Some Small Purchase Procurements at FERC Were Not Well Managed

RCED-83-95: Published: Mar 29, 1983. Publicly Released: Mar 29, 1983.

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GAO reviewed small purchase procurements of the Federal Energy Regulatory Commission (FERC) in regard to the Trans-Alaska Pipeline System (TAPS) rate case.

GAO noted that FERC spent over $179,000 in documenting the TAPS project which was originally estimated to cost about $1 billion but actually cost about $9.4 billion. GAO found that the FERC lack of management controls over the procurement and accounting aspects of the TAPS discovery effort resulted in: (1) erroneous certification regarding the status of appropriated funds, (2) unauthorized payments, (3) additional interest costs to the Government, (4) violations of both Federal and Department of Energy (DOE) procurement regulations and DOE accounting procedures, and (5) frequent deviations from FERC small purchase procedures. GAO believes that, if management had developed and documented procedures and supplemented them with guidelines and accounting controls, the adverse results could have been avoided.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Chairman, FERC, should determine whether a proper basis for interest collection was established through adequate notification procedures and, if so, pursue the collection of any interest that accrued during the period the accounts receivables were outstanding.

    Agency Affected: Federal Energy Regulatory Commission

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Chairman, FERC, should satisfactorily establish that the 17 procurement actions were authorized and the payments were therefore legal or take the appropriate steps to recover the unauthorized expenditures.

    Agency Affected: Federal Energy Regulatory Commission

  3. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Chairman, FERC, should continue the current efforts underway to satisfactorily resolve the Business Archives and Record Storage Company liability so that the Government's obligation can be liquidated.

    Agency Affected: Federal Energy Regulatory Commission

 

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