In addition to the special-use permit fees that are specifically for the use of the land, the Forest Service is authorized to recover the direct and indirect costs incurred in providing services that support the permitted activity. GRFS, which calculates fees for commercial recreational activities, limits the Forest Service’s fees to generally less than 3 percent of the permittees’ gross revenues while states receive 5 to 15 percent of gross revenues for similar uses of state lands. GRFS is a formula-based fee system that the agency has been using for decades. Accordingly, the fees are frequently lower than what they should be because they are based on out-of-date information. The costs incurred in reviewing and processing these recreation special-use applications were estimated to be about $6.5 million. As a result, these costs are not being recovered. Because of the lack of a cost-accounting system, Forest Service officials were not able to provide us with information on the overall cost of administering the recreation special-use permit program, which would not only include processing and reviewing applications for permits, but also include activities such as annual billing, conducting inspections, and training staff. As a result, these weaknesses have not been addressed. Even though the Forest Service has had the authority to recover costs since 1952, it has not developed the needed regulations to do so. In addition to a lack of priority, there is a lack of incentives for forest managers to seek higher permit fees. However, the Forest Service’s recreation special-use program is not receiving fair market value or recovering the costs of the program. Objectives, Scope, and Methodology

We were asked by the Chairman of the Subcommittee on Oversight of Government Management and the District of Columbia, Senate Committee on Government Affairs to determine (1) whether the fees currently charged for recreation special-use permits reflect fair market value; (2) whether permit processing and review costs are recovered; and (3) if fees do not reflect fair market value and costs are not being recovered, why not. As agreed, we focused our review on the Forest Service’s management of commercial and noncommercial recreation special-use permits because these permits account for approximately 73 percent of the annual fee revenue received from all Forest Service special-use permits. To assess the fair market value of fees for noncommercial activities, we limited our review and comparison to recreation residence permit sites. U.S. General Accounting Office P.O.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Forest Service's management of the recreation special-use program, focusing on whether: (1) the fees currently charged for recreation special-uses reflect fair market value; (2) application processing and review costs are recovered; and (3) fees reflect fair market value and costs are not being recovered, and if not, why.

What GAO Found

GAO found that: (1) in many instances, the Forest Service is not getting fair market fees for commercial and noncommercial recreation special-use permits; (2) the Forest Service's fee system that sets fees for most commercial uses has not been updated in nearly 30 years and generally limits fees to less than 3 percent of a permittee's gross revenues; (3) in comparison, fees for similar commercial uses of nearby state-held land average 5 to 15 percent of a permittee's gross revenues; (4) fees for holders of recreation residence permits are based on out-of-date assessments of the value of the land and, as a result, fees for many of these permit holders are lower than they should be on the basis of current market conditions; (5) while the Forest Service has been authorized to recover costs incurred in reviewing and processing all types of special-use permit applications since as far back as 1952, it has not done so; (6) on the basis of Service-provided information, GAO estimated that in 1994 the costs to review and process special-use permits were about $13 million, but this would not represent the cost to run the entire program, which also includes activities such as annual billing, conducting inspections, and training staff; (7) Service officials acknowledge that because they do not have a cost accounting system, they do not know the cost of administering all aspects of the special-use permit program; (8) the lack of priority given to the program by agency management and the lack of incentives to correct known problems contribute to the Service's problems in collecting fees and recovering costs; (9) as a result, resources needed to improve known program weaknesses have not been made available; and (10) since additional fees collected would generally be returned to the U.S. Treasury and not benefit the forest, there is a lack of incentive for the Service to dedicate the additional resources to address these issues.