
Ranking Minority Member of the House Government



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Reform Committee, Henry A. Waxman; the Ranking
Minority Member, Subcommittee on Government
Management, Information and Technology, House
Government Reform Committee, Dennis J. Kucinich;
Senator Joseph I. Lieberman; and Senator Carl Levin.

Copies of this report series are being sent to the
President, the congressional leadership, all other
Members of the Congress, the Director of the Office of
Management and Budget, the Secretary of the Interior,
and the heads of other major departments and agencies.




David M. Walker
Comptroller General of
the United States




            Page 3   GAO/OCG-99-9 Department of Interior Challenges
Contents



Overview                                                               6

Major                                                                 12
Performance and
Management
Issues
Related GAO                                                           34
Products
Performance and                                                       39
Accountability
Series




                  Page 4   GAO/OCG-99-9 Department of Interior Challenges
Page 5   GAO/OCG-99-9 Department of Interior Challenges
Overview



           The Department of the Interior has
           jurisdiction over about 450 million acres of
           land—about one-fifth of the total U.S.
           landmass—and about 3 billion acres of the
           Outer Continental Shelf. As the guardian and
           steward of these resources, the agency is
           entrusted to preserve our most awesome
           landscapes, like the wild beauty of the Grand
           Canyon and Yosemite national parks and the
           soaring peaks of Mount Rainier and Denali;
           our most historic places, such as
           Independence Hall and the Gettysburg
           battlefield; and our most revered national
           icons, such as the Statue of Liberty and the
           Washington Monument. At the same time,
           Interior is to provide for the environmentally
           sound production of oil, gas, minerals, and
           other resources found on America’s public
           lands; honor the nation’s obligations to
           American Indians and native Alaskans;
           protect habitat to sustain fish and wildlife;
           help manage water resources in Western
           states; and provide scientific and technical
           information to allow for sound
           decisionmaking about resources. To meet its
           responsibilities, Interior has been
           appropriated $6 billion to $7 billion annually
           in recent years. With these resources,
           Interior employs about 66,000 people at over
           4,000 sites across the country.



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                       Overview




                       Managing this vast federal estate is largely
                       characterized by the continual struggle to
                       balance the pressures and demands for
                       greater use with the need to conserve and
                       protect resources for the benefit of future
                       generations. We, Interior’s Inspector
                       General, the Department, and others have
                       documented many management problems
                       facing the agency and have recommended
                       reforms. However, in many cases, progress
                       has been slow. As a result, many major
                       performance and management challenges
                       still remain.


The Challenges

A Basic                The four major land management agencies in
Reexamination of       the United States are the Bureau of Land
the Organization and   Management (BLM), the National Park
Functions of Land      Service, and the Fish and Wildlife Service
Management
                       (FWS) in Interior and the Forest Service in
Agencies Is Needed
                       the Department of Agriculture. The
                       responsibilities of these
                       agencies—particularly, BLM and the Forest
                       Service—have become similar over time. At
                       the same time, managing these agencies has
                       become more complex; budgets have
                       become tighter, and there is an increased
                       understanding that the boundaries for

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                       Overview




                       natural systems are not necessarily
                       consistent with the existing jurisdictional
                       and administrative boundaries of federal,
                       state, and local agencies. These conditions
                       suggest a need to reexamine how these
                       agencies are organized and function in order
                       to streamline their operations and become
                       more efficient.


Interior Does Not      Even though Interior is the caretaker for
Have the               much of the nation’s natural and cultural
Information It Needs   resources, it frequently lacks information on
to Properly Protect,   the condition of these resources. In addition,
Preserve, and
                       Interior does not know the scope and extent
Maintain Resources
                       of maintenance problems at the tens of
                       thousands of buildings, dams, and other
                       facilities it is responsible for. As a result,
                       Interior does not know the status of key
                       issues like the nature or extent of many
                       problems relating to the resources it is
                       legislatively mandated to foster, protect, and
                       preserve; the effectiveness of measures
                       taken to deal with the problems; or the areas
                       where the limited financial resources
                       available should be allocated to achieve the
                       most good.


Guidance, Oversight,   Decentralization of responsibility, coupled
and Accountability     with inadequate guidance and oversight, has
Need Improvement

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                       Overview




                       resulted in significant differences in how
                       Interior’s field offices have implemented
                       both legislative mandates and the
                       administration’s goals and objectives.
                       Similarly, the Park Service is just now
                       developing systems to hold field managers
                       accountable for the results of their
                       decisions.


Management             Management problems continue to plague
Problems Continue      Interior’s tribal and Indian programs.
to Plague Interior’s   Management of the $3 billion Indian trust
Tribal and Indian      fund has long been characterized by
Programs
                       inadequate accounting and information
                       systems, untrained and inexperienced staff,
                       poor recordkeeping and internal controls,
                       and inadequate written policies and
                       procedures. In addition, the distribution of
                       about $800 million annually to tribes—for
                       basic services such as law enforcement and
                       child welfare and other social services and
                       for contract support activities—is not in
                       synch with the tribes’ changing needs or
                       changes in tribal revenues from activities
                       such as gaming.




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                    Overview




Problems in         A half-billion-dollar automated records
Managing New        system now being developed by BLM is years
Automated Records   behind schedule and is estimated to cost
System Put BLM      more than $100 million over the original
Programs at Risk
                    estimate. The system is still fraught with
                    problems, and the agency still has not yet
                    developed a credible schedule for when the
                    system will be fully deployed. In the
                    meantime, the agency’s mission-critical
                    systems for land and mineral records and
                    information to support land and resource
                    management activities involving oil and gas
                    leases, mining claims, land patents, and a
                    variety of other land uses are at risk of being
                    disrupted by the Year 2000 computer-date
                    problem.


Progress and        Interior has acknowledged the need to
Next Steps          address many of these challenges and, for
                    the most part, has begun to do so. Actions
                    being taken by the Department are largely
                    playing out through the development and
                    implementation of the strategic and
                    performance plans required by the Results
                    Act. However, much remains to be done, and
                    it is still too early to determine whether
                    Interior’s actions will be effective.

                    In order to ensure that Interior follows
                    through on efforts to deal with the major


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              Overview




              performance and management challenges we
              and others have identified, the Congress
              needs to monitor the progress made on
              them, as reported in the agencies’ annual
              performance plans and reports. If the
              Congress is not satisfied with the pace of
              Interior’s progress in addressing these
              issues, it may want to provide more specific
              directions, including tighter deadlines.
              However, resolving some of these problems,
              such as getting a better understanding of
              resource conditions and addressing
              Interior’s maintenance needs, will likely be
              expensive and will take years.


Key Contact   Victor S. Rezendes
              Energy, Resources, and Science Issues
              Resources, Community, and Economic
                 Development Division
              (202) 512-3841
              rezendesv.rced@gao.gov




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Major Performance and Management
Issues


            As the caretaker of the nation’s most
            precious natural and cultural treasures and
            steward of its trust responsibilities to
            American Indians and native Alaskans, the
            Department of the Interior helps define the
            nature and spirit of our common national
            heritage. In this capacity, Interior’s programs
            and activities touch the lives of Americans
            and the world community in many disparate
            ways. The public lands, parks, and
            waterways under Interior’s jurisdiction
            provide recreational opportunities for over
            400 million visitors annually. Commodities
            such as oil, natural gas, minerals, and
            timber—with a market value of over
            $20 billion—are extracted from land and
            water resources under the Department’s
            purview each year. In addition, Interior
            provides educational, social, and other
            services to more than 550 Indian tribes.

            The overarching management challenge
            facing Interior is striking a balance between
            its two basic mandates—accommodating the
            demands for greater use and more
            consumption of resources with the demands
            to protect and conserve resources for the
            benefit of future generations. Many of the
            major challenges facing Interior are shaped
            by its agencies’ actions in trying to manage
            the difficult trade-offs inherent in these


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                   mandates. In today’s climate of shrinking
                   budgets and a smaller federal government,
                   the need to reexamine past approaches to
                   help achieve increased effectiveness and
                   efficiency is imperative. In recent years, our
                   work has identified a number of
                   opportunities for how Interior can better
                   accomplish this imperative.


A Basic            Historically, Interior has been a highly
Reexamination of   decentralized agency. As a result, Interior
the Organization   has, for the most part, allowed its
and Functions of   component agencies to develop their own
Land               systems and processes for managing their
                   programs. Our past work at Interior has
Management
                   identified several areas where better
Agencies Is        coordination should have occurred; the
Needed             increases in effectiveness and efficiency
                   resulting from improved coordination would
                   be substantial.

                   The federal government now owns about 30
                   percent (about 650 million acres) of the
                   nation’s total surface area. BLM, the Park
                   Service, and FWS in Interior and the Forest
                   Service in the Department of Agriculture
                   manage about 95 percent of these lands for a
                   variety of commodity uses—including
                   hardrock mining, foraging by livestock, oil
                   and gas production and development, and


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timber harvesting. These agencies also
manage these lands for noncommodity
uses—including providing fish and wildlife
habitat; natural, scenic, and historic
resources; recreation; water; and wilderness.
Our work has shown that the responsibilities
of these four agencies have become similar
over time. All of these agencies—most
notably BLM and the Forest Service—now
provide more noncommodity uses, for
instance, recreation and protection of fish
and wildlife, on lands they manage. At the
same time, managing these lands has
become more complex. Managers have to
reconcile differences among a growing
number of laws and regulations, and the
authority for administering these laws is
dispersed among several federal, state, and
local agencies. These changes have
coincided with two other developments—the
federal government’s increased emphasis on
downsizing and budgetary constraints and
scientists’ increased understanding of the
importance and functioning of natural
systems whose boundaries may not be
consistent with existing jurisdictional and
administrative boundaries of federal, state,
and local agencies. Together, these
conditions suggest a basis for reexamining
the structure, as well as the processes, under
which the federal land management agencies
currently operate.
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Over the past 28 years, two basic strategies
have been proposed to improve federal land
management. These are (1) streamlining the
existing structure by coordinating and
integrating functions, systems, programs,
and field locations and (2) reorganizing the
structure by combining agencies. The two
strategies are not mutually exclusive, and
some prior proposals have encompassed
both.

But past efforts to improve federal land
management have not succeeded, in part,
because they were not supported by a solid
consensus for change. In addition, any effort
to streamline or reorganize the existing
structure of federal land management
agencies will require a coordinated approach
both within agencies and across agency lines
to avoid creating new unintended
consequences for the future. Moreover, the
need to create specific identifiable goals will
require decisionmakers to agree on, among
other things, how to balance differing
objectives for various uses of federal lands
over the short and long terms. While recently
there has been some evidence of greater
coordination and collaboration across
agency boundaries, particularly between BLM
and the Forest Service, these efforts have
been somewhat limited and have not


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                     included the kind of fundamental
                     reexamination of organization and functions
                     as suggested by our analysis.


Interior Does Not    A fundamental part of Interior’s mission is to
Have the             ensure that the nation’s natural and cultural
Information It       resources are properly protected, preserved,
Needs to Properly    and maintained. However, Interior’s ability
Protect, Preserve,   to carry out this part of its mission is
                     severely diminished because it lacks
and Maintain
                     essential information about the condition of
Resources            many of the resources it is responsible for.
                     This basic lack of information exists for
                     natural and cultural resources and the
                     infrastructure that supports activities on
                     federal lands.


The Condition of     We and others have reported that the
Many Resources Is    condition of important natural and cultural
Not Known            assets, such as wildlife at Yosemite and
                     Glacier national parks and some of the
                     buildings at Ellis Island, is not being
                     routinely monitored. In addition, data
                     needed to reach an overall judgment on the
                     health of wildlife on public lands or
                     determine the movement of endangered and
                     threatened species toward or away from
                     recovery are not being developed.
                     Furthermore, Interior cannot always clearly


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identify the environmental impacts of oil and
gas production.

In the absence of this kind of information, it
is difficult, at best, to determine whether the
condition of key resources under Interior’s
stewardship is deteriorating, stabilizing, or
improving. As a result, instead of fact-based
decisions, Interior must frequently rely on
subjective judgments in assessing how
effectively and efficiently its limited
budgetary resources are being used to
protect and preserve natural and cultural
assets. On a practical level, this means that
Interior currently frequently does not have
the information it needs to do things like
(1) objectively identify the most significant
problems concerning natural and cultural
resources; (2) rank priorities so that the
most pressing issues receive the most
attention; or (3) link its planning process
directly to budget decisions to have a greater
impact on the allocation of new financial
resources. Accordingly, Interior frequently
does not know the status of key issues that
directly affect its ability to perform its
mission. These issues include things like the
nature or extent of many problems relating
to the resources it is legislatively mandated
to foster, protect, and preserve; the
effectiveness of measures taken to deal with


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                  the problems; or the areas where the limited
                  financial resources available should be
                  allocated to do the most good.


The Extent of     In addition to its need to know about the
Maintenance       condition of its key resources, Interior also
Problems Is Not   needs to maintain these
Known             resources—including the buildings and
                  associated infrastructure that goes with
                  them. The three major land management
                  agencies within Interior—the Park Service,
                  BLM, and FWS—manage tens of thousands of
                  buildings and other facilities such as roads,
                  dams, bridges, utility lines, and recreation
                  sites. These facilities can be valued in the
                  billions of dollars, and many, like
                  Independence Hall and the Statue of Liberty,
                  are beyond valuation. As the steward of
                  these assets, Interior is obligated to maintain
                  them.

                  In this time of reduced federal spending and
                  increased competition for these limited
                  dollars, it is more critical than ever to know
                  what the agencies’ maintenance needs are
                  and how to best address them. Yet while the
                  Park Service, BLM, and FWS have estimated
                  that they have maintenance needs of about
                  $7 billion, Interior officials acknowledge that
                  this estimate does not mean much, since


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they do not have accurate or reliable
information on the extent of the problems.
As a result, managing the deferred
maintenance needs has eluded Interior. In
fact, our work has shown that Interior is
contributing to its own problems in this area.
Specifically, the Park Service is maintaining
a large housing inventory for employees in
more than 100 parks across the country
when the need for all of these housing units
is not at all clear. At the same time, Park
Service officials estimate that the deferred
maintenance on these housing units may
cost as much as $100 million to $200 million.
Obviously, minimizing the employee housing
inventory to include only those units that are
absolutely necessary would help stretch the
limited funding that is available for
addressing Interior’s maintenance needs.
After 5 years of urging by us and the
Congress, the Park Service is just now doing
a needs assessment for its employee
housing.

Even though the Congress has attempted to
help Interior deal with this problem in recent
years by providing additional appropriations
and revenue from a new experimental fee
program, the land management agencies are
not yet able to determine how much these
additional funds are helping because they do


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not know the size of the problem.
Accordingly, while we and Interior’s
Inspector General have reported on the
deteriorating conditions of the agencies’
facilities, until useful data are developed,
managing and resolving the deferred
maintenance problem will continue to elude
the agency.

Interior managers have been aware of the
problem for years but have not developed a
comprehensive approach to solving it.
Instead, Interior has approached this
problem piecemeal by trying to address what
it judges to be its highest priority needs each
year. However, recent developments should,
if properly implemented, help the agency
address this resource management issue.
New accounting standards and the
enactment and implementation of the
Results Act offer an opportunity to address
these concerns in a more strategic and
systematic way.1 Also, Interior has recently
completed a departmentwide study of
maintenance and repair issues that,
according to Interior officials, will lead to a
more complete and accurate understanding

1
 Federal Financial Accounting Standard No. 6, “Accounting for
Property, Plant, and Equipment,” requires disclosures about the
condition and estimated cost to remedy deferred maintenance of
property, plant, and equipment. It is effective for fiscal years
starting after September 30, 1997.

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                 of its maintenance and capital needs.
                 However, as now planned, acquiring the
                 needed data and getting the needed
                 processes in place will take several years.
                 Since the processes in support of all of these
                 initiatives are now being developed and
                 implemented, the Congress may wish to
                 continue emphasizing the importance of
                 effectively implementing them. Furthermore,
                 the Congress may wish to monitor Interior’s
                 activities to ensure that programs for
                 determining and monitoring the condition of
                 critical resources are included in the
                 agencies’ plans and that the agencies’
                 performance against established plans is
                 acceptable. Finally, in light of the Park
                 Service’s past reluctance to cut back on its
                 housing inventory, the Congress may wish to
                 monitor the agency’s progress in this area.


Guidance,        Decentralization of responsibility, coupled
Oversight, and   with inadequate guidance and oversight, has
Accountability   resulted in significant differences in how
Need             Interior’s various field offices have
Improvement      implemented both legislative mandates and
                 the administration’s goals and objectives.
                 For example, BLM field offices vary widely in
                 the organization and staffing of the oil and
                 gas inspection and enforcement program,
                 the degree of supervisory oversight


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provided, the number of inspections planned
and conducted, the types of enforcement
actions taken, the amount of training given
inspectors, and the extent of program
evaluation. As a result, BLM’s oil and gas
inspection and enforcement program
continues to be an area that is vulnerable to
abuse and/or mismanagement. BLM officials
are aware of this problem and have recently
taken a number of actions to address it.
However, since many of the corrective
actions were taken in 1998, it is still too early
to determine their effectiveness.

Similarly, in the Park Service, decisions
about spending and operating priorities are,
to a large degree, delegated to the individual
park managers. Under this approach, park
managers have broad discretion in deciding
how to spend the parks’ operating funds. The
most significant limitation associated with
this decentralized approach is that it does
not focus on the results that were achieved
with the funds spent. As a result, scarce park
dollars are not always spent in the best
interest of the agency as a whole but rather
on the more parochial interests and
preferences of individual park managers.
However, changes that are now being made
within the agency in response to the Results



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                    Act should, if implemented properly, help
                    address this issue.

                    As part of its implementation of the Results
                    Act, the Park Service is requiring individual
                    park managers to develop strategic and
                    annual performance plans that are
                    consistent with and support Service-wide
                    goals. The Park Service is also implementing
                    an information system to track performance
                    against established goals and to link
                    spending to goals. Nonetheless, until these
                    processes are fully implemented, there is no
                    effective means to monitor progress toward
                    achieving the agency’s goals and holding
                    park managers accountable. Consequently,
                    the Congress may want to continue to
                    emphasize and monitor the effective
                    development and implementation of the
                    accountability systems called for by the
                    Results Act so that Interior uses its financial
                    resources more efficiently.


Management          Interior administers the federal
Problems            government’s trust responsibilities to tribes
Continue to         and Indians. This responsibility includes
Plague Interior’s   managing $3 billion in Indian trust funds and
Tribal and Indian   providing about $800 million annually for
                    basic tribal services such as natural resource
Programs
                    management and social services.


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                      Management of the trust funds has long been
                      characterized by inadequate accounting and
                      information systems, poor recordkeeping
                      and internal controls, and other weaknesses
                      that result in no assurance that fund assets
                      are being properly managed. In addition,
                      federal funding to provide basic tribal
                      services has been criticized for not being
                      responsive because the funding does not
                      take into consideration tribes’ needs, the
                      tribes’ own revenues, or the funds necessary
                      to fully fund the tribal programs.


Indian Trust Funds    The Secretary of the Interior is responsible
and Assets Need to    for administering the government’s trust
Be More Effectively   responsibilities to tribes and Indians,
Managed               including managing about $3 billion in Indian
                      trust funds and about 54 million acres of
                      Indian lands. Management of the Indian trust
                      funds and assets has long been characterized
                      by inadequate accounting and information
                      systems; untrained and inexperienced staff,
                      backlogs in appraisals, determinations of
                      ownership, and recordkeeping; the lack of a
                      master lease file and an accounts receivable
                      system; inadequate written policies and
                      procedures; and poor internal controls.
                      Because of these overall weaknesses,
                      account holders do not have assurance that



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their account balances are accurate and that
their assets are being managed prudently.

To address these long-standing problems,
the Congress created the Office of the
Special Trustee for American Indians. In
April 1997, the Special Trustee submitted a
strategic plan to the Congress, but Interior
did not fully support the plan. On August 22,
1997, the Secretary of the Interior indicated
that he and the Special Trustee for American
Indians reached agreement on some of the
initiatives proposed in the strategic plan and
outlined the Department’s approach for
improving Indian trust management. That
approach, a 3-year effort, is directed at data
cleanup; systems improvements; and
addressing deficiencies regarding records
management, training, policies and
procedures, and internal controls.

Because many of the needed improvements
center on information technology, adhering
to legal and regulatory requirements, such as
the Clinger-Cohen Act and the Office of
Management and Budget’s guidance for
major information technology investments,
is critical. In this regard, we previously
recommended that Interior develop a
strategic information resources management
plan, criteria for the evaluation of major


Page 25   GAO/OCG-99-9 Department of Interior Challenges
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                   information system investments, and an
                   information architecture that aligns
                   technology with mission goals. To support
                   the design and development of management
                   and information systems and to provide
                   adequate evidence of a framework for
                   sharing related business and functional
                   information and program requirements
                   among the cognizant organizations and
                   functions, we also recommended that
                   Interior identify all related business
                   functions and obtain input on information
                   requirements from all Indian trust fund
                   stakeholders. Interior agreed with these
                   recommendations but has yet to implement
                   them.


Distribution of    The Bureau of Indian Affairs (BIA) is the
Funds for Indian   primary agency of the federal government
Programs May Not   charged with the responsibility to implement
Match Needs        federal Indian policy and to discharge the
                   federal trust responsibility for Indian tribes
                   and Alaska native villages. Under current
                   federal Indian policy, tribes are allowed to
                   administer their own programs. When the
                   tribes enter into agreements with BIA to
                   administer their own programs, BIA is
                   required to provide funding for the programs
                   as well as contract support funds to cover
                   the tribes’ administrative costs. Recently,


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these funds have approached $800 million
annually. They are distributed through a
process called tribal priority allocations
(TPA).

BIA’s distribution of a portion of TPA funds,
referred to as “TPA base funds,” has been
widely criticized for not being responsive to
changes in the relative needs of tribes. These
funds are used to provide basic tribal
services, such as social services, adult
vocational training, child welfare services,
and natural resources management. BIA
distributes TPA base funds primarily on the
basis of historical distribution levels. That is,
the amount available to a particular tribe is
generally the same as the previous year’s
amount, without consideration of the tribe’s
needs or the tribe’s own revenues. Not only
has no corresponding change occurred in the
amount of TPA base funds distributed to
tribes whose relative needs have changed,
but BIA has not even established criteria to
determine what the needs of the tribes are.
Consequently, the distribution of TPA base
funds has not kept pace with recent trends
and developments that directly affect the
funding needs of individual tribes. This is a
critical issue because for some tribes,
especially those with substantial gaming
operations, revenues over the past few years


Page 27   GAO/OCG-99-9 Department of Interior Challenges
Major Performance and Management
Issues




have risen dramatically. For example, for
several tribes, the revenues from gaming
have exceeded $100 million annually per
tribe. In total, these revenues are about
$1.8 billion annually, but these additional
revenues are not considered in distributing
TPA base funds. As a result, tribes with the
highest reported revenues can receive more
TPA base funds than other tribes with no
revenues or with losses.

The other type of fund distribution involves
contract support. These funds are to be
distributed on the basis of tribes’
administrative costs. However, insufficient
funds have been appropriated to fully meet
these needs. BIA calculated a $26 million
shortfall in funding for contract support
costs for fiscal year 1998. This shortfall
represents about 20 percent of the
$130 million needed for these costs.
Concerns have been raised in recent years
over the ever-increasing need for contract
support funds and the effect of funding
shortfalls on tribal governments. For
example, tribal governments may have to
use their own resources or use program
funds to cover their funding shortfalls.

Because it is critical that Interior continue
its efforts to address the deficiencies in


Page 28   GAO/OCG-99-9 Department of Interior Challenges
                   Major Performance and Management
                   Issues




                   Indian trust fund accounting and asset
                   management and that BIA and the Special
                   Trustee work together toward this end, the
                   Congress may wish to conduct oversight to
                   ensure progress. Regarding BIA’s distribution
                   of funds, various studies are under way to
                   address this matter. BIA has been directed to
                   report to the Congress by April 1, 1999, on
                   alternative methods for distributing TPA
                   funds, taking into account tribal revenues
                   and the relative needs of tribes and tribal
                   members. BIA, the Indian Health Service, and
                   the National Congress of American Indians
                   all have established work groups to review
                   contract support costs. In addition, we have
                   been directed to conduct a comprehensive
                   study of contract support costs and to report
                   on the results of the study to the Congress
                   by June 30, 1999. These issues will be at the
                   forefront of the congressional debate over
                   BIA’s fiscal year 2000 appropriation and the
                   long-term debate over the future of federal
                   Indian policy.


Problems in        During the energy boom in the early 1980s,
Managing New       BLM found that it could not handle the
Automated          case-processing workload associated with a
Records System     peak in the number of applications for oil
Put BLM            and gas leases. BLM recognized that to keep
                   up with increased demand, it needed to
Programs at Risk

                   Page 29   GAO/OCG-99-9 Department of Interior Challenges
Major Performance and Management
Issues




automate its records and case-processing
activities. Furthermore, according to BLM
officials, most of the more than 1 billion
paper documents in its
possession—including land surveys, tract
books, land patents, mining claims, and oil
and gas leases—are deteriorating and
becoming increasingly difficult to read.
These circumstances led BLM to begin
planning to acquire an automated land and
mineral case processing system. The scope
and attributes of the planned automated
system have changed over the years,
evolving into the largest system development
project ever undertaken by BLM or
Interior—the Automated Land and Mineral
Record System. In 1993 when BLM agreed to
the system design, the system was estimated
to cost $403 million.

Initially, BLM planned to begin to deploy the
system in fiscal year 1997. However, in
March 1997, we reported that the agency was
encountering problems with the system that
increased the risk of degraded performance
and capability and that had already resulted
in higher costs. At that time, the higher costs
were estimated to be about $537 million—
about $134 million, or 33 percent, higher
than BLM’s original estimate of $403 million.
We also reported BLM would not be ready to


Page 30   GAO/OCG-99-9 Department of Interior Challenges
Major Performance and Management
Issues




deploy the system until it had completed
essential management plans, policies, and
procedures to help ensure a successful
transition and operating environment.

As of May 1998, BLM had not yet fully dealt
with our concerns nor had it even developed
a credible schedule for fully implementing
the system. In addition, the agency has found
continuing problems with computer
hardware and software during testing of the
system. BLM’s testing also surfaced
operational concerns that had not been
adequately addressed, such as how the
system will support public information
needs and data exchanges between BLM and
other organizations. Finally, our work has
shown that recent and potential delays in
implementing the Automated Land and
Minerals Record System place BLM at risk
because existing systems that are being used
to support mission-critical business
processes, which are to be replaced by the
system under development, will be subject
to the Year 2000 computer-date problem.
While BLM is intending to provide the
upgrades necessary to allow for the
continued use of these systems in case the
Automated Land and Minerals Record
System is not fully deployed by 2000, the
agency has yet to develop a plan to do this.


Page 31   GAO/OCG-99-9 Department of Interior Challenges
Major Performance and Management
Issues




We have made several recommendations to
correct shortcomings and mitigate risks
associated with the project. These
recommendations have focused on areas
such as configuration management, security
planning and architecture, transition
planning, operations and maintenance
planning, and Year 2000 contingency
planning. While BLM has agreed with the
recommendations, it has not yet fully
implemented them.

In April 1998, we also testified that Interior
had shortcomings in its Year 2000 program.
At that time, Interior had not verified the
accuracy and reliability of BLM’s Year 2000
renovation actions to ensure that executive
management received a reliable picture of
the program’s progress. Nor had Interior
maintained a centralized inventory of its
more than 2,900 data exchanges to
determine whether agreements had been
reached with external entities. Therefore, it
may have missed key information showing
whether data exchanges were Year 2000
compliant; until these data exchanges are
compliant, there is an increased risk that
Interior’s systems will receive noncompliant
data that can corrupt its databases. Finally,
Interior had not instructed its bureaus to
develop plans to ensure the continuity of


Page 32   GAO/OCG-99-9 Department of Interior Challenges
Major Performance and Management
Issues




core business operations in the event of
unforeseen failures.




Page 33   GAO/OCG-99-9 Department of Interior Challenges
Related GAO Products



Reexamination of   Department of the Interior: Observations on
Organization and   Performance Plan and Other Management
Functions          Issues (GAO/T-RCED/AIMD-98-173, Apr. 22, 1998).

                   Results Act: Observations on the Department
                   of the Interior’s Draft Strategic Plan
                   (GAO/RCED-98-207R, July 18, 1997).

                   Federal Land Management: Streamlining and
                   Reorganization Issues (GAO/T-RCED-96-209,
                   June 27, 1996).


Protecting,        National Park Service: Efforts to Identify and
Preserving, and    Manage the Maintenance Backlog
Maintaining        (GAO/RCED-98-143, May 14, 1998).
Resources
                   National Park Service: Maintenance Backlog
                   Issues (GAO/T-RCED-98-61, Feb. 4, 1998).

                   National Park Service: Employee Housing
                   Issues (GAO/T-RCED-98-35, Oct. 29, 1997).

                   National Parks: Park Service Needs Better
                   Information to Preserve and Protect
                   Resources (GAO/T-RCED-97-76, Feb. 27, 1997).

                   Federal Land Management: Information on
                   Efforts to Inventory Abandoned Hard Rock
                   Mines (GAO/RCED-96-30, Feb. 23, 1996).



                   Page 34   GAO/OCG-99-9 Department of Interior Challenges
Related GAO Products




National Park Service: Difficult Choices
Need to Be Made on the Future of the Parks
(GAO/RCED-95-238, Aug. 30, 1995).

National Park Service: Condition of and
Need for Employee Housing (GAO/RCED-93-192,
Sept. 30, 1993).

Wildlife Protection: Enforcement of Federal
Laws Could Be Strengthened (GAO/RCED-91-44,
Apr. 26, 1991).

Public Land Management: Attention to
Wildlife Is Limited (GAO/RCED-91-64, Mar. 7,
1991).

Rangeland Management: BLM Efforts to
Prevent Unauthorized Livestock Grazing
Need Strengthening (GAO/RCED-91-17, Dec. 7,
1990).

Public Lands: Limited Progress in Resource
Management Planning (GAO/RCED-90-225, Sept.
27, 1990).

Federal Land Management: Better Oil and
Gas Information Needed to Support Land
Use Decisions (GAO/RCED-90-71, June 27, 1990).




Page 35   GAO/OCG-99-9 Department of Interior Challenges
                    Related GAO Products




                    Endangered Species: Management
                    Improvements Could Enhance Recovery
                    Program (GAO/RCED-89-5, Dec. 21, 1988).


Guidance,           National Park Service: Efforts to Link
Oversight, and      Resources to Results Suggest Insights for
Accountability      Other Agencies (GAO/AIMD-98-113, Apr. 10,
                    1998).

                    Park Service: Managing for Results Could
                    Strengthen Accountability (GAO/RCED-97-125,
                    Apr. 10, 1997).

                    Department of the Interior: Observations on
                    Performance Plan and Other Management
                    Issues (GAO/T-RCED-98-173, Apr. 22, 1998).

                    Results Act: Observations on the Department
                    of Interior’s Draft Strategic Plan
                    (GAO/RCED-98-207R, July 18, 1997).

                    Federal Land Management: Better Oil and
                    Gas Information Needed to Support Land
                    Use Decisions (GAO/RCED-90-71, June 27, 1990).


Tribal and Indian   Indian Programs: Tribal Priority Allocations
Programs            Do Not Target the Neediest Tribes
                    (GAO/RCED-98-181, July 17, 1998).



                    Page 36   GAO/OCG-99-9 Department of Interior Challenges
                Related GAO Products




                Financial Management: Recommendations
                on Indian Trust Fund Strategic Plan
                Proposals (GAO/AIMD-98-37, Nov. 26, 1997).

                Financial Management: Indian Trust Fund
                Strategic Plan (GAO/T-AIMD-97-138, July 30,
                1997).

                Financial Management: BIA’s Tribal Trust
                Fund Account Reconciliation Results
                (GAO/AIMD-96-63, May 3, 1996).


BLM’s Records   Land Management Systems: Actions Needed
System          in Completing the Automated Land and
                Minerals Record System Development
                (GAO/AIMD-98-107, May 15, 1998).

                Department of the Interior: Year 2000
                Computing Crisis Presents Risk of
                Disruption to Key Operations
                (GAO/T-AIMD-98-149, Apr. 22, 1998).

                Land Management Systems: Information on
                BLM’s Automated Land and Minerals Record
                System Release 2 Project (GAO/AIMD-97-109R,
                June 6, 1997).

                Land Management Systems: BLM Faces Risks
                in Completing the Automated Land and



                Page 37   GAO/OCG-99-9 Department of Interior Challenges
Related GAO Products




Minerals Record System (GAO/AIMD-97-42,
Mar. 19, 1997).

Land Management Systems: Progress and
Risks in Developing BLM’s Land and Minerals
Record System (GAO/AIMD-95-180, Aug. 31,
1995).




Page 38   GAO/OCG-99-9 Department of Interior Challenges
Performance and Accountability Series



             Major Management Challenges and Program
             Risks: A Governmentwide Perspective
             (GAO/OCG-99-1)

             Major Management Challenges and Program
             Risks: Department of Agriculture
             (GAO/OCG-99-2)

             Major Management Challenges and Program
             Risks: Department of Commerce
             (GAO/OCG-99-3)

             Major Management Challenges and Program
             Risks: Department of Defense (GAO/OCG-99-4)

             Major Management Challenges and Program
             Risks: Department of Education
             (GAO/OCG-99-5)

             Major Management Challenges and Program
             Risks: Department of Energy (GAO/OCG-99-6)

             Major Management Challenges and Program
             Risks: Department of Health and Human
             Services (GAO/OCG-99-7)

             Major Management Challenges and Program
             Risks: Department of Housing and Urban
             Development (GAO/OCG-99-8)




             Page 39   GAO/OCG-99-9 Department of Interior Challenges
Performance and Accountability Series




Major Management Challenges and Program
Risks: Department of the Interior
(GAO/OCG-99-9)

Major Management Challenges and Program
Risks: Department of Justice (GAO/OCG-99-10)

Major Management Challenges and Program
Risks: Department of Labor (GAO/OCG-99-11)

Major Management Challenges and Program
Risks: Department of State (GAO/OCG-99-12)

Major Management Challenges and Program
Risks: Department of Transportation
(GAO/OCG-99-13)

Major Management Challenges and Program
Risks: Department of the Treasury
(GAO/OCG-99-14)

Major Management Challenges and Program
Risks: Department of Veterans Affairs
(GAO/OCG-99-15)

Major Management Challenges and Program
Risks: Agency for International Development
(GAO/OCG-99-16)




Page 40   GAO/OCG-99-9 Department of Interior Challenges
Performance and Accountability Series




Major Management Challenges and Program
Risks: Environmental Protection Agency
(GAO/OCG-99-17)

Major Management Challenges and Program
Risks: National Aeronautics and Space
Administration (GAO/OCG-99-18)

Major Management Challenges and Program
Risks: Nuclear Regulatory Commission
(GAO/OCG-99-19)

Major Management Challenges and Program
Risks: Social Security Administration
(GAO/OCG-99-20)

Major Management Challenges and Program
Risks: U.S. Postal Service (GAO/OCG-99-21)

High-Risk Series: An Update (GAO/HR-99-1)




The entire series of 21 performance and
accountability reports and the high-risk
series update can be ordered by using
the order number GAO/OCG-99-22SET.




Page 41   GAO/OCG-99-9 Department of Interior Challenges
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