22 



I reiterate that investment in our forestlands ia necessary if the BLM is to fulfill 

 its statutory role of managing for sustained yield for community and industrial sta- 

 bility. The practices used by BLM are the most scientifically advanced practices 

 available, and are highly cost effective when implemented timely. We are proud of 

 our programs and the excellent and innovative techniques we use in the manage- 

 ment of our O&C lands. I have displayed much of this in graphs and other visual 

 charts that I will submit for the record. 



This concludes my prepared statement. I would be happy to answer questions. 



Mr. Vento. We will now hear from the D^uty Inspector General 

 before turning to questions for this pcmel. We are pleased to wel- 

 come Joyce neischman, whose report has been discussed already 

 by Mr. Penfold, and perhaps she can give us more information. 



Ms. Fleischman. 



STATEMENT OF JOYCE N. FLEISCHMAN 



Ms. Fleischman. Thank you, Mr. Chairman. Members of the 

 subcommittee, I am pleased today to appear before vou to discuss 

 the results of our audit work in the Bureau of Land Management 

 forestry operations in western Oregon. 



Our most recent audit on the Bureau's forestry operations was 

 issued in September of 1990 and generally covered the period be- 

 tween 1987 and 1989. At the time of our audit, the Bureau's timber 

 sales program in western Oregon was generating annual revenues 

 of over $200 million. Although this program was highly profitable, 

 returning revenues of over four times the cost of the program's op- 

 erations—I think we estimated at the time approximately a $4.30 

 return on every dollar invested — we found that the Bureau had not 

 requested sufficient funding to conduct its forest timber growth. 



Specifically, the Bureau had not requested the resources needed 

 to reduce the backlog of forest management activities that existed 

 in 1989. Those backlogs at that time consisted of 108,000 acres for 

 plantation maintenance, 43,000 acres for pre-commercial thinning, 

 127,000 acres for fertiUzation, and some 3,200 acres for timber 

 stand conversion. Based on historical cost information that we ob- 

 tained from the BLM we estimated that the Bureau would need a 

 one-time funding of approximately $48 million to eliminate those 

 backloGTs . 



Our report did not address reforestation as that term is used by 

 the BLM to mean tree-planting backlogs. As a result of the lack of 

 aggressive forestry management, substantial timber ^owth was 

 lost during the 4-year period of 1986 to 1989. At that time we pro- 

 jected that revenues received from the eventual sale of this timber 

 would be reduced by about $90 million. We also projected that the 

 losses would amount to approximately $21 million annually until 

 those backlogs were eliminated. At today's prices, the value of lost 

 timber growth for that 4-year period would be approximately $104 

 million, with an additional annual loss of $24 million. 



Also, we learned at the time of that audit that the Bureau was 

 unable to harvest and sell an additional 800 million board feet of 

 mature timber with a value of over $300 million. At today's prices 

 we estimate that value of mature timber would be approximately 

 $340 million. ^ , , 



The BLM also could not effectively manage other timberlands 

 that were capable of producing an additional $4.8 billion worth of 

 future timber sales revenues over the 60- to 80-year life cycles of 



