Report on Review of Administration of Employee and Contractor Housing at Page, Arizona, Glen Canyon Unit, Colorado River Storage Project, Bureau of Reclamation

B-146960: Published: Apr 11, 1966. Publicly Released: Apr 11, 1966.

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The General Accounting Office has reviewed the administration of employee housing provided by the Bureau of Reclamation and the contractor at the Glen Canyon Unit of the Colorado River Storage Project. The examination was made as a part of our continuing review of Colorado River Storage Project activities. Our review was made pursuant to the Budget and Accounting Act, 1921 (31 U.S.C. 53), and the Accounting and Auditing Act of 1950 (31 U.S.C. 67). We directed our examination to those areas which appeared to warrant particular attention and did not attempt to evaluate the Bureau's overall program for the construction and administration of employee housing. We examined into the Bureau's policies, practices, and procedures for construction and administration of housing at Page, Arizona. We reviewed correspondence and other pertinent records at the Bureau's Regional Office, Region 4, Salt Lake City, Utah; Glen Canyon Unit Office, Page, Arizona; and Office of Chief Engineer, Denver, Colorado.

During our review, we found several matters which required attention, including (1) the need for the Bureau to make vacant permanent housing available to other Government agencies to eliminate the necessity for the Government to construct additional homes, (2) the need to require contractors to adequately maintain homes in which the Government has a reversionary interest, and (3) the need to discontinue deductions from rental rates for employee housing, which did not appear to be justified. The National Park Service has constructed four permanent residences at Page, Arizona, at a cost of about $73,000, which we believe could have been avoided, because the Bureau should have rented or transferred vacant permanent housing to the Service. The Bureau's houses were constructed to serve the permanent operating personnel after completion of the project. However, the estimated number of operating employees to be assigned to the project was reduced after the houses were constructed, indicating that all the houses would not be needed. The Bureau's decision not to make the houses available to the National Park Service was based on its belief that it would have a need for the housing during a future period when construction of the Glen Canyon Unit was being completed and housing would temporarily be needed for both construction and operating personnel, We believe, however, that it would have been in the best interests of the Government for the Bureau to utilize temporary housing to satisfy its temporary needs and to release the vacant permanent homes to the National Park Service, thus avoiding the need for the construction of additional permanent housing. We also found that the Bureau sold a reversionary interest in the contractor's permanent-type housing, upon completion of construction of the housing, at an amount substantially below cost because, on the basis of its experience at other construction camps, the Bureau believed it likely that the housing would be allowed to deteriorate since the contractor was not required to adequately maintain the property. In April 1965, we proposed that, where facilities constructed for the use of contractors' employees at Bureau of Reclamation project sites are expected to be usable after the projects have been completed, the construction contracts contain appropriate language to require the contractors to adequately maintain the housing and facilities and to return them to the Government in good condition upon completion of the projects. Our review also disclosed that the revenue from the rental of Government-owned housing at Page, Arizona, had been reduced by about $156,000 because (1) deductions totaling about $76,000 to compensate tenants for unusual transportation costs caused by isolated living conditions were granted during the period July 1, 1963, through July 31, 1964, although Page did not qualify as an isolated community and (2) deductions totaling about $80,000 for extraordinary heating costs were made during the period May 1, 1961, through July 31, 1964, although Bureau of Reclamation instructions do not specifically provide for the granting of heating deductions, and the Bureau did not consider the fact that rates for other utilities were relatively low, which tended to offset the extraordinary heating costs. As a result of our bringing these deductions to its attention, the Bureau revised the rental rates at Page in August 1964, thereby reducing the isolation and heating deductions and increasing annual rental revenue by about $50,000, However, because the deductions were not completely eliminated and an additional deduction for extraordinary maintenance was granted, reductions in revenues of about $55,000 annually, which we believe are unjustified, will continue to be made until further action is taken to revise the rates.