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Regional Forester Authorities for Cost Share Agreements - Inspection

We assessed the adequacy of FS’ policies and procedures to ensure duties and responsibilities of personnel are adequately segregated from initiating, approving, or executing reimbursable agreements or CSAs.

Inspection Report: 08801-0001-41
Published: 10/06/2021
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Fast Facts

The Forest Service (FS)—a major partner in the Federal wildland fire management community—protects natural resources on 193 million acres of National Forest System lands. FS also supports sustainable management on approximately 500 million acres of private, State, and tribal forests. FS’ collaboration with Federal, State, and local governments is essential to effectively control fires on the Nation’s wildlands.

To accomplish its mission to suppress wildland fires, FS enters into 5-year agreements—commonly known as Cooperative Fire Protection Agreements (CFPA)—with Federal, State, and local firefighting entities. CFPAs document the framework for the commitment, support, and coordination among the firefighting entities suppressing wildland fires.

When a fire impacts multiple jurisdictions, those jurisdictions may enter into a cost share agreement (CSA). A CSA is prepared when there is a multi-jurisdictional incident with a single or unified command and the jurisdictional agencies have decided to share resources. CSAs are based on the commitment, support, and coordination framework established in the corresponding CFPA and are signed by the relevant parties for the fire incident. CSAs establish the share of the overall fire suppression costs that FS—along with other Federal, State, and local entities—pays for suppressing the fire.

After a multi-jurisdictional fire incident ends, a cost settlement package is prepared to establish the total fire suppression cost incurred by FS, along with the amount that is reimbursable to FS by the State and local entities that benefited from FS’ fire suppression efforts. The reimbursable amounts established in the cost settlement package are determined from the CSA between FS and the non-Federal entities involved in the fire incident.

In January 2018, the Government Accountability Office (GAO) issued a report that identified that “FS (1) did not have adequately described processes and related control activities in manuals and handbooks for its reimbursable agreement processes and (2) lacked control activities related to segregating incompatible duties performed by line officers and program managers. For example, line officers may be responsible for initiating cost sharing agreements, modifying cost settlement packages, and changing or canceling the related receivable, which represent incompatible duties.” In response to the GAO report, in September 2019, FS issued a standard operating procedure (SOP) that outlined additional control activities surrounding its CFPAs and cost settlement packages.

Despite the SOP, the Office of Management and Budget (OMB) had concerns regarding the adequacy of FS’ controls surrounding its reimbursable agreements and CSAs. As a result, in June 2020, OMB informed FS that, beginning July 1, 2020, for funds apportioned for “Wildland Fire Reimbursable” and “Wildland Fire Mobility/Safety,” that “no obligations shall be made by Region 5 [Pacific Southwest Region] personnel, including any line officer, program manager or other Region 5 employee, unless and until the [United States Department of Agriculture] USDA Inspector General certifies to OMB that the duties and responsibilities of such personnel are adequately segregated from initiating, approving, or executing reimbursable agreements or cost share agreements in accordance with Standards for Internal Control in the Federal Government.” OMB stated that this restriction would remain in effect until FS institutionalizes adequate mitigating controls in its directive system to separate incompatible duties and responsibilities, including independent Washington Office approval of reimbursable agreements and CSAs.

OBJECTIVES 

Our objective was to assess the adequacy of the design of FS’ policies and procedures to ensure that the duties and responsibilities of such personnel are adequately segregated from initiating, approving, or executing reimbursable or cost share agreements, in accordance with Standards for Internal Control in the Federal Government.

Although the Office of Inspector General (OIG) had no reportable issues relating to the segregation of duties pertaining to the CFPAs and cost settlement packages, it did have a reportable issue relating to the review and approval of the CSAs. OIG also had other reportable issues relating to the overall control environment surrounding reimbursable or cost share agreements. These issues pertained to FS documenting its new policies and procedures in its directives system and establishing a process for reviewing and approving regions’ supplemental SOPs for administering CFPAs and reimbursable agreements.

WHAT OIG FOUND

The Forest Service (FS) protects natural resources on National Forest System lands and adjacent State and private lands. FS’ collaboration with Federal, State, and local governments is essential to effectively control fires. When a fire impacts multiple jurisdictions, those jurisdictions may enter into a cost share agreement (CSA). Each fire generally has its own CSA that establishes the share of the overall fire suppression costs that FS, along with other entities, pays, and is based on the commitment, support, and coordination framework established in the corresponding Cooperative Fire Protection Agreements (CFPA).

In 2020, the Office of Management and Budget (OMB) restricted funds to FS’ Pacific Southwest Region (Region 5) until the duties and responsibilities of Region 5 personnel are adequately segregated from initiating, approving, or executing reimbursable agreements or CSAs. Prior to the OMB restriction, FS’ Washington Office revised its standard operating procedures (SOP) for administering CFPAs and reimbursable agreements. We found that, while FS had established adequate controls surrounding CFPAs, the agency did not establish adequate controls surrounding CSAs, which are instrumental in establishing the actual share of the overall fire suppression cost FS pays. Without controls to ensure CSAs are consistent with their corresponding CFPAs, there is no assurance that the costs FS pays for fire suppression are fair and equitable.

We also found that the FS Washington Office had not established a formal process for reviewing and approving regions’ supplemental SOPs for administering CFPAs and reimbursable agreements. Without this process, FS has reduced assurance that regions will timely submit supplemental SOPs to the Washington Office for review and approval. Finally, FS did not adequately address the Washington Office SOP in its directives system, specifically the handbook. As a result, FS risks that the Washington Office SOP may not be fully implemented as intended.

FS generally agreed with our findings and recommendations and we accepted management decision on all six recommendations.