UNITED STATES GENERAL A~COIJNTING OFFICE REGIONAL OFFJCE SO96 FEDERAL OFFICE BUILDING 909 FIRST &VENUE -= SEATTLE, WASHINGTON 98104 Mr. Earold T. Nelson, R&final Director Y Region 1, u,s. Bureau of Reel ti0Xl Department of the InteriolP P, 0. Box 8008 Boise, Idaho 83707 Dear Mr. Nelson: We have completed our review of the accounts and accounting pro- cedrsree of the power generating and related multipurpose projects fn Region 1, Burezm of Reclamation, that participated in the Federal Columbia R&vex Power System (FCPSS) during the f9scal year ended June 30, 1970. The review was dfrected toward determining the reasonableness and propriety sf the projects* flmncIa1 statements submitted to Bonneville Powes: Admini- stratbon (WA) for casmolidatfm and inclusfon iaa the fiscal year 1970 FCRPS financial statements. Our review included an evaluation of current administrative procedures and controls and included such tests QE financial transactions as we deemed necessary* We are pleased to report that generally we found the administrative pa*ocedwes and c~no~sols to be adequate. MQSGemors noted were Bnsigtificant and were informally dascussed and resolved with your staff during the audit. In addition, our audit dasclosed the following matters. Your staff revised two of the statements for the Columbia Basin Project, (1) Amount and Allocation of Plant Investment Schedule A, and (2) Statement of Project Cost and Repayment, The revisions were made because of allocation errors %n the computation of irrigation assistance required from power revenues for the Columbia Basin and Teton projects. Toward the end of our audft we noted that there has sometimes been delays in recording completed plant additions in the plant-in-service general ledger accounts. Ue noted this for the Columbia Basin project. C~nstructisn work under certain Cost Authorities for this project was completed in fiscal yeas 1969 or earlier, but was not transferred to completed plant-In-service untal fiscal year 1970. Delays iu recording completed plant additxons results i.n understatement of Interest on the Federal investment in addition to understatement of the plant-m-service account and overstatement of the constructzon work-in-process account, You may want to look into thfs and consider procedures to provide for more tamely communication between the indivxdual Project Engineers' Offices and the Regional Finance Office upon completion of a Cost Authority. 50 TH ANNIVERSARY 1921- 1971 Mr. Harold T. Nelson -2- Certain matters dfsclosed by prior years' audits remain to be resolved for improved reportzng on the financial statements. These matters include (I) the capltalizatrox of interest during construction for Bureau power projects constructed prnor to 1956, (2) the determina- tion of the proper base to be used to compute interest expense, (3) the recording of interest expense OR the Columbza Baslx ProJect investment suballocated to downstream river regulation prior to 1963, and (4) the reporting of accrued unused annual leave as a lrability. During calendar year 1970 we recommended in two separate letter reports directed to the Secretary of the Interior and the Commisszoner of Reclamation that the Bureau of Reclamation (1) capltalire interest costs durmg construction as part of the Federal investment for all power proJects constructed prior to 1956 and compute accumulated annual interest expense on the basis of such noncapitalized costs, (2) compute fraterest expense on net additions to the Federal investment during the year and make a retroactive adfustment for such interest expense not re- corded III past years, and (3) schedule such noncapitalized interest costs and znterest expense for repayment to the Treasury from power revenues. We understand the Bureau is currently considering these recommendations. Durfrig OLt fiscal year 1969 audit Ge discussed with Bureau officials the need to include the imputed cost for space provided by the General Services Administration which was then considerably higher than earlier years due to the Bureau's move to the recently completed Federal Office Building. Bureau officials informed us during the current audit that the imputed rental cost will be included in the formal accounts and financial statements for the Bureau projects beginnang in fiscal yean 1971. A copy of this letter is being sent to the Director, Office of Survey and Review, Department of the Interior. We tish to express our appreciation to you snd your staff for the courtesy and cooperation given our representatives during this review. - Sincerely yours, William NJ Conrardy V Regional Manager cc: Director, Office of Survey and Review, Department of the Interior
Fiscal Year 1970 Financial Audit of Commercial Power Operations in Region I, Bureau of Reclamation
Published by the Government Accountability Office on 1971-03-04.
Below is a raw (and likely hideous) rendition of the original report. (PDF)