Report on Upper Colorado River Basin Water Resources Development Program, Bureau of Reclamation, Department of the Interior, Fiscal Years 1957-1959
B-133053: Published: Jan 25, 1960. Publicly Released: Jan 25, 1960.
- Full Report:
The General Accounting Office has made an audit of selected activities of the Bureau of Reclamation, Department of the Interior, in the upper Colorado River basin for the fiscal years ended June 30, 1957, 1958, and 1959. This audit was made pursuant to the Budget and Accounting Act, 1921 (31 U.S.C. 531, and the Accounting and Auditing Act of 1950 (31 U.S.C. 67). Our audit of the Bureau of Reclamation's water resources development program in the upper Colorado River basin Included reviews of activities and selected examinations of financial transactions. We reviewed the basic laws authorizing the activities, and the pertinent legislative history, to ascertain the purposes of the activities and their intended scope. We ascertained the polices adopted by the Bureau and reviewed the policies for conformance with basic legislation. We reviewed the procedures followed by employees of the Bureau to determine the effectiveness of the procedures. We did not make a detailed audit but we examined certain selected transactions for fiscal years 1957-59 to the extent deemed appropriate for the purposes of this report. Our examination was made with due regard for the nature and volume of transactions and the effectiveness of internal control including internal audits. The examination of transactions was conducted at the Salt Lake City, Utah (Region 4), Bureau of Reclamation, regional office. Certain supplemental data relating to the Colorado River Storage Project and participating projects was obtained from the Upper Colorado River Office located at Salt Lake City, Utah, and regional offices located at Denver, Colorado; Amarillo, Texas; and Boulder City, Nevada. The projects under audit were the Colorado River Storage Project and participating projects and the individually authorized projects located within the basin.
In the Bureau of Reclamation's second financial and economic analysis of the authorized Colorado River Storage Project and participating projects, dated December 1958, construction costs are estimated to total $1,003,550,000. This estimate Is an increase of $11,376,000 over the estimate shown in the Bureau's first financial and economic analysis, dated February 1958, and an increase of $69,890,000 over the estimate considered by the Congress prior to authorization of the Colorado River Storage Project and participating projects by the act of April 11, 1956. The Bureau anticipates that net power revenues will repay about 91 percent of the total reimbursable construction costs within the repayment periods specified in the authorizing legislation, The Bureau's determinations on the ability of the project to produce the anticipated net power revenues are based on assumptions and estimates relating to many factors including water supply and resultant power-production capability, power-marketing arrangements, and interest rates. Our audit disclosed that significant changes in the construction and repayment plans for the Collbran Project have occurred since the project was authorized by the Congress in 1952. The principal differences between the revised plan and the authorized plan are (1) the elimination of the specific municipal and industrial water supply features because the city of Grand Junction, Colorado, declined to participate in the project, (2) the relocation of the Cameo power plant to the Lower Molina site, and (3) an increase in total installed generating capacity of the proposed power plants from 7,400 kilowatts to 13,500 kilowatts. We found also that, based on Bureau studies and a rate of 8.8 mills a kilowatt-hour for firm power, it will take 61 years to repay, with interest, the Government's investment in power; the studies show also that it will take another 14 years after power has been repaid, or a total of 75 years, to repay irrigation construction, costs which are beyond the water users' ability to repay within their 5-year contract period. Under reclamation law, investigation costs applicable to authorized projects are generally reimbursable by project beneficiaries, However, since there is no specific legislative requirement for reimbursement of expenditures made from the Colorado River Development Fund, the Bureau considers all costs financed from such fund as non-reimbursable even though certain costs are applicable to authorized projects and are transferred to and recorded as a cost of such projects. The financial statements (schedules 1 through 3) included In this report present on a combined basis the assets and liabilities and the results of operations of the major activities of the Bureau of Reclamation in the upper Colorado River basin. These financial statements have been prepared from the records of the Bureau of Reclamation. With respect to the Bureau's accounting procedures for activities In the upper Colorado River basin, the principal deficiency disclosed by our audit relates to a lack of acceptable and consistently applied procedures for recording Interest during construction.