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STATEMENT OF JAMIE RAPPAPORT CLARK, DIRECTOR, THE U.S. FISH AND WILDLIFE SERVICE, DEPARTMENT OF THE INTERIOR, BEFORE THE COMMITTEE ON RESOURCES, U.S. HOUSE OF REPRESENTATIVES, REGARDING ADMINISTRATION OF THE FEDERAL AID PROGRAM

SEPTEMBER 29, 1999

 

Thank you for the opportunity to appear at the continuation of the July 20, 1999, hearing to discuss the Fish and Wildlife Service's administration of the Federal Aid in Wildlife Restoration Program (Pittman-Robertson Program) and the Federal Aid in Sport Fish Restoration Program (Dingell-Johnson or Wallop-Breaux Program).

As we stated in our testimony submitted for the record at the July 20, 1999, hearing before this Committee, we acknowledge many of the concerns the General Accounting Office pointed out and agree with many of the issues they highlight. The Service started its review of our Federal Aid program several years ago; however, the reviews by the GAO and Resources Committee have motivated us to take an even more critical examination of our administration of these two important programs. We are cooperating with the GAO and Resources Committee staff as well as our State partners and welcome the assistance of this Committee in our efforts to improve management of our program. Where there are problems--and there are problems--we are working aggressively to resolve them.

Testimony submitted by the Service at the July 20, 1999, hearing discussed actions that were taken by the Service prior to the GAO review and those taken as a result of the GAO review to improve administration of the Federal Aid program. Today, I will expand on some of the issues discussed in our earlier testimony and on statements in GAO's written testimony and oral remarks. Several of these issues have also been addressed in an August 1999 letter to the GAO.

Well before the beginning of the current GAO audit, the Service initiated several corrective measures to improve Federal Aid's management of administrative funds. In September of 1998, we published a Federal Register query to solicit public input to identify better ways to manage administrative grants. Subsequently, we decided to terminate the administrative grants program. In a May 12, 1999, letter to the International Association of Fish and Wildlife Agencies (IAFWA), the Service announced its plans to eliminate the grants program due in part to concerns received in response to the Federal Register notice regarding the management of these grants. In July, we published a Federal Register notice terminating future Federal Aid administrative grants.

During the Fall of 1998, in our review of the uses of administrative funds, we became concerned about the Director's Conservation Fund. While these funds supported many worthwhile conservation projects, it was decided to reduce the funding available during Fiscal Year 1999 and to terminate the program for future years. Notification was made on this decision in March 1999.

Another initiative of the Service was the establishment of a State/Federal Review Team to review administration of the Federal Aid program. During a meeting with the IAFWA this past March, the Service initiated an oversight evaluation of Washington and regional-level administration of the Federal Aid program to be conducted in cooperation with our State partners. The State/Federal Review Team met formally for the first time on July 27 and 28, 1999, and then again on August 4, 5 and 6. The Team identified ways in which the Federal Aid program can be more efficient, effective and responsive. During this evaluation, the Review Team will also carefully consider current and previous GAO findings and recommendations to improve program management.

The GAO testimony points out concerns in several areas that are already being addressed by the Service. First, GAO's testimony refers to an $85 million discrepancy due to administrative errors, such as clerical mistakes, as the Service attempts to reconcile accounts in its new grant financial management and information system. However, this figure is not accurate, and the nature of the actual discrepancy must be put in context. Many of these errors represent differences among balances in a system maintained by the Division of Federal Aid and the official administrative accounting system used to track all Service funds. Such differences arose over the last ten years due to the need for a systemic process to identify and correct errors.

Such differences arose due to the timing of official postings. In 1998, in order to address this and other problems, the Federal Aid Office and the Service's Division of Finance commenced a joint effort to identify the specific grant records, correct data errors, and most importantly, create a new data management system. This reconciliation has been a time and labor intensive effort, but much progress has been made. In fact, the purported discrepancy has been reduced to less than $7.5 million, and we soon expect to have full reconciliation. We are also confident that we will complete implementation of the new management system this fall, and it will eliminate recurrence of this problem. It is important to note here that the error is in bookkeeping, and that no funds have been lost.

GAO's testimony also identified a "missed opportunity to earn over $400,000 in interest income." GAO is referring to an advance payment of $9.7 million the Service transferred to the Bureau of Census for work on the National Survey of Hunting, Fishing and Wildlife Associated Recreation. The advance payment represented the amount we believed at the time was necessary for the Bureau of the Census to ensure on-schedule completion of the survey. We recognize that interest income was lost. To avoid similar future losses, we will make only those payments essential for incremental progress in carrying out the survey. We would note that the Service was cost-conscious in its planning for the 1996 Survey and was able to complete this project at a cost almost $5 million less than the 1991 National Survey.

I would like to point out here that additional funds have been made available for the allocations to the States as a result of other initiatives of the Service. In 1998, the Service initiated a Working Group, comprised of representatives from the office of Senator John Breaux, office of Congressman John Tanner, IAFWA, Wildlife Management Institute, Archery Merchants and Manufacturers Organization, Internal Revenue Service, and Bureau of Alcohol Tobacco and Firearms, to review the accuracy and timing of excise tax collections and deposits in the Wildlife Restoration Account. As a result of this Working Group's efforts, more than $20 million was recovered and transferred to the Account. These funds were allocated to the States in fiscal year 1999.

GAO's testimony notes travel discrepancies in the Office of Federal Aid. Concurring that this problem warrants immediate attention, the Service has rescinded the Limited Open Travel Authorization for the entire office and re-apprised all staff of Service travel rules and regulations. In addition, the Chief of the office was directed to submit all future travel vouchers to his supervisor, the Assistant Director for External Affairs, for appropriate review.

GAO's testimony notes that the Service does not have a routine audit program for the review of the use of administrative funds. In 1998, the Service initiated efforts with the Defense Contract Audit Agency (DCAA) to establish such an audit program, but DCAA ultimately advised us they would be unable to develop this program. The Service agrees that an audit program for administrative funds is important and has asked the State/Federal Review Team to offer guidance as we establish an audit procedure.

Another issue discussed in the GAO written statement and the Service's earlier testimony is a lack of uniformity or guidance with respect to Service regional office uses of administrative funds. GAO states that there is neither uniformity nor guidance concerning regional office uses of administrative funds. Although direct administrative support services constitute a legitimate use of administrative funds, the Service has sought to provide a workable degree of consistency - recognizing that our State clients and their needs vary dramatically from Region to Region. As part of our annual budget guidance, the Service has directed Regional Directors as follows: "No assessments may be levied against any program, budget activity, subactivity, or project funded by the [Federal Aid in Wildlife Restoration] Act unless advance notice of such assessments and the basis therefore are presented to the Committee on Appropriations and are approved by such Committee." The Service acknowledges that not all Regions have followed this guidance. In order to assure accountability and adherence to budget guidance, the Service will identify and adopt specific steps to help provide consistency and uniformity. Additionally, the Service will seek guidance in this area from the State/Service Federal Aid Review Team.

GAO made a number of points in their testimony we believe were based on incomplete or erroneous information or assumptions. GAO's testimony refers to an accumulation of "over $100,000 in contract generated fees, the disposition of which is unclear." The Service has thoroughly reviewed the contract in question and finds no ambiguity whatever regarding the "fees" generated under this contract. The contract specifically states that the Government pays to the contractor the costs of providing services to cooperators. The contractor is allowed to charge non-cooperators, primarily non-government organizations and private researchers, costs for copying, compiling, and mailing information they request. Thus, the "generated funds" are not "profits" to the contractor, but are fees the contractor collects to offset its costs. Nonetheless, the Service's contracting officer will make necessary modifications to clarify language to avoid possible future misinterpretation.

GAO also notes that the Service has completed audit reports on how grant funds are being used in 22 States, and that the resolution in the case of two states may not comply with the program's legal requirements. In the view of our Solicitor's office representative, these resolutions are consistent with legal requirements and the Service may decide these matters within its policy-making authority.

News stories and other witnesses at the hearing have made misleading and inaccurate statements about Federal Aid awarding grants to animal rights or anti-hunting groups. This mis-information has caused considerable confusion. It is important to clarify that none of the Federal Aid grant funds have been directed to animal rights or anti-hunting groups. During the hearing, GAO was asked to provide information to the Committee specifying the recipients of the Director's former Administrative Grants and the Director's Conservation Fund monies. Their response to this Committee will help to verify that the Service has issued grants only to groups representing the recipients authorized by law - hunters, anglers, and boaters - or to projects of benefit to State wildlife agencies and managers.

Now, I would like to address the Service's use of administrative funds to provide grants. The Federal Aid in Wildlife Restoration Act authorizes the Service to use up to 8 percent of the funds in the program for administration and execution of the program. The Federal Aid in Sport Fish Restoration statute authorizes the Service to use up to 6 percent of funds (after making certain deductions) for necessary investigations, administration and execution of that program. Congress gave the Secretary and the States considerable flexibility to determine within the parameters of the law which programs or projects to fund. We acknowledge that our management processes for overseeing these administrative funds have shown some deficiencies in the past, and we are working diligently to correct those. But we also believe the Service enjoys considerable leeway in identifying and funding timely and important conservation opportunities with these funds consistent with the spirit of the laws.

We would point out that the concept of awarding of grants utilizing administrative funding from the Sport Fish and Wildlife Restoration programs to provide information and assistance to the Service and the State fish and wildlife agencies has been an ongoing process, over many years, withstanding legal scrutiny from the Department's Solicitor's Office, and has been supported by State agencies.

As far back as 1955, the Solicitor's office issued an opinion recognizing that administrative funds could be utilized to fund a project aimed at surveying the expenditures of boaters and anglers. In 1986, the Assistant Solicitor for Fish and Wildlife affirmed the 1955 opinion, and endorsed the concept that the funding of administrative grants was justified where the information developed from such projects would be valuable in administering the Federal Aid Program, and would be useful to States in determining the types of restoration projects for which Federal assistance was being sought.

Acquiring such information serves the administration of the Federal Aid program, and the authority for the Service to enter grant agreements for this purpose is delegated from the Secretary's authority under the Fish and Wildlife Coordination Act (16 U.S.C. 661), which authorizes the Secretary to provide assistance to and cooperate with Federal, State and public or private agencies or organizations for a broad range of fish and wildlife purposes.

The States, which are the direct beneficiaries of the Federal Aid program, have played an integral role in the process of selecting the special projects to be funded through administrative grants. The Service has worked in close partnership with the International Association of Fish and Wildlife Agencies to ensure that funding priorities specifically address the administrative needs of the Federal Aid program.

The Chairman of a subcommittee of the International's Grants-In-Aid Committee assigned to review the policy and procedures for the uses of Federal Aid Administrative Funds, in an October 25, 1990, memorandum, reported the subcommittee's finding that the "use of Administrative Funds to do special projects is in the best interests of the states."

Service Director John Turner issued a memorandum to the Service Directorate on May 17, 1991, transmitting the policies and procedures to be used for approving the funding of special projects with Administrative Funds. The policy stated that the administrative funds available for special project grants were to be used for purposes "necessary for the Service's administration of the (Federal Aid) programs or to facilitate the States in their execution of the programs."

While we recognized that corrective measures were needed to improve management of the Administrative Grant program, and began to identify better ways of managing the program more than a year ago, we maintain that the Service's use of administrative grants to fund special projects has served a valuable function to both the Service and the States in administering the Federal Aid program. Nonetheless, as I have already stated, we have terminated the Administrative Grants Program.

The oldest Federal Aid program-- the Pittman-Robertson Program-- is more than 60 years old. The Dingell-Johnson or Wallop-Breaux program will celebrate its 50th year during the year 2000. Since their inception, these programs have contributed more than $6 billion to the States and U.S. affiliated territories for their fish, wildlife , wetlands, and boating projects. Without these programs, many states would not have received the fish and wildlife management successes that they now enjoy. Successful administration of this program requires a complex network of management systems. Over the past several years, the Service has been working energetically to improve these systems so that we can keep pace with the evolving needs of the States. These ongoing improvements, and others which we will develop as a result of recommendations from this Committee, the GAO, and the States, will enable us to continue to keep our Federal Aid Programs at the forefront of fish and wildlife conservation in the new millennium.

That concludes my written testimony.

Disclaimer: All statements are not the opinions or position of those testifying, rather they are the official positions taken by the Administration.