Reimbursable Activities Funded Through the National Park Service’s Construction Account

We inspected the National Park Service’s (NPS) practice of using its construction account to fund reimbursable activities performed under interagency agreements. A reimbursable activity is one in which NPS dollars cover the initial cost of providing a service to another agency and then the cost is reimbursed by that agency. NPS’ construction account funds are appropriated, however, only for expenses that relate to “construction, improvements, repair, or replacement of physical facilities.” 

 

We sampled 21 NPS interagency agreements under which NPS funded its reimbursable activities from its construction account to determine whether the expenses charged to the construction account were construction related. As a result of our inspection work, we question the reimbursement process and whether a valid construction purpose exists for 17 of the 21 agreements. These 17 agreements total $68.6 million in approved funding over the course of the agreements’ life cycles, in which $18.6 million was expensed in FY 2014. 

 

NPS maintains that, under the Economy Act, using its construction account in this way is appropriate and affords the NPS a method to fund the reimbursable agreements within its current appropriation accounts. OIG believes this funding mechanism is not meeting the purpose statute because NPS uses the construction account to pay nonconstruction expenses and treats its account as if it were a revolving fund. OIG and NPS continue to disagree regarding the legality of NPS’ use of the construction account to pay nonconstruction expenses because the expenses result from an interagency agreement and because it is a no year account that affords NPS flexibility for expenses to be incurred prior to receiving reimbursement. Our report offers NPS a recommendation with a couple alternatives to allow NPS to properly manage their reimbursable agreements, as well as a second recommendation should these alternatives not prove feasible for NPS.