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April 17, 2007

Audit Finds DEC Not Meeting Timber Harvesting Goals
Established to Promote Forest Health and Biodiversity

State Lost Millions in Potential Timber Sales Revenue

The New York State Department of Environmental Conservation (DEC) cut only about half of the harvestable timber from state forests, falling well short of its annual timber harvest goals, according to an audit released today by the New York State Comptroller’s office.

As a result, the state lost approximately $14.6 million, about $4.85 million a year, in potential revenue from timber sales over a three-year period.

DEC manages about four million acres of state owned land, including about 762,000 acres of state forests which are regularly harvested to promote forest health, sustainability and biodiversity. Timber harvesting and other forest management activities are overseen by DEC foresters, along with other stewardship tasks, are responsible for determining the specific areas that should be harvested to achieve the desired forest density and mixture of species, and for placing a dollar value on the trees to be cut.

In 1992, DEC determined that the optimal amount of timber that could be cut down in state forests each year was 17,675 acres. This figure is referred to as the annual allowable cut and is based on the size of state-owned forests at that time and the size of the trees and their estimated growth rates. DEC also determined annual harvesting targets -- which were approximately 5,000-6,000 acres less than the annual allowable cut, based on harvestable acres in particular regions of the state and the availability of foresters. The annual allowable cut and harvesting targets have remained relatively stable over the years while state-owned forest lands have increased.

When auditors examined whether DEC had been cutting trees to meet its harvesting goals over a three-year period, they found that the agency harvested only 52 percent of the total timber that was ready to be cut. DEC harvested 10,157 acres in 2003-04, 8,559 acres in 2004-05 and 9,080 acres in 2005-06 -- considerably below annual allowable cut levels and the even lower targets. While the state collected $15.3 million in revenue from timber sales during this time, auditors determined that another $14.6 million in potential revenues was lost because DEC did not have enough foresters dedicated to timber harvesting.

Auditors found that, between April 2001 and March 2006, the number of foresters working for DEC decreased from 46 to 33, about 28 percent reduction, while the amount of state-owned forested land increased by 18,700 acres. Because of the staff shortage and other competing priorities for the time of foresters, DEC could not fully achieve its forest management goals.

Auditors determined that DEC was properly complying with competitive bidding requirements for timber sales of more than $10,000 that were subject to formal, competitive bidding. However, for sales less than $10,000, auditors where unable to determine whether competitive requirements had been followed or whether DEC received a fair market price for these sales because documentation had not been kept on all of these sales. Auditors also found that DEC had not issued guidelines to foresters on how timber should be appraised and in several instances bids came in that were significantly higher than what the forester had appraised the timber to be worth. As a result, it was unclear if appropriate appraisals had been developed or if all the bids received resulted in proper payments to the state.

Auditors recommended that DEC review its forest management workload and consider hiring more foresters. Auditors estimated that adding 17 additional foresters would cost the state $1.15 million in salaries and fringe benefits a year but also allow the department to harvest an additional $4.85 million a year in timber sales revenues, providing the state with $3.7 million a year in net revenue. Auditors also recommended that DEC use more up-to-date determinations for annual allowable cuts and harvesting goals, as well as improve its appraisal process.

DEC generally agreed with the audit findings and has taken steps to implement auditors’ recommendations. DEC’s full response is included in the audit report.

Click here for a copy of the audit



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