If a federal agency is involved in authorizing, funding, or carrying out a  proposed project, FWS’s discussions with project proponents about  options to avoid and minimize potential adverse impacts on the ABB can  occur within the context of consultations under section 7 of the ESA. In these cases, FWS has other options—compensatory mitigation  strategies—that project proponents may choose to use to compensate for  the impact of their projects. FWS Has Used In- Lieu Fee Programs and Conservation Banks to Conserve the ABB but Does Not Track the Use of In- Lieu Fee Programs Across Regions

FWS uses several compensatory mitigation strategies, such as in-lieu fee  programs and conservation banks operated by third parties, to provide  project proponents the option to compensate for remaining unavoidable  impacts to endangered or threatened species after project proponents  have implemented all appropriate and practicable avoidance and  minimization measures, and FWS has used these strategies to conserve  the ABB. FWS Uses Several Types of Compensatory Mitigation Strategies and in September 2016 Issued a Draft ESA Compensatory Mitigation Policy

In addition to discussing and, in some cases, requiring measures to avoid  and minimize potential adverse impacts to listed species, FWS may also  discuss compensatory mitigation strategies with the project proponents so  that they can compensate for any remaining unavoidable impacts on  listed species from their projects after implementing all appropriate and  practicable avoidance and minimization measures. FWS Tracks Key Information about Conservation Banks, but Its Plan to Track In-Lieu Fee Programs Has Not Been Fully Implemented

FWS tracks key information about the conservation banks it approves,  such as the location and credits available, but it does not track in-lieu fee  programs. Federal government standards for internal control provide that  management should design control activities to achieve objectives and  respond to risks. To accomplish this, according to federal internal  control standards, management should define the time frames for  achieving the objectives. Until  FWS establishes a timetable with milestones for modifying the RIBITS  database to incorporate in-lieu fee program information, the agency will  not have reasonable assurance that it will obtain relevant and reliable  data on its in-lieu fee programs, which will impact its ability to effectively  evaluate its in-lieu fee programs and determine the most effective  strategy for conservation. Since 2014, FWS Has Used Two Conservation Banks to Allow Project Proponents to Compensate for Potential Impacts on the ABB in Oklahoma

The Oklahoma Ecological Services Field Office approved two  conservation banks for the ABB in an effort to allow project proponents to  compensate for the potential adverse impacts of their projects on the ABB  and to provide long-term conservation for the species, according to  agency officials. Recommendation for Executive Action

To help improve FWS’s ability to evaluate the effectiveness of its  compensatory mitigation strategies and ensure that the agency  appropriately plans the obligations necessary for this purpose, we  recommend that the Director of the U.S. Fish and Wildlife Service (FWS) has sought to avoid and minimize  potential adverse impacts on the American burying beetle (ABB) from  construction and other projects and (2) what is known about FWS’s  compensatory mitigation strategies and how FWS has used two of these  strategies, in-lieu fee programs and conservation banks, for the ABB. To conduct our work, we reviewed and analyzed relevant laws, agency  policies, guidance, and other documentation related to the Endangered  Species Act (ESA), compensatory mitigation strategies, and conservation  efforts for the ABB. We also analyzed FWS  data on the use of conservation banks for all species listed under the  ESA, which is reported in the U.S. Army Corps of Engineers’ Regulatory  In-lieu fee and Bank Information Tracking System (RIBITS).
Why GAO Did This Study

The ABB is a large scavenger insect that FWS listed as endangered in 1989 under the Endangered Species Act (ESA). FWS uses various strategies to address potential adverse impacts on protected species from construction and other projects. In some cases, FWS has required project proponents to take specific steps to avoid, minimize, or compensate for a project's potential impacts on the ABB or its habitat. When these proponents make financial contributions to compensate for the impacts of these projects, FWS generally refers to it as compensatory mitigation. GAO was asked to provide information on how FWS uses different compensatory mitigation strategies.
This report examines: (1) how FWS has sought to avoid and minimize potential adverse impacts on the ABB from projects and (2) what is known about FWS's compensatory mitigation strategies and how FW has used two of them, in-lieu fee programs and conservation banks, for the ABB. GAO reviewed relevant laws, policies, guidance, and conservation efforts for the ABB; analyzed FWS data on ESA consultations and the use of conservation banks; and interviewed officials from FWS, project proponents, and organizations involved in ABB conservation.

What GAO Found

To address the potential adverse impacts of construction and other projects on the American burying beetle (ABB) and its habitat, the U.S. Fish and Wildlife Service (FWS), within the Department of the Interior, first focuses on avoidance and minimization approaches. For example, to avoid impacts on ABB habitat, FWS may suggest that project proponents—public and private entities—relocate the project or part of the project to another location. If complete avoidance is not possible, FWS may suggest ways to minimize the potential impacts, such as reducing soil disturbance during construction or limiting the use of pesticides. If avoidance and minimization actions are impractical or inadequate, then FWS may suggest compensatory mitigation strategies, which allow project proponents to choose to compensate for the potential adverse impacts of their projects.
FWS uses several types of compensatory mitigation strategies, including (1) conservation banks, in which third parties invest up front in protected lands that are conserved and managed for a species, and then sell mitigation credits to project proponents, and (2) in-lieu fee programs, in which third parties generally collect money from several project proponents and conduct conservation activities for the species in a location away from the project site after the project's potential impacts have occurred. FWS has used two conservation banks in Oklahoma and three in-lieu fee programs in several states specifically to conserve the ABB. FWS tracks key information about its conservation banks, such as the location and mitigation credits available, and uses this information to help manage activities. However, FWS has not fully implemented its plan to track in-lieu fee programs. FWS signed an interagency agreement with the U.S. Army Corps of Engineers in February 2016 to modify its Regulatory In-lieu fee and Bank Information Tracking System (RIBITS) to enable FWS to track its in-lieu fee programs. However, FWS has not obligated funds for the necessary modifications or developed a timetable for doing so. Federal internal control standards provide that management should design control activities to achieve objectives and respond to risks. To accomplish this, federal internal control standards recommend that management define the time frames for how objectives will be achieved. Until FWS collects relevant and reliable data on its in-lieu fee programs, the agency will not be able to evaluate the effectiveness of its programs and determine the most effective strategy for conservation.

What GAO Recommends

To ensure that appropriate plans are made to obligate funds, GAO recommends that FWS establish a timetable with milestones for modifying RIBITS to incorporate FWS's in-lieu fee program information.
FWS concurred with this recommendation.