BLM and the Forest Service: Land Exchanges Need to Reflect Appropriate Value and Serve the Public Interest

Highlights

Pursuant to a congressional request, GAO reviewed Bureau of Land Management's (BLM) and the Forest Service's land exchange programs, focusing on the: (1) agencies' use of land exchanges since 1989; (2) extent to which the agencies ensure that their land exchanges meet exchange requirements; (3) effect of the agencies' recent efforts to improve the management of their exchange programs; and (4) extent to which problems in specific exchanges are reflective of inherent difficulties in the land exchange program as a whole.

Recommendations

Matter for Congressional Consideration

Matter	Status	Comments
Since Congress passed legislation to facilitate land exchanges more than a decade ago, BLM and the Forest Service have increasingly relied on exchanges to acquire land. In recent years, many controversies and problems have been reported in both agencies' land exchange programs. While both agencies have taken steps to improve their programs, GAO believes that these problems reflect, in part, the difficulties and inefficiencies that are inherent in land exchanges. And GAO remains concerned that the BLM want to continue to sell and buy land under the umbrella of its assembled land exchanges. On the basis of these fundamental issues, Congress may wish to consider directing both agencies to discontinue their land exchange programs.	Closed – Not Implemented	In response to the report, the requester wrote letters to both agencies asking them to adopt a moratorium on land exchanges, which neither agency did. There has been no other congressional action taken on this issue.

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Department of Agriculture	The Secretary of the Interior should instruct the Director of BLM and the Secretary of Agriculture should instruct the Chief of the Forest Service to require that all exchanges be reviewed and approved by the agencies' review teams (or other designated officials) before those exchanges are completed. In this review, the agencies must ensure that the federal and nonfederal lands proposed to be exchanged are appropriately valued, that the officials give full consideration to improving federal land management or addressing state or local needs, that the benefits from acquiring the nonfederal land will match or exceed the benefits from retaining the federal land, and that all statutory and regulatory requirements for land exchanges are met.	Closed – Implemented In response to the draft report, the Forest Service began to require that its national review team or regional directors review all land exchanges twice during the exchange process, once at the feasibility phase and again prior to making a formal decision.
Department of the Interior	The Secretary of the Interior should instruct the Director of BLM and the Secretary of Agriculture should instruct the Chief of the Forest Service to require that all exchanges be reviewed and approved by the agencies' review teams (or other designated officials) before those exchanges are completed. In this review, the agencies must ensure that the federal and nonfederal lands proposed to be exchanged are appropriately valued, that the officials give full consideration to improving federal land management or addressing state or local needs, that the benefits from acquiring the nonfederal land will match or exceed the benefits from retaining the federal land, and that all statutory and regulatory requirements for land exchanges are met.	Closed – Implemented In response to the draft report, the Bureau of Land Management began to require that its national review team or state directors review and concur with all land exchanges.
Department of the Interior	The Secretary of the Interior and BLM should identify and immediately discontinue assembled exchanges under which the BLM is--either directly or through third-party facilitators--following the unauthorized practice of selling federal land, retaining the sales proceeds (and interest) in escrow accounts rather than depositing them into the Treasury, and using these proceeds to buy nonfederal land.	Closed – Not Implemented In response to the report, the Bureau of Land Management (1) identified funds (sales proceeds and interest balances) that were in escrow accounts set up for assembled exchanges, and deposited the interest balances into the Treasury; (2) issued guidance that defined the terms and elements of assembled exchanges, and established more stringent financial controls; and (3) contracted with the Appraisal Foundation for a review of their appraisal process. However, the Bureau continues assembled exchanges under which it uses sale proceeds to buy nonfederal land.
Bureau of Land Management	The Secretary of the Interior and BLM should identify and immediately discontinue assembled exchanges under which the BLM is--either directly or through third-party facilitators--following the unauthorized practice of selling federal land, retaining the sales proceeds (and interest) in escrow accounts rather than depositing them into the Treasury, and using these proceeds to buy nonfederal land.	Closed – Not Implemented In response to the report, the Bureau of Land Management (1) identified funds (sales proceeds and interest balances) that were in escrow accounts set up for assembled exchanges, and deposited the interest balances into the Treasury; (2) issued guidance that defined the terms and elements of assembled exchanges and established more stringent financial controls; and (3) contracted with the Appraisal Foundation to review their appraisal processes. However, the Bureau continues assembled exchanges under which it uses sale proceeds to buy nonfederal land.
Department of the Interior	The Secretary of the Interior and BLM should conduct a full audit of financial records associated with assembled exchanges under which land has been sold and purchased--including escrow accounts and expenses deducted by third-party facilitators--to: (1) determine whether sale proceeds were handled properly; (2) resolve any augmentation, erroneous use of public funds, or deficiency in accordance with appropriate laws; and (3) take appropriate actions, including reporting to the President and to Congress, as required by law, all relevant facts and a statement of the actions taken.	Closed – Implemented In response to the report, the Bureau of Land Management hired an independent accounting firm to audit the financial records associated with 23 specific assembled land exchanges. The accounting firm's final report was issued earlier this year. GAO was told that BLM's management is preparing a summary of the reports and that they will determine what, if any, additional measures need to be taken based on the reports.
Bureau of Land Management	The Secretary of the Interior and BLM should conduct a full audit of financial records associated with assembled exchanges under which land has been sold and purchased--including escrow accounts and expenses deducted by third-party facilitators--to: (1) determine whether sale proceeds were handled properly; (2) resolve any augmentation, erroneous use of public funds, or deficiency in accordance with appropriate laws; and (3) take appropriate actions, including reporting to the President and to Congress, as required by law, all relevant facts and a statement of the actions taken.	Closed – Implemented In response to the report, the Bureau of Land Management hired an independent accounting firm to audit the financial records associated with 23 specific assembled land exchanges. The accounting firm's final report was issued earlier this year. GAO was told that BLM's management is preparing a summary of the reports and that they will determine what, if any, additional measures need to be taken based on the reports.
Department of the Interior	The Secretary of the Interior and BLM should review all exchange initiation agreements for ongoing exchanges to ensure that they comply with regulations--for example, specifically and clearly describing the land that will be exchanged--and amend them if warranted.	Closed – Implemented In response to the draft report, the Bureau of Land Management issued new guidance that requires (1) the national review team to review and concur with exchange initiation agreements that are over $500,000 in value, part of an assembled land exchange, use ledger accounts, and contemplate competitive processing; and (2) state directors to review all other exchange initiation agreements. In addition, the Bureau expects to issue revised guidance relating to exchange initiation agreement requirements, content, and format later this year.
Bureau of Land Management	The Secretary of the Interior and BLM should review all exchange initiation agreements for ongoing exchanges to ensure that they comply with regulations--for example, specifically and clearly describing the land that will be exchanged--and amend them if warranted.	Closed – Implemented In response to the draft report, the Bureau of Land Management issued new guidance that requires (1) the national review team to review and concur with exchange initiation agreements that are over $500,000 in value, part of an assembled land exchange, use ledger accounts, and contemplate competitive processing; and (2) state directors to review all other exchange initiation agreements. In addition, the Bureau expects to issue revised guidance relating to exchange initiation agreement requirements, content, and format later this year.

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Topics

Natural Resources and Environment

AppraisalsFair market valueLand managementLand transfersLand use lawNoncompliancePublic landsLand exchangeLand exchangesEscrow accounts