Four Federal Agencies Provide Funding for Rural Water Supply and Wastewater Projects
GAO-07-1094: Published: Sep 7, 2007. Publicly Released: Sep 7, 2007.
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funds for constructing and upgrading water supply and wastewater treatment facilities. As a result, they typically rely on federal grants and loans, primarily from the Rural Utilities Service (RUS), Economic Development Administration (EDA), Bureau of Reclamation (Reclamation), and the U.S. Army Corps of Engineers (Corps), to fund these projects. Concern has been raised about potential overlap between the projects these agencies fund. For fiscal years 2004 through 2006 GAO determined the (1) amount of funding these agencies obligated for rural water projects and (2) extent to which each agency's eligibility criteria and the projects they fund differed. GAO analyzed each agency's financial data and reviewed applicable statutes, regulations, and policies.
From fiscal years 2004 through 2006, RUS, EDA, Reclamation, and the Corps obligated nearly $4.7 billion to about 3,100 rural water supply and wastewater projects. RUS obligated the majority of these funds--about $4.2 billion--to about 2,800 projects. Of this $4.2 billion, RUS loans accounted for about $2.7 billion, and RUS grants accounted for about $1.5 billion. EDA, Reclamation, and the Corps, combined, obligated a total of about $500 million in grants to rural communities for about 300 water projects. RUS, EDA, Reclamation, and the Corps fund similar rural water supply and wastewater projects, but they have varied eligibility criteria that limit funding to certain communities based on population size, economic need, or geographic location. RUS, EDA, and the Corps provide funding for both water supply and wastewater projects, while Reclamation provides funding only for water supply projects. Eligible water projects can include constructing or upgrading distribution lines, treatment plants, and pumping stations. RUS and EDA have formal nationwide programs with standardized eligibility criteria and processes under which communities compete for funding. In contrast, Reclamation and the Corps fund water projects in defined geographic locations under explicit congressional authorizations. In 2006 the Congress passed the Rural Water Supply Act, directing Reclamation to develop a rural water supply program with standard eligibility criteria. The Corps continues to fund rural water supply and wastewater projects under specific congressional authorizations, many of which are pilot programs. The Congress required the Corps to evaluate the effectiveness of these various pilot programs and recommend whether they should be implemented on a national basis. The Corps has only completed some of the required evaluations and, in most cases, has not made the recommendations that the Congress requested about whether or not the projects carried out under these pilot programs should be implemented on a national basis.
Recommendation for Executive Action
Status: Closed - Implemented
Comments: The Army Corps of Engineers (Corps) funds rural water supply and wastewater projects under specific congressional authorizations, many of which are pilot programs. When the Congress authorized the Corps to fund these various pilot programs, it also required the agency to evaluate the effectiveness of several of them and recommend to the Congress whether these pilot projects should be implemented on a national basis. GAO found that the Corps completed 9 of the 12 required evaluations but, in most cases, these evaluations did not contain the required recommendation. GAO recommended in September 2007 that the Corps provide to Congress a comprehensive report on the water supply and wastewater projects funded under its pilot projects and determine whether these pilot programs duplicate other agency efforts and should be discontinued or whether these pilot programs address an unmet need and should be expanded and made permanent at a national level. To address our recommendation, the Corps submitted to Congress in August 2008 a comprehensive report of its pilot programs. This August 2008 report concluded that the Corps' pilot projects duplicate long-standing programs established by other agencies to fund rural water and wastewater projects and that the Corps' funding should be directed towards the agency's primary mission areas of flood risk reduction, commercial navigation, and aquatic ecosystem restoration.
Recommendation: To ensure that the Congress has the information it needs to determine whether the Corps should continue to fund rural water supply and wastewater projects, the Secretary of Defense should direct the Commanding General and the Chief of Engineers of the U.S. Army Corps of Engineers to provide a comprehensive report on the water supply and wastewater projects that the Corps has funded under its pilot programs and determine whether these pilot programs duplicate other agency efforts and should be discontinued, or whether these pilot programs address an unmet need and should be expanded and made permanent at a national level.
Agency Affected: Department of Defense