GAO COMMENTS ON BUREAU OF LAND MANAGEMENT BALANCE SHEET

The balance sheet as of June 30, 1957 (exhibit 2), was prepared by the Bureau of Land Management. Based on our review and discussion with BLM employees, comments on certain significant items, either included in or excluded from the balance sheet, follow: Funds held in trust by Treasury in deposit accounts

Funds held in trust by Treasury of $119,182,392 consist principally of receipts from sale of oil and gas rights on Outer Continental Shelf lands that will not be distributed or disposed of until a determination of landownership has been made ($99,952,759) and deposits received with applications for use of lands or for sale of land products ($10,843,987). The latter two amounts are shown on the balance sheet under the caption "Other liabilities."

Unapplied accounts receivable

The credit balance under unapplied accounts receivable of $14,364,701 represents payments received by the Geological Survey and deposited to BLM accounts for which billings have not yet been prepared. When leases become productive, rentals and royalties are collected by the Geological Survey pursuant to departmental order No. 2505 and deposited into the Treasury to the accounts of the Bureau of Land Management. The Bureau of Land Management and the Geological Survey are developing accounting procedures to more closely aline collections and billings and to eliminate the large credit balances. Fixed assets

However,

Public domain lands are a significant asset of BLM. they are not recorded in the books of account or shown on the BLM balance sheet. Regarding the valuation of the public domain, we noted that values were established by the Department of the Interior for the purpose of furnishing information to a congressional committee. On November 20, 1957, the Department submitted a tabulation to the chairman, Committee on Government Operations, House of Representatives, showing estimated market value of public domain lands administered by the Department. The reported land value for the continental United States and Alaska was $2,681,875,000, of which about 72 percent, or $1,957,110,000, was attributable to lands administered by BLM. Values assigned by the Department were stated as based on "real estate" rather than on "recreational or other value." The Department stated in its transmittal letter that the estimates are, at best, a rough approximation of values, subject to serious limitations on their usefulness. The land values do not include values of buildings, structures, and other facilities or value of mineral resources subject to disposal under mining or mineral leasing laws.

The reported real property of $912,649 represents structures and improvements, and capital work in progress. Structures and improvements are recorded at cost or appraised value, including buildings structures and appurtenances of permanent nature, and land other than public domain.

BLM has not capitalized the cost of roads and trails. However, we have been informally advised that the Bureau is providing for capitalizing roads and trails, including road allowances granted in timber sales, within the near future.

The equipment and furniture of $6,188,759 represent the cost of movable property of a capital nature.

BLM does not depreciate fixed assets.

Unmatured receivables

Unmatured receivables of $18,569,251 represent estimated timber contracts which will become due in future periods. The contraaccount, deferred income from unmatured timber contracts, represents accounts to be taken into income as portions of contracts are completed by lumbering concerns.

Undistributed special funds

The undistributed special funds totaling $69,774,664 represent receipts derived from the sale of public lands and products and the leasing of public lands. The funds are distributed periodically in accordance with applicable laws. Most of the balance at June 30, 1957, was distributed in July and August 1957. The contra-account is shown on the balance sheet under the caption "Current Assets."

Materials and supplies.

Contract authorizations (unfunded).

Undistributed costs of construction plans, survey and super

vision____

Total assets--

82,887 1,286, 164

610, 234 72, 052, 500

7,692, 216

203, 214, 878

1 These amounts represent only the cost of property that has been taken up in the plant-in-service accounts since the Service's new accounting system was installed, beginning in the 1956 fiscal year. Arrangements are now being worked out to place under accounting control all property, such as lands, buildings, related structures and facilities, roads, and trails, acquired and developed prior to the installation of the new accounting system. Public domain lands are to be taken up in the accounts at token values. The figures reflected in this statement represent only small portions of the Government investment in the Service's lands and improvements. The total investment in such assets is not known at this time; however, it is estimated to exceed $500,000,000.

This figure includes the cost of a number of projects which have actually been completed but which have not yet been transferred to the plant-in-service accounts.

This figure is understated by the investment in lands and improvements, such as buildings, utilities, roads, and trails, acquired or developed prior to installation of the Service's new accounting system but which have not as yet been taken up in the accounting records. As indicated in footnote 1, the investment in such property is not known at this time but is estimated to exceed $500,000,000.

GENERAL NOTE.-This balance sheet and the notes were prepared by the National Park Service. General Accounting Office comments on certain significant items appear on p. 19.

GAO COMMENTS ON NATIONAL PARK SERVICE BALANCE SHEET

The balance sheet as of June 30, 1957 (exhibit 3), was prepared by National Park Service.

Based on our review and discussions with NPS employees, comments on certain significant items, either included in or excluded from the balance sheet, follow:

Land, structures, and equipment

NPS has not recorded a value for lands, buildings, roads and trails, and other improvements acquired or constructed prior to the installation of the new accounting system in 1956. Evaluation of lands acquired from the public domain and by other means of acquisition is a major problem. As shown in footnote 1 to the balance sheet, public domain lands are to be taken up in the accounts at token values; also, the estimated cost of unrecorded investment in lands and improvements exceeds $500 million. This estimate is based on data submitted to GSA on the Annual Report of Real Property Owned by United States Government (GSA Form 1166) and does not include lands acquired from the public domain.

The Department of the Interior estimated that at June 30, 1957, the value of lands reserved or withdrawn from the public domain and under the administrative control of NPS totaled $641,741,000. In transmitting certain data pertaining to the value of public domain lands to the chairman, Committee on Government Operations, House of Representatives, on November 20, 1957, it was stated that the values assigned were based on real estate rather than on recreational or other value and that the estimates do not give proper weight to the scenic and recreational sites of the national parks and monuments. Equipment and related depreciation

NPS employees informed us that the reported equipment value of $15,577,516 represents for the most part acquisition costs. Equipment inventory cards generally support the values recorded in the accounts. At many locations inventories have not been taken to confirm the amounts recorded at the time of converting to the new accounting system.

The recorded depreciation of $2,952,965 is considered by NPS employees to be understated. Not all the equipment is depreciated. In most cases only automotive and some office equipment are depreciated.

Construction work in process

The reported work in process of $66,919,296 consists principally of general construction and plant in process of reclassification. Some completed project costs are included in the reported construction work-in-process amount, and normally they would be transferred to a plant-in-service group of accounts which shows classes of capital properties used by NPS. Transfer of completed work has been delayed in some cases because procedures for distributing related plans, survey, and supervision costs have not been fully developed.

To clear work in process to specific plant-in-service accounts, NPS will have to inventory, appraise, and analyze cost data applicable to the construction activities. NPS is preparing an accounting manual which will provide accounting instructions for classifying construc

tion work in process and allocation of the related plans and survey and supervision costs.

Undistributed costs of construction plans, survey, and supervision

The reported undistributed costs of construction plans, survey, and supervision of $7,692,216 at June 30, 1957, are closely related to the work in process. Transfer of these costs to the related plant in service group of accounts has been delayed until procedures have been completed for allocations to this group of accounts. The Service is in the process of preparing these instructions.

Contract authorizations (unfunded)

The Federal-Aid Highway Acts of 1954 and 1956 (68 Stat. 72 and 70 Stat. 376) authorized the appropriation of funds to cover contractual obligations for the fiscal years 1956 through 1959. NPS receives annual appropriations to liquidate obligations incurred under the authorization. At June 30, 1957, the unfunded contract authorization by program was as follows: