Each area can  receive funding through the Park Service’s budget—generally limited to  not more than $1 million a year for 10 or 15 years. No Systematic Process Exists for Identifying and Designating National Heritage Areas

No systematic process is in place to identify qualified candidate sites and  designate them as national heritage areas. Furthermore, of the 14 areas that were designated after a full evaluation,  the Congress designated 8 consistent with the Park Service’s  recommendations, 5 without the agency’s advice, and 1 after the agency  had recommended that action be deferred. A suitability/feasibility study, should examine a proposed area using the  following criteria:    The area has natural, historic, or cultural resources that represent  distinctive aspects of American heritage worthy of recognition,  conservation, interpretation, and continuing use, and are best managed  through partnerships among public and private entities, and by combining  diverse and sometimes noncontiguous resources and active communities;   The area’s traditions, customs, beliefs, and folk life are a valuable part of  the national story;   The area provides outstanding opportunities to conserve natural, cultural,  historic, and/or scenic features;   The area provides outstanding recreational and educational opportunities;    Resources that are important to the identified themes of the area retain a  degree of integrity capable of supporting interpretation;   Residents, businesses, nonprofit organizations, and governments within  the area that are involved in the planning have developed a conceptual  financial plan that outlines the roles for all participants, including the  federal government, and have demonstrated support for designation of the  area;   The proposed management entity and units of government supporting the  designation are willing to commit to working in partnership to develop the  area;   The proposal is consistent with continued economic activity in the area;    A conceptual boundary map is supported by the public; and    The management entity proposed to plan and implement the project is  described. National Heritage Areas Annually Receive Millions in Federal Funding

According to data from 22 of the 24 heritage areas, about half of their total  funding of $310 million in fiscal years 1997 through 2002 came from the  federal government and the other half from state and local governments  and private sources. However, in each case, the  sunset date was extended and the heritage area continued to receive  funding from the Congress. Finally, the areas’ designating legislation typically requires the heritage  areas to match the amount of federal funds they receive with a specified  percentage of funds from nonfederal sources. The Park Service Lacks an Effective Process for Ensuring that National Heritage Areas Are Accountable for Their Use of Federal Funds

In the absence of a formal program, the Park Service oversees heritage  areas’ activities by monitoring the implementation of the terms set forth in  the cooperative agreements. According to Park Service officials, the agency has not taken actions to  improve oversight because, without a formal program, it does not have the  direction or funding it needs to effectively administer its national heritage  area activities. National Heritage Areas Do Not Appear to Have Affected Individual Property Rights

National heritage areas do not appear to have affected private property  rights, although private property rights advocates have raised a number of  concerns about the potential effects of heritage areas on property owners’  rights and land use. However, most of the management plans state that local  governments’ participation will be crucial to the success of the heritage  area and encourage local governments to implement land use policies that  are consistent with the plan. Property rights advocates are  concerned that such provisions give heritage areas an opportunity to  indirectly influence zoning and land use planning, which could restrict  owners’ use of their property. Despite concerns about private property rights, officials at the 24 heritage  areas, Park Service headquarters and regional staff working with these  areas, and representatives of six national property rights groups that we  contacted were unable to provide us with a single example of a heritage  area directly affecting—positively or negatively—private property values  or use. These actions  should include    developing well-defined, consistent standards and processes for regional  staff to use in reviewing and approving heritage areas’ management plans; requiring regional heritage area managers to regularly and consistently  review heritage areas’ annual financial audit reports to ensure that the  agency has a full accounting of their use of funds from all federal sources,  and   developing results-oriented performance goals and measures for the  agency’s heritage area activities, and requiring, in the cooperative  agreements, heritage areas to adopt such a results-oriented management  approach as well.
Why GAO Did This Study

The Congress has established, or "designated," 24 national heritage areas to recognize the value of their local traditions, history, and resources to the nation's heritage. These areas, including public and private lands, receive funds and assistance through cooperative agreements with the National Park Service, which has no formal program for them. They also receive funds from other agencies and nonfederal sources, and are managed by local entities. Growing interest in new areas has raised concerns about rising federal costs and the risk of limits on private land use. GAO was asked to review the (1) process for designating heritage areas, (2) amount of federal funding to these areas, (3) process for overseeing areas' activities and use of federal funds, and (4) effects, if any, they have on private property rights.

What GAO Found

No systematic process currently exists for identifying qualified sites and designating them as national heritage areas. While the Congress generally has designated heritage areas with the Park Service's advice, it designated 10 of the 24 areas without a thorough agency review; in 6 of these 10 cases, the agency recommended deferring action. Even when the agency fully studied sites, it found few that were unsuitable. The agency's criteria are very general. For example, one criterion states that a proposed area should reflect "traditions, customs, beliefs, and folk life that are a valuable part of the national story." These criteria are open to interpretation and, using them, the agency has eliminated few sites as prospective heritage areas. According to data from 22 of the 24 heritage areas, in fiscal years 1997 through 2002, the areas received about $310 million in total funding. Of this total, about $154 million came from state and local governments and private sources and another $156 million came from the federal government. Over $50 million was dedicated heritage area funds provided through the Park Service, with another $44 million coming from other Park Service programs and about $61 million from 11 other federal sources. Generally, each area's designating legislation imposes matching requirements and sunset provisions to limit the federal funds. However, since 1984, five areas that reached their sunset dates had their funding extended. The Park Service oversees heritage areas' activities by monitoring their implementation of the terms set forth in the cooperative agreements. These terms, however, do not include several key management controls. That is, the agency has not (1) always reviewed areas' financial audit reports, (2) developed consistent standards for reviewing areas' management plans, and (3) developed results-oriented goals and measures for the agency's heritage area activities, or required the areas to adopt a similar approach. Park Service officials said that the agency has not taken these actions because, without a program, it lacks adequate direction and funding. Heritage areas do not appear to have affected property owners' rights. In fact, the designating legislation of 13 areas and the management plans of at least 6 provide assurances that such rights will be protected. However, property rights advocates fear the effects of provisions in some management plans. These provisions encourage local governments to implement land use policies that are consistent with the heritage areas' plans, which may allow the heritage areas to indirectly influence zoning and land use planning in ways that could restrict owners' use of their property. Nevertheless, heritage area officials, Park Service headquarters and regional staff, and representatives of national property rights groups that we contacted were unable to provide us with any examples of a heritage area directly affecting--positively or negatively--private property values or use.