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Highlights

Pursuant to a congressional request, GAO reviewed hydropower relicensing, focusing on the status of efforts to recover the costs incurred by federal agencies to administer the hydropower program.

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Recommendations

Matter for Congressional Consideration

Matter Status Comments
Should the Federal Energy Regulatory Commission not report adequate progress in developing the recommended guidance and federal agencies not report adequate progress in improving their financial management and reporting systems in their fiscal year 2002 budget submissions, Congress may wish to consider directing the Commission and the other agencies to accomplish the actions by a certain date.
Closed - Not Implemented
Congress has declined to act on this matter.
Congress may wish to consider whether to continue to fund the costs incurred by the federal agencies (other than the Federal Energy Regulatory Commission) to administer the hydropower program solely through the annual appropriations process or to allow them to retain licensees' reimbursements to offset some or all of these costs. In doing so, Congress would need to weigh any benefits that such a provision would provide against the loss of flexibility over the use of funds.
Closed - Not Implemented
Congress has not enacted any changes that would permit federal agencies (other than FERC) to retain hydropower licensees' reimbursements to offset the costs of administering the hydropower program.

Recommendations for Executive Action

Agency Affected Recommendation Status
Federal Energy Regulatory Commission Because the federal government will likely be at risk of continuing to lose millions of dollars a year until guidance is issued on which other federal agencies' costs are eligible for recovery under the Federal Power Act, the Chairman and Members of the Federal Energy Regulatory Commission should issue guidance, developed in consultation with the Office of Management and Budget (OMB) and all affected federal agencies, that specifies what federal administrative costs are eligible for recovery under the Federal Power Act and how these costs are to be reported. This guidance should take into account OMB's Circular A-25-User Charges and Federal Financial Accounting Standard Number 4.
Closed - Implemented
FERC has issued guidance to other federal agencies on what federal administrative costs are eligible for recovery under the Federal Power Act.
Federal Energy Regulatory Commission Because the federal government will likely be at risk of continuing to lose millions of dollars a year until guidance is issued on which other federal agencies' costs are eligible for recovery under the Federal Power Act, the Chairman and Members of the Federal Energy Regulatory Commission should report the Commission's progress in developing this guidance in the Commission's fiscal year 2002 budget submission to Congress in February 2001.
Closed - Not Implemented
Because of litigation between FERC licensee groups and FERC, the Commission has not commented in its budget submissions to the Congress on the guidance FERC has developed or the costs reported to FERC by other federal agencies.
Federal Energy Regulatory Commission Because the federal government will likely be at risk of continuing to lose millions of dollars a year until guidance is issued on which other federal agencies' costs are eligible for recovery under the Federal Power Act, the Chairman and Members of the Federal Energy Regulatory Commission should report annually to the Appropriations Committees of Congress any failures by federal agencies to report costs in accordance with the Commission's guidance.
Closed - Not Implemented
Because of litigation between FERC licensee groups and FERC, the Commission has not commented in its budget submissions to the Congress on the guidance FERC has developed or the costs reported to FERC by other federal agencies.
Forest Service Because the federal government will likely also continue to be at risk of losing millions of dollars a year, the Secretaries of the Interior, Commerce, and Defense and the Chief of the Forest Service and the Administrator, Environmental Protection Agency (EPA), should ensure that their agencies' financial management and reporting systems are capable of producing accurate, timely, and reliable information on hydropower-program-related administrative costs eligible for recovery in accordance with the Federal Energy Regulatory Commission's prospective new guidance.
Closed - Implemented
According to the Forest Service, since 2000 the agency has improved its accounting of its hydropower related expenses to the point where the expenses it provides FERC are accurate and reliable. Each of its regional offices has set up accounting codes to track costs, and the agency can meet FERC's reporting criteria--including certifying the accuracy of the costs that are being reported.
Department of Commerce Because the federal government will likely also continue to be at risk of losing millions of dollars a year, the Secretaries of the Interior, Commerce, and Defense and the Chief of the Forest Service and the Administrator, Environmental Protection Agency (EPA), should ensure that their agencies' financial management and reporting systems are capable of producing accurate, timely, and reliable information on hydropower-program-related administrative costs eligible for recovery in accordance with the Federal Energy Regulatory Commission's prospective new guidance.
Closed - Not Implemented
This recommendation cannot be implemented because FERC has not issued the necessary guidance.
Department of Defense Because the federal government will likely also continue to be at risk of losing millions of dollars a year, the Secretaries of the Interior, Commerce, and Defense and the Chief of the Forest Service and the Administrator, Environmental Protection Agency (EPA), should ensure that their agencies' financial management and reporting systems are capable of producing accurate, timely, and reliable information on hydropower-program-related administrative costs eligible for recovery in accordance with the Federal Energy Regulatory Commission's prospective new guidance.
Closed - Not Implemented
This recommendation cannot be implemented until FERC issues the needed guidance.
Department of the Interior Because the federal government will likely also continue to be at risk of losing millions of dollars a year, the Secretaries of the Interior, Commerce, and Defense and the Chief of the Forest Service and the Administrator, Environmental Protection Agency (EPA), should ensure that their agencies' financial management and reporting systems are capable of producing accurate, timely, and reliable information on hydropower-program-related administrative costs eligible for recovery in accordance with the Federal Energy Regulatory Commission's prospective new guidance.
Closed - Implemented
Since 2000, the Department of the Interior has a stronger and more accurate system for accounting for its hydropower related expenses. The cost data that Interior provides to FERC is consistent with federal accounting standards and is certified as accurate by DOI's Office of Financial Management.
Environmental Protection Agency Because the federal government will likely also continue to be at risk of losing millions of dollars a year, the Secretaries of the Interior, Commerce, and Defense and the Chief of the Forest Service and the Administrator, Environmental Protection Agency (EPA), should ensure that their agencies' financial management and reporting systems are capable of producing accurate, timely, and reliable information on hydropower-program-related administrative costs eligible for recovery in accordance with the Federal Energy Regulatory Commission's prospective new guidance.
Closed - Not Implemented
EPA cannot implement this recommendation because FERC has refused to issue the needed guidance.
Forest Service Because the federal government will likely also continue to be at risk of losing millions of dollars a year until the agencies produce accurate, timely, and reliable information on their hydropower-program-related administrative costs, the Secretaries of the Interior, Commerce, and Defense and the Chief of the Forest Service and the Administrator, EPA, should report their agencies' progress in improving their systems in their fiscal year 2002 budget submissions to Congress in February 2001.
Closed - Not Implemented
According to the Forest Service, no progress can be made until FERC issues the necessary guidance.
Department of Commerce Because the federal government will likely also continue to be at risk of losing millions of dollars a year until the agencies produce accurate, timely, and reliable information on their hydropower-program-related administrative costs, the Secretaries of the Interior, Commerce, and Defense and the Chief of the Forest Service and the Administrator, EPA, should report their agencies' progress in improving their systems in their fiscal year 2002 budget submissions to Congress in February 2001.
Closed - Not Implemented
No progress can be made until FERC issues the necessary guidance, which it has not yet done.
Department of Defense Because the federal government will likely also continue to be at risk of losing millions of dollars a year until the agencies produce accurate, timely, and reliable information on their hydropower-program-related administrative costs, the Secretaries of the Interior, Commerce, and Defense and the Chief of the Forest Service and the Administrator, EPA, should report their agencies' progress in improving their systems in their fiscal year 2002 budget submissions to Congress in February 2001.
Closed - Not Implemented
No progress can be reported until FERC issues the needed guidance.
Department of the Interior Because the federal government will likely also continue to be at risk of losing millions of dollars a year until the agencies produce accurate, timely, and reliable information on their hydropower-program-related administrative costs, the Secretaries of the Interior, Commerce, and Defense and the Chief of the Forest Service and the Administrator, EPA, should report their agencies' progress in improving their systems in their fiscal year 2002 budget submissions to Congress in February 2001.
Closed - Not Implemented
Interior cannot report progress until FERC issues the needed guidance.
Environmental Protection Agency Because the federal government will likely also continue to be at risk of losing millions of dollars a year until the agencies produce accurate, timely, and reliable information on their hydropower-program-related administrative costs, the Secretaries of the Interior, Commerce, and Defense and the Chief of the Forest Service and the Administrator, EPA, should report their agencies' progress in improving their systems in their fiscal year 2002 budget submissions to Congress in February 2001.
Closed - Not Implemented
No progress can be reported because FERC has not issued the needed guidance.

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