National Park Service: Revenues from Fees and Donations Increased, but Some Enhancements Are Needed to Continue This Trend

The Park Service manages 409 park units that cover 84 million acres. Park Service funding is generally composed of annual appropriations along with revenues from recreation fees, commercial service fees, and philanthropic donations. GAO was asked to review the Park Service's collection of these fees and donations.

This report examines the Park Service's (1) overall funding trends for fiscal years 2005 through 2014; (2) trends in revenues from fees and donations; and (3) efforts to increase revenues and donations, and factors that affected these efforts. To conduct this work, GAO analyzed budget data for fiscal years 2005 through 2014 on the Park Service's overall funding and fee revenue and donations. GAO also reviewed laws, examined Park Service reports, and interviewed agency officials and stakeholders, such as nonprofit partners and concessioners.

The National Park Service's (Park Service) total funding did not keep pace with inflation for fiscal years 2005 through 2014, even as fees and donations increased. Total funding increased in nominal dollars from $2.7 billion to $3.1 billion (15 percent) during this period, but declined by 3 percent after adjusting for inflation. Annual appropriations, which comprised about 88 percent of total funding on average, declined 8 percent after adjusting for inflation. Fees, donations, and other funding sources, which accounted for the remainder, increased 39 percent after adjusting for inflation.

Revenues from fees and donations grew for fiscal years 2005 through 2014 to varying degrees. Specifically, revenues from recreation fees, which include entrance and amenity fees for facilities such as campsites, increased from about $148 million to $186 million (26 percent). Revenues from fees from concessions operations, which comprise the vast majority of commercial service fees, nearly tripled from almost $29 million to $85 million. Meanwhile, cash donations from philanthropic sources fluctuated, ranging from $19.5 million in fiscal year 2011 to $94.7 million in fiscal year 2014.

The Park Service has efforts under way to increase revenues from fees and donations, but certain factors limit these efforts. For recreation fees, the Park Service updated its fee schedule, and several park units increased entrance and amenity fees. However, the Federal Lands Recreation Enhancement Act (FLREA) does not give the Park Service and other agencies that charge recreation fees the authority to adjust the price of a lifetime senior pass, which has been $10 since 1993. GAO's guide on user fees states that federal agencies should regularly review fees and make changes if warranted. Without the authority to modify the price of the senior pass, the Park Service is limited in its ability to increase revenue from this fee. In addition, Park Service guidance on recreation fees directs the agency to ensure its fees are set at a reasonable level, but does not call for periodic reviews of these fees, and the agency has no plans to do so. The agency also does not require park units to provide information on decisions to not change their fees or deviate from the fee schedule because decisions about raising fees are left to the park units. As a result, the Park Service is missing opportunities to ensure that its entrance fees are reasonable. To increase commercial service revenues, the Park Service increased minimum franchise fees that concessioners pay, and some park units have developed leasing programs. Several factors, such as limited competition for some concessions contracts, complicate efforts to increase these fees. For philanthropic donations, the Park Service has launched fundraising and public outreach campaigns in conjunction with its centennial anniversary in 2016 and has modified fundraising policies to increase donation opportunities. According to agency officials, several factors hamper the agency's ability to increase donations, such as projects that need funding are not always attractive to donors.

Congress should consider amending FLREA so that the federal agencies that charge recreation fees can determine whether to adjust the price of a senior pass. GAO also recommends that the Department of the Interior direct the Park Service to revise its guidance to periodically review entrance fees and direct park units to provide information on their decisions to not increase fees. Interior concurred with the recommendations.

The National Park Service (Park Service)—within the Department of the  Interior—manages 409 park units that cover 84 million acres across all 50  states, the District of Columbia, and some territories. These park units,  which include national parks, historic sites, monuments, recreation areas,  and battlefields, received 293 million visits in 2014. In recent years,  reports prepared by the Park Service and stakeholder groups have  highlighted challenges the Park Service faces—including fiscal  challenges. The Park Service has reported that its funding does not cover  the full cost of its mission to preserve the park units for current and future  generations to enjoy. In 2006, we reported that the Park Service faced a  backlog of about $5 billion for the buildings, trails, and artifacts it is  responsible for maintaining, and in a 2013 testimony before Congress,  the Director of the Park Service stated that about $250 million in  additional annual funding was needed to keep this maintenance backlog  from growing. As of September 30, 2014, the Park Service estimated its  maintenance backlog had grown to about $11.5 billion.

Funding for the Park Service is generally composed of annual  appropriations along with revenues generated from fees and donations  that the Park Service is authorized to collect and use. Fees include  recreation fees—primarily entrance and amenity fees—and commercial  service fees paid by private companies that provide services, such as  operating lodges and retail stores in park units. The Park Service can also  receive cash and in-kind donations from nonprofit partner groups, known  as friends groups and cooperating associations. In addition, the Park  Service benefits from individuals who volunteer their time at individual  park units.

In a 2013 testimony before Congress, the Director of the Park Service  said that the agency was reassessing its commercial service fees and  undertaking other efforts to generate additional revenue for the agency.  With the Park Service approaching its centennial in 2016, policymakers  and others have proposed additional ways to help the Park Service  handle its fiscal challenges, including for the Park Service to increase  revenues from fees and donations.

You asked us to review funding for the Park Service, including the fees  and donations it is authorized to collect. This report examines (1) general  trends in funding for the Park Service for fiscal years 2005 through 2014;  (2) the trends in the Park Service’s revenues from recreation and  commercial service fees and donations from philanthropic sources for  fiscal years 2005 through 2014; and (3) the Park Service’s efforts to  increase fee revenues and donations, and factors, if any, that may affect  these efforts.

To examine general funding trends for the Park Service for fiscal years  2005 through 2014, we obtained and analyzed data on the Park Service  from the Office of Management and Budget (OMB) MAX Information  System (MAX). Data reported in OMB MAX are subject to review and  checks through OMB to help ensure consistency of the data, and we  determined these data were sufficiently reliable for our purposes. We  analyzed these data in both nominal and inflation adjusted terms. We  also examined Park Service budget documents, including its annual  budget justifications and spoke with Park Service officials at  headquarters, regional offices, and park units to better understand these  trends.

To examine trends in fee revenues and donations for the Park Service for  fiscal years 2005 through 2014, we analyzed OMB MAX data along with  other data on these funding sources we received from the Park Service.  We used the OMB MAX data to examine the trends at a national level,  and we used the data from the Park Service to examine trends at the park  unit level. We also interviewed Park Service officials at headquarters,  regional offices, and park units to better understand the trends we  identified in the data. To determine the reliability of the Park Service’s  data, we spoke with agency officials that were familiar with these data,  reviewed relevant documentation, and compared these data to data from  OMB MAX. We generally found these data to be sufficiently reliable for  our purposes. The exception is the park unit level data on philanthropic  donations, which we found to have certain limitations, and we identify  these limitations in our use of these data.

To examine the Parks Service’s efforts to increase fee revenues and  donations and any factors that may affect these efforts, we examined  Park Service documents and interviewed agency officials at the  headquarters, regional, and park unit levels. We compared this  information with relevant laws and agency policies, as well as GAO’s  design guide for federal user fees and Standards for Internal Control in  the Federal Government. We interviewed officials at 23 park units in  person and contacted officials from another 8 park units by phone and  asked about their experiences with these funding sources. In selecting  parks, we included a range of park units that varied by certain  characteristics, including number of visitors and type (i.e., scenic vs.  historical), and we interviewed officials from at least 1 park unit in all 7 of  the Park Service’s regions. We also interviewed stakeholders, including  concessioners and nonprofit partners. We selected these stakeholders  because of their affiliation with parks in our review or because they would  be able to provide other perspectives on these revenue sources. The  views from these interviews are not generalizable to all parks,  concessioners, and nonprofit partners, but they were used to provide a  range of perspectives on Park Service’s efforts. Appendix I contains a  more detailed description of our objectives, scope, and methodology.

We conducted this performance audit from October 2014 to December  2015 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

The National Park Service Organic Act of 1916 established the Park  Service within the Department of the Interior to promote and regulate the  use of the National Park System with the purpose of conserving the  scenery, natural and historic objects, and wildlife therein and to leave  them unimpaired for the enjoyment of future generations. The Park  Service manages its responsibilities through its headquarters office  located in Washington, D.C., seven regional offices, and 409 individual  park units that are part of the system. Park unit types include national  parks, such as Yellowstone and Great Smoky Mountains; national historic  parks, such as Valley Forge and the Chesapeake and Ohio Canal;  national battlefields, such as Antietam and Fort Necessity; national  historic sites, such as Ford’s Theatre and Theodore Roosevelt’s  birthplace; national monuments, such as Muir Woods and the Statue of  Liberty; national preserves, such as the Yukon-Charley Rivers and Big  Cypress; national recreation areas, such as Lake Mead and the  Chattahoochee River, and national lakeshores, such as Sleeping Bear  Dunes and the Apostle Islands.

Funding for the Park Service is composed of two sources: (1) annual  appropriations and (2) fees, donations, and other funding sources.

Annual appropriations. The Park Service generally receives funding  through annual appropriations acts, which provide funds used by park  units or applicable entities, such as states and local governments, in the  following five accounts:

Operation of the National Park System. Provides base funding for  the operation of park units and for Park Service-wide programs. This  funding is used by park units for visitor services, park protection, and  maintenance projects, among other things.

National Recreation and Preservation. Supports programs that  assist state, local, and tribal governments, and private organizations  with outdoor recreation, preservation, and environmental compliance.

Historic Preservation Fund. Provides grants to state, territorial, and  tribal governments and certain private groups for preserving historical  and cultural resources.

Construction. Supports planning and implementation of major  rehabilitation and replacement projects at park units, along with  unplanned, emergency construction projects.

Land Acquisition and State Assistance. Uses funding from the  Land and Water Conservation Fund to support Park Service land  acquisition activities and provide grants to state and local  governments for the purchase of land for recreation activities.

Fees, donations, and other funding sources. The Park Service collects  and uses funds from fees, donations, and other funding sources. These  include:

Entrance fees and amenity fees. The Federal Lands Recreation  Enhancement Act (FLREA) authorizes the Park Service to collect  and use recreation fees, including entrance fees and amenity fees for  certain equipment and services, such as campgrounds.

Franchise fees and commercial use authorization fees. The  National Park Service Concessions Management Improvement Act of  1998 (Concessions Act) authorizes the Park Service to collect and  use certain fees from concessioners that operate businesses in park  units. Specifically, the Park Service may collect and use franchise  fees from concessioners who operate restaurants, lodges, and other  business operations inside park units. These fees are generally  assessed as a percentage of the concessioners’ total gross receipts.  The Park Service also collects fees for commercial use authorizations,  which include small-scale commercial activities, such as leading  workshops or tours.

Rents. The Park Service is authorized to collect and use certain  rents. Through its leasing program, the Park Service leases  buildings and associated property to businesses, individuals, and  government entities.

Donations. The Park Service is authorized by law to receive and use  cash donations and in-kind donations from individuals, nonprofit  organizations, and corporations. Examples of in-kind donations  include artifacts or services provided by nonprofit partner groups on  behalf of the Park Service. The Park Service is also authorized to  develop agreements with nonprofit partner groups, known as friends  groups and cooperating associations. In general, friends groups  engage in fundraising efforts on behalf of individual parks units, while  cooperating associations provide interpretive services for visitors and  manage retail operations at parks and share a portion of their  proceeds from these operations with park units. The Park Service  also has a volunteer program authorized by the Volunteers in the  Parks Act of 1969. Volunteers help with a variety of tasks at park  units, including doing maintenance work and providing interpretive  services to visitors.

Other funding sources. Other funding sources include transportation  fees the Park Service collects to operate public transportation  systems in park units; rents collected for employee housing; and  funding from the U.S. Department of the Treasury for certain pension  payments for United States Park Police annuitants.

Park Service’s Total Funding Did Not Keep Pace with Inflation for Fiscal Years 2005 through 2014, Even with Increases in Fees and Donations

According to our analysis of OMB MAX data, total funding for the Park  Service increased in nominal dollars from $2.7 billion in fiscal year 2005  to $3.1 billion in fiscal year 2014 (15 percent), as shown in table 1.  However, when adjusted for inflation, total funding for the Park Service  declined by 3 percent during this period.

For fiscal years 2005 through 2014, the largest component of funding for  the Park Service was its annual appropriations, which comprised 88  percent of its total funding on average, with fees, donations, and other  funding sources comprising the remaining 12 percent. Over time, there  has been some growth in the proportion of total Park Service funding that  fees, donations, and other funding sources comprise (see fig. 1).

Annual appropriations increased by 9 percent overall from fiscal year  2005 through fiscal year 2014 in nominal terms but declined by 8 percent  after adjusting for inflation (see fig. 2). A large increase in appropriations  came in fiscal year 2009, when the American Recovery and  Reinvestment Act provided an additional $750 million to the Park  Service. Since fiscal year 2010, annual appropriations for the Park  Service have generally declined. Park Service officials told us that flat or  declining appropriations have made it difficult to cover increases in salary  and expenses for agency employees and to address the agency’s  growing maintenance backlog. In addition, the number of park units in the  system has been growing, and some Park Service officials said that this  increase in units meant that the agency’s appropriations had to be divided  among an increasing number of units. In 2006, there were 390 park units,  and there are 409 park units as of November 2015.

Fees, donations, and other funding sources grew 64 percent in nominal  terms from fiscal year 2005 through fiscal year 2014 and have increased  in most years, as shown in figure 3. Even after adjusting for inflation,  funding from these sources increased by 39 percent during this period.

Recreation fees, commercial service fees, and cash donations comprised  on average 74 percent of the total fees, donations, and other funding  sources for the Park Service for fiscal years 2005 through 2014. Park  Service officials told us that these three revenue sources provided  important support to park units. For example, from 2005 through 2011,  recreation fees funded an estimated 8,575 projects at park units,  including maintenance and other projects that enhanced the visitor  experience, according to a 2012 report on the implementation of  FLREA. In addition, during that time period, the Park Service used  revenue from franchise fees to reimburse numerous concessioners that  improved facilities in park units. Further, philanthropic donations enabled  some parks to complete projects, such as improving trails or rehabilitating  visitor centers. Some Park Service officials voiced concern to us that fees  and donations could be viewed as a substitute for annual appropriations.  They said that these sources are to be viewed as a supplement to annual  appropriations but not a replacement.

Park Service’s Revenues from Fees and Donations Increased to Varying Degrees from Fiscal Year 2005 through Fiscal Year 2014

Revenues from recreation and commercial service fees and donations  from philanthropic sources grew from fiscal year 2005 through fiscal year  2014. Specifically, revenues from recreation fees increased 26 percent  during the period, while revenue from commercial service fees nearly  tripled. Meanwhile, cash donations from philanthropic sources have  fluctuated, while volunteer support has consistently increased.

Revenues from Recreation Fees Grew 26 Percent, and a Small Number of Parks Account for a Large Proportion of These Fees

According to our analysis of Park Service data, revenues from recreation  fees increased from about $148 million to about $186 million (26 percent)  during the period we examined, as shown in figure 4. With the exception  of fiscal years 2009, 2010, and 2013, revenues from recreation fees   increased over the prior year.

Revenues from recreation fees are comprised largely of entrance fees  and amenity fees for equipment, services, and facilities, such as  campsites. Revenues from entrance fees have been higher than amenity  fees from fiscal year 2005 through fiscal year 2014, accounting for about  77 percent on average of the total recreation fees collected, with amenity  fees on average accounting for the remaining 23 percent.

Although recreation fee revenues have been generally increasing, the  number of park units collecting entrance fees has declined from fiscal  year 2008, the first year for which data are available according to Park  Service officials, through fiscal year 2015. The number of park units  charging amenity fees has remained largely constant over this period  (see table 2).

The decision to charge recreation fees involves individual park units,  which make proposals to charge fees, and regional and headquarters  officials who approve these fees. According to Park Service guidance,  one of the guiding principles of the program is that parks will not collect  recreation fees if the cost of collection exceeds the amount of revenue  generated. For example, some park units do not have many visitors, so  the administrative costs of charging these fees, which include paying staff  to collect them, purchasing cash registers to process them, and hiring an  armored car service to deposit them, can outweigh the anticipated  revenues.

Even with the decline in the number of parks collecting recreation fees,  revenues grew over the period we examined, largely because the fees  collected at a small number of parks account for a large portion of the  fees collected. In fiscal year 2014, five national parks—Grand Canyon,  Yosemite, Yellowstone, Rocky Mountain, and Zion—accounted for $59.6  million or about one-third of the total recreation fees collected that year. In  addition, according to our analysis of the Park Service data, the top 50  park units collected about 88 percent of the total recreation fees collected  in fiscal year 2014.

Revenues from Commercial Service Fees and Rents Almost Tripled, and Concessions Contracts Generate the Majority of These Revenues

According to our analysis of Park Service data, revenues from  commercial service fees and rents almost tripled during the period,  growing from almost $33 million in fiscal year 2005 to about $95 million in  fiscal year 2014, as shown in figure 5. Revenues from franchise fees,  rents, and commercial use authorization fees all grew during this period.  Specifically, revenues from franchise fees almost tripled, growing from  about $29 million in fiscal year 2005 to about $85 million in fiscal year  2014. In addition, rents grew from about $2 million in fiscal year 2005 to  almost $8 million in fiscal year 2014, and fees from commercial use  authorizations more than doubled from about $988,000 in fiscal year 2005  to about $2 million in fiscal year 2014.

The Park Service generates the vast majority of its commercial service  revenues from franchise fees associated with concession contracts.  Specifically, these fees accounted for about 90 percent of all commercial  service revenues in fiscal year 2014. A small number of large  concessions contracts accounted for the majority of these fees. According  to Park Service officials, data from concessioners’ 2014 annual financial  reports showed that 51 of the agency’s approximately 500 concessions  contracts generated 84 percent of all franchise fees paid to the Park  Service in fiscal year 2014. Leases generated about 8 percent of fiscal  year 2014 commercial service revenues, and commercial use  authorizations generated about 2 percent.

The growth in commercial service revenues can be attributed in part to an  increase in the franchise fee rates that concessioners are paying to the  Park Service. According to Park Service officials, franchise fees for  individual contracts have increased an average of 2.4 percentage points  as they have turned over and been awarded under the terms of the new  Concessions Act. In addition, our analysis of Park Service data showed  that the number of park units collecting commercial service fees has  grown. In fiscal year 2005, 146 parks reported collecting at least one  type of commercial service fee; the number grew to 176 by 2014.  According to Park Service officials, growth in commercial service  revenues can also be attributed to improved economic conditions, which  has led to increased visitation levels at park units and higher gross  receipts for concessioners.

Cash Donations to the Park Service Fluctuated, and Volunteer Support Consistently Increased

Cash donations to the Park Service did not have a discernible trend from  fiscal year 2005 through fiscal year 2014, and there was considerable  fluctuation in donations during this period (see fig. 6), ranging from $19.5  million in fiscal year 2011 to $94.7 million in fiscal year 2014. According to  a senior Park Service official, this variation is largely due to donors  contributing to large projects at particular park units that attracted the  attention of donors in certain years. For example, $65.5 million of the  $94.7 in total cash donations (69 percent) the Park Service received in  fiscal year 2014 is from donations to renovate the museum and build a  new visitor’s center at the Gateway Arch in St. Louis, which is part of the  Jefferson National Expansion Memorial. Park Service officials also  pointed out that economic factors play a role in influencing donation  trends, noting that donations declined after the 2008 U.S. recession.

Cash donations to the Park Service come from a variety of sources,  including friends groups and cooperating associations. These groups also  provide in-kind donations to the Park Service, which include artifacts  donated or services provided to the agency. In general, we found that  total donations from friends groups—both cash and in-kind donations— rose from about $68 million in fiscal year 2005 to about $147 million in  2011, the latest year for which data are available according to Park  Service officials. Regarding donations from cooperating associations,  Park Service officials and cooperating association officials told us that  donations have generally been increasing, although this trend has been  tempered by declining book sales nationwide, which have traditionally  been a key source of cooperating associations’ revenues at the stores  they operate.

According to Park Service data, volunteer support for the agency has  increased steadily. Specifically, the number of volunteers increased from  about 132,000 in fiscal year 2005 to about 248,000 in fiscal year 2014,  and the estimated cash value of their work increased from about $93  million to about $155 million during this period. The number of  volunteers increased every year, except for fiscal year 2013. According to  a senior Park Service official, the decline in the number of volunteers that  year was attributable to Hurricane Sandy and the 2013 federal  government shutdown, both of which disrupted the typical operations of  the Park Service.

Park Service Has Initiatives Under Way to Increase Revenues from Fees and Donations, but Certain Factors Complicate These Efforts

The Park Service has efforts under way to increase revenues from  recreation and commercial service fees along with philanthropic  donations. However, certain factors complicate these efforts and limit the  agency’s ability to increase revenue from these sources.

Park Service Recently Increased Recreation Fees at Many Parks, but Faces Challenges to Further Increases

In 2014, the Park Service encouraged park units that were collecting  recreation fees to increase them, and 111 park units subsequently  elected to do so, as of September 2015. Park Service officials told us that  parks are expected to examine their amenity fees each year; however,  there are no plans to regularly reassess entrance fees. The Park  Service’s ability to increase funding from recreation fees is also limited by  legislation and park-specific characteristics.

Park Service Increased Both Entrance and Amenity Fees at Several Parks but Does Not Plan to Regularly Reassess Entrance Fees

The Park Service has recently increased entrance and amenity fees at  several parks. In August 2014, the Director of the Park Service issued a  memorandum that ended a moratorium on entrance fee increases that  had been in place since 2008 and updated the agency’s entrance fee rate  schedule for the first time since 2006 (see table 3). Like the 2006 fee  schedule, the updated schedule separates the park units that collect  entrance fees into four groups by type of park unit. If adopted, these fees  represent an increase of 20 to 50 percent in most instances over the 2006  fee schedule, depending on the type of park unit and type of entrance fee  being charged. Park Service officials told us that the agency estimates  that $58 million in additional entrance fees could be generated if all parks  charging entrance fees followed the schedule and visitation is not  impacted by the increase in fees.

The Park Service gave discretion to the park units to decide whether to  increase entrance fees, and the memo states “if there is significant public  controversy, a park may choose not to implement new fees, may phase in  the new rates over three years, or delay the new rates until 2016 or  2017.” To assess public reaction to proposed fee changes, the  memorandum encouraged park units to conduct public outreach in late  summer or fall of 2014. According to Park Service officials we  interviewed, park units used different methods to conduct this outreach,  including using social media, holding public meetings, and meeting with  congressional delegations.

According to the memorandum, once public outreach was complete, each  park unit that chose to proceed with a rate change had to submit their  proposed change to regional and headquarters offices for approval. Of  the 130 park units that charged an entrance fee in 2014, 92 park units  proposed increasing the per person entrance fee, and 60 park units  proposed increasing the per vehicle entrance fee, and all of them  received approval to do so. For those increasing fees, a number of park  units chose to charge less than the revised entrance fee schedule by  2017. Specifically, of the 92 park units that received approval to increase  fees for individuals, 59 (64 percent) will be charging an entrance fee for  individuals in line with the proposed schedule; the remainder elected to  charge less than what the schedule recommends.

A senior Park Service official told us that discretion was given to the parks  under agency guidance about whether to follow the fee schedule, and fee  increases needed to be supported by the public. According to the  memorandum establishing the new entrance fee schedule, “the goal (if  supported by civic engagement) is for all entrance fee parks to align with  the standard rate for their group by 2017.” However, several park units  that are collecting some type of entrance fee in 2015 did not increase  entrance fees, and may not align with the fee schedule by 2017, unless  they undertake efforts to do so. In addition, Park Service does not require  park units to provide information supporting their decisions on not  increasing entrance fee rates or increasing their fees by less than the fee  schedule. According to a senior Park Service official, providing this  information was not required because it was not compulsory that park  units increase their fees. However, Federal Internal Control Standards  state that for an agency to run its operations, it must have reliable and  timely communication and that information is needed throughout the  agency to achieve its objectives. By not requiring that parks provide  information on decisions that deviate from the fee schedule, the Park  Service may not have relevant information that would help to manage  changes to recreation fees more effectively and ensure that park units are  taking steps to determine whether entrance fees are set at a reasonable  level.

Regarding amenity fees, the August 2014 Park Service Director’s  memorandum encouraged park units that charge amenity fees to  examine them to determine whether they should increase. In order to  increase these fees, the memorandum directs park units to conduct  studies to compare the amenities offered in their parks and associated  fees with those offered by private businesses in the surrounding area. Of  the 131 park units that charged amenity fees in 2014, 55 park units  received approval from Park Service headquarters to increase their  amenity fees. Many of these parks received headquarters approval to  increase fees at campgrounds. For example, Whiskeytown National  Recreation Area in California received approval to increase fees $5 a  night in most cases for recreation vehicle, tent, and horse camping. In  general, Park Service officials told us that they expect parks to conduct  comparability studies on an annual basis to see if amenity fees should be  raised as part of the annual process to request changing fees, which is  laid out in Park Service guidance.

Unlike amenity fees, Park Service officials told us there were no plans to  periodically review entrance fees to see if they should be increased. Our  2008 guide on federal user fees states that if federal user fees are not  reviewed and adjusted regularly, federal agencies run the risk of  undercharging or overcharging users. Moreover, Park Service guidance  directs the agency to ensure its fees are set at a reasonable level, but this  guidance does not direct that these fees be periodically reviewed. In a  2015 report, the Department of the Interior Inspector General  recommended that the Park Service establish intervals for periodic  reviews of its entrance fees to ensure that the fee schedule remains up to  date. Park Service officials told us they were hesitant to commit to such  reviews until FLREA is reauthorized because they were unsure if they  would continue to have the authority to continue charging entrance fees.  However, Park Service has not required periodic reviews of entrance fees  for the 11 years that FLREA has been in place. By not regularly  reviewing its entrance fee schedule, the Park Service is missing an  opportunity to ensure that these fees are reasonable.

Legislation and Park-Specific Characteristics Limit Recreation Fee Collection

The Park Service’s ability to further increase revenues from recreation  fees is limited by legislation and park-specific characteristics.

Legislation. According to Park Service data, 58 park units are prohibited  by law from charging entrance fees. For example, the Alaska National  Interest Lands Conservation Act prohibits the Park Service from charging  entrance fees at all park units in Alaska. FLREA prohibits the Park  Service from charging entrance fees at parks that lie within the District of  Columbia, and the National Parks and Recreation Act of 1978 prohibits  the Park Service from charging entrance fees at Point Reyes National  Seashore. Park Service officials also said there were limits to how much  the agency could raise fees because FLREA requires that the agency  consider the impacts of fees on visitors, and the Park Service did not  want to dissuade visitors from coming to parks. For example, there was  opposition from the public to implementing entrance fees at additional  areas of the Chesapeake and Ohio (C&O) National Historical Park and, in  response, park officials withdrew this proposal in February 2015.

FLREA also directed the Secretary of the Interior to establish an  interagency pass that covers entrance fees and certain amenity fees for  all federal recreational lands. The price of the pass is $80 annually, as of  October 2015, and covers national park units, as well as recreational  lands managed by U.S. Forest Service, Bureau of Reclamation, Bureau  of Land Management, and the U.S. Fish and Wildlife Service. However,  FLREA limits agencies’ ability to increase revenue from recreation fees.  For example, the law prohibits charging entrance fees to persons under  16 years of age. FLREA also requires the Secretary of the Interior to offer  a lifetime interagency pass for a one-time $10 price to senior citizens,  defined as being over 62 years of age, and requires that free interagency  passes be made available to permanently disabled people.

While under FLREA, the price of the annual interagency pass can be  changed by the agencies that administer it, the law does not provide this  flexibility for the $10 lifetime senior pass, the free annual pass for  disabled individuals, or free entry for those under age 16. Interior’s  Inspector General found that this aspect of FLREA “hampers agencies’  flexibility and their ability to make business decisions” and concluded that  free and substantially discounted passes represent missed opportunities  for revenue. The price of the senior pass has been $10 since 1993, but  a bill introduced in September 2015 would increase this price to a one- time amount matching the price of the annual interagency pass, which is  $80, as of October 2015. If this occurred, it could generate about  another $35 million in revenue annually, assuming that the same number  of passes was sold, as in fiscal year 2014, which was about 500,000.  Because of the limitations in FLREA, Park Service and the other agencies  that administer the recreation fee program do not have the flexibility to  periodically reassess and change the price of the lifetime senior pass.  Providing this flexibility to these agencies would allow them to consider  adjusting fees periodically, which is consistent with our guide on federal  user fees.

Park-specific characteristics. At some park units, collecting recreation  fees is precluded by the configuration of the parks or is not economically  advantageous. For example, some park units have many entry points,  which make the logistics of collecting entrance fees difficult, according to  Park Service officials. In addition, as previously described, at some park  units, it may not be economically advantageous to collect recreation fees  at some park units. For example, at parks with few visitors, the costs of  administering the fee collection program would be a significant portion of  the total fees collected, and these parks may not choose to charge an  entrance fee. Other park units—for example, national historic sites—may  not offer amenities, such as campsites, for which the Park Service could  charge fees.

Park Service Increased Revenues from Commercial Services and Is Looking for New Opportunities to Generate Revenue, but Several Factors Complicate These Efforts

The Park Service increased revenues from commercial service fees from  fiscal year 2005 through 2014, in part by increasing the franchise fees  that concessioners are to pay and by taking steps to make certain  contracts more attractive to potential bidders. However, several factors  complicate these efforts.

Park Service Increased Concessions Revenues and Is Looking for Opportunities to Increase Revenues from Other Commercial Services

The Park Service increased revenues from commercial service fees from  fiscal year 2005 through fiscal year 2014, in part by increasing the  minimum franchise fees included in contract prospectuses. According to  Park Service officials, the agency increased the minimum franchise fee by  modifying the process they used to develop contract prospectuses, which  describe the services concessioners are to provide, any investments  required for the operation, such as maintenance or equipment, and the  minimum franchise fee, among other things. After a prospectus is issued,  potential concessioners submit bids that include, among other things, the  franchise fee they agree to pay if they are awarded the contract—which  has to be equal to or higher than the minimum in the prospectus—along  with details about the services they propose to provide. Before 1998,  when the Concessions Act was enacted, the Park Service set minimum  franchise fees based on limited financial reviews of concessioners’  financial statements, according to Park Service officials. After 1998, Park  Service officials told us that they started hiring hospitality consultants to  help them with the financial aspects of contract prospectuses to meet the  requirements of the new act. Specifically, the agency started working with  hospitality consultants to conduct in-depth financial analyses to develop  minimum franchise fees for the Park Service’s largest contracts—those  with gross revenues above $5 million. These analyses involve estimating  concessioners’ costs and anticipated revenues and comparing the  estimated profitability of the concessions operations with industry  standards. Park Service officials and hospitality consultants told us that  these more sophisticated analyses allowed the agency to better estimate  the franchise fees that concessioners could pay while still having a  reasonable opportunity for profit, as required by the Concessions Act,  which led to higher franchise fees.

Park Service officials also made efforts to increase revenues from  commercial service fees by working to make concessions contracts more  attractive and increasing competition among potential bidders. Park  Service officials told us that increased competition among potential  concessioners generally results in higher franchise fees in winning  contracts. Our analysis of Park Service data also found that increased  competition was associated with higher franchise fees. Specifically, based  on our analysis of 25 large contracts awarded between fiscal years 2005  and 2014 we found that the Park Service earned an average of 5 percent  in franchise fees from contracts that attracted 1 or 2 bidders and an  average of 16 percent in franchise fees from contracts that attracted 3 or  more bidders. One of the ways that Park Service officials said they tried  to make concessions contracts attractive to more potential bidders was by  reducing the amount of Leaseholder Surrender Interest (LSI) that had  accumulated under certain contracts. LSI generally represents the  depreciated value of capital improvements made by a concessioner to a  property, such as building a new structure or completing a major  rehabilitation. If a contract is awarded to a different concessioner when  the contract ends, the Concessions Act requires the previous  concessioner to be reimbursed for any LSI. The previous concessioner  may be reimbursed by the new contract holder or the Park Service. Park  Service officials and concessioners we spoke with said that LSI can  create barriers to competition because few companies have the  resources to reimburse the previous concessioner. Park Service officials  told us that they chose to reduce the LSI associated with certain contracts  because these contracts would otherwise have attracted few bidders. For  example, in 2014, the Park Service spent almost $100 million reducing  LSI to increase competition for a large concessions contract at Grand  Canyon National Park. The Park Service initially invested $19 million in  LSI payments. However, even with this reduction in LSI, the Park Service  did not receive offers that met the terms of its first three prospectuses,  and agency officials said that the level of LSI remained a barrier to  potential bidders. As a result, the Park Service paid an additional $81  million to further reduce LSI. The Park Service received multiple bids on  the fourth prospectus for this contract. Park Service officials told us that  they plan to award this contract by January 1, 2016.

In addition to reducing LSI associated with certain contracts, the Park  Service has limited the amount of LSI that potential bidders can incur in  new contracts, according to Park Service and concessioner officials we  spoke with. Park Service officials told us that limiting LSI could reduce  start-up costs associated with future contracts since new concessioners  would not have to reimburse previous concessioners for accumulated  LSI. However, some concessioners told us that limiting LSI could lead to  lower levels of investment in concessioner-run properties, since  concessioners may be less likely to make capital improvements if they  are not reimbursed for these investments. This, in turn, could contribute to  additional asset degradation and increased future maintenance costs,  according to some concessioners we spoke with.

Park Service officials also have looked for opportunities to increase  revenues from leases and commercial use authorizations. Specifically,  the Park Service hired a national leasing manager in 2015 to formalize its  leasing program, and some parks units and regions have developed  active leasing programs. For example, from 2009 through 2014, the  Northeast region increased the number of leases from 25 to 76. As a  result, the region more than doubled the revenue it generated from rents  and payments made in lieu of rent, which increased from almost $14  million to $38 million during this time period. According to regional Park  Service officials, the region increased its leases by increasing the number  of full-time leasing positions and by hiring staff with real estate expertise  to help advise parks on developing leases and perform market studies to  set rental rates.

The Park Service also has developed a new policy that has the potential  to increase revenues from commercial use authorizations, according to  Park Service officials. Traditionally, fees for commercial use  authorizations were set to recover costs that park officials incurred  administering the program. According to several park unit officials we  spoke with, these fees ranged from $100 to $350 per permit. In 2015, the  Park Service developed guidance that allows park officials to charge  businesses a fee based on a percentage of gross receipts or a fee that is  sufficient to cover administrative and management costs incurred issuing  these commercial use authorizations—whichever is more. For example,  the new guidance allows park officials to charge recreation service  providers that generate less than $250,000 in annual gross receipts the  greater of either 3 percent of gross receipts or $500. Some businesses  operating under commercial use authorizations generate significant  revenues, sometimes hundreds of thousands of dollars, according to Park  Service officials. As a result, officials said that this shift has the potential  to increase revenues because the resulting fees would be higher than the  flat fees that have traditionally been charged.

Several Factors Complicate Park Service’s Efforts to Increase Revenues from Commercial Service Fees

Several factors complicate the Park Service’s efforts to increase revenues  from commercial service fees. In particular, officials noted that the Park  Service is required by law to balance a number of priorities. Specifically,  under the Concessions Act, accommodations, facilities, and services  offered under a concessions contract must be consistent to the highest  practicable degree with the preservation and conservation of park units  they are proposed to operate in, provide a reasonable opportunity for  profit to concessioners, and offer reasonable rates for facilities and  services to the public. The law does not require the Park Service to  maximize franchise fees; instead, it states that franchise fees are a lower  priority than protecting, conserving and preserving park units or providing  necessary and appropriate facilities and services to visitors at reasonable  rates. As a result, Park Service officials told us that increasing revenues  from franchise fees can be challenging.

The Park Service’s efforts to increase revenues from commercial service  fees also have been affected by limited competition for some concessions  contracts. Our analysis of Park Service data found that 32 percent (8 of  25) of the Park Service’s largest contracts—those generating $5 million or  more—awarded between fiscal years 2005 and 2014 attracted one  bidder. These 25 contracts generated about 45 percent of the $65 million  in franchise fees collected by the Park Service in fiscal year 2013, the  most recent year for which data are available. Park Service officials told  us that, of these 25 contracts, 2 contracts for lodging services initially  received no bids. In addition, some parks offer limited opportunities for  revenue generation, which may in turn limit the number of bidders. For  example, Park Service officials told us that some park units are located in  remote locations that attract few visitors or have short tourist seasons,  which limits the potential profitability of these contracts. According to Park  Service officials, they are pleased to receive one bid in such cases.

Adjusting a concessions contract to provide additional services, which  could increase revenues for concessioners and the Park Service, can be  a lengthy process, according to some concessioners we spoke with. For  example, one concessioner that provides transportation services at a park  told us that his company proposed increasing the number of park visitors  transported per day to levels consistent with the park’s management plan.  This proposed change took 20 months to be reviewed and approved by  the Park Service, which, according to the concessioner, resulted in lost  revenue for both the concessioner and Park Service. Another  transportation concessioner told us about similar challenges adjusting his  company’s operating plan to increase service hours by 30 minutes.  Although such a change in operating hours is generally the purview of the  park superintendent, according to the concessioner, the change took 5  years to be approved due to turnover in park leadership and park budget  constraints.

Park Service officials told us that they act as quickly as possible when  they receive requests to change or increase concessioners’ services but,  in some cases, it takes time to collect and assess the necessary  information to make an informed decision. For example, according to  Park Service officials, the agency considers the impact of the proposed  change on park operations and on other business operations in the park.  Park Service officials also told us that they are developing guidance to  establish factors to consider for adding services to help park unit staff  when considering concessioners’ requests. Proposed factors include  whether the proposed services complement the terms of the current  contract and whether there will be environmental impacts at the park unit  from these services. In addition, concessioners must be fully compliant  with their current contracts before requests to add services may be  considered. As of August 2015, this guidance was under development,  and agency officials were uncertain when it would be issued.

Efforts to increase revenues from leases and commercial use  authorizations also face challenges. According to Park Service officials,  leasing opportunities can be limited because some park units do not have  buildings available to lease or the facilities they have are not suitable for  leasing due to their poor physical condition. In addition, park officials at  two parks we visited told us that they do not have sufficient staff to  manage a leasing program. For commercial use authorizations, some  park officials we spoke with said that changing their fee structure to one  based on a percentage of business owners’ gross revenues could pose a  financial burden to smaller businesses that have low profit margins yet  provide important services for park visitors. For example, park officials at  one park told us that some businesses have held commercial use  authorizations to deliver portable toilets, which they said is an essential  service during large events. These officials told us that these businesses  have relatively low profit margins and may be unwilling to operate in parks  if they had to pay higher fees.

Park Service Has Sought to Increase Philanthropic Donations, but Several Factors Limit Its Ability to Do So

To increase philanthropic donations, the Park Service is leveraging  opportunities arising from its centennial anniversary in 2016, adjusting  relevant policies, helping to increase the fundraising capacity of its  nonprofit partners, and training its own staff on ways to collaborate more  effectively with nonprofit partners. Several factors limiting the Park  Service’s ability to increase philanthropic support include attractiveness of  certain projects needing donations, limited capacity to manage  volunteers, and lack of detailed information on donations.

Park Service Is Leveraging Its Centennial Anniversary, Revising Policy, and Providing Other Assistance to Increase Donations

To increase philanthropic donations, the Park Service is leveraging  opportunities arising from its centennial anniversary in 2016. The  Centennial Campaign has two primary efforts—fundraising and public  outreach—both of which are being conducted in collaboration with the  Park Service’s congressionally chartered nonprofit partner, the National  Park Foundation (Foundation).

Fundraising. The Park Service and the Foundation have launched a  major fundraising campaign, which aims to raise $250 million in  donations by 2018. These funds will be used to support 100 projects  that protect resources, connect visitors with the parks, and develop  the next generation of park stewards. For example, in the area of  protecting resources, projects include rehabilitating Constitution  Gardens in Washington, D.C., and restoring an area of large Sequoia  trees to a more natural state in Yosemite’s Mariposa Grove.

Public Outreach. In collaboration with the Foundation, the Park  Service launched the “Find Your Park” campaign in 2015. This public  outreach effort is designed to encourage Americans to visit park units,  generate interest in parks, and help raise financial and in-kind support  for park units. This effort uses social media and disseminates  marketing materials online and in park units. The Park Service has  partnered on this campaign with certain major donors, which each  made at least $500,000 in contributions to the Foundation to support  the campaign. Figure 7 shows examples of posters developed for the  campaign to be displayed in park units and also used in online and  print advertising.

The Park Service also has allocated about $49 million in funds  appropriated by Congress for the centennial anniversary. Congress has  also appropriated funds to be used for matching grants. Specifically,  Congress appropriated $25 million in 2008, $15 million in 2010, and $10  million in fiscal year 2015 to match philanthropic donations dollar-for- dollar to fund projects in park units. To be considered, proposed projects  are to benefit one or more Park Service areas and have matching  donations of at least 50 percent of project costs, according to the Park  Service. Agency officials have prioritized projects with higher rates of  matching donations, and considered the timeliness of donations,  readiness of projects, and whether proposed projects address centennial  and service-wide goals, such as high-priority deferred maintenance.  Examples include rehabilitating the underground Franklin Court Museum  at Independence National Historical Park and reconstructing roads,  parking, walks, signs, and pedestrian areas to meet park road standards,  accessibility standards, and historical context at Roosevelt Arch in  Yellowstone National Park.

Since 2014, the Park Service has also been revising its policies related to  philanthropy to help increase donations. Specifically, the Park Service  has been revising Director’s Order 21—the Park Service’s main policy  governing donations and fundraising. Some nonprofit partners told us that  this guidance lengthened the donations process in the past by requiring  significant Park Service review. Park Service documentation suggests  that, when approved, the revised Director’s Order 21 will likely shift  greater authority to regional directors and superintendents to accept  donations and approve fundraising agreements. For example, current  policy allows regional directors to approve donations less than $1 million.  The revised policy, which will likely be signed in early 2016, may allow the  Park Service Director to delegate approval authority to regional directors  for donations up to $5 million. The Park Service is also revising Director’s  Order 7, which addresses volunteering, and Reference Manual 32, its  internal guidance on cooperating associations and is planning to  complete these revisions in late 2015. According to Park Service officials  involved with these revisions, the goal of these revisions is to emphasize  the importance of collaboration between Park Service and its partners.

In addition, in January 2015 the Park Service temporarily waived three  parts of its policies to help with centennial fundraising efforts. First, Park  Service policy generally prohibits naming park assets as a form of donor  recognition. For example, buildings, vehicles, and park features are not to  bear donor names. Park Service waived this policy with regard to certain  donations for items including benches, bricks, motor vehicles, and rooms  in buildings—although buildings themselves are still prohibited from  bearing donors’ names. Second, Park Service policy generally prohibits  donor recognition from including corporate logos in park units. The Park  Service waived this policy to allow corporate logos to be included on  vehicles under certain conditions. Figure 8 provides an example of a  corporate logo displayed on a Park Service vehicle. Third, the Park  Service also issued a waiver allowing it to advertise with an alcohol  company. All three of these waivers will be effective until 2017, when  Park Service will reevaluate them to determine if they should remain in  place, according to a Park Service official.

The Park Service has also sought to increase philanthropic donations by  encouraging the Foundation to expand and by helping friends groups  increase their fundraising capacity. Specifically, the Park Service  encouraged the Foundation to restructure and expand its staffing to better  align with the current philanthropic practices. Since 2008, the Foundation  has added 50 people and created three offices focused on corporate  giving, private giving, and marketing. According to Foundation officials,  the Foundation plans to continue increased fundraising efforts after the  centennial campaign.  With regard to friends groups, the Park Service has  begun training its own staff on ways in which they can collaborate more  effectively with nonprofit partners on their fundraising efforts. Park unit  officials we spoke with told us that they help friends groups with their  member outreach by attending fundraising events to describe the park’s  needs to potential donors. In addition, park unit officials work with friends  groups to identify potential projects that need funds and that donors  would likely support. Park Service officials told us that improving the  fundraising capacity of friends groups is important since several new  friends groups have been started in the past 10 years, and many have not  yet developed fundraising skills.

The Park Service has also taken steps to increase volunteerism.  Specifically, the Park Service allocated an additional $2 million in fiscal  year 2015 to pay for 70 new volunteer coordinators, known as Centennial  Volunteer Ambassadors. According to the Park Service, these 1-year  internship positions will be dispersed throughout the Park Service. These  coordinators will be responsible for helping to design and coordinate  volunteer training and service. They will also perform outreach to attract  volunteers.

Several Factors Hamper the Park Service’s Ability to Increase Donations

According to Park Service officials, several factors hamper the agency’s  ability to increase philanthropic donations. One factor they cited is the  types of projects that need funding are not always attractive to donors.  For example, routine maintenance on buildings or sewer systems may be  less attractive to donors than large, visible projects, such as the  construction of a visitor center. In addition, the location of some parks can  limit their ability to obtain philanthropic support. For example, Park  Service officials in one regional office told us that some friends groups  have difficulty raising large sums of money because their parks are not  near urban areas with large pools of potential donors. Similarly, some  parks may not generate as much interest as larger, better known parks  and may struggle to attract donors. Another factor that Park Service  officials cited is some internal resistance to relying on outside funding  sources. For example, Park Service officials told us that some agency  employees have expressed concern about some efforts to increase  philanthropic donations—particularly the recent temporary waiver on  partnering with corporations, which they view as commercializing the  parks.

The Park Service also has limited capacity to manage volunteers.  According to Park Service officials, volunteers provide essential support  at many parks—including helping with maintenance projects and  interpretative assistance—but their efforts must be managed. In addition,  the number of people who want to volunteer at some parks outpaces the  availability of staff to manage them. Park Service officials explained that  some park units do not have dedicated volunteer coordinators and  instead assign these tasks as collateral duties due to budget constraints.  Park Service officials told us that if they were able to dedicate more staff  hours to managing volunteers, they could increase the level of volunteer  support the agency receives.

The Park Service compiles data on cash and in-kind donations from  friends groups and cooperating associations as part of their business  practices, but these data have several limitations. For example:

Certain data are outdated. The Park Service is delayed in compiling  data on donations from friends group because the agency’s process  relies on examining Internal Revenue Service (IRS) Form 990s  submitted by friends groups, and these groups can request  extensions in filing these forms.

Certain data are incomplete. We found that some information was  missing—specifically some years of data from the National Park  Foundation and information on donations from smaller friends  groups. For cooperating associations, we also found that data were  missing for certain years.

Some data lack specificity and hinder certain analyses. We were  unable to determine the trends in cash donations and in-kind  donations received from friends groups because the Park Service did  not differentiate between cash and in-kind donations for all years. For  cooperating associations, we also found that the Park Service had not  disaggregated cash from in-kind donations provided by cooperating  associations.

The Park Service is developing a new data portal for philanthropic  donations that may address some shortcomings we identified.  Specifically, according to a Park Service official leading this effort, the  portal is intended to collect information from all friends groups, not just the  larger ones, in addition to gathering information from cooperating  associations. In addition, the portal is to gather information on monetary  as well as in-kind services provided, according to documentation  describing the system. Further, information is to be collected on an  annual basis as a way to improve the timeliness of data. The Park  Service plans to provide training on the portal in the spring of 2016 to the  philanthropic partners who will be expected to enter data using the portal,  according to a Park Service official involved in this effort. This official also  said the agency plans to develop measures to ensure the reliability of the  data collected, but specific details on these measures are not yet  available.

In a time of constrained resources, recreation fees, commercial service  fees, and philanthropic donations are becoming increasingly important to  the Park Service. The Park Service has undertaken several efforts to  increase funding from these sources, and from fiscal year 2005 through  fiscal year 2014, funding from these sources increased by about 40  percent, after adjusting for inflation. However, the Park Service faces  challenges in increasing revenues from these sources and may be  missing additional opportunities to increase funding from recreation fees.

In particular, since 1993, senior lifetime interagency passes have been  sold for a one-time price of $10—a significantly lower price than the  current $80 annual price for a regular annual interagency pass. Our past  work on federal user fees has highlighted the importance of regularly  reviewing these fees. However, unlike the annual interagency pass,  FLREA does not permit Park Service or the other agencies that charge  recreation fees to increase the price of the senior pass. Without the  authority to adjust the price of the senior pass, the Park Service is limited  in its ability to increase revenue from this recreation fee. In addition, when  the Park Service updated its entrance fee schedule for the first time since  2006, several parks increased entrance fees, but the Park Service does  not have guidance to periodically review these fees. Moreover, the Park  Service does not require park units that choose not to follow its entrance  fee schedule to provide information on these decisions. Without guidance  to periodically review fees and direct the park units to provide information  on deviations from the fee schedule, the Park Service may not ensure  that its entrance fees are set at a reasonable level and may be missing  opportunities to more effectively manage its fees.

To increase the flexibility that Park Service has to change entrance fees,  Congress should consider amending FLREA to give authority to the Park  Service and the other four agencies that implement the recreation fee  program—Bureau of Reclamation, Bureau of Land Management, the U.S.  Fish and Wildlife Service, and the U.S. Forest Service—to adjust the price  of a lifetime senior pass.

To help improve its management of recreation fees, we recommend that  the Secretary of the Interior direct the Director of the Park Service to take  the following two actions:  revise its guidance on recreation fees so that the agency periodically  reviews its entrance fees to determine whether the fees are  reasonable, and direct that park units provide information to headquarters on why they  are choosing to not increase entrance fees or increase them by an  amount less than the fee schedule.

We provided a draft of this report to the Department of the Interior for  review and comment. In its written comments, reproduced in appendix IV,  the Department of the Interior generally agreed with our findings and  concurred with our recommendations.  Interior also noted that the Park  Service is planning to address these recommendations.  Specifically, in  2016, the Park Service is planning to revise its guidance on recreation  fees to require periodic evaluation of the entrance fee pricing structure.  In  addition, beginning in 2016, Interior indicated the Park Service will require  park units to provide information on their decisions to not increase  entrance fees.

As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date.  At that time, we will send copies of this report to the  appropriate congressional committees, the Secretary of the Interior, and  other interested parties.  In addition, the report will be available at no  charge on the GAO website at http://www.gao.gov.

If you or your staff members have any questions about this report, please  contact me at (202) 512-3841 or fennella@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found  on the last page of this report. GAO staff who made major contributions to  this report are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

Our objectives were to examine (1) general trends in funding for the  National Park Service (Park Service) for fiscal years 2005 through 2014;  (2) the trends in the Park Service’s revenues from recreation and  commercial service fees and donations from philanthropic sources for  fiscal years 2005 through 2014; and (3) the Park Service’s efforts to  increase fee revenues and donations, and factors, if any, that may affect  these efforts.

To examine general funding trends for the Park Service for fiscal years  2005 through 2014, we obtained and analyzed data on the Park Service  from the Office of Management and Budget (OMB) MAX Information  System (MAX). We selected this period because this was the most  recent 10-year period for which data were available, and 10 years of data  would allow us to identify any trends. Data reported in OMB MAX are  subject to review and checks through OMB to help ensure consistency of  the data, and we determined these data were sufficiently reliable for our  purposes. We analyzed these data in both nominal and inflation adjusted  terms. We also examined Park Service budget documents, including its  annual budget justifications.

To examine trends in fee revenues and donations for the Park Service for  fiscal years 2005 through 2014, we analyzed OMB MAX data along with  other data on these funding sources we received from the Park Service.  We used the OMB MAX data to examine the trends at a national level,  and we used the data from the Park Service to examine trends at the  national and park unit levels. To determine the reliability of the Park  Service’s data, we spoke with agency officials who were familiar with  these data, reviewed relevant documentation, and compared these data  to data from OMB MAX. We generally found these data to be sufficiently  reliable for our purposes. The exception is the park unit level data on  philanthropic donations, which we found to have certain limitations, and  we identify these limitations in our use of these data.

To examine the Parks Service’s efforts to increase fee revenues and  donations and any factors that may affect these efforts, we examined  relevant laws and Park Service documents, and interviewed agency  officials. The laws we examined were the Federal Lands Recreation  Enhancement Act for recreation fees; National Park Service  Concessions Management Improvement Act of 1998 for commercial  service fees; and laws governing Park Service’s relationships with  friends groups, cooperating associations, and volunteers, such as the  Volunteers in Parks Act of 1969. We also examined Park Service’s policy  manual along with specific policy documents for the revenue streams we  examined: Director’s Order 22 and Reference Manual 22A for recreation  fees; Reference Manuals 48A and 48B for commercial service fees;  Director’s Order 21 and Reference Guide to Director’s Order 21 for  friends groups; Director’s Order 32 and Reference Manual 32 for  cooperation associations; Director’s Order 7 for volunteers. We also  reviewed the agency’s August 2014 memorandum that encouraged parks  to consider increasing fees and memorandums that approved the fee  increases that followed. We compared the laws and agency guidance and  memoranda, as well as GAO’s design guide for federal user fees and  Standards for Internal Control in the Federal Government, with  documentation associated with Park Service’s efforts to increase  recreation fees. For commercial service fees, we analyzed Park Service  data on franchise fee rates, number of bidders, revenues of certain  commercial use authorization holders, and certain lease payments. For  philanthropic donations, we examined documents associated with Park  Service’s centennial efforts.

For all three objectives, we conducted interviews with Park Service  officials at the headquarters, region, and park unit levels. At the  headquarters level, we interviewed officials in the Chief Financial Officer’s  Office, including those responsible for budgeting and overseeing the  recreation fee program; officials in the Office of Commercial Services that  are responsible for overseeing the commercial service program; officials  in the Office of Partnerships and Civic Engagement that oversee  relationships with friends groups; and officials in the Office of  Interpretation, Education, and Volunteers that oversee cooperating  associations and volunteers. At the regional level, we spoke with the  regional directors in all seven of Park Service’s regional offices—Alaska,  Intermountain, Midwest, National Capital, Northeast, Pacific West,  Southeast—along with officials in these offices that help to manage the  recreation fee program, commercial services program, and relationships  with philanthropic partners. At the park unit level, we spoke with officials  that are involved in managing 31 park units. Specifically, we interviewed  officials at 23 park units in person and contacted officials from another 8  park units by phone and asked about their experiences with these funding  sources. Table 4 in appendix II lists the parks that we contacted as part  of our work. In selecting parks to contact, we included a range of parks,  that varied by certain characteristics, including number of visitors and  type (i.e., scenic vs. historical), and we interviewed officials from at least  one park unit in all seven of the Park Service’s regions. We also spoke  with a variety of stakeholders, including concessioners and nonprofit  partners. We selected these stakeholders because of their affiliation with  parks in our review or because they would be able to provide other  perspectives on these revenue sources. For example, during some of our  site visits, we met with concessioners and partners that were working with  the park units we were visiting. The views from these interviews are not  generalizable to all parks, concessioners, and nonprofit partners, but they  were used to provide a range of perspectives on Park Service’s efforts.  We also examined reports prepared in the last 10 years by Park Service  and stakeholder groups on recreation fees, commercial service fees, and  philanthropic donations.

We conducted this performance audit from October 2014 to December  2015 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

Appendix II: Data on Selected National Park Units

Table 4 provides information on the national park units that we contacted  as part of our work. The table describes how we contacted the park  (either in person or by phone) along with background information on the  park and data on recreation fees, commercial service fees, and  philanthropic donations.

Appendix III: Park Profiles on Selected National Park Units

The following figures provide a summary of selected information we  collected during interviews with park officials and information we reviewed  about individual parks’ recreation fees, commercial service fees, and  philanthropic partnerships.

Recreation fees include entrance fees and amenity fees for certain  equipment and services, such as campgrounds.

Commercial service fees include franchise fees, commercial use  authorizations, and rents.

The Park Service is also authorized to develop agreements with  nonprofit partner groups, known as friends groups and cooperating  associations.

Appendix IV: Comments from the Department of the Interior

Appendix V: GAO Contact and Staff Acknowledgments

In addition to the individual named above, Elizabeth Erdmann (Assistant  Director), Scott Heacock, Mary Koenen, and Sean Standley made key  contributions to this report. Additional contributions were made by Penny  Berrier, Antoinette Capaccio, Alexandra Dew Silva, Carol Henn, Paul  Kinney, Ying Long, Armetha Liles, John Mingus, Alison O’Neill, Guisseli  Reyes-Turnell, and Rebecca Shea.

Question: How did revenues from fees and donations change from 2005 to 2014?

Answer: Revenues from fees and donations grew for fiscal years 2005 through 2014 to varying degrees.

Question: How did revenues from recreation fees change?

Answer: Specifically, revenues from recreation fees, which include entrance and amenity fees for facilities such as campsites, increased from about $148 million to $186 million (26 percent).

Question: How did fees from concessions operations change?

Answer: Revenues from fees from concessions operations, which comprise the vast majority of commercial service fees, nearly tripled from almost $29 million to $85 million.

Question: How did cash donations change?

Answer: Meanwhile, cash donations from philanthropic sources fluctuated, ranging from $19.5 million in fiscal year 2011 to $94.7 million in fiscal year 2014.

Park Service’s Total Funding Did Not Keep Pace with Inflation for Fiscal Years 2005 through 2014, Even with Increases in Fees and Donations

Park Service’s Revenues from Fees and Donations Increased to Varying Degrees from Fiscal Year 2005 through Fiscal Year 2014

Revenues from Recreation Fees Grew 26 Percent, and a Small Number of Parks Account for a Large Proportion of These Fees

Revenues from Commercial Service Fees and Rents Almost Tripled, and Concessions Contracts Generate the Majority of These Revenues

Cash Donations to the Park Service Fluctuated, and Volunteer Support Consistently Increased

Question: What is the status of the Park Service's attempt to increase revenues?

Answer: The Park Service has efforts under way to increase revenues from fees and donations, but certain factors limit these efforts.

Question: How has Park Service increased recreation fees?

Answer: For recreation fees, the Park Service updated its fee schedule, and several park units increased entrance and amenity fees.

Question: Why is the Park Service unable to further increase recreation fees?

Answer: However, the Federal Lands Recreation Enhancement Act (FLREA) does not give the Park Service and other agencies that charge recreation fees the authority to adjust the price of a lifetime senior pass, which has been $10 since 1993.

Question: Why should GAO be able to increase such fees?

Answer: GAO's guide on user fees states that federal agencies should regularly review fees and make changes if warranted. Without the authority to modify the price of the senior pass, the Park Service is limited in its ability to increase revenue from this fee.

Question: What is the status of the Park Service's review of its fees?

Answer: In addition, Park Service guidance on recreation fees directs the agency to ensure its fees are set at a reasonable level, but does not call for periodic reviews of these fees, and the agency has no plans to do so. The agency also does not require park units to provide information on decisions to not change their fees or deviate from the fee schedule because decisions about raising fees are left to the park units. As a result, the Park Service is missing opportunities to ensure that its entrance fees are reasonable.

Question: How did the Park Service increase commercial service revenues?

Answer: To increase commercial service revenues, the Park Service increased minimum franchise fees that concessioners pay, and some park units have developed leasing programs.

Question: What prevents Park Service from increasing commercial service revenues more?

Answer: Several factors, such as limited competition for some concessions contracts, complicate efforts to increase these fees.

Question: How has the Park Service tried to increase philanthropic donations?

Answer: For philanthropic donations, the Park Service has launched fundraising and public outreach campaigns in conjunction with its centennial anniversary in 2016 and has modified fundraising policies to increase donation opportunities.

Question: What is making further increases difficult?

Answer: According to agency officials, several factors hamper the agency's ability to increase donations, such as projects that need funding are not always attractive to donors.

Park Service Has Initiatives Under Way to Increase Revenues from Fees and Donations, but Certain Factors Complicate These Efforts

Park Service Recently Increased Recreation Fees at Many Parks, but Faces Challenges to Further Increases

Park Service Increased Both Entrance and Amenity Fees at Several Parks but Does Not Plan to Regularly Reassess Entrance Fees

Park Service Increased Revenues from Commercial Services and Is Looking for New Opportunities to Generate Revenue, but Several Factors Complicate These Efforts

Park Service Increased Concessions Revenues and Is Looking for Opportunities to Increase Revenues from Other Commercial Services

Several Factors Complicate Park Service’s Efforts to Increase Revenues from Commercial Service Fees

Park Service Has Sought to Increase Philanthropic Donations, but Several Factors Limit Its Ability to Do So

Park Service Is Leveraging Its Centennial Anniversary, Revising Policy, and Providing Other Assistance to Increase Donations

Several Factors Hamper the Park Service’s Ability to Increase Donations

Question: What does the report examine?

Answer: This report examines the Park Service's (1) overall funding trends for fiscal years 2005 through 2014; (2) trends in revenues from fees and donations; and (3) efforts to increase revenues and donations, and factors that affected these efforts.

Question: How did GAO conduct analysis for the report?

Answer: To conduct this work, GAO analyzed budget data for fiscal years 2005 through 2014 on the Park Service's overall funding and fee revenue and donations. GAO also reviewed laws, examined Park Service reports, and interviewed agency officials and stakeholders, such as nonprofit partners and concessioners.

Question: How did GAO interact with Park Service in its review?

Answer: GAO also reviewed laws, examined Park Service reports, and interviewed agency officials and stakeholders, such as nonprofit partners and concessioners.

Appendix I: Objectives, Scope, and Methodology