UNITED STATES GENERALACWNTING OFFICE REGIONAL OFFICE 3066FEDERAL OFFICE BUILDING 909 FIRST AVENUE SEATTLE, WASHINGTON 98104 MAR 4 1971 Mr. Henry R, kkhmond, Administrator Bonnev%l%~ Power A.dm%n~tration P. 0. Box 3621 Portland, Oregon 97208 Dear Bfr. Bichmond: We have exam%ned the Bonneville Power AW%otrat%on (BPA) account- ing records and practfces %n connection w%tb our annual f%nanc%al aud%t of the Federal Columbia Paver Power System (FCEPS) for the fiscal. year ended June 30, 1970. Our review9 completed in November 1970, was directed toward determ%n%ng the reasonableness and propr%ety of BPA's fzbumdal stateaente %ncluded %n the fiscal year 1970 consolidated FCRPSfxnancial statements. Our review included an evaluation of adm%u%- stardative procedures and controls and such tests of financial transactions as we considered necessary. We are pleased to report that we found adm%nfstrat%ve procedures end .-%-4.-IIl- -T" rp"rrDb.Y*ots ho sdeq&ze. We are aiso pieasesl to report that certain, matters discussed in the following paragraphs were mutually-resolved as a result of ddscussions with your staff, except as noted. F%nanefal Statement Adjustments Your staff adjusted the ffnancial statements for the following matters disclosed by our audit. 1. The balance sheet line items Trust Funds and Trust Fund Advances were overstated by $1,429,000 due to inclusion of a sub-account twace . Adjustments were made to reduce the account balances. 2. The balance sheet l%ne Item Other Assets and Deferred Charges in- cluded $750,000 of expired contract option costs charged to the Celflo-Mead DC l%ne, constructron of which has been %ndef%n%.tely deferred. After dfscusslng these costs we agreed to mite them off against Accumulated Wet Reventxes. 3. Other Assets and Deferred Charges was also overstated by $109,000 as a result of charging this account rather than the Transfers to Federal Agencies account with the cost of certain material and equ%pment transferred to Southwestern Power Adm%n%strat%on. Appropriate adjustments were made. 50TH ANNIVERSARY 1921-1971 Mr. Henry R. Richmond -2- Other Items 1. In our fiscal. year 1969 exchange of letters, we questioned a quality increase granted to a Bureau of Csmmgrcial Fisher&es' employee in January 1966. On December 18, 1970, we received a letter from the Darector of the Matioaal Marine Fishemies Service in Washington, D.C., which stated that he believed the payroll actbon was proper, We have discussed this matter with our attorneys and plan to take a formal exception to thjs item. 2, BPA officials have advised us that the written agreements and proper accounting entries to record a June 1970 power exchange transaction (whereby BPA delivered energy, surplus to Cominco Limzkted, to the Los Angeles Departmat of Water and Bower) will be completed zn February 1971. During our audit we noted that the accounting section was not provided with a formal agreement or other satisfactory supporting information to properly record this trmsactbosa, Although a transactto of this t9pe may somet$.mes be necessary be%ore any formal written agreemesas are prepared supporting it, we believe that appropriate memorandums &Q Lieu of formal agreements should be provided the accounting sectsons so that the transactions may be properly recorded. 3. As provided for in the Secretary of Zmterior's Order No. 2929 issued on January 29, 19709 and subsequent gu-bdelznes, BPA will apply a mw interest rate beginxung far fiscal. yeaa: 1971. The inftial rate is 4-7/8 percent. According to the Secretarxal Order and the guidelnnes the uew interest rate policy applies to any Corps or Bureau construction initiated after January 29, 1970. We under- stand that discussions are bedng held between Department of Interior and Corps officials at Washington on the implementation of this policy. T-. 4. During our review we discussed tith BPA officials the need for dis- closure in the notes to the finar~ciaf statements of BPA's commitments aesultfng from agreements signed as part of the Columbia Storage Power Exchange and Canadzan Treaty, and the hydro-thermal power program planned for the Pacific Northwest. As h result of these dis- cussio~s, BPA officials agreed to include these rtems in the notes. A copy of this letter is being sent to the Director, Office of Survey and Review, Department of the Interior. Mr. Henry R. Ricbonti -3- We wish to acknowledge the courtesy and cooperation given our representatjtves durmg this review. Your comments and advice as to final action taken on these mattem will be apprec%ated. Sincerely yours, William i, Contardy Regional Manager cc: Directm, Office of Survey aud Review, Department of the Interior
Fiscal Year 1970 Financial Audit of Commercial Power Operations of Bonneville Power Administration
Published by the Government Accountability Office on 1971-03-04.
Below is a raw (and likely hideous) rendition of the original report. (PDF)