Bureau of Reclamation:

Opportunities Exist to Improve Managerial Cost Information and Cost Recovery

GAO-02-973, Sep 20, 2002

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In a previous report (GAO/AIMD-00-127, May 2000), GAO identified reimbursable project costs that were not being recovered by the Department of the Interior's Bureau of Reclamation. In this report, GAO reviewed the Bureau of Reclamation's managerial cost accounting and cost recovery practices. The Bureau does not currently identify and distribute all of the costs it incurs to its specific projects and activities. These costs are not distributed because the Bureau considers them nonreimbursable and because its cost accounting system is used to capture costs related to reimbursable purposes such as irrigation, municipal and industrial (M&I) water supply, and power generation. While GAO recognizes that the Bureau does not have the authority to recover certain costs, such as those funded through the Policy and Administration appropriation, all of the costs should nevertheless be distributed to the relevant activities to provide information useful in managerial decision making. Because not all costs are distributed, information on the full cost of projects and activities is not readily available to the Congress, program managers, and others to facilitate decision making and the allocation of the federal government's resources.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The Secretary of the Interior should direct the Commissioner, Bureau of Reclamation, to enhance the Bureau's managerial cost accounting, so as to provide more complete cost information that facilitates managerial decision making and fulfills each of the five purposes of the Managerial Cost Accounting Standards. This would include distributing Policy and Administration and Bureauwide program costs to the appropriate projects and activities and could be accomplished in conjunction with the Department of the Interior's current cost accounting initiative.

    Agency Affected: Department of the Interior

    Status: Closed - Not Implemented

    Comments: The Bureau of Reclamation did not concur with this recommendation and therefore does not plan to take any follow-up action. As of followup in July 2006, BOR continued to not concur and did not intend to implement. Recommendation is considered closed and not implemented.

    Recommendation: The Secretary of the Interior should direct the Commissioner, Bureau of Reclamation, to review the Bureauwide programs and recover the costs of teahouse that either directly or indirectly benefit projects, unless recovery is prohibited under current law. Where it is determined that cost recovery is prohibited, this would include documenting the specific legal basis and rationale for the determination.

    Agency Affected: Department of the Interior

    Status: Closed - Implemented

    Comments: The Bureau of Reclamation has developed a plan to review BOR-wide programs that either directly or indirectly benefit projects and also develop applicable, individualized directives and standards for those programs. This is expected to address the basis for funding of these programs, as well as applicable rationale for the determination of appropriate cost recovery or the determination that costs are nonreimbursable. BOR plans to issue revised or new directives and standards by March 31, 2005. As of follow-up in July 2006, BOR had completed the above review and issued revised or new directives and standards, which addressed reimbursability and cited supporting legislation. The recommendation is considered largely implemented and closed.