Report on Audit of Southeastern Power System and Related Activities, Corps of Engineers (Civil Functions) and Southeastern Power Administration, Fiscal Years 1961, 1962, and 1963

B-125032: Published: Jun 29, 1965. Publicly Released: Jun 29, 1965.

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GAO has made an audit of the power-generating and related activities of the Corps of Engineers (Civil Functions), Department of the Army, and the power-marketing activities of the Southeastern Power Administration, Department of the Interior, in the southeastern area of the United States, for fiscal years 1961, 1962, and 1963. We issued this report to advise the Congress of the actions taken on the recommendations in our prior reports, the status of repayment of the Federal investment allocated to power, and our opinion of the financial statements of the Southeastern Power System.The financial statements included in this report were prepared by GAO, as in past years, from the records of the Southeastern Power Administration and the Corps of Engineers. The continued preparation of combined states is desirable in order to disclose fully on an integrated system basis, for the information of the Congress, the President of the United States, and the public, the financial position and the result of operations of the Southeastern Power System. In our opinion, however, the preparation of the combined financial statements is more properly a function of the executive branch of the Federal Government.

The report contains our opinion that, because of certain accounting deficiencies related to the depreciation of project facilities and the disagreement between the Department and the Corps on the proper cost allocation method for certain projects, the accompanying financial statements do not present fairly the financial position of the Southeastern Power System and Related Activities at June 30, 1963, and the results of operations for the year then ended, in conformity with the principles and standards of accounting prescribed by the Comptroller General of the United States. We are again reporting, as in prior audit reports, that the status of repayment of the Government's investment in the power program in the southeastern area of the United States is not adequately shown in repayment schedules prepared by the Southeastern Power Administration because no comparison is made between actual and scheduled repayment.