Changes in Federal Water Project Repayment Policies Can Reduce Federal Costs

CED-81-77: Published: Aug 7, 1981. Publicly Released: Aug 7, 1981.

Additional Materials:

Contact:

Michael Gryszkowiec
(202) 275-5514
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Because prior GAO studies disclosed several large federal reservoirs with substantial amounts of unsold water or storage space, GAO reviewed the repayment policies and practices of the Army Corps of Engineers and the Bureau of Reclamation that do not ensure fair and timely recovery of water projects' reimbursable costs.

Current repayment policies, for the most part, require that water projects must be fully used to ensure cost recovery. However, much water is neither purchased nor used as originally intended and is likely to remain underutilized for years. As a result, the federal government will continue to absorb substantial costs. Agency officials have made some changes, but much more should be done. Millions of acre-feet of underutilized water are available in federal reservoirs. Agency officials stated that they had no water marketing policies and generally relied on state water boards, local chambers of commerce, and water districts to carry out water marketing activities. Agencies have not taken advantage of opportunities to increase cost recovery. Sometimes agencies use outdated prices for determining operation and maintenance (O&M) costs. In some cases, repayment was not required even though water users received benefits. Payments received from water option contractors were not always apportioned to O&M costs. Occasionally, the Bureau of Reclamation charged water users for O&M costs but credited the revenues to construction cost repayment. As a result of such practices, reimbursable O&M costs had to be paid from federal funds. O&M costs were not accumulated as reimbursables for future water price determinations, but often were reassigned to nonreimbursable categories.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of the Army and the Interior should issue instructions requiring all O&M charges to be updated annually and applied to new or amended contracts.

    Agency Affected: Department of Defense: Department of the Army

  2. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of the Army and the Interior should issue instructions requiring all O&M charges to be updated annually and applied to new or amended contracts.

    Agency Affected: Department of the Interior

  3. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of the Army and the Interior should develop an overall water marketing strategy for their agencies.

    Agency Affected: Department of Defense: Department of the Army

  4. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of the Army and the Interior should develop an overall water marketing strategy for their agencies.

    Agency Affected: Department of the Interior

  5. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of the Army and the Interior should issue instructions requiring all reservoir users to share equitably in O&M cost recovery.

    Agency Affected: Department of Defense: Department of the Army

  6. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of the Army and the Interior should issue instructions requiring all reservoir users to share equitably in O&M cost recovery.

    Agency Affected: Department of the Interior

  7. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretary of the Interior should issue instructions requiring that option revenues be equitably allocated to O&M cost recovery.

    Agency Affected: Department of the Interior

  8. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of the Army and the Interior should annually disseminate information on the available water supply to Congress, state agencies, and potential buyers.

    Agency Affected: Department of Defense: Department of the Army

  9. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of the Army and the Interior should annually disseminate information on the available water supply to Congress, state agencies, and potential buyers.

    Agency Affected: Department of the Interior

  10. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretary of the Interior should issue instructions requiring that O&M cost reallocations be limited to those based upon demonstrated changes in benefits.

    Agency Affected: Department of the Interior

  11. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of the Army and the Interior should issue instructions requiring congressional authorization to be sought for water uses not specifically authorized.

    Agency Affected: Department of Defense: Department of the Army

  12. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of the Army and the Interior should issue instructions requiring congressional authorization to be sought for water uses not specifically authorized.

    Agency Affected: Department of the Interior

  13. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretary of the Interior should issue instructions requiring that reallocation policies be equally applied to both reimbursable and nonreimbursable expenses.

    Agency Affected: Department of the Interior

  14. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretary of the Interior should require reasonable payment for all water reservations.

    Agency Affected: Department of the Interior

  15. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretary of the Interior should require water prices to be based upon how much water can be delivered and sold.

    Agency Affected: Department of the Interior

  16. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretary of the Interior should require water contracts with renewal provisions to specify the method for price adjustments.

    Agency Affected: Department of the Interior

  17. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretary of the Interior should require annual water price reevaluations as a basis for establishing new or amended contract prices.

    Agency Affected: Department of the Interior

  18. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of the Army and the Interior should establish policies that will require unrecovered reimbursable O&M costs to be accumulated and considered in future price determinations.

    Agency Affected: Department of Defense: Department of the Army

  19. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of the Army and the Interior should establish policies that will require unrecovered reimbursable O&M costs to be accumulated and considered in future price determinations.

    Agency Affected: Department of the Interior

  20. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of the Army and the Interior should establish policies that will require an interest allocation to be included in all water charges to municipal and industrial users.

    Agency Affected: Department of Defense: Department of the Army

  21. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of the Army and the Interior should establish policies that will require an interest allocation to be included in all water charges to municipal and industrial users.

    Agency Affected: Department of the Interior

  22. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of the Army and the Interior should establish policies that require all project purposes to share, in accordance with actual reservoir uses, in O&M expenses.

    Agency Affected: Department of Defense: Department of the Army

  23. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of the Army and the Interior should establish policies that require all project purposes to share, in accordance with actual reservoir uses, in O&M expenses.

    Agency Affected: Department of the Interior

  24. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretary of the Interior should require specific approval of the Commissioner of Reclamation when contract revenues from federal reservoirs will be applied to a non-federal entity.

    Agency Affected: Department of the Interior

  25. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretary of the Interior should require nationwide distribution of its and the Bureau of Reclamation's repayment policies, procedures, and applicable interpretations for establishing and implementing repayment requirements.

    Agency Affected: Department of the Interior

  26. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretary of the Interior should require a periodic review of regional pricing and accounting practices to ensure that they consistently and equitably apply agency policy.

    Agency Affected: Department of the Interior

 

Explore the full database of GAO's Open Recommendations »

Jul 21, 2016

Jun 23, 2016

May 12, 2016

Apr 14, 2016

Mar 4, 2016

Oct 30, 2015

Sep 9, 2015

Aug 17, 2015

Jul 9, 2015

Apr 27, 2015

Looking for more? Browse all our products here