Congressional Guidance Needed on Federal Cost Share of Water Resource Projects When Project Benefits Are Not Widespread

CED-81-12: Published: Nov 13, 1980. Publicly Released: Nov 13, 1980.

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Many water resource projects provide benefits to large segments of the country; however, the Corps of Engineers (CE) and the Soil Conservation Service (SCS) have built some projects that primarily benefit only a few landowners or businesses.

GAO found that for CE and SCS projects, the non-Federal entity was seldom required to share a larger portion of project cost to compensate for the special benefits, such as land enhancement or increased local taxes. Local sponsors provide land easements, rights-of-way, and utility relocations for most projects. In feasibility studies, the estimated costs of the items are shown as the non-Federal cost share. However, GAO found that the estimated non-Federal cost share in the studies by SCS usually contain extraneous cost items which were not genuine project costs. This inflated the total project cost and also made the non-Federal share appear much higher than it actually was. Land treatment represents 55 percent of the total non-Federal share for all the projects approved by SCS through September 1979. GAO believes land treatment is important and should be strongly encouraged. However, it is misleading to include the estimated cost along with other cost items because: (1) land treatment is the individual landowner's responsibility; (2) land treatment is strictly voluntary and SCS has little or no control over implementing recommended treatment; (3) SCS does not effectively monitor or follow up on whether the measures are applied, and if so, at what cost; and (4) SCS does not include land treatment measures when estimating each project's benefit/cost ratio.

Matter for Congressional Consideration

  1. Status:

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should clarify its intent regarding cost sharing for future water resource projects which provide significant special local benefits and give additional guidance to the Federal agencies involved in water resource development concerning the projects.

Recommendation for Executive Action

  1. Status:

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Agriculture should direct the Administrator of SCS to stop including ongoing land treatment measures as part of the estimated project cost and non-Federal share in SCS feasibility studies. The estimated land treatment costs should be itemized but shown separately on a different schedule.

    Agency Affected: Department of Agriculture


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