Summary: Serious, long-standing accounting and financial reporting weaknesses continue to plague the Forest Service's operations. As a result, GAO has included the Forest Service in its list of government operations that are particularly vulnerable to waste, fraud, abuse, and mismanagement. (See GAO/HR-99-1, Jan. 1999.) The Forest Service's problems have included a lack of basic accountability for major assets and liabilities, the inability to accurately track the cost of programs and activities, and significant reporting errors in the Forest Service's financial statements and the records that support those statements. In addition, the Forest Service has experienced significant problems in implementing its new accounting system, which is crucial to overcoming its financial management shortcomings and attaining basic accountability over billions of dollars in taxpayers' funds and investments. This testimony (1) briefly describes the historical pattern of the Forest Service's financial management weaknesses, (2) discusses the fundamental problems that the Forest Service must resolve to achieve financial accountability, (3) outlines GAO's criteria for placing the Forest Service's financial management on its high-risk list and what must take place for the agency to be removed from that list, and (4) highlights corrective measures that the agency has under way.
