In addition,  Interior’s programs for managing hardrock mining, oil, and gas operations  have not adequately protected federal resources from the environmental  effects of these activities. Management Problems in Indian and Island Community Programs Persist

GAO has reported on management weaknesses in Indian programs for a  number of years. While Interior has made major program changes, significant problems  continue. Specifically, to remedy decades of problems with the quality and  objectivity of its land appraisals, Interior removed the land appraisal  function from its land management agencies and consolidated it into a  departmental office—the Appraisal Services Directorate—in November  2003. Since our report last fall, Interior has taken encouraging steps to address  our recommendations. For example, Interior has stated that it has  implemented a compliance inspection program for appraisals that are  considered “high risk” to help ensure that such appraisals comply with  recognized appraisal standards. We will continue to monitor the  department’s progress in this area. Deferred Maintenance Backlog Needs to Be Addressed

In addition to the challenges the department faces in adequately  maintaining the natural resources under its stewardship, it also faces a  challenge in adequately maintaining its facilities and infrastructure. While Interior has made progress addressing prior  recommendations to improve information on the maintenance needs of  Park Service facilities and BIA schools, the challenge of how the  department will secure the significant funding needed to reduce this  maintenance backlog to a manageable level remains. Interior Has Not Maximized Revenue Collections from Recreational and Other Uses

Interior agencies are authorized—and in some cases required—to collect  fees for a variety of uses. However, we found that the  agencies were not collecting such fees in the following cases:  In May 2006, we reported that the Park Service was not collecting all  required fees from companies conducting air tours in or around three  highly visited national parks because of (1) an inability to verify the  number of air tours conducted over the three national parks and,  therefore, to enforce compliance and (2) confusion resulting from  differing geographic applicability of legislation governing air tours in  national parks. Contract and Grant Management Lack Needed Controls

Interior’s management of contracts and grants has been identified as a  management challenge by Interior’s IG for a number of years. While some of the programs we evaluated in the past have  improved, evaluations of additional programs reveal many of the same  persistent management problems—a lack of adequate data to understand  the condition of its natural resources and infrastructure and the actions  necessary to improve them, a lack of adequate controls and accountability  to ensure federal resources are properly used and accounted for, and a  lack of adequate strategic planning and guidance for program  implementation. Clearly the department needs to address management  and control gaps in its programs and ensure its activities are carried out in  the most cost-effective and efficient manner, but difficult choices remain  for improving the condition of the nation’s natural resources and the  department’s infrastructure in light of the federal deficit and long-term  fiscal challenges facing the nation. Major Management Challenges and Program Risks: Department of the  Interior. Wildland Fire Management: Update on Federal Agency Efforts to Develop  a Cohesive Wildland Fire Strategy. Indian Trust Funds: Tribal Account Balances. National Park Service: Status of Efforts to Develop Better Deferred  Maintenance Data. Revenue Collection Opportunities

Oil and Gas Royalties: Royalty Relief Will Likely Cost the Government  Billions, but the Final Costs Have Yet to Be Determined. Oil and Gas Development: Increased Permitting Activity Has Lessened  BLM’s Ability to Meet Its Environmental Protection Responsibilities.
Why GAO Did This Study

The Department of the Interior is responsible for managing much of the nation's vast natural resources. Its agencies implement an array of programs intended to protect these precious resources for future generations while also allowing certain uses of them, such as oil and gas development and recreation. In some cases, Interior is authorized to collect royalties and fees for these uses. Over the years, GAO has reported on challenges facing Interior as it implements its programs. In addition to basic program management issues, the department faces difficult choices in balancing its many responsibilities, and in improving the condition of the nation's natural resources and the department's infrastructure, in light of the federal deficit and long-term fiscal challenges facing the nation. This testimony highlights some of the major management challenges facing Interior today.

What GAO Found

The Department of the Interior has made progress in addressing challenges that GAO has identified in such areas as developing and maintaining better data to manage the department's programs and strengthening internal controls. However, numerous important problems remain, as discussed below. Management of resource protection efforts needs to be strengthened. Interior has undertaken steps to improve some of its resource protection efforts, but it has yet to develop a cohesive national strategy to address wildland fire issues, as GAO has recommended. In addition, Interior agencies that manage hardrock mining and oil and gas production on their lands have not effectively carried out their environmental protection responsibilities. Management problems in Indian and island community programs persist. While Interior has implemented major reforms to address weaknesses in managing Indian trust funds and other assets, concerns remain about finalizing organizational changes and delays in decisions about land that the department will take into trust status. In addition, island community programs continue to lack accountability measures. Land appraisals continue to fall short of standards. While Interior has consolidated the land appraisal function into a departmental office to address serious problems with the quality of its appraisals and the millions of dollars that had been lost as a result, a large portion of appraisals that GAO reviewed still did not comply with recognized appraisal standards. Deferred maintenance backlog needs to be addressed. Interior has implemented improved inventory and asset management systems for some programs, but it is not clear how it will address the estimated $17 billion in deferred maintenance. Other programs continue to lack information required to accurately estimate needs. Revenue collection needs more management attention. Interior may not be collecting billions of dollars of revenue from oil and gas royalties; geothermal royalties; and fees from individual recreational uses, air tour operations in and around national parks, and commercial filming and still photography in national parks. Contract and grant management lack needed controls. Because it lacks adequate controls over management of grants and contracts, Interior cannot ensure that millions of dollars in grant and contract funding were used appropriately.